S.148 NI Act | Appellate Court May Relax Condition To Deposit Minimum 20% Fine If Exceptional Case Made Out: Andhra Pradesh High Court

The Andhra Pradesh High Court has clarified that the provision enabling an appellate court to suspend a conviction order under Negotiable Instruments Act, by directing deposit (under section 148) of minimum 20% of the fine or compensation awarded by the trial court, is discretionary in nature and not mandatory.The order was passed by Justice B V L N Chakravarthi in a criminal petition filed to quash the order of suspension of sentence passed by an Appellate Court.“...normally, the Appellate Court will be justified in imposing condition of deposit as provided in section 148 of N.I.A.ct. However, in a case, whether the Appellate Court is satisfied with the condition of deposit of 20% will be unjust, exceptions can be made for the reason specifically recorded. Hence, when the Appellate Court considers an application filed U/s.389(3) Cr.P.C. corresponding to Section 430 of BNSS by the drawer of the cheque (accused), who was convicted for the offense U/s.138 of Negotiable Instruments Act, the Appellant Court has to consider whether it is exceptional case which warrants grant of suspension of sentence without imposing condition of deposit of 20% of fine/compensation amount. If the Appellate Court comes to said conclusion that it is an exceptional case, reasons for coming to such conclusion must be recorded,” it held.The case arose from a criminal appeal filed against the conviction of the petitioner herein under Section 138 of the Negotiable Instruments Act. The petitioner had approached the appellate court, seeking suspension of his sentence pending appeal. The Sessions Judge suspended the sentence of imprisonment by imposing a fine of 20% of the compensation as per section 148 of the NI Act within one month. The petitioner argued that the Sessions Court's order was not in accordance with the precedent laid down by the Supreme Court in Jamboo Bhandari v. MP State Industrial Development Corporation Ltd, which held that suspending the order was a discretionary remedy.Per contra, the State maintained that the appellate court has the power to order such a deposit as per the provisions of Section 148.The High Court while passing the order, traced the evolution of the judicial interpretation of Section 148 of the Negotiable Instruments Act. The Court noted that the section was introduced to ensure speedy disposal of cheque dishonor cases and prevent undue delays caused by frivolous appeals. The Court referred to two significant Supreme Court judgments that have shaped the understanding of this provision, i.e Surinder Singh Deswal @ Colonel S.S. Deswal and others v. Virender Gandhi and in Jamboo Bhandari v. M.P. State Industrial Development Corporation Limited and Others.In Surinder Singh case, the Supreme Court had held that the word "may" in Section 148 should generally be construed as "shall," making it a rule for appellate courts to order the deposit of at least 20% of the fine or compensation. The Supreme Court had emphasized that this interpretation aligns with the legislative intent behind the amendment.However, the High Court also relied on the more recent judgment of Jamboo Bhandari, wherein the Apex Court had taken a nuanced approach. The Court had held that, Courts are at liberty to use their discretion to make exceptions in cases where such a condition would be unjust or deprive the appellant of their right to appeal when enforcing the provisions of Section 148. Based on these precedents, Bench reasoned that appellate courts must consider whether each case presents exceptional circumstances warranting the suspension of sentence without imposing the condition of deposit. Importantly, the Court stressed that if an exception is made, the reasons for doing so must be specifically recorded in the order.In the case at hand, it was found that the Appellate court had not considered whether the case fell within the exception contemplated by the Supreme Court. The absence of such consideration was deemed a significant omission, necessitating a fresh examination of the matter.“In the case on hand, the impugned order of the learned Appellate Court does not disclose anything that the learned Appellate Court considered whether the cases in the exception or not? i.e., whether it warrants grant of suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount?”Thus, the case was remanded back to the appellate court for a fresh consideration, with the petitioner directed to appear before the court within ten days. CRIMINAL PETITION NO: 5914/2024Counsel for the petitioner: Y NARAPA REDDYCounsel for respondents: PP.Click Here To Read/Download Order

S.148 NI Act | Appellate Court May Relax Condition To Deposit Minimum 20% Fine If Exceptional Case Made Out: Andhra Pradesh High Court

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