Breaking: Section 148 Of Negotiable Instruments Act Has Retrospective Effect, Holds Supreme Court [Read Judgment]

In an important judgment, the Supreme Court has held that Section 148 of the Negotiable Instruments Act as amended, shall be applicable in respect of the appeals against the order of conviction and sentence for the offence under Section 138 of the N.I. Act, even in a case where the criminal complaints for the offence under Section 138 of the N.I. Act were filed prior to 2018 amendment Act i.e., prior to 01.09.2018. The bench of Justice MR Shah and Justice AS Bopanna upheld a First Appellate Court order that had directed the appellants-convicts to deposit 25% of the amount of fine/compensation ordered by the Trial Court. (This First Appellate court order was later affirmed by the Punjab and Haryana High Court). Section 148 of the NI Act, introduced vide an amendment in 2018, empowers the Appellate Court to direct the accused/appellant to 'deposit' minimum of 20% of 'fine' or 'compensation' awarded by the Trial Court. In Surinder Singh Deswal @ Col. S.S. Deswal vs. Virender Gandhi, the issue considered by the Supreme Court bench was whether the first appellate court is justified in directing the appellants – original accused who have been convicted for the offence under Section 138 of the N.I. Act to deposit 25% of the amount of compensation/fine imposed by the learned trial Court, pending appeals challenging the order of conviction and sentence and while suspending the sentence under Section 389 of the Cr.P.C., considering Section 148 of the N.I. Act as amended?The contention of the accused before the Apex Court was that the Section 148 shall not be applicable with respect to criminal proceedings already initiated prior to the amendment in Section 148 of the N.I. Act Explaining the object of 2018 amendment, the bench said that that it is because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the Parliament thought it fit to amend Section 148 of the N.I. Act . The court added that by the amendment , it cannot be said that any vested right of appeal of the accused – appellant has been taken away and/or affected. It observed: "Therefore, considering the Statement of Objects and Reasons of the amendment in Section 148 of the N.I. Act stated hereinabove, on purposive interpretation of Section 148 of the N.I. Act as amended, we are of the opinion that Section 148 of the N.I. Act as amended, shall be applicable in respect of the appeals against the order of conviction and sentence for the offence under Section 138 of the N.I. Act, even in a case where the criminal complaints for the offence under Section 138 of the N.I. Act were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018. If such a purposive interpretation is not adopted, in that case, the object and purpose of amendment in Section 148 of the N.I. Act would be frustrated."Appellate Court Has Power To Direct Deposit Of Minimum 20% Fine/Compensation Awarded By Trial CourtAnother contention made before the bench was that, as per Section 357(2) of the Cr.P.C., no such fine is payable till the decision of the appeal and therefore the first appellate Court ought not to have passed any order directing the appellants to deposit 25% of the amount of fine/compensation, pending appeal/s. Reliance was placed on the judgment in Dilip S. Dhanukar v. Kotak Mahindra Bank. Rejecting this plea, the bench said: "The opening word of amended Section 148 of the N.I. Act is that "notwithstanding anything contained in the Code of Criminal Procedure…..". Therefore irrespective of the provisions of Section 357(2) of the Cr.P.C., pending appeal before the first appellate court, challenging the order of conviction and sentence under Section 138 of the N.I. Act, the appellate court is conferred with the power to direct the appellant to deposit such sum pending appeal which shall be a minimum of 20% of the fine or compensation awarded by the trial Court."Not To Direct To Deposit By The Appellate Court Is An Exception For Which Special Reasons Are To Be AssignedYet another contention raised in this case was based on the word 'may' used in Section 148 of the N.I. Act. The provisions states that 'the appellate Court "may" order the appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court". It was contended that since the word used is not "shall", the discretion is vested with the first appellate court to direct the appellant – accused to deposit such sum and the appellate court has construed it as mandatory, would be contrary to the provisions of Section 148 of the N.I. Act as amended. The bench observed:Considering the amended Section 148 of the N.I. Act as a whole to be read with the Statement of...

Breaking: Section 148 Of Negotiable Instruments Act Has Retrospective Effect, Holds Supreme Court [Read Judgment]

Ashok Kini

"Section 148 NI Act, applies even in a case where the criminal complaints for the offence under Section 138 of the N.I. Act were filed prior to 2018 amendment Act i.e., prior to 01.09.2018."

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