S. 148 NI Act - Appellate Court Must Pass A Speaking Order To Order Deposit Of Minimum 20 % Compensation/Fine Amount: Kerala High Court

On appeal against conviction for dishonor of cheque under Section 138 NI Act, the appellate court as per Section 148 NI Act has the power to grant suspension of sentence pending appeal with imposition of a condition for payment of minimum 20% of compensation/fine amount as ordered by the trial court.

Justice P.V.Kunhikrishnan, on relying upon the Apex Court decision in in Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd. (2023) observed that deposit of minimum 20% compensation/fine amount was not an absolute blanket rule while considering suspension of sentence. It held that the appellate court has the duty to decide whether it has to impose such a condition for payment of compensation/fine amount and pass a speaking order by recording its reasons.

“Therefore, the duty of the appellate court is firstly to decide whether such a deposit is to be Bhandari's case (supra), when an accused applies under S.389 of the CrPC for suspension of sentence, he normally applies for grant of relief of suspension of sentence without any condition. Therefore, when a blanket order is sought by the appellants, the Court has to consider whether the case falls within the exception or not. The appellate court while suspending a sentence cannot pass a blanket order in all cases to deposit 20% of the fine or compensation without assigning any reason.”

The petitioner was convicted and sentenced by Judicial First-Class Magistrate Court – II under Section 138 of NI Act for dishonor of cheque. He was sentenced to undergo simple imprisonment till the rising of the court and to pay compensation/fine of rupees three lakhs twenty-seven thousand and in default, imprisonment for one month. In Appeal, Sessions court suspended sentence, with direction to deposit 20 per cent of compensation/fine amount within sixty days. Aggrieved by this, petitioner approached the High Court.

Relying upon the Apex Court decision in Jamboo Bhandari (supra), Counsel for petitioner argued that a speaking order was necessary if appellate court decided to impose condition to deposit amount under Section 148 NI Act. He alleged that the order of the Sessions Court was not a speaking order.

The Court noted that in Jamboo Bhandari (supra), the Apex Court observed that deposit of minimum 20% compensation/fine amount under Section 148 of Negotiable Instruments Act as a condition to suspend sentence was not an absolute blanket rule. High Court held that as per the Apex Court decision, it was the duty of the appellate court to give reason for imposing the condition to deposit 20% of compensation for suspending the sentence.

On analyzing Section 148 NI Act, the Court noted that it has two limbs:

1. the appellate court has to first decide whether to order the appellant to pay fine/compensation amount,
2. the appellate court has to order for deposit of minimum 20% of compensation/fine amount.

It observed that the appellate court must decide whether it has to pass an order for imposition of condition for payment of compensation/fine amount under Section 148 NI Act. It noted that the Court cannot pass a blanket order for payment of 20 % of compensation/fine amount while considering suspension of sentence without giving reason. It held that the appellate court can also order for payment of deposit of compensation/fine amount which was a minimum of 20% and could be higher also. The Court thus noted that for all the above reasons also, a speaking order was necessary.

Accordingly, the Court set aside the order of the Sessions Court and directed it to be reconsidered.

Counsel for the petitioner: Advocates M.Shaju Purushothaman, K.S.Rajesh

Counsel for the respondents: Public Prosecutor Renjith T R

Citation: 2023 LiveLaw (Ker) 712

Case title: Baiju v State of Kerala

Case number: CRL.MC NO. 8844 OF 2023

Click Here To Read/Download The Order