Deposit Of Minimum 20% Fine/Compensation U/s 148 NI Act Mandatory, Holds Kerala HC [Read Judgment]

Justice Mary Joseph observed that the provision, introduced by 2018 amendment, impose a minimum of 20% and the maximum amount liable to be imposed on the appellant, can go to any extent or in other words it can go upto the fine/compensation amount, imposed by the judgment appealed against, in the absence of a cap laid on the upper limit. [T.K.Sajeevan vs. Francis T.Chacko] 

One of the contentions raised in this case was that Section 148 is directory in nature. Since the word 'may' is there in Section 148 N.I. Act, the deposit contemplated is only a discretionary relief, it was urged. Rejecting the same, the court said:

In view of the object of the Legislature while incorporating Section 148 into N.I. Act, the word 'may' will have to be read as 'shall'. The imposition of payment contemplated under Section 148 N.I. Act cannot be restricted to some prosecutions and evaded in other prosecutions. Since the amount directed to be deposited being compensation, undoubtedly, it is liable to be ordered to be deposited irrespective of the nature of the prosecution. Therefore, the word 'may' can only be taken to have the colour and meaning of 'shall' and there is no scope for exercise of discretion. It is something to be imposed irrespective of the nature of prosecutions preferred under Section 142 N.I. Act.

SC View: Not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned

The Supreme Court had, in Surinder Singh Deswal @ Col. S.S. Deswal vs. Virender Gandhi, dealt with the contention 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. The bench had observed: Considering the amended Section 148 of the N.I. Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 of the N.I. Act, though it is true that in amended Section 148 of the N.I. Act, the word used is "may", it is generally to be construed as a "rule" or "shall" and not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned.

2018 Amendment of NI Act

Both these provisions viz. Sections 143A and 148 were introduced last year by an amendment to the Negotiable Instruments Act. Section 143A gives power to the Trial Court to direct the accused to 'pay' an interim compensation which cannot be more than 20% of the 'cheque amount'. The interim compensation has to be paid within a period of sixty days of the order. It can be recovered in the manner of recovery of fine as provided in Section 421 of the Code of Criminal Procedure. The provision further states that the interim compensation so received has to be returned by the complainant along with interest at bank rates as prescribed by the Reserve Bank of India, if the accused is acquitted after trial. Section 148 of the NI Act, empowers the Appellate Court to direct the accused/appellant to 'deposit' minimum of 20% of 'fine' or 'compensation' awarded by the Trial Court.

Supreme Court judgments rulings on retrospectivity of Sections 143A and 148

Recently, the Supreme Court had held that Section 148 of the Negotiable Instruments Act 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. [Surinder Singh Deswal @ Col. S.S. Deswal vs. Virender Gandhi] However, in another judgment, the Supreme Court held that Section 143A is prospective in operation and that the provisions can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book. [GJ Raja vs. Tejraj Surana]

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