Section 148 NI Act - Deposit Of Minimum 20% Amount Is Not An Absolute Rule; Can Be Relaxed If Exceptional Case Is Made Out: Supreme Court

The Supreme Court observed that deposit of minimum 20% amount under Section 148 of Negotiable Instruments Act as a condition to suspend sentence is not an absolute rule.

When a Appellate Court considers the prayer under Section 389 Cr.P.C. of an accused who has been convicted for offence under Section 138 of the Negotiable Instruments Act, it can consider whether it is an exceptional case which warrants grant of suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount, the Court observed.

The bench of Justices Abhay S. Oka and Pankaj Mithal observed that if the Appellate Court comes to the conclusion that it is an exceptional case, the reasons for coming to the said conclusion must be recorded

In this case, the accused were convicted under Section 138 NI Act. In appeal, relying upon Section 148 NI Act, the Sessions Court granted relief under Section 389 CrPC subject to condition of appellants depositing 20% of the amount of compensation. The Madhya Pradesh High Court confirmed this order. According to the High Court, relief of suspension of sentence under Section 389 of the Cr.P.C. can be granted only by directing the accused to deposit minimum of 20% of the compensation/fine amount.

In appeal, the court noted the observations made in Surinder Singh Deswal Alias Colonel S.S. Deswal and Others v. Virender Gandhi (2019) 11 SCC 341 and observed:

"What is held by this Court is that a purposive interpretation should be made of Section 148 of the N.I. Act. Hence, normally, Appellate Court will be justified in imposing the condition of deposit as provided in Section 148. However, in a case where the Appellate Court is satisfied that the condition of deposit of 20% will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded."

It was contended that neither before the Sessions Court nor before the High Court, there was a plea made by the appellants that an exception may be made in these cases and the requirement of deposit or minimum 20% of the amount be dispensed with.

"When an accused applies under Section 389 of the Cr.P.C. 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 in exception or not.. In these cases, both the Sessions Courts and the High Court have proceeded on the erroneous premise that deposit of minimum 20% amount is an absolute rule which does not accommodate any exception", the court said.

The bench therefore directed the High Court to reconsider the case afresh.

Jamboo Bhandari vs MP State Industrial Development Corporation Ltd - 2023 LiveLaw (SC) 776 - 2023 INSC 822

Negotiable Instruments Act, 1881 ; Section 148 - Normally, Appellate Court will be justified in imposing the condition of deposit as provided in Section 148. However, in a case where the Appellate Court is satisfied that the condition of deposit of 20% will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded. (Para 5-6)

Code of Criminal Procedure, 1973 ; Section 389 - Negotiable Instruments Act, 1881; Section 148 - When a Appellate Court considers the prayer under Section 389 Cr.P.C. of an accused who has been convicted for offence under Section 138 of the Negotiable Instruments Act, it can consider whether it is an exceptional case which warrants grant of suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount- if the Appellate Court comes to the conclusion that it is an exceptional case, the reasons for coming to the said conclusion must be recorded.When an accused applies under Section 389 of the Cr.P.C. 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 in exception or not. (Para 7-10)

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