The court reaffirms that, following Supreme Court precedent, appellate courts must ordinarily mandate deposit of at least 20% of the compensation under Section 148 NI Act following conviction under Section 138, unless exceptional circumstances, supported by cogent material, are proved by the convict. This decision upholds existing precedent and serves as binding authority within Punjab & Haryana, providing clear practical guidance for cheque dishonour appeals.
Summary
| Category | Data |
|---|---|
| Case Name | CRM-M/54829/2025 of M/S SHIVIKA INFRASTRUCTURE ENGINEERS AND CONTRACTORS Vs HARPREET SINGH |
| CNR | PHHC011569972025 |
| Date of Registration | 24-09-2025 |
| Decision Date | 31-10-2025 |
| Disposal Nature | DISMISSED |
| Judgment Author | MR. JUSTICE SUMEET GOEL |
| Court | High Court of Punjab and Haryana |
| Precedent Value | Binding within jurisdiction; follows and applies Supreme Court authority |
| Overrules / Affirms | Affirms Supreme Court decisions (Jamboo Bhandari; Muskan Enterprises) |
| Type of Law | Criminal Procedure (Banking/Negotiable Instruments) |
| Questions of Law |
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| Ratio Decidendi |
The appellate court, when considering suspension of sentence in appeals against convictions under Section 138 NI Act, must ordinarily impose a condition requiring deposit of at least 20% of the compensation awarded by the trial court, as mandated by Section 148. This requirement can only be waived in exceptional cases where the convict demonstrates compelling and substantiated grounds justifying such waiver. Financial difficulty alone does not constitute “exceptional circumstances.” The legislative intent behind Section 148 is to protect the complainant’s rights and discourage frivolous/delaying appeals. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court |
The petitioner was convicted under Section 138 NI Act and sentenced to 4 months’ imprisonment and compensation; appellate court suspended sentence subject to deposit of 20% of compensation; petitioner sought quashing of this condition citing financial hardship; court examined whether financial hardship suffices as exceptional ground to waive mandatory deposit. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Punjab and Haryana |
| Persuasive For | Other High Courts; can be cited as correctly applying Supreme Court decisions |
| Follows |
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What’s New / What Lawyers Should Note
- The High Court clarifies that financial hardship alone is not sufficient to waive the statutory deposit condition under Section 148 NI Act.
- The convict bears the onus to demonstrate exceptional circumstances, with cogent and substantiated material, to seek waiver of the mandatory deposit.
- The judgment confirms that unless such exceptional grounds are shown and specifically recorded, the deposit condition must be imposed by appellate courts while suspending sentence in Section 138 NI Act appeals.
- Lawyers should ensure sufficient evidentiary basis before seeking relaxation of the 20% deposit requirement.
Summary of Legal Reasoning
- The High Court considered whether the requirement to deposit 20% of the compensation under Section 148 NI Act as a precondition for suspension of sentence in Section 138 convictions is mandatory or discretionary.
- Cited Supreme Court judgments, especially Jamboo Bhandari (2023) and Muskan Enterprises (2024), which interpret Section 148 NI Act as generally mandating the deposit, with waiver allowed only in exceptional cases—and such reasons must be specifically recorded.
- Analyzed legislative intent: ensuring speedy justice for complainants and preventing frivolous/dilatory appeals.
- Emphasized that “financial difficulty” claimed by the appellant does not by itself constitute an “exceptional circumstance” justifying waiver of deposit.
- Applied the above principles to the facts and found no exceptional circumstances or cogent material to justify waiver, thereby upholding the Sessions Court’s order imposing the deposit condition.
Arguments by the Parties
Petitioner
- Argued inability to deposit the stipulated 20% of compensation due to financial difficulty.
- Contended that the Sessions Court imposed the deposit condition without affording due and requisite opportunity of hearing.
- Submitted that imposing such a deposit condition effectively takes away the right of appeal.
Factual Background
- The petitioner was convicted by the trial court for offence under Section 138 of the Negotiable Instruments Act and sentenced to 4 months’ simple imprisonment and directed to pay compensation of Rs. 19,00,000.
- The petitioner appealed the conviction and sought suspension of sentence.
- The Sessions Judge suspended execution of sentence subject to deposit of 20% of the compensation as a precondition.
- The petitioner challenged this condition before the High Court on the ground of financial hardship.
Statutory Analysis
- The court discussed Section 148 of the Negotiable Instruments Act (as amended in 2018), which empowers appellate courts to require deposit of at least 20% of fine/compensation as a condition for hearing appeals against conviction under Section 138.
- Interpreted the statutory mandate as generally requiring the deposit, with appellate court retaining discretion to waive it only for exceptional reasons, which must be specifically demonstrated and recorded.
- Relied on Supreme Court’s purposive interpretation of Section 148 and emphasised its operation as a rule, not an exception, to balance the interests of complainant and accused.
Alert Indicators
- ✔ Precedent Followed – When existing law is affirmed.