The High Court reaffirms that while the default rule is imposition of a 20% deposit of compensation when suspending a sentence in Section 138 NI Act appeals, lower appellate courts must apply their mind, consider submissions on “exceptional” cases, and give reasons for any waiver or imposition. The order clarifies and enforces binding precedent from the Supreme Court (Jamboo Bhandari v. MP State Industrial Development Corp., 2023), requiring speaking orders and fair hearing on the deposit condition. It stands as binding precedent within the Punjab & Haryana jurisdiction for all cheque dishonour conviction appeals.
Summary
| Category | Data |
|---|---|
| Case Name | CRM-M/48667/2025 of VIKAS Vs ASHOK KUMAR |
| CNR | PHHC011389372025 |
| Date of Registration | 29-08-2025 |
| Decision Date | 01-09-2025 |
| Disposal Nature | DISPOSED OF |
| Judgment Author | Ms. Justice Rupinderjit Chahal |
| Court | High Court of Punjab and Haryana |
| Precedent Value | Binding within jurisdiction; clarifies procedure on conditional suspension of sentence |
| Overrules / Affirms | Affirms Supreme Court’s decision in Jamboo Bhandari v. MP State Industrial Development Corp., 2023 |
| Type of Law | Criminal Procedure / Negotiable Instruments Act |
| Questions of Law | Whether lower appellate courts must consider and record reasons for imposing or waiving the 20% deposit condition when suspending sentence in cheque dishonour conviction appeals. |
| Ratio Decidendi | Appellate courts hearing appeals against conviction under Section 138 of the NI Act must consider whether a case presents exceptional circumstances justifying waiver of the standard 20% deposit requirement stipulated by Section 148. They must grant a fair opportunity to appellants to present such circumstances and must record specific reasons if they decide to waive or impose the condition. A mechanical or unreasoned imposition of the condition is contrary to binding Supreme Court precedent (Jamboo Bhandari, 2023). Orders imposing the deposit must thus be speaking and reflect due application of mind. |
| Judgments Relied Upon | Jamboo Bhandari v. MP State Industrial Development Corp., Criminal Appeal No. 2741 of 2023 (Supreme Court) |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Interpreted Supreme Court’s direction for “purposive interpretation” of Section 148 NI Act and requirement of exceptional circumstances and recorded reasons for waiver of deposit. |
| Facts as Summarised by the Court | Petitioner was convicted and sentenced to six months’ imprisonment under Section 138 NI Act and directed to pay double the cheque amount as compensation. On appeal, the appellate court suspended the sentence but imposed a 20% compensation deposit condition, without considering exceptional circumstances or granting a hearing on that issue. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Punjab & Haryana; lower appellate courts hearing Section 138 NI Act appeals |
| Persuasive For | Other High Courts considering the mechanical imposition of Section 148 NI Act deposit requirements |
| Follows | Jamboo Bhandari v. MP State Industrial Development Corp., Criminal Appeal No. 2741 of 2023 (Supreme Court) |
What’s New / What Lawyers Should Note
- Lower appellate courts must not impose the 20% deposit requirement under Section 148 of the NI Act mechanically; “exceptional circumstances” must be considered if pressed.
- Appellants must be given a clear opportunity to make submissions regarding why the deposit would be unjust or deprive their right to appeal.
- Final orders must be speaking/reasoned, recording the court’s application of mind to whether a waiver is justified.
- Lawyers can now specifically demand a hearing on this issue and challenge unreasoned or mechanical orders.
- The High Court remanded the matter for fresh hearing, directing compliance with Supreme Court precedent.
Summary of Legal Reasoning
- The High Court observed that the lower appellate court failed to consider whether the case was an “exceptional” one justifying waiver of the standard 20% deposit condition when suspending sentence after a conviction under Section 138 of the NI Act.
- Reliance was placed on the Supreme Court’s reasoning in Jamboo Bhandari v. MP State Industrial Development Corp., which mandates a purposive interpretation of Section 148: the 20% deposit is the norm, but exceptions are permitted with recorded reasons.
- The court underscored that denial of opportunity to present exceptional circumstances, or imposition of the deposit mechanically, is contrary to the binding apex court precedent.
- Consequently, the High Court set aside the portion of the appellate order related to the deposit and remanded the issue for hearing, with express directions to apply the law as clarified by the Supreme Court.
Arguments by the Parties
Petitioner
- Contended that the lower appellate court imposed the deposit condition “mechanically,” without proper appreciation of the facts or hearing.
- Argued that the imposition of the condition was arbitrary, illegal, and contrary to the Supreme Court’s authority in Jamboo Bhandari v. MP State Industrial Development Corp., 2023.
Factual Background
The petitioner was convicted by the Judicial Magistrate First Class, Panipat, for an offence under Section 138 of the Negotiable Instruments Act, and sentenced to six months’ imprisonment along with compensation of Rs. 7,86,000 (double the cheque amount) payable within two months. On appeal, the Additional Sessions Judge, Panipat, suspended the sentence but ordered the petitioner to deposit 20% of the compensation amount within 60 days. The petitioner challenged the imposition of this condition as being mandatory and unreasoned, leading to the present petition.
Statutory Analysis
- Section 148, Negotiable Instruments Act: The provision empowers appellate courts to order deposit of a minimum 20% compensation amount as a condition for suspending a sentence in cheque dishonour conviction appeals. The Supreme Court clarified that while imposition is “the rule,” courts retain the discretion to waive this requirement in “exceptional circumstances” for recorded reasons.
- The High Court reinforced that statutory discretion must be exercised judiciously, not mechanically, and in accordance with the “purposive interpretation” laid down by the Supreme Court.
Dissenting / Concurring Opinion Summary
No dissenting or concurring opinion was recorded in the judgment.
Procedural Innovations
- The High Court directed remand for a limited hearing on whether the appellant’s case justifies waiver of the deposit, with an express mandate for reasoning in the final order, effectively introducing procedural safeguards against mechanical orders under Section 148 NI Act.
Alert Indicators
- ✔ Precedent Followed – Supreme Court’s binding interpretation in Jamboo Bhandari (2023) followed and enforced.
Citations
- Jamboo Bhandari v. MP State Industrial Development Corp., Criminal Appeal No. 2741 of 2023 (Supreme Court), decided on 04.09.2023.