WIDE INTERPRETATION TO SECTION 148 NI ACT 1882

SC in its recent judgment held that it is mandatory to deposit fine/compensation as contemplated under newly inserted section 148 Negotiable Instrument Act 1882 as amended upto date and applies irrespective to criminal proceedings already initiated.

Apex Court in its recent ruling “Surinder Singh Deswal @ Col. S.S.Deswal and others verses Virender  Gandhi” Criminal Appeal No 917944 of 2019(Arising out of SLP(Criminal) Nos. 4948-4975/2019 dated 29/05/2019  held that Section 148 of the N.I. Act, shall be applicable with respect to criminal proceedings already initiated prior to the amendment in Section 148 of the N.I. Act whereby appellants have been directed by the First Appellate Court to deposit 25% of the amount of the compensation/fine imposed by the learned trial court.

The  question involved in the case that whether the first appellate court was justified in directing the appellants  who have been convicted for the offence under Section 138 of the N.I. Act to deposit 25% of the amount of compensation/fine imposed by the learned   trial   Court,   pending  appeals  challenging  the   order   of conviction   and   sentence   and   while   suspending   the   sentence under Section 389 of the Cr.P.C., in the light of Section 148 of the N.I. Act as amended?

Section 148 of NI Act reads as under:-

‘‘148. Power   to   Appellate   Court   to   order payment   pending   appeal   against   conviction.... (1) Notwithstanding anything contained in the Code of   Criminal   Procedure,   1973   (2   of   1974),   in   an appeal   by   the   drawer   against   conviction   under section   138,   the   Appellate   Court   may   order   the appellant to deposit such sum which shall be a minimum   of   twenty   per   cent   of   the   fine   or compensation awarded by the trial Court:  Provided that the amount payable under this sub section   shall   be   in   addition   to   any   interim compensation paid by the appellant under section 143A.

(2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the order,  or  within  such   further   period   not exceeding thirty days as may be directed by the Court   on   sufficient   cause   being   shown   by   the appellant. 

(3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal:  Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the   order,   or   within   such   further   period   not 14 exceeding thirty days as may be directed by the Court   on   sufficient   cause   being   shown   by   the complainant.’’

The object of the said amendment as laid down by the legislature which reads as under:-

: “ Because of delay tactics of unscrupulous drawers of dishonoured cheques due to  easy   filing   of   appeals   and   obtaining   stay   on proceedings. As a result of this, injustice is caused to the payee of a dishonoured cheque who has to spend   considerable   time   and   resources   in court proceedings   to   realize   the   value   of   the   cheque. Such   delays   compromise   the   sanctity   of   cheque transactions.

 2. It is proposed to amend the said Act with a view to   address   the   issue   of   undue   delay   in   final resolution   of   cheque   dishonour   cases   so   as   to provide   relief   to   payees   of   dishonoured   cheques and   to   discourage   frivolous   and   unnecessary litigation which would save time and money. The proposed   amendments   will   strengthen   the credibility of cheques and help trade and commerce in   general   by   allowing   lending   institutions, including banks, to continue to extend financing to the productive sectors of the economy. 

3.   It   is,   therefore,   proposed   to   introduce   the Negotiable Instruments (Amendment) Bill, 2017 to provide, inter alia, for the following, namely:—

 (ii) to insert a new section 148 in the said Act so as to provide that in an appeal by the drawer against conviction under Section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent of the fine or compensation awarded by the trial court.

Apex Court after hearing the parties and referring to the object of the New Amendment in the NI Act came to the conclusion that  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   given.   Therefore   amended   Section   148   of   the   N.I.   Act confers   power   upon   the   Appellate   Court   to   pass   an   order 18 pending appeal to direct the Appellant¬ Accused to deposit the sum   which   shall   not   be   less   than   20%   of   the   fine   or compensation   either   on   an   application   filed   by   the   original complainant or even on the application filed by the Appellant Accused   under   Section   389   of   the   Cr.P.C.   to   suspend   the sentence.