Recently, the Punjab and Haryana High Court dealing with a case under Section 138 of the Negotiable Instruments Act, 1881, held that while appellate courts possess discretion to impose the statutory requirement of deposit under Section 148 of the NI Act, such discretion must be exercised judiciously in cases where exceptional circumstances exist. The Court observed that imposing a mandatory deposit without considering factors like the appellant’s advanced age or serious medical condition “may amount to deprivation of the right of appeal,” emphasizing the need for reasoned orders when statutory discretion is exercised.
Brief Facts:
The petition before the Court arose from a complaint filed in 2017 under Section 138 of the NI Act, concerning the dishonour of a cheque issued by the petitioner towards repayment of a loan. The trial Court convicted the petitioner, sentencing him to undergo simple imprisonment for 10 months and directing payment of Rs. 80,00,000 as compensation, with a further three months imprisonment in default.
The petitioner appealed, and the Additional Sessions Judge, Nuh, admitted the appeal but imposed a condition requiring the deposit of 20% of the compensation for suspension of sentence. The petitioner, citing advanced age (69 years) and serious medical ailments supported by medical records, challenged this condition, seeking its quashing under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
Contentions of the Petitioner:
Petitioner’s Counsel: The petitioner’s counsel argued that the imposition of a 20% deposit was made without “assigning any cogent or reasoned findings” and failed to consider the petitioner’s “advanced age and adverse medical condition.” Counsel contended that this financial requirement practically fettered the petitioner’s statutory right of appeal and requested that the Court quash the deposit condition. Reliance was placed on the Supreme Court’s decision in Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd., asserting that appellate discretion under Section 148 must be exercised only in exceptional cases with specific reasons recorded.
Contentions of the Petitioner:
Counsel for the complainant opposed the petition, emphasizing the seriousness of the offence, noting that the cheque was dishonoured with remarks “Exceeds Arrangement” despite repeated demands. It was argued that the Sessions Court acted within its powers and that the imposition of the 20% deposit condition was lawful and did not warrant interference. The counsel maintained that dismissal of the petition was appropriate as the petitioner had not sufficiently demonstrated exceptional circumstances to deviate from statutory requirements.
Observations of the Court:
The Court meticulously examined Section 148 of the NI Act, which authorizes appellate courts to require deposit of a minimum of 20% of the compensation as a pre-condition for suspension of sentence. While acknowledging the legislative intent to balance the accused’s right to appeal with the complainant’s right to timely compensation, the Court noted that discretion under Section 148 is structured and must be exercised judiciously. Citing Jamboo Bhandari and Muskan Enterprises v. State of Punjab, the Court highlighted that the appellate court may waive the deposit requirement only in exceptional cases with credible material demonstrating compelling circumstances.
It observed that the impugned order lacked any reasoning while imposing the 20% deposit. Given the petitioner’s age, serious medical condition, and financial incapacity, the Court concluded that the statutory discretion should have been applied in a nuanced manner. The Court emphasized: “The convict bears the onus of demonstrating special, exceptional or compelling circumstances... In the absence of such exceptional circumstances, the legislative mandate ordinarily prevails.” However, in the present matter, the petitioner had placed sufficient evidence warranting modification of the deposit requirement.
The decision of the Court:
The Court allowed the petition to the limited extent of setting aside the condition requiring the petitioner to deposit 20% of the compensation amount, while directing the Appellate Court to decide the main appeal expeditiously, preferably within four weeks. The Court clarified that this order does not express any opinion on the merits of the appeal itself. The ratio decidendi establishes that while Section 148 of the NI Act empowers appellate courts to impose deposit conditions for suspension of sentence, such discretion must be exercised with reasoned consideration of exceptional circumstances, balancing the appellant’s rights against the complainant’s entitlement to timely relief.
Case Title: Arjun Walia Vs. Tarun Batra and another
Case No.: CRM-M-35548-2025
Coram: Justice Sumeet Goel
Advocate for Petitioner: Adv. Vishal Sharda
Advocate for Respondent: Adv. Yashvardhan Goyal, Gurmeet Singh (AAG Haryana)
Read Judgment @Latestlaws.com
Picture Source :
