Section 148 NI Act: Interim compensation during appeal can be given in the cases already pending at the time of amendment [Read the Supreme Court Judgment]

May 29, 2019:

Supreme Court has held that the amendment introduced in the NI Act for providing interim compensation during the appeal is applicable even to the cases already pending at the time of amendment.

A bench of Justice Shah and Justice Bopanna has passed the judgment in the case titled as Surinder Singh Deswal vs Virender Gandhi on 29.05.2019.

When an accused filed an appeal against conviction in a cheque bounce case, the appellate court considering the provisions of amended Section 148 of the N.I. Act, which has been amended by Amendment Act No. 20/2018, which came into force w.e.f. 1.9.2018, while suspending the sentence and allowing the application/s under Section 389 of the Cr.P.C, directed the appellants to deposit 25% of the amount of compensation/fine awarded by the learned trial Court.

When the matter reached the Supreme Court the accused argued  that Section 148 of the N.I. Act, as amended by Act No. 20/2018, shall not be applicable with respect to criminal proceedings already initiated prior to the amendment in Section 148 of the N.I. Act.

Supreme Court however did not agree and observed "Having observed and found that because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of Section 138 of the N.I. Act was being frustrated, the Parliament has thought it fit to amend Section 148 of the N.I. Act, by which the first appellate Court, in an appeal challenging the order of conviction under Section 138 of the N.I. Act, is conferred with the power to direct the convicted accused – appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. By the amendment in Section 148 of the N.I. Act, it cannot be said that any vested right of appeal of the accused – appellant has been taken away and/or affected. Therefore, submission on behalf of the appellants that amendment in Section 148 of the N.I. Act shall not be made applicable retrospectively and more particularly with respect to cases/complaints filed prior to 1.9.2018 shall not be applicable has no substance and cannot be accepted, as by amendment in Section 148 of the N.I. Act, no substantive right of appeal has been taken away and/or affected".

Supreme Court held "Therefore, considering the Statement of Objects and Reasons of the amendment in Section 148 of the N.I. Act stated hereinabove, on purposive interpretation of Section 148 of the N.I. Act as amended, we are of the opinion that Section 148 of the N.I. Act as amended, shall be applicable in respect of the appeals against the order of conviction and sentence for the offence under Section 138 of the N.I. Act, even in a case where the criminal complaints for the offence under Section 138 of the N.I. Act were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018. If such a purposive interpretation is not adopted, in that case, the object and purpose of amendment in Section 148 of the N.I. Act would be frustrated. Therefore, as such, no error has been committed by the learned first appellate court directing the appellants to deposit 25% of the amount of fine/compensation as imposed by the learned trial Court considering Section 148 of the N.I. Act, as amended".

Read the Judgment here:

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