Source: Rajasthan High Court 

Why in News? 

A bench of Justice Arun Monga held that condition of pre-deposit under Section 148 of Negotiable Instruments Act, 1881 is not mandatory in nature.                  

• The Rajasthan High Court held this in the case of Asha Devi v. Narayan Keer & Anr. 

What was the Background of Asha Devi v. Narayan Keer & Anr. Case?  

• The petitioner in this case has filed an application to suspend sentence under Section 389 of Criminal Procedure Code, 1973 (CrPC).  
• The Sessions Court held that the petitioner will have to pay 20% of the amount of fine/compensation as per Section 148 of Negotiable Instruments Act, 1881 (NI Act). 
• In case the petitioner fails to pay the same as per the Sessions Court order the petitioner was to undergo the sentence awarded by the trial Court. 
• The order of the Sessions Court was mainly on the premise that as per Section 148 of NI Act the sentence can only be suspended if a minimum of 20% of the fine amount is paid to the complainant. 
• It is the case of the petitioner that she is a poor lady who works on daily wages and hence is not in a position to deposit such a huge i.e. 20% of the amount of the cheque. 
• Hence, the matter was before the High Court.  

What were the Court’s Observations?  

• The Court held that in the facts on hand looking at the financial condition of the petitioner directing her to deposit 20% of the amount would jeopardize a very important right of the petitioner. 
• Since the lady is in financial distress in the larger interest of justice, she has to be granted indulgence in order to enable her to defend herself in the pending appeal. 
• Hence, the Court set aside the condition of pre-deposit of 20% of interim compensation.

What is Section 148 of NIA? 

• Section 148 of NIA provides for the power of the Appellate Court to order payment pending appeal against conviction. 
• Section 148 (1): Condition of pre-deposit on Appeal. 
  • Non-obstante clause: This Sub-section starts with the words “Notwithstanding anything contained in CrPC”.  
  • This clause comes into picture when an appeal is filed by the drawer against the conviction under Section 138 of NIA. 
  • In such a situation the Appellate Court may order the appellant to deposit a sum which is minimum of 20% of fine or compensation awarded by the trial Court. 
  • Proviso: This provides that the amount payable under this section shall be in addition to any interim compensation paid by the appellant under Section 143 A of NIA.   
• Section 148 (2): Timeline for deposit of Amount. 
  • The amount under sub-section 1 shall be deposited within 60 days from the date of order. 
  • This period can be extended on showing sufficient cause within such further period not exceeding 30 days as may be directed. 
• Section 148 (3): Direction of Release of amount  
  • During the pendency of appeal, the Appellate Court may order release of the amount deposited by the appellant. 
  • Proviso: It provides that 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. 
    • Time period for the above payment: 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 complainant.

What are the Landmark Judgments on Section 148 of NIA? 

• Jamboo Bhandari v. MP State Industrial Development Corporation Ltd & Ors (2023): 
  • The Court held that a purposive interpretation should be made of Section 148 of NIA. 
  • Hence, the Court held that normally the Appellate Court would be justified in imposing a condition of deposit under Section 148 NI Act.  
  • However, in cases where deposit of 20% will be unjust or imposing such a condition would amount to deprivation of the right of appeal of the appellant the exception can be made for reasons to be recorded in writing.  
  • Thus, the Court held that it is always open to the Appellate Court to consider whether it is an exceptional case which warrants grant of suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount. 
  • The Court also reiterated that when the Appellate Court comes to the conclusion that it is an exceptional case the reasons of coming to such a conclusion should be recorded.
• Surinder Singh Deswal v. Virender Gandhi (2019): 
  • The issue before the Court was whether Section 148 of NI Act as amended by the 2018 amendment Act is retrospective or prospective in application. 
  • The Court held that it cannot be said that any vested right of appeal of accused- appellant has been taken away and/or affected. 
  • Thus, no substantive right of appeal has been taken away and/or affected. 
  • The Court thus held that considering the statement of object and reasons of amendment in Section 148 NIA and on purposive interpretation of the same it can be concluded that the amendments to Section 148 NIA are retrospective in nature.