Repeal of 2018 Amendment Act Does Not Affect Section 148 NI Act

Source: Rajasthan High Court

Why in News?

Justice Anil Kumar Upman of the Rajasthan High Court decided A.L.D Infratech Pvt. Ltd. & Anr. v. Baljeet Singh (2026), along with connected petitions. The Court held that Section 148 of the Negotiable Instruments Act, 1881 (NI Act), which allows an Appellate Court to direct a convicted appellant to deposit at least 20% of the fine or compensation, continues to be in force despite the repeal of the 2018 Amendment Act that inserted it. The Court also held that financial hardship alone is not an exceptional circumstance for waiving the deposit. The appeal was dismissed. 

What was the Background of A.L.D Infratech Pvt. Ltd. v. Baljeet Singh (2026) Case? 

• The appellant had been convicted for the offence of cheque dishonour under the NI Act. 
• While hearing his appeal against conviction, the Appellate Court directed him to deposit 20% of the compensation awarded by the trial court under Section 148 of the NI Act. 
• The appellant challenged this order before the High Court. He argued that:  
  • Section 148 was inserted into the NI Act by the Negotiable Instruments (Amendment) Act, 2018. 
  • The 2018 Amendment Act was repealed by the Repealing and Amendment Act, 2025. 
  • Since the instrument that brought Section 148 into effect had been repealed, the provision could no longer be in force. 
• He further argued that:  
  • Section 148 uses the word "may", so the deposit is not automatic. 
  • In Jamboo Bhandari v. MP State Industrial Development Corporation Ltd. & Ors., the Supreme Court held that an exception can be made where the Appellate Court is satisfied that imposing the deposit condition would be unjust or would deprive the appellant of the right to appeal. 
  • The deposit would impose an exceptionally onerous financial burden on him, and this should be treated as an exceptional situation. 

What were the Court's Observations? 

On the effect of repeal of an amending Act: 

• The Court relied on the Supreme Court's decision in Independent Schools' Federation of India v. Union of India. There, it was held that a provision inserted into the parent Act remains on the statute book even after the amending Act is repealed. 
• It is a settled principle of statutory interpretation that once an amendment is incorporated into the parent Act, it becomes part of that Act and derives its force from the parent legislation. 
• Repeal of the amending Act only ends the amending enactment as an independent legislative measure. It does not wipe out the amendments already incorporated into the parent Act. 

On Section 6A of the General Clauses Act, 1897: 

• The Court referred to Section 6A of the General Clauses Act, which deals with the repeal of an enactment that amends another Central Act. 
• Under Section 6A, such a repeal does not affect the continuance of any amendment made by the repealed enactment. 
• Section 148 of the NI Act therefore continues to operate despite the repeal of the 2018 Amendment Act. 

On the plea of financial hardship: 

• The contention that the deposit would cause financial hardship cannot, by itself, constitute an exceptional circumstance. 
• It does not attract the exception contemplated by the Supreme Court in Jamboo Bhandari. 

Conclusion 

• Legal position: Section 148 of the NI Act remains in force despite the repeal of the Negotiable Instruments (Amendment) Act, 2018, since an amendment incorporated into the parent Act survives the repeal of the amending Act. Financial hardship alone does not justify waiving the 20% pre-deposit. 
• Outcome: The appeal was dismissed and the Appellate Court's order directing the 20% deposit was upheld.

What is Section 148 of the NI Act? 

About: 

• Section 148 of the Negotiable Instruments Act, 1881 empowers the Appellate Court to order a payment pending an appeal against conviction. 
• It was inserted by the Negotiable Instruments (Amendment) Act, 2018, which came into force on 1st September 2018. 
• Its object is to prevent drawers from using appeals as a tool to delay payment to the complainant. 

Provisions: 

• Section 148(1): In an appeal by the drawer against conviction under Section 138, the Appellate Court may order the appellant to deposit a sum which shall be a minimum of 20% of the fine or compensation awarded by the trial court. This amount is in addition to any interim compensation paid under Section 143A. 
• Section 148(2): The amount must be deposited within 60 days from the date of the order, or within a further period of up to 30 days if the appellant shows sufficient cause. 
• Section 148(3): The Appellate Court may direct the release of the deposited amount to the complainant at any time during the pendency of the appeal. 
• Proviso to Section 148(3): If the appellant is acquitted, the Court shall direct the complainant to repay the amount released, with interest at the bank rate published by the Reserve Bank of India at the beginning of the relevant financial year, within 60 days of the order, or within a further period of up to 30 days on sufficient cause.