Appellate Court Has Discretion Not To Order The Deposit Of 20% Of The Amount U/S. 148 NI Act In Appropriate & Exceptional Cases: SC

The Court quashed the Order of the Punjab and Haryana High Court which dismissed a Petition under Section 482 of the CrPC filed by Muskan Enterprises (Appellant). The Court remitted the matter to the Sessions Court for reconsideration of the deposit condition under Section 148 of the Negotiable Instruments Act (N.I. Act), 1881.

The Bench of Justice Dipankar Datta and Justice Prashant Kumar Mishra observed, “It would amount to a travesty of justice if exercise of discretion, which is permitted by the legislature and could indeed be called for in situations such as these pointed out above, or in any other appropriate situation, is not permitted to be exercised by the Appellate Court by a judicial interpretation of ‘may’ being read as ‘shall’ in sub-section (1) of Section 148 and the aggrieved appellant is compelled to make a deposit of minimum 20% of the fine or compensation awarded by the trial court, notwithstanding any opinion that the Appellate Court might have formed at the stage of ordering deposit as regards invalidity of the conviction and sentence under challenge on any valid ground.”

Advocate Shumaila Altaf represented the Appellants, while AAG Mohd Irshad appeared for the Respondents.

The Appellants were convicted under Section 138 of the N.I. Act in a cheque bounce case by the Trial Court.

While admitting the Appeal against the same, the Sessions Court suspended the sentence and granted bail but directed the Appellants to deposit 20% of the compensation within 60 days. The Appellants challenged the deposit condition before the High Court under Section 482 of the CrPC. However, the Petition was dismissed as withdrawn after the Supreme Court’s judgment in Surinder Singh Deswal v. Virender Gandhi (2019) held the deposit condition mandatory under Section 148 of the N.I. Act.

Subsequently, the Supreme Court delivered its judgment in Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Ltd. (2023), clarifying that Appellate Courts have discretion to waive the deposit condition in exceptional cases. Relying on this decision, the Appellants filed a second Petition under Section 482 of the CrPC, which the High Court also dismissed.

The Supreme Court stated that the “constricted view” taken by the High Court to hold that the Appellants were required to obtain the leave of the Judge who had dismissed the earlier Petition prior to filing the subsequent Petition was “clearly untenable and not warranted in law.”

The Court referred to its decision in Jamboo Bhandari (Supra), wherein a Co-ordinate Bench held that “a purposive interpretation should be made of Section 148 of the NI Act. Hence, normally, Appellate Court will be justified in imposing the condition of deposit as provided in Section 148. However, in a case where the Appellate Court is satisfied that the condition of deposit of 20% will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded.”

Consequently, the Court held, “In such view of the matter and for the foregoing reasons, we are unhesitatingly of the view that the impugned order of the High Court declining to entertain the subsequent petition under Section 482, Cr. PC of the appellants is unsustainable in law. However, we do not consider the need to remit the matter to the High Court for consideration of the subsequent petition under Section 482, Cr. PC; instead, in our view, justice would be sufficiently served if the Sessions Court re-examines the issue of deposit being required to be made by the appellants in the light of the law laid down in Jamboo Bhandari (supra).”

Accordingly, the Supreme Court allowed the Appeal.

Cause Title: Muskan Enterprises & Anr. v. The State Of Punjab & Anr. (Neutral Citation: 2024 INSC 1046)

Appearance:

Appellant: Advocates Shumaila Altaf, Harvinder Singh Mann and Sakib Altaf; AOR Abhimanue Shrestha

Respondent: AAG Mohd Irshad; AOR Karan Sharma and Nishant Bishnoi; Advocates Dilpreet Singh Gandhi, Srishti Prabhakar and R. C. Goutam

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