IMPORTANT POINT
The appellate court has discretion under Section 148 of the NI Act to impose a deposit condition, but must consider exceptions and provide reasons when waiving such conditions.

ORDER :

This Criminal Petition is filed by the petitioner/Accused, under Section 482 of Code of Criminal Procedure, 1973, for quash of the order dated 26.07.2024 in Crl.M.P.No.211 of 2024 in Crl.A.No.50 of 2024 passed by the learned III Additional District & Sessions Judge, Nandyal, Kurnool District.

2. Heard learned counsel for the petitioner and learned Assistant Public Prosecutor representing the State.

3. Learned counsel for the petitioner would submit that learned Sessions Judge in the appeal against the conviction for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 passed the impugned order dated 26.07.2024 in Crl.M.P.No.211 of 2024 under Section 389(3) Cr.P.C., directed the petitioner to deposit 20% of the compensation amount ordered by the learned Trial Judge within a period of one (01) month from the date of the order, while suspending the sentence of imprisonment awarded by the learned Magistrate. He would submit that the order of the learned Sessions Judge is not in accordance with Jamboo Bhandari v. MP State Industrial Development Corporation Ltd’s case.

4. The learned Assistant Public Prosecutor takes notice for the State and would submit that the Appellate Court has power to order the appellant to deposit such sum, which shall be a minimum of 20% of the fine or compensation amount awarded by the trial Court in an appeal against the conviction U/s.138 of the Negotiable Instruments Act, 1881.

5. Section 148 of the Negotiable Instruments Act is as under:

S. 148

Power of Appellate Court to order payment pending appeal against conviction

1. Notwithstanding anything contained in the Code of Criminal Procedure, 1973, in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit1 such sum which shall be a minimum of twenty percent of the fine or compensation awarded by the trial Court:

Provided that the amount payable under this sub-section shall be in addition to any interim compensation paid by the appellant under section 143A.

2. The amount referred to in sub-section (1) shall be deposited 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 appellant.

3. The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal:

Provided that if 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, 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.

6. The Hon’ble Supreme Court in the case of Surinder Singh Deswal @ Colonel S.S.Deswal and others, 2019 (11) SCC 341 on section 148 of Negotiable Instruments Act held as under:

“Now so far as the submission on behalf of the appellants that even considering the language used in Section 148 of the NI Act as amended, the appellate court “may” order the appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial court and the word used is not “shall” and therefore the discretion is vested with the first appellate court has construed it as mandatory, which according to the learned Senior Advocate for the appellants would be contrary to the provisions of Section 148 of the NI Act as amended is concerned, considering the amended Section 148 of the NI Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 of the NI Act, the word used is “may”, it is generally to be construed as a “rule” or “shall” and not to direct to deposit by the appellate court is an exception for which special reasons are to be