IMPORTANT POINT
The court established the nature and extent of the statutory discretion conferred on the Appellate Court under Section 148 of the N.I. Act and emphasized the requirement of furnishing reasons for the decision.

ORDER :

A.K. Jayasankaran Nambiar, J.

The above cases have been placed before us by an order of the Chief Justice pursuant to a reference order dated 20.02.2014 of a learned Single Judge of this Court. The issue referred to us concerns the interpretation of the provisions of Section 148 of the Negotiable Instruments Act, 1881 [hereinafter referred to as the “N.I. Act”] that deals with the power of an Appellate Court to order payment pending an appeal against conviction. In particular, we are called upon to clarify the nature and extent of the statutory discretion conferred on the Appellate Court, in the matter of ordering payments pending appeal against conviction under Section 138 of the N.I. Act. as also on the requirement of furnishing reasons in support of the order passed by the Appellate Court in exercise of that discretion.

2. In both the cases before us, orders passed by the Sessions Court [Appellate Court] directing deposit of a percentage of the compensation amount ordered by the trial court under Section 148 of the N.I. Act are impugned inter alia on the ground that the orders passed by the Appellate Court were not supported by any reasons. The referring Judge noticed that different perspectives had been embraced by Single Judges of this Court while comprehending the law laid down by the Supreme Court in Surinder Singh Deswal @ Col. S.S. Deswal and Others v. Virender Gandhi – [(2019) 11 SCC 341] and Jamboo Bhandari v. M.P.State Industrial Development Corporation Ltd. -[(2023) 10 SCC 446]. The different perspectives of the Single Judges of this Court are found in Ambili R. v. Sree Gokulam Chit and Finance Company (P) Ltd. and Another – [2020 (1) KHC 476] and Baiju v. State of Kerala -[2023 (7) KHC 669], and the referring Judge, while favouring the view taken in Ambili R. (supra), believed that a conflicting view had been taken in Baiju (supra) and referred the issues to be considered by this Division Bench.

3. We have heard Sri.Samsudin Panolan, the learned counsel for the petitioner as also Sri.Alex M. Thombra, the learned Public Prosecutor for the respondent State.

4. In the interests of brevity and clarity, we feel it apposite not to elaborately discuss the findings of the learned Single Judges of this Court in the decisions referred above. We feel it would suffice to merely analyse the statutory provision and express our opinion on the interpretation to be placed on the provisions of Section 148 of the N.I. Act in the light of the binding precedents of the Supreme Court in Surinder Singh Deswal and Jamboo Bhandari (supra).

5. Section 148 of the N.I. Act reads as under:

“148. Power of Appellate Court to order payment pending appeal against conviction

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent. 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 s