The court emphasized that mandatory deposit provisions under Section 148 may hinder access to justice, directing prompt appeals hearings for those unable to comply due to financial constraints.

JUDGMENT :

RAJESH BHARDWAJ, J.

1. Present petition has been filed praying for quashing of impugned order dated 12.07.2024 passed by learned Additional Sessions Judge, Fazilka in CRA No.185 of 2024 arising out of judgment and order dated 14/15.06.2024 arising out of Crl. Complaint bearing NACT-277-2018, under Section 138 of Negotiable Instruments Act, 1881 vide which the sentence awarded to the petitioner by ld. Judicial Magistrate First Class, Sirsa has been suspended with a direction to the petitioner to deposit 20% of compensation amount.

2. Learned counsel for the petitioner has submitted that the petitioner was prosecuted in a complaint filed under Section 138 of the Negotiable Instruments Act (for short ‘the Act’). He has submitted that the petitioner was convicted by the learned Judicial Magistrate First Class, Sirsa under of the Act vide judgment dated 14/15.06.2024 and sentenced to undergo simple imprisonment for a period of 01 year and was ordered to pay compensation to the tune of Rs.7,00,000/- to the complainant. He has further submitted that against the order dated 14/15.06.2024, the petitioner filed an appeal before the Court of learned Additional Sessions Judge, Sirsa and the learned Appellate Court vide its impugned order dated 12.07.2024 (Annexure P-3) suspended the sentence of the petitioner subject to deposit of 20% of the total compensation amount. He has submitted that in view of Section 148 of the Negotiable Instruments Act, 1881, automatic deposit of 10 % of the compensation amount at the appellate stage, is not mandatory. However, due to financial constraints, the petitioner failed to comply with the order dated 12.07.2024. However, he has submitted that Hon’ble the Division Bench of this Court in the case of M/s Coromandel International Limited vs. Shri Ambica Sales Corporation , in CRM-M-7799-2025 decided on 24.09.2025 has dealt with the issue involved in the present petition and has observed as under:-

“75. The legislative sanction given to an Appellate Court to direct an Appellant who has challenged the conviction, sentence, and compensation amount, by filing an appeal, to deposit at least 20% of the compensation amount under Section 148 of the Negotiable Instruments Act, 1881, miserably fails on the proportionality test. The provision of Section 148 is based on proclivities and thus arbitrary; on the contrary, as per the literal and practical meaning, it does not authorize the Appellate Court to suspend the sentence by mandatorily imposing a condition of deposit. The purpose Section 148 intended to achieve was to ensure that at least 20% of the compensation amount is handed over to the holder of the cheque whose debt or other liability amount was withheld due to the dishonor of the cheque. However, due to ambiguous drafting because of the absence of clear procedures for quick recovery, e.g., freezing bank accounts to the extent of the deposit, attachment of property, etc., has led to the recovery of the deposits by imposition of conditions while suspending the sentence in a bailable offence. Furthermore, as per Section 148 of the NI Act, the only individual who can be compelled to deposit is the person who issued the cheque in his personal liability. For corporate entities, signing and issuing a cheque is a ministerial act; the signatory is often an employee working for the company, with a limited liability partnership, association, body, or firm, and none of these can be forced to deposit due to vicarious liability, not personal liability. Additionally, suspending the sentence based on the deposit does not affect juristic persons because they cannot be imprisoned and thus cannot seek a suspension of sentence or appeal, as these