Under Section 148 of the N.I. Act, the Appellate Court must record specific reasons if it decides to impose the 20% deposit condition or determine if the case is an exception warranting a waiver of such deposit while suspending the sentence.

NAFR

Order on Board

Heard.

1 The present petition has been filed by the petitioner under Section 528 of the BNSS, 2023 being aggrieved by the impugned order dated 31.01.2026 passed in Criminal Appeal No. 05/2026 by the Learned Second Additional Sessions Judge, Kawardha, District – Kabirdham (C.G.) whereby the learned Sessions Court has imposed a condition of depositing 20% (Rs. 8,00,000/-) of the compensation/fine amount within 60 days while suspending the execution of the judgment dated 01.01.2026 on an application preferred under Section 430 of BNSS, 2023.

Digitally signed by HEERAHEERA LAL LAL SAHU SAHU D 20 a 2 te 6 : .04.07 16:38:09 +0530

2 Brief facts of the case are that the respondent/complainant filed a case under Section 138 of N.I. Act against the petitioner before the learned Judicial Magistrate First Class, Pandariya, District – Kabirdham (C.G.). The learned trial Court after taking into consideration the facts and circumstances of the case and evidence adduced in the case passed the judgment dated 01.01.2026 and convicted the present petitioner and sentenced him to undergo S.I. for 1 year and directed to pay a compensation of Rs. 40,00,000/- under Section 357(3) of Cr.P.C. with default stipulation of three months S.I.

3 Being aggrieved by the aforesaid judgment/order the petitioner preferred a Criminal Appeal under Section 415 of BNSS, 2023 before the Learned appellate Court along with an application under Section 430 of BNSS, 2023 for suspension of execution of judgment/order dated 01.01.2026 which got allowed with a condition that petitioner shall deposit 20% (Rs. 8,00,000/-) of the compensation amount within 60 days while suspending the execution of the judgment/order dated 01.01.2026.

4 Learned counsel for the petitioner contended that the word 'may' has been used in Section 148 of the N.I. Act an the Appellate Court has used discretion but has not given any reason for the same. The learned appellate court has committed grave error while passing the impugned order dated 31.01.2026 and has wrongly imposed a condition of depositing 20% of the compensation amount while suspending the execution of order dated 01.01.2026. The learned Appellate court has without following the provisions of the Code of Criminal Procedure, 1973 and without considering the facts material available on record passed the impugned order, hence it is liable to be quashed.

5 Since the issue before this Court hinges upon the interpretation of Section 148 of the N.I. Act, which was subsequently incorporated to the N.I. Act vide the Negotiable Instruments (Amendment) Act, 2018 (Act No. 20 of 2018), the relevant part thereof is reproduced hereunder:-

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………"

(2)….. (3)…..

Provided that …...]

6 Hon’ble Supreme Court in the matter of Jamboo Bhandari vs. M.P. State Industrial Development Corporation Ltd. & Ors²(2023) 10 SCC 446 passed in Criminal Appeal No. 2741 of 2023 (@ SLP (Crl.) No. 4927 of 2023) on 04.09.2023 held as under:

“7. Therefore, when Appellate Court considers the prayer under Section 389 of the Cr.P.C. of an accused who has been convicted for offence under Section 138 of the N.I. Act, it is always open for the Appellate Court to consider whether it is an exceptional case which warrants grant of suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount. As stated earlier, if the Appellate Court comes to the conclusion that it is an exceptional case, the reasons for coming to the said conclusion must be recorded.”

7 The Hon’ble Supreme Court in the matter of Muskan Enterprises & Anr. vs. State of Punjab & Anr.³2024 SCC OnLine SC