Discretionary power of Appellate Court under Section 148 of NI Act must be exercised with reasons; financial inability can be considered for waiving mandatory deposit.

O R D E R

Aggrieved by Annexure A1 judgment passed by the Court of the Judicial First Class Magistrate (Special Maradu Cases), Kozhikode (‘Trial Court’, for short), in S.T. No. 97/2021, convicting and sentencing the petitioner for an offence under Section 138 of the Negotiable Instruments Act (‘NI Act’, for brevity), the petitioner has preferred Crl. Appeal No. 417/2025 before the Court of Session, Kozhikode (‘Appellate Court’, for short). Along with the appeal, the petitioner also filed an application to suspend the execution of the sentence of fine. However, by the impugned Annexure A3 order, the Appellate Court has suspended the execution of the sentence, subject to the condition that the petitioner deposit 20% of the cheque amount within 60 days from the date of the order. Annexure A3 order is palpably wrong and unsustainable in law. The Appellate Court has failed to give any reason in the said order as laid down by the Honourable Supreme Court in Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd ( 2023 (6) KHC 80 ) and Surinder Singh Deswal @ Col. S.S. Deswal and others v. Virendar Gandhi ( 2019 (11) SCC 341 ). Hence, the Annexure A3 order may be quashed, and the execution of the substantive sentence as well as the fine amount may be unconditionally suspended in view of the exceptional circumstances made out by the petitioner.

2. I have heard the learned counsel for the petitioner and the learned Public Prosecutor. As the Criminal Miscellaneous Case is filed challenging the order to conditionally suspending the sentence, I dispense with notice to the respondents 2 and 3.

4. The learned counsel for the petitioner submits that the petitioner is a lady. Her properties have been attached, as evidenced by Annexure A4 sale notice. The petitioner is in penury and does not have any means to deposit 20% of the fine amount, which works out to Rs. 6.6/- lakh. Although the petitioner had stated all these contentions in the memorandum of appeal, the Appellate Court has, by the cryptic Annexure A3 order, without assigning any reasons, directed the petitioner to deposit 20% of the cheque amount. Section 148 of the NI Act contemplates the remittance of the minimum of 20% of the fine or compensation awarded by the Trial Court. Therefore, there is a non-application of mind by the Appellate Court. Furthermore, the petitioner may also be given an opportunity to produce the necessary materials to substantiate that she does not have financial resources to deposit 20% of the fine amount. Hence, Annexure A3 order may be quashed.

5. In Surinder Singh Deswal’ case (supra), the Honourable Supreme Court has categorically held that the language under Section 148 of the N.I.Act is ‘may’

and not ‘shall’. Therefore, the discretion is vested with the 1st Appellate Court to decide whether 20% of the fine/compensation amount is to be deposited or waived, for suspending the execution of the sentence imposed on the accused. The said provision has to be purposefully interpreted in furtherance of the objects and reasons of the amendment under Section 148 of the N.I.Act.

6. The above view has been reiterated in Jamboo Bhandari’s case (supra) by holding that when an accused applies under Section 389 of the Cr.P.C. for suspension of sentence, he normally applies for grant of relief for suspension of sentence without condition. Therefore, when a blanket order is sought by the appellant, the Appellate Court has to consider whether the case falls within exceptional grounds. An identical view has been taken by a Division Bench of this Court in Sreenivasan P. v. Babu Raj ( 2024 (2) KHC 621 ), by holding that the Appellate Court has a discret