176 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 22.12.2025 Ranjan Bhatia ..... Petitioner Versus Manoj .......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BHARDWAJ Present: Mr.Kamal Chaudhary, Advocate, for the petitioner.

Rajesh Bhardwaj, J. (ORAL)

1. Prayer in the present petition is for quashing of order dated 18.09.2025 passed by learned Addl. Sessions Judge, Faridabad directing the petitioner to deposit 20% of compensation amount in CRA No.981 of 2025, arising out of complaint No.COMA No.6236 of 2019 dated 01.10.2019 under Section 138 of the Negotiable Instruments Act, 1881.

2. Learned counsel for the petitioner has stated that the petitioner was prosecuted in a complaint under Section 138 of the Act and he was convicted by learned Judicial Magistrate First Class, Faridabad, under Section 138 of the Act, vide judgment dated 06.08.2025 and sentenced to undergo imprisonment for four months and was ordered to pay compensation to the tune of Rs.4,00,000/- to the complainant vide order dated 13.08.2025. It is further submitted that against the orders dated 06.08.2025 and 13.08.2025, the petitioner filed an appeal before the Court of learned Additional Sessions Judge at Faridabad and learned Appellate Court vide its impugned order dated 18.09.2025 (Annexure P-3) suspended the sentence of petitioner subject to deposit of 20% of the 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. He has further submitted that Hon’ble 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 24.09.20245 has dealt with the issue involved in the present petition and the 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 are statutory rights that cannot be subjected to the deposit. Given the above, the legislatures’ dominant purpose has failed miserably on two counts; first it does not impact juristic persons, and second, individuals whose cheques are often security cheques taken by the money lenders, and these individuals face forced recoveries, which may discourage some from even ch