The requirement under Section 148 of the Negotiable Instruments Act to deposit 20% of the compensation for suspension of sentence is not absolute or mandatory; Appellate Courts must exercise discretion to waive or reduce this amount in exceptional cases to prevent the deprivation of the right of appeal.

RUPINDERJIT CHAHAL, J. (ORAL)

1. The instant petition has been filed for quashing/modification of order dated 28.11.2025 (Annexure P-2) passed by the Court of learned Additional Sessions Judge, Pathankot in CIS No. 263 of 2025 titled as ‘Vijay Kumar vs. Joginder Pal’, vide which the petitioner has been directed to deposit 20% of the amount of compensation/cheque amount within a period of 60 days.

2. Vide judgment of conviction and order on quantum of sentence dated 14.11.2025 passed by learned Judicial Magistrate Ist Class, Pathankot the petitioner was convicted and sentenced to undergo rigorous imprisonment for a period of 02 years for commission of offence punishable under Section 138 of Negotiable Instruments Act and was further directed to pay compensation to the tune of Rs.2,00,000/- (i.e. equivalent to the cheque amount) to the complainant within a period of one month, along with default mechanism. Thereafter, the petitioner preferred an appeal against the said judgment of conviction and order of sentence before the learned Additional Sessions Judge, Pathankot. The learned Appellate Court vide order dated 28.11.2025, suspended the sentence of the petitioner subject to depositing 20% of the compensation amount before the date fixed.

3. Learned counsel for the petitioner inter alia contends that the learned lower Appellate Court failed to appreciate the facts in the right perspective and imposed the condition to deposit 20% of the compensation amount and such a condition is illegal, arbitrary and in violation of the law as laid down by the Hon’ble Supreme Court.

4. Heard.

5. Hon’ble Supreme Court in Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd. & Ors., (2023) 10 SCC 446. Speaking through Justice Abhay S. Oka, has held as follows:-

"6. What is held by this Court is that a purposive interpretation should be made of Section 148 of the N.I. Act. Hence, normally, Appellate Court will be justified in imposing the condition of deposit as provided in Section 148. However, in a case where the Appellate Court is satisfied that the condition of deposit of 20% will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded.

7. Therefore, when Appellate Court considers the prayer under Section 389 of the Cr.P.C. of an petitioner 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."

6. In Coromandel International Limited v. Ambica Sales Corporation 2025 (4) RCR (Criminal) 490; division bench of this Court has held that Section 148 of the Negotiable Instruments Act, 1881 does not impose a mandatory condition of depositing 20% of compensation for suspension of sentence during appeal; exceptions can be granted with recorded reasons. The operative part is reproduced below:

"59. The offence under Section 138 of the NI Act is bailable, and when in a complaint, the summons is issued against an accused, bail is a right subject to the furnishing of bonds.

60. If the trial results in a conviction and consequent sentence, fine, and compensation, it is the free will of every convict, whether to undergo the sentence or to challenge it before the Appellate Court by filing an Appeal.

61. In the case of juristic persons such as limited liab