IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 09.04.2026 Jaspal Singh ..... Petitioner versus S.D. Enterprises .....Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BHARDWAJ Present: Ms. Navjot Kaur, Advocate for Mr. B.S. Bhalla, Advocate for the petitioners.

RAJESH BHARDWAJ , J. (ORAL)

1. Present petition has been filed praying for setting aside the impugned order dated 16.03.2026 passed by the learned Additional Sessions Judge, Amritsar in CRA-170 of 16.03.2026 wherein while entertaining the appeal of the petitioner, the learned Appellate Court has directed the petitioner to deposit 20% of the compensation amount awarded by the learned trial Court.

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’). She has submitted that the petitioner was convicted by the learned Judicial Magistrate First Class, Amritsar under Section 138 of the Act vide judgment dated 18.02.2026 and sentenced to undergo rigorous imprisonment for a period of 01 year and was ordered to pay compensation of Rs.24,20,000/- to the complainant vide order dated 18.02.2026. She has further submitted that against the judgment/order dated 18.02.2026, the petitioner filed an appeal before the Court of learned Additional Sessions Judge, Amritsar and the learned Appellate Court vide its impugned order dated 16.03.2026 suspended the sentence of the petitioner subject to deposit of 20% of the total compensation amount. She 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 16.03.2026. However, she 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 are statutory rights that cannot be subjected to the deposit. Given the above, the legislatures’ dominant purpose h