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Upholds 20% Under Section 148 NI Act Despite Repeal
In a decisive ruling that reinforces the continued enforceability of Section 148 of the , the has held that the repeal of the 2018 Amendment Act does not extinguish the requirement for a 20% in . Justice Anil Kumar Upman dismissed four connected petitions filed by and its director Deepak Kumar, who had challenged orders of the , directing them to deposit 20% of the compensation awarded by the trial court.
The Dispute and the Deposit Order
The case arose from a longstanding commercial relationship between the petitioners and respondent Baljeet Singh, involving real estate and project development. Cheques issued as security in connection with a Memorandum of Understanding for the "Royal Square" project in Neemrana were dishonoured, leading to multiple complaints under . The trial court convicted the petitioners, sentencing them to one year imprisonment and awarding compensation totalling over ₹11.57 crore across four cases.
Aggrieved, the petitioners appealed and sought . During the appeal, the respondent moved an application under , seeking a direction for deposit of 20% of the compensation. The appellate court allowed the application, ordering the petitioners to deposit amounts ranging from ₹56.80 lakh to ₹61.06 lakh per case.
The Repeal Argument: A Dead End?
The petitioners’ primary contention was that —introduced by the —had ceased to exist after the , repealed the 2018 amendment. They argued that the appellate court could no longer invoke Section 148 to mandate a .
The court, however, rejected this argument emphatically. Relying on the Supreme Court’s decision in and earlier authorities including , the High Court clarified that once an amendment is incorporated into the parent Act, it becomes an integral part of the legislation. The subsequent repeal of the amending Act merely removes the amending statute as an independent measure—it does not undo the amendments already embedded in the principal enactment.
The court also invoked , which specifically preserves amendments made by a repealed enactment unless a different intention appears. As no such intention was evident, the court held that Section 148 remains fully in force.
No to Waive Deposit
The petitioners further argued that the direction to deposit 20% of the compensation imposed an , warranting an exception under the principles laid down in , where the Supreme Court held that the word “may” in Section 148 preserves to waive the deposit in exceptional cases.
The High Court noted that the petitioners had not established any . Significantly, petitioner No.2 (Deepak Kumar) had admitted in cross-examination that he owned two companies with assets exceeding ₹100 crore. The court observed that the mere plea of , without more, does not constitute an exceptional circumstance justifying a departure from the normal rule.
The court also found that the appellate court’s orders were well-reasoned and had considered all relevant aspects, including the petitioners’ financial capacity. The impugned orders, therefore, did not suffer from any or .
Key Observations
The judgment emphasised the settled principle that “an amendment once incorporated into the parent Act, the amendment becomes a part thereof and derives its force from the parent legislation. Consequently, repeal of the amending Act merely brings the amending enactment to an end as an independent legislative measure; it does not efface the amendments already incorporated into the parent Act.”
On the question of , the court observed that “the contention advanced by counsel for the petitioner, that the direction to deposit 20% of the compensation would cause or result in cannot by itself be accepted as constituting an exceptional circumstance.”
The Court’s Decision
Dismissing all four petitions, the upheld the appellate court’s orders directing the of 20% of the compensation. The court, however, directed the appellate court to expedite the hearing of the appeals and conclude them within three months. The ruling reinforces the continuing validity of and clarifies that the repeal of the amending Act has no bearing on its enforceability, providing clarity for countless pending cheque bounce appeals across the country.
