Devnarayan Sahu v. Rajesh Kumar Gupta

Mr. Palash Agrawal, Advocate None Hon'ble Shri Justice Parth Prateem Sahu Order On Board

02.09.2025

#1. Heard.

#2. This petition is filed challenging the impugned order dated 08.07.2025 passed by the learned Second Additional Session Judge, District- Balodabazar - Bhatapara, Chhattisgarh, passed in an appeal challenging the order passed by learned Magistrate in the proceedings under Section 138 of Negotiable Instruments Act, whereby the learned 2 Magistrate has imposed punishment of 06 months Simple Imprisonment with fine of Rs. 5000/-.

#3. Counsel for petitioner would submit that against the order passed by the learned Magistrate in a proceedings under Section 138 of NI Act, he preferred an appeal along with an application under Section 430 of BNSS, 2023. Learned Appellate Court taking into consideration the provisions of under Section 148 of NI Act has directed to deposit 20% of the amount as mentioned in cheques (Cheque No. 483230 for Rs. 1,00,000/- and Cheque No. 255984 for Rs. 33,207/-) upon the appellant which comes to Rs. 26,641.4/-. Appellant is not in a position to deposit such a huge amount. He also pointed out that the provisions under Section 148 of NI Act is not mandatory and, therefore, the Court without considering the provisions under Section 148 of NI Act in an appropriate manner has passed the order.

#4. I have heard learned counsel for the petitioner and also perused the impugned order which is under challenge.

#5. Perusal of the impugned order (Annexure A/01) would show that at the time of hearing, an application under Section 430 of BNSS for suspension of sentence in an appeal filed by the petitioner challenging the order under Section 138 of NI Act passed by learned Second Additional Sessions Judge, has issued a direction to deposit 20% of the cheque amount.

#6. The relevant provision under Section 148 of the Negotiable Instrument Act is extracted under for ready reference:-

#148. Power of Appellate Court to order payment pending appeal against conviction.- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), in an appeal by the drawer against conviction under Section 138, the Appellate Court may 3 order the appellant to deposit such sum which shall be a minimum of twenty per cent of the fine or compensation awarded by the trial Court: Provided that the amount payable under this sub- section shall be in addition to any interim compensation paid by the appellant under Section 143A. (2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant. (3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal: Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the appellant is acquitted, the Court shall direct the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.

#7. The provision under Section 148 would show that word “may” have been used and further it has been mentioned that it shall be minimum of 20% of the fine or compensation awarded by the trial Court . Hon’ble Supreme Court in case of Jamboo Bhandri Vs. M.P. Industrial Development Corporation reported in 2023 10 SCC 446 while considering the provision under Section 148 of NI Act has observed as under:

#4. The High Court relied upon the decision of this Court in Surinder Singh Deswal V. Virendra Gandhi. The High Court proceeded on the footing that, as this Court has interpreted the word “may” appearing in Section 148 as “shall” the relief of suspension of sentence under Section 389 CrPC can be granted only by directing the accused to deposit minimum of 20% of the compensation/fine amount.

#5. Para 8 of the decision of this Court in Surinder Singh Deshwal reads thus: (SCC p. 350) “8. Now so far as the submission on behalf of the appellants that even considering the language used in Section 148 NI Act as amended, the appellate court “may” 4 order the appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court and the word used is not “shall” and therefore the discretion is vested with the first appellate court to direct the appellant-accused to deposit such sum, and the appellate court has construed it as mandatory, which according to the learned Senior Advocate for the appellants would be contrary to the amended Section 148 NI Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 NI Act, though it is true that in the amended Section 148 NI Act, though it is generally to be construed as a “rule” or “shall” and not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned. Therefore amended Section 148 NI Act confers power upon the appellate court to pass an order pending appeal to direct the appellant-accused to deposit the sum which shall not be less than 20% of the fine or compensation either on an application filed by the original complainant or even on the application filed by the appellant-accused under Section 389 CrPC to suspend the sentence. The aforesaid is required to be construed considering the fact that as per the amended Section 148 NI Act, a minimum of 20% of the fine or compensation awarded by the trial court is directed to be deposited and that such amount is to be deposited within a period of 60 days from the date of the order, or within such further period not exceeding 30 days as may be directed by the appellate court for sufficient cause shown by the appellant. Therefore, if amended Section 148 NI Act is purposively interpreted in such a manner it would serve the Objects and Reasons of not only amendment in Section 148 NI Act, but also Section 138 NI Act. The Negotiable Instruments Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating tot the offence of the dishonour of cheques. So as to see that due to delay tactics by the unscrupulous drawers of the dishonored cheques due to easy filing of the appeals and obtaining stay in the proceedings, an injustice was caused to the payee of a dishonored cheque who has to spend considerable time and resource in the court proceedings to realize the value of the cheque and having observed that such delay has compromised the sanctity of the cheque transactions, Parliament has thought it fit to amend Section 148 NI Act. Therefore, such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 NI Act and also Section 138 NI Act.”

#6. What is held by this Court is that a purposive interpretation should be made of Section 148 NI Act. Hence, normally, the appellate court will be justified in imposing the condition of 5 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.

#8. Yet in another case of Rakesh Ranjan Shrivastava Vs. State of Jharkhand (2024) 4 SCC 419, Hon’ble Supreme Court while considering the word “may” used in provision under Section 143-A of NI Act has observed as under.

#19. Considering the drastic consequences of exercising the power under Section 1143-A and that also before the finding of the guilt is recorded in the trial, the word “may” used in the provision cannot be construed as “shall”. The provision will have to be held as directory and not mandatory. Hence, we have no manner of doubt that the word “may” used in Section 143-A, cannot be construed or interpreted as “shall”. Therefore, the power under sub- section (1) of Section 143-A is discretionary.

#20. Even sub-section (1) of Section 148 uses the word “may”. In Surinder Singh Deswal Vs. Virendra Gandhi, this Court after considering the provisions of Section 148, held that the word “may” used therein will have to be generally construed as “rule” or “shall”. It was further observed that when the appellate Court decides not to direct the deposit by the accused, it must record the reasons. After considering the said decision in Surinder Singh Deswal, this Court in Jamboo Bhandari Vs. M.P. SIDC Ltd, in para 6, held thus:(SCC p.449) “6. What is held by this Court is that a purposive interpretation should be made of Section 148 NI Act. Hence, normally, the 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.”

#9. From the aforementioned decision, it is apparent that the Hon’ble Supreme Court has interpreted the use of word “may” in the provision of under Section 143-A and Section 148 of the NI Act and, it is held that 6 the Court can use its discretion in appropriate case and if satisfied that the condition of deposit of 20% will be unjust and such a condition will amount to deprivation of right of appeal of the appellant exception can be made for the reasons specifically recorded.

#10. In the case at hand, learned Trial Court has not considered the grounds/reasons as assigned by appellant(therein) seeking relaxation from deposit of 20% of the cheque amount under provisions of Section 148 of NI Act and, therefore, in the opinion of this Court, impugned order dated 08.07.2025 is not sustainable. Accordingly, it is set aside and the application is restored to the file of appeal pending before the Appellate Court with a direction to Appellate Court to consider and decide the application under Section 430 of BNSS afresh, after giving an opportunity of hearing to the appellant (therein)/petitioner (herein), keeping in mind the principles laid down by Hon’ble Supreme Court in above cases.

#11. Petitioner is directed to appear before the Court on the next date fixed to make his submission on application of suspension of sentence.

#12. In view of the above, the criminal miscellaneous petition is allowed to the extent as indicated above. sd/- (Parth Prateem Sahu) Judge alfiza