Deposit-linked suspension of sentence in cheque dishonour cases upheld as a lawful condition under appellate powers.

In a Section 138 NI Act prosecution, the appellate court may impose reasonable conditions while suspending sentence under Section 389 CrPC, including a requirement to deposit part of the compensation amount. The Court treated cheque dishonour liability as criminal liability arising by legal fiction, while recognising the complainant's entitlement to recovery within a reasonable time. Relying on prior authority approving deposit-linked suspension orders in cheque dishonour cases, it held that directing deposit of 25% of the compensation amount was lawful and not improper; the writ petition was dismissed.

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Issues: Whether the appellate court could validly impose a condition requiring deposit of a portion of the compensation amount while suspending the sentence in a prosecution under Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The Court held that the statutory scheme of the Negotiable Instruments Act, 1881 treats the transaction as one giving rise to criminal liability by legal fiction, while the complainant remains entitled to recovery within a reasonable time. In that context, the appellate court's power to suspend execution of sentence under Section 389 of the Code of Criminal Procedure, 1973 includes authority to impose reasonable conditions. Reliance was placed on prior decisions upholding deposit-linked suspension orders in cheque dishonour matters, including the permissibility of requiring part-payment or deposit as a condition for suspension of sentence pending appeal.

Conclusion: The condition directing deposit of 25% of the compensation amount was held to be lawful and not improper, and the writ petition was dismissed.

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