2022 (6) TMI 1306 - HC - Indian Laws

Court rules in favor of petitioner, enforces retrospective amendment to Negotiable Instruments Act. Deposit requirements highlighted.

SYED ISHRATHULLA HUSSAINI Versus MR. NOOR AHMED N.M.

The Court ruled in favor of the petitioner, emphasizing the retrospective application of the amendment to Section 148 of the Negotiable Instruments Act, ... Dishonor of Cheque - seeking suspension of sentence and deposit of only 10% of the amount awarded - Section 148 of NI Act - HELD THAT:- In the light of the judgment of the Apex Court in SURINDER SINGH DESWAL @ COL. S.S. DESWAL AND OTHERS VERUS VIRENDER GANDHI AND ORS. [2019 (5) TMI 1626 - SUPREME COURT] holding that amendment to Section 148 of the Act was retrospective and would become applicable against the order of conviction and suspension of sentence even if the complaints were filed prior to the amendment i.e., prior to 01-09-2018, the order that rejects the prayer of the petitioner would fall foul of the judgment rendered by the Apex Court in the aforesaid case. The reliance that is placed by the learned Sessions Judge to hold that the amendment is prospective in the case of G.J.RAJA v. TEJRAJ SURANA [2019 (8) TMI 91 - SUPREME COURT] was concerning Section 143A of the Act which was also amended by the very same amending Act. Section 143A which directs payment of interim compensation to the complainant is held to be prospective. There was no obfuscation for the learned Sessions Judge in interpreting the amendment qua Section 148 of the Act. But, the learned Sessions Judge appears to have generated one. Petition allowed. Issues Involved:1. Retrospective application of Section 148 of the Negotiable Instruments Act, 1881.2. Discretion of the Appellate Court in directing the deposit amount under Section 148.3. Interpretation of the word 'may' in Section 148 as 'shall'.4. Validity of the Sessions Judge's order directing a 10% deposit contrary to the statutory minimum of 20%.Detailed Analysis:1. Retrospective Application of Section 148 of the Negotiable Instruments Act, 1881:The petitioner contended that the amendment to Section 148 of the Act, which came into effect on 01-09-2018, has retrospective effect and should apply to cases filed prior to this date. The respondent argued that the amendment is prospective and should not affect transactions that occurred before the amendment. The Court referenced the Supreme Court's decision in *Surinder Singh Deswal v. Virender Gandhi* (2019) 11 SCC 341, which held that the amendment to Section 148 is retrospective and applies to appeals against convictions even if the complaints were filed before the amendment. This interpretation ensures that the purpose of the amendment—to prevent delay tactics by unscrupulous drawers—was not frustrated.2. Discretion of the Appellate Court in Directing the Deposit Amount under Section 148:The Court analyzed Section 148 of the Act, which empowers the Appellate Court to order the appellant to deposit a minimum of 20% of the fine or compensation awarded by the trial Court. The petitioner argued that the Sessions Judge's order directing a 10% deposit was contrary to the statute. The Court concluded that the Appellate Court does not have the discretion to reduce this minimum amount and must adhere to the statutory requirement of a 20% deposit.3. Interpretation of the Word 'May' in Section 148 as 'Shall':The Court interpreted the word 'may' in Section 148 as 'shall,' indicating that the statute mandates a minimum deposit of 20% and does not leave room for judicial discretion to reduce this amount. This interpretation aligns with the legislative intent to ensure speedy disposal of cheque dishonor cases and to prevent misuse of the appellate process by convicted individuals.4. Validity of the Sessions Judge's Order Directing a 10% Deposit Contrary to the Statutory Minimum of 20%:The Sessions Judge's order directing a 10% deposit was found to be in violation of the statutory requirement under Section 148. The Court quashed the order dated 23-12-2019 by the XIII Additional City Civil and Sessions Judge, Mayohall Unit, Bangalore, and directed the respondent to deposit a minimum of 20% of the fine or compensation as determined by the Magistrate within four weeks, excluding the amount already deposited. The Court also granted the Sessions Judge discretion to release the deposited amount to the complainant under sub-section (3) of Section 148.Conclusion:The Court allowed the writ petition, quashed the Sessions Judge's order, and mandated compliance with the statutory requirement of a 20% deposit under Section 148 of the Negotiable Instruments Act, 1881. The Court emphasized the retrospective application of the amendment and clarified that the appellate courts must adhere to the statutory minimum deposit requirements to uphold the legislative intent of preventing delays and ensuring the credibility of cheque transactions. The proceedings were directed to be concluded expeditiously within six months.