2020 (5) TMI 313 - HC - Indian Laws

Court Upholds Deposit Order in Cheque Dishonor Case Under Amended Law, Emphasizes Credibility

The court dismissed the revision, upholding the appellate court's order to deposit 30% of the fine/compensation, citing the applicability of the amended ... Dishonor of Cheque - stay of fine - effect of amendment in Section 148 of the N.I. Act - HELD THAT:- With the objective of reducing delay in proceedings pertaining to dishonour of cheques and to provide interim relief to the payee in such cases, the Negotiable Instruments (Amendment) Bill of 2017 was tabled before the Lok Sabha. In the wake of current scenario, The Negotiable Instruments (Amendment) Act, 2018 passed by both the Houses (Lok Sabha on July 23, 2018; Rajya Sabha on July 26, 2018; and notified on August 02, 2018) has come as a breather for the aggrieved Drawees. Nonpayment because of cheque dishonor contribute majorly towards business inconsistencies leading not only to an cash flow, but also chain of inconveniences/incalculable losses forced upon them involuntarily - Further, delayed justice owing to lengthy court procedures add to the woes. Therefore, the Amendment Act aims to give potency in enforcing quick relief and to act as a deterrent for future cases by enhancing credibility of cheques as a negotiable instrument. The Drawer of the cheque is made liable to prosecution and partial payment upon dishonour of the cheque implying that the provisions are punitive as well as compensatory, that is, the punitive aspect leading to compensation. It can be ascertained that the Legislature has made a remarkable move by bringing this amendment in the interest of speedy justice. Thus, the applicability of the provision under Section 148 of the N.I. Act is mandatory. Deposit of fine not less than 20% is condition precedent for admission of appeal and provision under Section 357 (2) Cr.P.C. are not made applicable during admissibility and pendency of appeal. Section 148 of the N.I. Act can be applied to complaint filed prior to 1.9.2018 - there are no reason to interfere with the impugned order dated 23.10.2019 passed by the appellate sessions court directing the Appellants to deposit 30% of the amount of fine/compensation pending appeals. Revision dismissed. Issues Involved:1. Legality of the conviction and sentencing under Section 138 of the Negotiable Instruments Act (N.I. Act).2. Applicability of amended Section 148 of the N.I. Act to cases filed before the amendment.3. Requirement to deposit a percentage of the fine/compensation during the pendency of appeal.4. Interpretation of Section 357(2) Cr.P.C. in relation to the stay of fine payment during appeal.Detailed Analysis:1. Legality of the Conviction and Sentencing under Section 138 of the N.I. Act:The revisionist challenged the judgment dated 25.09.2019 by filing a revision, arguing that the judgment was 'manifestly erroneous, not sustainable in law,' and that the trial court failed to appreciate the evidence properly. The revisionist contended that the execution of the cheque was not proven. However, the court noted that the revisionist had already availed the statutory remedy by filing an appeal under Section 374(3) Cr.P.C. before the Sessions Court, which was admitted on 23.10.2019. The court concluded that the revisionist cannot avail a parallel remedy through revision and, therefore, no relief could be granted regarding the first prayer to set aside the trial court's judgment.2. Applicability of Amended Section 148 of the N.I. Act to Cases Filed Before the Amendment:The revisionist argued that the amended Section 148 of the N.I. Act, which came into force on 01.09.2018, should not apply to cases where complaints were filed before the amendment. The court referred to the Hon'ble Apex Court's decision in Surinder Singh Deswal @ Col. S. S. Deswal Vs Virender Gandhi AIR 2019 SC 2956, which clarified that the amendment is procedural in nature and does not affect substantive rights. Therefore, the amended Section 148 applies to appeals filed after the amendment, even if the original complaints were filed before the amendment. The court emphasized that the amendment aims to reduce delays and provide interim relief to the payee of dishonored cheques.3. Requirement to Deposit a Percentage of the Fine/Compensation During the Pendency of Appeal:The appellate court directed the revisionist to deposit 30% of the fine/compensation awarded by the trial court as a condition for suspending the sentence under Section 389 Cr.P.C. The revisionist contended that such a requirement should not be imposed as a condition precedent for admitting the appeal. However, the court upheld the appellate court's order, stating that Section 148 of the N.I. Act mandates the deposit of a minimum of 20% of the fine/compensation during the pendency of the appeal. The court noted that this provision is intended to prevent delay tactics and ensure the payee receives interim relief.4. Interpretation of Section 357(2) Cr.P.C. in Relation to the Stay of Fine Payment During Appeal:The revisionist argued that under Section 357(2) Cr.P.C., no fine is payable until the decision of the appeal, and therefore, the appellate court should not have directed the deposit of 30% of the fine/compensation. The court referred to the Hon'ble Apex Court's interpretation in Dilip S. Dhanukar v. Kotak Mahindra Bank, which held that while the appellate court can put the appellant on terms, such terms must be reasonable and fair. However, the court concluded that the provisions of Section 357(2) Cr.P.C. do not override the mandatory requirement of Section 148 of the N.I. Act, which explicitly states that the deposit is required 'notwithstanding anything contained in the Code of Criminal Procedure.'Conclusion:The court dismissed the revision, holding that the appellate court's order directing the deposit of 30% of the fine/compensation was legal and in accordance with the amended Section 148 of the N.I. Act. The court emphasized that the amendment aims to expedite the resolution of cheque dishonor cases and provide interim relief to the payee, thereby upholding the credibility of cheque transactions. The revisionist's arguments regarding the non-applicability of the amendment and the stay of fine payment under Section 357(2) Cr.P.C. were found to be without merit.