2022 (3) TMI 684 - HC - Indian Laws

Deposit Requirement Upheld in Section 138 Appeal

The court upheld the Appellate Court's order requiring the petitioner to deposit 20% of the fine amount during the pendency of an appeal against a ... Dishonor of cheque - quantum of deposit of fine - it is argued that petitioner that Section 148 of the Act uses the expression “may” and, therefore, the learned Appellate Court was not justified in imposing such an onerous condition particularly when the amount of fine was exorbitant and there was a discretion with the Appellate Court to not direct the petitioner to deposit such amount - whether the usage of word ‘may’ in section 148 provides a discretion to the Court to impose or not to impose the condition of depositing minimum 20% of the fine amount, is required to be dilated upon at some length? - HELD THAT:- If section 148 is regarded to be discretionary, to the effect that the Court may do away with the deposit, then, the Court would render defunct the very requirement of deposit pendente lite appeal. Because as per section 148 of the Act, such amount cannot be less than 20% of the fine amount and any other percentage of amount (being less than 20%) would be in direct contravention of the express provision which postulates that minimum of 20% of fine amount has to be deposited - Because not directing any amount to be deposited would be tantamount to depositing 0% of the fine amount and the same being less than 20% of the fine amount is impermissible as per the mandate of section 148 of the Act. Had the legislature intended to make the exercise of power under section 148 discretionary, it would not have imposed the duty upon the Court to direct deposit of a minimum 20% of fine amount. In the opinion of this Court, if modal auxiliary verbs or imperative words such as ‘may’, ‘should’ etc. are followed by the provision/expression prescribing lower bar/limit such as ‘minimum’, ‘not below’, etc. then, these words (‘may’, ‘should’, etc.) are required to be read as ‘shall’. Similarly, if the word ‘shall’ is followed by provision/words providing upper cap/upper limit by usage of words ‘maximum’ or ‘not above’, etc. then, the expression ‘may’ or ‘shall’ confer the discretion upon the Court/Authorities and hence, the words ‘may’ or ‘shall’ would be read as ‘may’. A purposive interpretation of section 148 of the Act is necessary and the same would warrant that the expression ‘may’ as contained in section 148 of the Act be read as ‘shall’. Read this way, the provision would mean that the Court ‘shall’ order the convict to pay minimum of 20% amount of fine in an appeal against conviction under section 138 of the Act and resultantly, the plight of the drawee would be eased (as intended by the legislature while enacting section 148 of the Act) which otherwise would have been aggravated due to prolonged judicial proceedings. This Court does not find any error or infirmity in the impugned order - Petition dismissed. Issues Involved:1. Legitimacy of the Appellate Court's order requiring the petitioner to deposit 20% of the fine amount.2. Interpretation of the term 'may' in Section 148 of the Negotiable Instruments Act, 1881.3. Comparison with the Supreme Court judgment in the case of Dilip Singh vs. State of Madhya Pradesh & Anr.Issue-wise Detailed Analysis:1. Legitimacy of the Appellate Court's Order:The petitioner challenged the order dated 08.11.2021 by the Additional Sessions Judge, Bilara, Jodhpur, which required the petitioner to deposit 20% of the fine amount (Rs. 2,65,800 out of Rs. 13,29,000) and furnish a bail bond of Rs. 30,000. The petitioner argued that this condition infringed upon his right to liberty. The court examined Section 148 of the Negotiable Instruments Act, 1881, which mandates the deposit of a minimum of 20% of the fine or compensation awarded by the trial court during the pendency of an appeal against a conviction under Section 138 of the Act. The court concluded that the Appellate Court's order was in accordance with the statutory requirement and did not find any error or infirmity in the order.2. Interpretation of 'may' in Section 148 of the Negotiable Instruments Act:The petitioner contended that the term 'may' in Section 148 implies discretion for the Appellate Court to decide whether or not to impose the condition of depositing 20% of the fine amount. The court analyzed the statutory language and legislative intent behind Section 148, noting that the term 'may' is followed by 'sum which shall be a minimum of twenty percent of the fine.' The court emphasized that if 'may' were interpreted as discretionary, it would render the mandatory minimum deposit requirement redundant. The court referred to various judgments, including Bachahan Devi & Ors. vs. Nagar Nigam, Gorakhpur & Ors and The Official Liquidator vs. Dharti Dhan (P) Ltd., to highlight that 'may' can be interpreted as 'shall' if it serves the legislative intent and purpose. The court concluded that 'may' in Section 148 should be read as 'shall,' making the deposit of a minimum of 20% of the fine amount mandatory.3. Comparison with the Supreme Court Judgment in Dilip Singh vs. State of Madhya Pradesh & Anr:The petitioner relied on the Supreme Court judgment in Dilip Singh, where the court held that imposing a condition of deposit for pre-arrest bail under Section 438 of the Code of Criminal Procedure was akin to recovery in a civil suit. The court distinguished the present case from Dilip Singh, noting that the latter involved a pre-arrest bail application under Section 438, whereas the present case involved a statutory requirement under Section 148 of the Negotiable Instruments Act for a deposit during the pendency of an appeal against a conviction under Section 138. The court found the reliance on Dilip Singh misplaced and upheld the Appellate Court's order.Conclusion:The court dismissed the petition, affirming the Appellate Court's order requiring the petitioner to deposit 20% of the fine amount. The petitioner was given liberty to deposit the amount by 31.03.2022, failing which legal consequences would follow. The stay application was also dismissed.