Court upholds quashed conviction under Section 138 NI Act, emphasizes fine deposit, non-compliance consequences

The Court upheld the orders quashing the petitioners' conviction under Section 138 of the Negotiable Instruments Act. The petitioners were directed to deposit 20% of the fine amount, failing which the suspension of their sentence was vacated. The Court rejected the waiver of the fine deposit and emphasized the mandatory nature of Section 148 NI Act. The decision aligned with the Supreme Court's stance that non-payment of the fine could lead to the vacation of the suspension of sentence. The petitioners were given a deadline to comply, failing which surrender before the Trial Court was required.

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Issues Involved:
1. Quashing/setting aside of the orders dated 01.10.2022 and 06.01.2023.
2. Waiver of payment of 20% of the fine amount under Section 148 of NI Act.
3. Legality of vacating the suspension of sentence due to non-payment of the fine amount.

Summary:

Issue 1: Quashing/setting aside of the orders dated 01.10.2022 and 06.01.2023
The petitioners sought to quash the orders dated 01.10.2022 and 06.01.2023 passed by the learned Appellate Court. The petitioners were convicted under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) and sentenced to pay a fine of Rs. 27,20,000/- by the Trial Court. The Appellate Court directed the petitioners to deposit 20% of the fine amount, which they failed to do, leading to the vacation of the suspension of their sentence.

Issue 2: Waiver of payment of 20% of the fine amount under Section 148 of NI Act
The petitioners argued for a waiver of the 20% fine deposit, citing their acquittal in a similar case. However, the Court held that the mere belief of having a good case for acquittal does not constitute "special reasons" to exempt from depositing the fine. The Court emphasized that Section 148 NI Act mandates the deposit of a minimum of 20% of the fine or compensation during the pendency of the appeal unless special reasons are recorded.

Issue 3: Legality of vacating the suspension of sentence due to non-payment of the fine amount
The Court referred to the Supreme Court's decision in Surinder Singh Deswal v. Virender Gandhi, which clarified that non-compliance with the condition of depositing the fine amount can lead to the vacation of the suspension of sentence. The Appellate Court has the authority to take appropriate action in case of non-compliance. The Court found no infirmity in the Appellate Court's order vacating the suspension of the sentence due to the petitioners' failure to deposit the 20% fine amount.

Conclusion:
The Court directed the petitioners to deposit 20% of the fine amount within 10 days, failing which they must surrender before the Trial Court. The petition was disposed of, and it was clarified that the observations made are specific to this petition and do not affect the pending appeal.

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