2024 (4) TMI 668 - HC - Indian Laws

Appellate court erred requiring full fine deposit instead of minimum twenty percent under Sections 148(1) and 148(2)

The Allahabad HC disposed of a petition concerning dishonour of cheque bail conditions under the Negotiable Instruments Act, 1881. The appellate court had ... Dishonour of Cheque - Grant of Bail - Mandate to deposit of a minimum of twenty percent of the fine or compensation awarded by the trial court - failure to consider the Statutory Provisions as enshrined U/S 148(1) & 148 (2) of NI Act 1881 - HELD THAT:- In the instant case, the Appellate court although vide order dated 29.02.2024 had admitted the appeal and also allowed the Bail Application moved by the appellant/petitioner but by the same order despite admitting the appeal preferred by the appellant/petitioner had erroneously rejected the stay and operation of the impugned order dated 16.02.2024 passed by the trial court and thereby, rejected the stay application (Paper No.5B) and further directed him to deposit amount of fine imposed by the trial court within a period of ten days' from the date of the order and also provided that in case of non-deposition of fine by the appellant/petitioner, the order of granting bail to the appellant/petitioner shall stand automatically cancelled, thus, the appellate court while passing the impugned order dated 29.02.2024 by which it has rejected to stay the operation of the order dated 16.02.2024 passed by the trial court has failed to consider the Statutory Provisions as enshrined under Section 148(1) and 148(2) of the Negotiable Instrument Act, 1881, which resulted in miscarriage of justice. This Court finds that the Appellate Court has erred in law while rejecting the stay application of the appellant/petitioner, by which it was prayed by the appellant/petitioner to stay the fine of Rs.4,00,000/- imposed by the trial court while convicting him under Section 138 of the Negotiable Instruments Act, 1881 till the disposal of the appeal preferred by the appellant/petitioner before the Appellate Court. Petition disposed off. Issues Involved:1. Legality of the trial court's conviction and sentencing.2. Appellate court's refusal to stay the trial court's order.3. Application of Section 148 of the Negotiable Instruments Act, 1881.Summary:Issue 1: Legality of the trial court's conviction and sentencingThe petitioner was convicted by the First Additional Chief Judicial Magistrate, Ayodhya, u/s 138 of the Negotiable Instruments Act, 1881, and sentenced to three months of simple imprisonment with a fine of Rs. 4,00,000/-. The trial court ordered that Rs. 3,90,000/- be given to the complainant as damages u/s 357 of Cr.P.C, and the remaining Rs. 10,000/- be deposited in court. In case of non-deposition, the petitioner would serve an additional month of imprisonment.Issue 2: Appellate court's refusal to stay the trial court's orderThe petitioner filed a statutory appeal u/s 374 Cr.P.C. and moved applications for bail and stay of the trial court's order. The appellate court admitted the appeal and granted bail but declined to stay the operation of the trial court's order. The appellate court directed the petitioner to deposit the fine within ten days, failing which the bail would be automatically cancelled.Issue 3: Application of Section 148 of the Negotiable Instruments Act, 1881The petitioner argued that the appellate court failed to consider the statutory provisions u/s 148(1) & 148(2) of the Negotiable Instruments Act, 1881, which resulted in a miscarriage of justice. Section 148(1) mandates the appellant to deposit a minimum of twenty percent of the fine or compensation awarded by the trial court during the appeal. The appellate court's order was deemed punitive and against settled legal principles, as it did not grant interim relief during the pendency of the appeal.Court's Observations:The court referred to the Supreme Court's judgments in Surinder Singh Deswal Alias Colonel S.S. Deswal and Others vs. Virender Gandhi and Jamboo Bhandari vs. Madhya Pradesh State Industrial Development Corporation Limited and Others, which emphasized the mandatory nature of Section 148 and the need for appellate courts to ensure speedy disposal of cases related to cheque dishonour.Final Decision:The High Court found that the appellate court erred in law by rejecting the stay application. The impugned order dated 29.02.2024 was modified, directing the petitioner to deposit 20% of the fine within sixty days from the date of this judgment. The bail granted by the appellate court would continue until the disposal of the appeal. If the petitioner failed to deposit the amount within the stipulated period, the bail would be automatically cancelled.The petition was disposed of with these observations, and a copy of the judgment was directed to be communicated to the appellate court for immediate compliance.