High Court reduces fine deposit requirement from 50% to 20% in cheque dishonour appeal under Section 138

Allahabad HC modified an appellate court order requiring 50% fine deposit in a cheque dishonour case under Section 138 of the Negotiable Instruments Act. The HC held that Section 148 mandates only 20% minimum deposit of fine/compensation to prevent delay tactics by dishonoured cheque drawers. The appellate court erred by ordering 50% deposit instead of the statutory 20% requirement. The HC directed deposit of 20% fine within sixty days while maintaining bail until appeal disposal, emphasizing speedy disposal objectives of the 2018 amendment.

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Issues involved:
1. Requirement to deposit 50% of the fine by the Appellate Court.
2. Interpretation of Section 148 of the Negotiable Instruments Act, 1881.

Summary:

1. Requirement to deposit 50% of the fine by the Appellate Court:
The applicant filed an application u/s 482 Cr.P.C. requesting the trial court to accept only 20% of the amount in Criminal Appeal No.83 of 2024 related to Complaint Case No.2213 of 2017 u/s 138 N.I. Act. The applicant was convicted by the trial court and ordered to pay Rs.6,75,000/- along with three months of simple imprisonment. The applicant appealed u/s 374 Cr.P.C., and the Appellate Court admitted the appeal and granted bail on the condition of depositing 50% of the imposed fine within 30 days. The applicant argued that this order was punitive and contrary to the statutory provisions u/s 148(1) & 148(2) of the Negotiable Instruments Act, 1881, which mandates a minimum deposit of 20% of the fine or compensation.

2. Interpretation of Section 148 of the Negotiable Instruments Act, 1881:
The court discussed Section 148 of the Negotiable Instruments Act, 1881, inserted through the Negotiable Instruments (Amendment) Act, 2018, which allows the Appellate Court to order the appellant to deposit a minimum of 20% of the fine or compensation pending appeal. The court referenced the Supreme Court's interpretation in Surinder Singh Deswal Alias Colonel S.S. Deswal and Others vs. Virender Gandhi, emphasizing that the term "may" in Section 148 should generally be construed as "shall" to prevent misuse by unscrupulous drawers of dishonored cheques.

Judgment:
The court found that the Appellate Court erred in ordering the applicant to deposit 50% of the fine. The impugned order dated 27.03.2024 was modified to direct the applicant to deposit 20% of the fine within sixty days from the date of this judgment. The bail granted by the Appellate Court shall continue until the disposal of the appeal. If the applicant fails to deposit the 20% fine within the stipulated period, the bail will be automatically canceled. The application u/s 482 Cr.P.C. was disposed of with these modifications, and a copy of the judgment was directed to be communicated to the Appellate Court for immediate compliance.

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