TaxTMI 
TaxTMI 
2019 (5) TMI 1626
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....first appellate court - learned Additional Sessions Judge, Panchkula, directing the appellants herein - original appellants - original accused to deposit 25% of the amount of compensation, in view of the provisions of amended Act No. 20 of 2018 in Section 148 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'N.I. Act'), the original appellants - original accused have preferred the present appeals. 4. The facts leading to the present appeals in nutshell are as under: That criminal complaints were filed against the appellants herein - original accused for the offence under Section 138 of the N.I. Act. That the said criminal complaints were filed prior to 2.8.2018. That the learned trial Court vide judgment and order dated 30.10.2018 convicted the appellants for the offence under Section 138 of the N.I. Act and sentenced them to undergo imprisonment of two years and to pay cheque amount + 1% as interest and litigation expenses as fine. 4.1 Feeling aggrieved and dissatisfied with the order of conviction passed by the learned trial Court, convicting the appellants - original accused for the offence under Section 138 of the N.I. Act and the sentence impose....
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....ts - original accused have preferred the present appeals. 5. Shri Vijay Hansaria, learned Senior Advocate has appeared on behalf of the appellants - original appellants - original accused and Shri Alok Sangwan, learned Advocate has appeared on behalf of the original complainant. 5.1 Shri Vijay Hansaria, learned Senior Advocate appearing on behalf of the appellants has vehemently submitted that in the present case, both, the High Court as well as the learned first appellate Court have materially erred in directing the appellants to deposit 25% of the amount of compensation as per Section 148 of the N.I. Act, as amended. 5.2 It is vehemently submitted by the learned Senior Advocate appearing on behalf of the appellants that in the present case as the criminal proceedings were initiated and the complaints were filed against the accused for the offence under Section 138 of the N.I. Act, prior to the amendment Act came into force, Section 148 of the N.I.Act, as amended shall not be applicable. 5.3 It is further submitted by the learned Senior Advocate appearing on behalf of the appellants that the legal proceedings, whether civil or criminal, are to be decided on the basis o....
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....nal Writ Petition No. 258 of 2019). It is submitted that in the said decision, the Bombay High Court has also observed and held that as per Section 148 of the N.I. Act as amended, the appellate Court has the discretion to direct deposit the sum pending appeal, but if at all such direction is given, that sum shall not be less than 20% of the amount of fine or compensation awarded by the trial Court. It is submitted that in the present case, the appellate Court wrongly presumed that the requirement under Section 148 of the N.I. Act is the deposit of 25% of the fine or compensation. 5.7 It is further submitted by the learned Senior Advocate appearing on behalf of the appellants that in the present case the learned trial Court imposed the fine under Section 138 of the N.I. Act, equal to the amount of cheque plus 1%. It is submitted that as per Section 357(2) of the Cr.P.C., no such fine is payable till the decision of the appeal. It is submitted that therefore also the first appellate Court ought not to have passed any order directing the appellants to deposit 25% of the amount of fine/compensation, pending appeal/s. In support of his above submission, learned Senior Counsel has hea....
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....tted that the aforesaid submission has no substance. It is submitted that first of all amendment in Section 148 of the N.I. Act is procedural in nature and therefore there is no question of applying the same retrospectively. It is submitted that as such no vested right of the appeal of the appellants has been taken away or affected by amendment in Section 148 of the N.I. Act. It is submitted that in the present case, admittedly, the appeals were preferred after the amendment in Section 148 of the N.I. Act came into force and therefore Section 148 of the N.I. Act, as amended, is rightly invoked/applied by the learned first appellate Court. It is submitted that therefore the amendment so brought in the Act by insertion of Section 148 of the N.I. Act is purely procedural in nature and not substantive and does not affect the vested rights of the appellants, as such, the same can have a retrospective effect and can be applied in the present case also. 6.2 Now so far as the reliance placed on Section 357(2) of the Cr.P.C. and the submission of the learned Senior Advocate appearing on behalf of the appellants that in view of Section 357(2) of the Cr.P.C., fine during the pendency of the a....
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....ct with a view to address the issue of undue delay in final resolution of cheque dishonour cases so as to provide relief to payees of dishonoured cheques and to discourage frivolous and unnecessary litigation which would save time and money. The proposed amendments will strengthen the credibility of cheques and help trade and commerce in general by allowing lending institutions, including banks, to continue to extend financing to the productive sectors of the economy. 3. It is, therefore, proposed to introduce the Negotiable Instruments (Amendment) Bill, 2017 to provide, inter alia, for the following, namely:- (i) to insert a new section 143A in the said Act to provide that the Court trying an offence under section 138, may order the drawer of the cheque to pay interim compensation to the complainant, in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and in any other case, upon framing of charge. The interim compensation so payable shall be such sum not exceeding twenty per cent of the amount of the cheque; and (ii) to insert a new section 148 in the said Act so as to provide that in an appeal by the....
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....under Section 389 of the Cr.P.C. to suspend the sentence pending appeals challenging the conviction and sentence, amended Section 148 of the N.I. Act came into force and was brought on statute w.e.f. 1.9.2018. Therefore, considering the object and purpose of amendment in Section 148 of the N.I. Act and while suspending the sentence in exercise of powers under Section 389 of the Cr.P.C., when the first appellate court directed the appellants to deposit 25% of the amount of fine/compensation as imposed by the learned trial Court, the same can be said to be absolutely in consonance with the Statement of Objects and Reasons of amendment in Section 148 of the N.I. Act. 8.1 Having observed and found that because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of Section 138 of the N.I. Act was being frustrated, the Parliament has thought it fit to amend Section 148 of the N.I. Act, by which the first appellate Court, in an appeal challenging the order of conviction under Section 138 of the N.I. Act, is conferred with the power to direct the convicted accused - a....
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....ourt has construed it as mandatory, which according to the learned Senior Advocate for the appellants would be contrary to the provisions of Section 148 of the N.I. Act as amended is concerned, considering the amended Section 148 of the N.I. Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 of the N.I. Act, though it is true that in amended Section 148 of the N.I. Act, the word used is "may", it is generally to be construed as a "rule" or "shall" and not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned. Therefore amended Section 148 of the N.I. Act confers power upon the Appellate Court to pass an order pending appeal to direct the Appellant Accused to deposit the sum which shall not be less than 20% of the fine or compensation either on an application filed by the original complainant or even on the application filed by the AppellantAccused under Section 389 of the Cr.P.C. to suspend the sentence. The aforesaid is required to be construed considering the fact that as per the amended Section 148 of the N.I. Act, a minimum of 20% of the fine or compensation awarded by the trial cour....