SC: Amended S.148 of N.I. Act shall have retrospective application too

Today, i.e. on 29th May 2019, the Hon’ble Supreme Court, in the matter of Surinder Singh Deswal @ Col. S.S.Deswal and others v. Virender Gandhi pronounced that the word “may” used in the amended Section 148 of the Negotiable Instruments Act is generally to be construed as a “rule” or “shall”. Appellate Court’s not directing the appellant-accused to deposit 20% is an exception for which special reasons are to be assigned.

The Hon’ble Supreme Court also observed that:

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 Negotiable Instruments Act, 1881 was being frustrated, the Parliament has thought it fit to amend Section 148 of the Negotiable Instruments Act, by which the first appellate Court, in an appeal challenging the order of conviction under Section 138 of the Negotiable Instruments Act, 1881 , is conferred with the power to direct the convicted accused – appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. (Para 8.1)

Considering the Statement of Objects and Reasons of the amendment in Section 148 of the Negotiable Instruments Act, 1881, on purposive interpretation of Section 148 of the Negotiable Instruments Act, 1881 as amended, Section 148 of the Negotiable Instruments Act, 1881 as amended, shall be applicable in respect of the appeals against the order of conviction and sentence for the offence under Section 138 of the Negotiable Instruments Act, 1881 , even in a case where the criminal complaints for the offence under Section 138 of the Negotiable Instruments Act, 1881 were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018. If such a purposive interpretation is not adopted, in that case, the object and purpose of amendment in Section 148 of the Negotiable Instruments Act, 1881 would be frustrated. (Para 8.1)

Though it is true that in amended Section 148 of the Negotiable Instruments Act, 1881 , 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 Negotiable Instruments Act, 1881 confers power upon the Appellate Court to pass an order. (Para 9)

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 Appellant­-Accused 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 Negotiable Instruments Act, 1881 , a minimum of 20% of the fine or compensation awarded by the trial court is directed to be deposited and that such amount is to be deposited within a period of 60 days from the date of the order, or within such further period not exceeding 30 days as may be directed by the appellate court for sufficient cause shown by the appellant. Therefore, if amended Section 148 of the Negotiable Instruments Act, 1881 is purposively interpreted in such a manner it would serve the Objects and Reasons of not only amendment in Section 148 of the Negotiable Instruments Act, 1881 , but also Section 138 of the Negotiable Instruments Act, 1881 . (Para 9)

Irrespective of the provisions of Section 357(2) of the Cr.P.C., pending appeal before the first appellate court, challenging the order of conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881 , the appellate court is conferred with the power to direct the appellant to deposit such sum pending appeal which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. (Para 10)

Copy of judgement: Judgement_29-May-2019

-Tushar Kaushik         

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