[Crl Appeal 917-944/2019, decided on 29.05.2019]
In the present case, it was ruled by the apex court that the amended Section 148 of the Negotiable Instruments (NI) Act shall be applicable to appeals against the order of conviction and sentence for the offence under Section 138 of the NI Act. It was held that the amended section would be applicable to the cases where the criminal complaints under Section 138 of the NI Act were filed before the amendment of Section 148 had taken place i.e., prior to 01.09.2018.
The bench in the present case comprised of Justices M.R. Shah and A.S. Bopanna.
The first appellate order, later affirmed by the Punjab & Haryana High Court, was upheld by the apex court. The order of the first appellate court had directed the appellants-convicts to deposit 25% of the amount of fine/compensation ordered by the Trial Court.
The power to direct the accused/appellant to ‘deposit’ minimum of 20% of ‘fine’ or ‘compensation’ awarded by the Trial Court was granted to the Appellate Court vide an amendment in 2018 in Section 148 of the NI Act. In the present case, the apex court looked into the fact that whether the appellate court is justified in directing the appellants to deposit 25% of the amount of compensation/fine imposed by the learned trial court, pending appeals challenging the order of conviction and sentence while suspending the sentence under Section 389 of the Cr.P.C., considering Section 148 of the N.I. Act as amended. Where the appellants are the original accused being convicted under Section 138 of the N.I. Act.It was contended on behalf of the accused in front of the apex court that in the case of criminal proceedings already initiated before the amendment in Section 148 of the NI Act, the amended section shall not apply. The court stated that the Parliament thought it apt to amend the Section 148 of the N.I Act. The reason stated behind it was the delay tactics of corrupt drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on appeals. The court said this while explaining the object of 2018 amendment.
It observed:
“Therefore, considering the Statement of Objects and Reasons of the amendment in Section 148 of the N.I. Act stated hereinabove, on purposive interpretation of Section 148 of the N.I. Act as amended, we are of the opinion that Section 148 of the N.I. Act 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 N.I. Act, even in a case where the criminal complaints for the offence under Section 138 of the N.I. Act 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 N.I. Act would be frustrated”.
The appellants further contended on the lines of the judgment passed in Dilip S. Dhanukar v Kotak Mahindra Bank. It was argued on the basis of Section 357(2) of the Cr.P.C. that no such fine is payable till the final decision of the appeal. Therefore, the first appellate court was wrong in passing an order directing the appellants to deposit 25% of the amount of fine/compensation, pending appeal/s. Rejecting this plea, court stated:
“The opening word of amended Section 148 of the N.I. Act is that “notwithstanding anything contained in the Code of Criminal Procedure….”. Therefore 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 N.I. Act, 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”.
Another contention in the case was raised based on the language of Section 148 of the N.I. Act. The Section states “the appellate Court ‘may’ order the appellant to deposit such sum which shall be a minimum of twenty percent of the fine or compensation awarded by the trial Court”. It was argued that since the provision uses word “may” and not “shall”, so there is an existence of discretion resting with the first appellate court. The discretion is with regards to granting a direction to the appellant-accused to deposit such sum. It was argued that the appellate court had construed it as mandatory. Thus, it would be contrary to the provisions of Section 148 of the amended N.I. Act. Here, the court observed:
“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”.
The court further observed:
“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 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 N.I. Act, 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 N.I. Act is purposively interpreted in such a manner it would serve the Objects and Reasons of not only amendment in Section 148 of the N.I. Act, but also Section 138 of the N.I. Act. Negotiable Instruments Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of the dishonoured of cheques. So as to see that due to delay tactics by the unscrupulous drawers of the dishonoured cheques due to easy filing of the appeals and obtaining stay in the proceedings, an injustice was caused to the payee of a dishonoured cheque who has to spend considerable time and resources in the court proceedings to realise the value of the cheque and having observed that such delay has compromised the sanctity of the cheque transactions, the Parliament has thought it fit to amend Section 148 of the N.I. Act. Therefore, such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 of the N.I. Act and also Sec 138 of the N.I. Act”.