Delve into the recent Supreme Court judgment addressing the Amendment in the Negotiable Instruments Act. The case pertains to the applicability of the amended Section 148 and its impact on pending criminal proceedings. Discover the insights and implications of the ruling in this comprehensive summary. #LegalJudgment #SupremeCourt #NIAmendment #CaseSummary
Facts
- The appellants were convicted for the offence under Section 138 of the N.I. Act and sentenced to two years of imprisonment.
- The High Court dismissed the revision applications and confirmed the order of the first appellate Court directing the appellants to deposit 25% of the compensation awarded by the trial Court.
- The appeals arise from a common judgment of the High Court and are being decided together.
- The appellants challenged the High Court’s order which required them to deposit 25% of the compensation amount as per the amended Section 148 of the N.I. Act.
- Criminal complaints were filed against the appellants for the offence under Section 138 of the N.I. Act.
- The first appellate Court allowed the suspension of sentence under Section 389 of the Cr.P.C. but directed the appellants to deposit 25% of the compensation/fine.
- The appellants preferred criminal appeals before the first appellate Court challenging the conviction and sentence imposed by the trial Court.
- The appellants approached the High Court via revision applications after being directed to deposit 25% of the compensation/fine pending appeal.
- The Court examined the issue of applicability of Section 148 of the NI Act, as amended by Act No 20/2018, to criminal proceedings initiated prior to the amendment.
- It was argued on behalf of the appellants that the amendment should not apply to proceedings already pending before the amendment came into effect.
- The Court emphasized the importance of the procedural law principle that a law ought to be deemed prospective unless expressly made retrospective.
- It was observed that in the absence of any express provision or necessary intendment, a statute is presumed to be prospective in operation.
- The Court referred to previous case law and precedents to support the argument that the amendment should not apply retroactively to ongoing criminal proceedings.
- Ultimately, the Court held that Section 148 of the NI Act, as amended by Act No 20/2018, shall not be applicable to criminal proceedings already initiated prior to the amendment.
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Issue
- The issue before the Court is whether the first appellate court was justified in directing the appellants – original accused to deposit 25% of the amount of compensation/fine imposed by the trial court while pending appeals challenging the order of conviction and sentence.
- This directive was made while suspending the sentence under Section 389 of the Cr.P.C., taking into consideration Section 148 of the N.I. Act as amended.
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Arguments
- The amendment in Section 148 of the N.I. Act is procedural and can have a retrospective effect.
- The first appellate Court did not exercise discretion when directing the deposit of 25% of the compensation as a condition for suspension of sentence.
- The High Court should have remanded the matter back to the appellate Court for proper consideration on the suspension of sentence.
- The trial Court imposed a fine equal to the amount of the cheque plus 1% under Section 138 of the N.I. Act.
- The appellants argue that the order to deposit 25% of the compensation pending appeal was erroneous, citing a decision in Dilip S. Dhanukar v. Kotak Mahindra Bank.
- The Bombay High Court observed that the appellate Court has discretion to direct the deposit sum pending appeal, but it should not be less than 20% of the fine or compensation awarded by the trial Court.
- The appellants claim that the law applicable should be at the time of the offense or filing, unless amended retrospectively.
- The appellants argue that their vested rights were not affected by the amendment in Section 148 of the N.I. Act.
- The original complainant supports the first appellate Court’s decision, stating it aligns with the intent of the amendment to prevent delays by convicted cheques drawers.
- The appellate Court wrongly presumed that 25% deposit was required under Section 148 of the N.I. Act, while Section 357(2) of the Cr.P.C. states no such fine is payable until the appeal decision.
- The appellants appeal to quash the order directing the deposit of 25% of the compensation based on the amended Section 148 of the N.I. Act.
- Section 357(2) of the Cr.P.C. states that fine during the pendency of the appeal is not recoverable.
- In Section 148 of the N.I. Act as amended, it is mentioned that ‘Notwithstanding anything contained in the Code of Criminal Procedure, 1973’.
- The amendments in the N.I. Act provide specific instructions that override the provisions of the Cr.P.C.
- The appellant argues that the specific provisions in the N.I. Act take precedence over the general provisions in the Cr.P.C.
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Analysis
- Amendment in Section 148 of the N.I. Act applies to cases/complaints filed before 1.9.2018 as well
- Purpose of the amendment was to address delays in cheque dishonour cases and provide relief to payees
- Amended Section 148 allows the Appellate Court to direct the appellant to deposit at least 20% of the fine or compensation within a specified time frame
- The word ‘may’ in the amended Section 148 is to be interpreted as ‘shall’ unless special reasons are given
- The amendment aims to discourage frivolous litigation and strengthen the credibility of cheques
- Object and purpose of the amendment was to prevent the frustration of Section 138 of the N.I. Act
- First Appellate Court can direct the appellant to deposit a minimum of 20% of the fine/compensation imposed by the Trial Court
- Amendment in Section 148 does not take away or affect the substantive right of appeal
- Appellants were directed to deposit 25% of the fine/compensation, in line with the amendment, which is justified
- The amendment is meant to expedite cheque dishonour cases and provide relief to the payees
- The appellants in the case argued that the criminal complaints against them under Section 138 of the Negotiable Instruments Act were lodged before the amendment Act No 20/2018.
- The proposed Negotiable Instruments (Amendment) Bill, 2017 aims to introduce new sections, including 143A and amend Section 148 of the Act.
- Section 143A allows the court to order the drawer of the cheque to pay interim compensation to the complainant in various scenarios.
- Amended Section 148 grants the Appellate Court the power to order the appellant to deposit a minimum of twenty percent of the fine or compensation awarded by the trial court in appeal cases against conviction under Section 138.
- The amount deposited by the appellant may be released to the complainant during the appeal, subject to repayment with interest if the appellant is acquitted.
- The opening phrase of amended Section 148 states that it overrides the provisions of the Code of Criminal Procedure.
- The impugned Judgment and Order passed by the High Court does not warrant any interference based on the reasons provided.
- The first appellate court has the authority to direct the appellant to deposit a sum pending appeal, which should be a minimum of 20% of the fine or compensation awarded by the trial Court.
- The learned Senior Advocate representing the appellants has requested an extension of three months to deposit the amount as specified by the first appellate court and confirmed by the High Court.
Decision
- The learned Advocate opposing the prayer for extension of time to deposit compensation as directed by the appellate court
- Amended Section 148 of the N.I. Act requires the accused to deposit the amount within 60 days, extendable by a further 30 days on sufficient cause shown
- The appellants are granted an additional four weeks to deposit the amount due to bonafide litigation and the substantial sum involved
- The High Court’s decision confirming the order to deposit 25% of the fine/compensation pending appeals is upheld
- The appeals are dismissed, and the appellants are directed to deposit the amount within the extended period of four weeks
Case Title: SURINDER SINGH DESWAL @ COL. S. S. DESWAL Vs. VIRENDER GANDHI
Case Number: Crl.A. No.-000917-000944 / 2019
