Cheque Bounce Case: The Supreme Court has held that the accused shall deposit 20 per cent of the amount in question to appeal against order in a cheque bounce case. The apex court Bench of Justices Ashok Bhushan and MR Shah has also reiterated that Section 148 of the Negotiable Instruments Act can be applied with retrospective effect. Under this section, courts can order defaulters to deposit an amount during pendency of a cheque bounce case.
The appellants in the case were partners in an infrastructure company. The Respondent No.1 was also a partner of the firm. When the respondent retired, a check of Rs 45,84,915 was issued to him by the firm against the part payment of the retirement dues. As many as 63 other cheques were issued by the appellant in favour of the respondent. All of these cheques were dishonoured. The respondent filed 28 complaints under Section 138 of the NI Act before the Judicial Magistrate, Ist Class, Panchkula, which held the appellants “guilty for the offence punishable under Section 138 of the NI Act.”
The appellants were convicted and sentenced to undergo imprisonment for two years and to pay jointly and severally an amount equal to the amount involved in the present case i.e. cheque amount plus 1 per cent of this amount as interest as well as litigation expenses.
The appellants appealed against the order before the Sessions Court which suspended the previous sentence while asking them to deposit 25 per cent of the compensation amount. The appellants then moved the high court which dismissed the appeal. The Supreme Court also dismissed their appeal.
However, later, the Additional Sessions Judge asked the appellants to surrender before the trial court, leading to a fresh round of litigation with the matter finally reaching the top court. The appellant’s counsel argued before the apex court that “the direction to deposit 25% of the compensation as directed by the trial court could not have been made under Section 148 of the NI Act. Section 148 of the NI Act having come into force on 01.09.2018 could not have been relied by the Courts below. Since, the complaint was filed in the year 2015 alleging offence under Section 138 of the NI Act which was much before the enforcement of Section 148 of the NI Act.”
The top court had earlier noted in the case, “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 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.”
On the question of suspension of sentence, the apex court noted, “The Court which has suspended the sentence on a condition, after noticing non-compliance of the condition can very well hold that the suspension of sentence stands vacated due to non-compliance.”
“It is for the Appellate Court who has granted suspension of sentence to take call on non-compliance and take appropriate decision. What order is to be passed by the Appellate Court in such circumstances is for the Appellate Court to consider and decide. However, non-compliance of the condition of suspension of sentence is sufficient to declare suspension of sentence as having been vacated,” the Supreme Court said.