Case Summary: Surinder Singh Deswal @ Col. S.S.Deswal & Ors. V. Virender Gandhi & Anr.



Court- Supreme Court of India




Brief Facts-

The appellants were partners at a firm called Bhoomi Infrastructure Co., now known as GLM Infratech Private Limited. Respondent no. 1 was also a partner at the same firm , who retired and a cheque dated 31.03.2014 was drawn on Canara Bank amounting to Rs.45,84,915/- and was issued by the appellant to respondent No.1 against the part payment of the retirement dues. Similarly, 63 other cheques were issued by the appellants in favour of respondent arising out of the same transaction. On 06.04.2015, respondent No.1 deposited a cheque in his Bank that is Karnataka Bank Ltd., Sector-11, Panchkula. The cheque was dishonoured and returned vide memo dated 07.04.2015 with the remarks funds insufficient. Other 63 cheques were also dishonoured. . Complaints were filed by respondent No.1 against the appellants under Section 138 of the NI Act before the Judicial Magistrate, Ist Class, Panchkula. In all 28 complaints were filed. The complaints were decided by Judicial Magistrate vide his judgment dated 30.10.2018 holding the appellant Nos.1 and 2 guilty for the offence punishable under Section 138 of the NI Act, who were accordingly convicted. The appeal was filed by the appellants against the judgment dated 30.10.2018 and sentence dated 30.11.2018 in the Court of Sessions Judge, Panchkula. The appellants filed an appeal under sec.389 of Cr.P.C for the suspension of the sentence , but the court suspended the sentence during the pendency of the appeal, subject to furnishing of bail bond and surety bond in the sum of Rs.50,000/- with one surety in the like amount and also subject to deposit of 25% of the amount of compensation awarded by the learned trial court in favour of the complainant. The appellants failed to do so and filed another another petition under Section 482 Cr.P.C. was filed by the appellants challenging the order dated 20.07.2019 passed by the Additional Sessions Judge.

Issues –

The prime issue considered by the Supreme Court bench was whether the first appellate court is justified in directing the appellants – original accused who have been convicted for the offence under Section 138 of the N.I. Act to deposit 25% of the amount of compensation/fine imposed by the learned trial Court, since the amendment of sec, 148 of the Negotiable Instruments Act was done after the case arose and why does it have a retrospective effect when sec. 143 A , brought in the same amendment has a prospective effect .

The second issue raised by the appellants was that the first appellate court has interpreted the word “may” in section 148 has been interpreted as “shall” by the first appellate court and hence , it has proceeded on the basis that it is mandatory for the appellate court to direct deposit of minimum of 25% of the fine or compensation awarded by the trial court for suspension of sentence.

Decision Overview-

The appellants that mere non- deposit of 25% of the amount of compensation as directed on 01.12.2018 cannot result vacation of the suspension of sentence. They also submitted that the direction to deposit 25% of the compensation by the trial court cannot be 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. It was further argued that non-deposit of 25% of the amount of compensation could not lead to vacation of the order suspending the sentence rather it was open to the respondents to recover the said amount as per the procedures prescribed under Section 421 Cr. P.C.

Also Read:  Case Summary: Henthorn v. Fraser

To this , the Court while dealing with the instant appeal referred to the “Statement of Objects and Reasons” of the NI Amendment Act and considering the first issue concerning applicability of the amended section 148, observed that due to the delay tactics of some unscrupulous drawers of dishonoured cheques because of  easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of section 138 of the NI Act was prone to being frustrated and because if which the amended section 148 was brought by the Parliament. It was also observed that the amendment in section 148 does not take away and/or affect any vested right of appeal of the appellants and therefore, the contention on behalf of the appellants that amendment in section 148 cannot be applicable to complaints filed prior to the amended section 148 came into force was not accepted by the court. The Court held that if such a purposive interpretation is not adopted then the objective and purpose of the amendment in section 148 would be hampered.

Dealing with the second issue the Supreme Court observed that even though the amended section 148 used the word “may” it is generally to be construed as a “rule” or “shall” and not as an exception for which special reasons have to assigned by the appellate court for directing for payment of the deposit under section 148. In such previous views, the Supreme Court held that amended Section 148 confers due power upon the appellate court to pass an order pending appeal to direct the appellants 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 under section 389 of CrPC to suspend the sentence.



Leave A Reply

Subscribe For Latest Updates

Signup for our newsletter and get notified when we publish new articles for free!