The Punjab and Haryana High Court has upheld the requirement of depositing 20% of the compensation amount in cheque bounce cases under Section 148 of the Negotiable Instruments Act, 1881, unless exceptional circumstances are proven. The ruling was delivered by Justice Sumeet Goel, who dismissed a petition seeking to waive this mandatory condition, stating that financial difficulties alone do not justify exemption.
Background of the Case
The case originated from an order dated October 4, 2024, issued by an Additional Sessions Judge. The order suspended the sentence of a convicted individual on the condition that 20% of the compensation amount be deposited within two months.
The petitioner, through their counsel, argued before Justice Goel’s court that they were unable to comply with the condition due to financial hardship. The counsel also claimed that the petitioner was not given a fair opportunity to present their case before the impugned order was passed, and that the condition effectively deprived them of their right to appeal.
Court’s Observations
Justice Goel emphasized that the mandatory deposit under Section 148 of the Negotiable Instruments Act is generally a rule, and waiving it requires proof of exceptional circumstances. The provision aims to expedite justice and prevent undue hardship to the complainant caused by prolonged litigation.
“The onus of demonstrating exceptional circumstances lies with the convict,” Justice Goel stated, adding that appellate courts should impose the condition to ensure that complainants are not deprived of compensation while discouraging frivolous appeals.
The court clarified that the appellate court has discretion to waive the condition only in extraordinary situations, supported by compelling and substantiated evidence.
Financial Difficulty Not a Valid Ground
Justice Goel rejected the petitioner’s argument of financial hardship, stating, “The ground pleaded by the petitioners that they are facing financial difficulty cannot be said to be sufficient for carving out an exception from the mandate contained in Section 148 of the Negotiable Instruments Act, 1881.”
The court further noted that the imposition of the 20% deposit condition was neither unjust nor tantamount to taking away the petitioner’s right of appeal.
Conclusion
Dismissing the petition, Justice Goel reiterated the legislative intent behind Section 148, which seeks to balance the rights of both parties in cheque bounce cases. The ruling underscores the mandatory nature of the 20% deposit as a condition for appeal, with exceptions granted only in rare and substantiated cases.
