Monday, 4 January 2021

Whether appellate court can refuse to admit appeal in cheque dishonour case if convict fails to deposit interim compensation directed by it?

 Section 374 Cr.P.C. as reproduced above does not prescribe any condition for admission of an appeal. In other words, the provisions of the statute which vests a convict with a valuable right to challenge his conviction are not circumscribed by any conditions. Nor does any provision of the Negotiable Instruments Act, 1881 refer to any pre-condition for availing a valuable right of first appeal. Section 148 of the Act just vests the Appellate Court with the power to direct the appellant to deposit an amount not less than 20% of the compensation amount but under no circumstances the same can be interpreted to be a condition pre-requisite for availing the right of appeal. Imposition of any condition at the time of suspending of sentence may be a different matter and the trial Court may in its wisdom, impose such a condition failing which the order suspending sentence may be vacated. In other words, his bail during the pendency of appeal may be cancelled upon failure of the appellant to comply with the direction of deposit of such amount as may have been directed by the Appellate Court.

As an upshot of the discussion made above, all the aforesaid three petitions are accepted in the following terms:

(i) The condition made in the impugned orders wherein the

admission of appeal has been made subject to deposit of 20% of

the compensation amount is set aside and it is ordered that the

appeals shall stand admitted before the lower Appellate Court.

The petitioners are, however, directed to deposit an amount

equivalent to 20% of the amount of compensation awarded by

the trial Court within 60 days from today.

 IN THE HIGH COURT OF PUNJAB AND HARYANA AT

CHANDIGARH.

( I ) CRM-M-15131-2020 (O&M)

Sudarshan Kumar Vs Manish Manchanda


Date of decision : 15.12.2020

CORAM : Hon'ble Mr. Justice Gurvinder Singh Gill


1. The above mentioned three petitions are being taken up together as a common question of law is involved therein.


2. The petitioners in all the three cases were arrayed as accused in three

different complaints filed against them by respondent/complainant Manish

Manchanda under Section 138 of Negotiable Instruments Act, 1881

(hereinafter referred to as the ‘Act’), alleging therein that the cheques

drawn by the accused, upon their presentation in the bank by the

complainant for their encashment were dishonoured. The accused were

tried by the Court of Judicial Magistrate First Class, Ludhiana and were

found guilty and were imposed sentence of rigorous imprisonment for one

year in each of the three cases and were also directed to pay compensation.

The petitioners/accused, being aggrieved by the judgements holding them

guilty preferred appeals in the Court of Sessions wherein at the time of the

admission of appeals, the impugned orders dated 28.2.2020 (Annexure P-3

in all the cases) were passed. Since the impugned orders are absolutely

identical, one such order as annexed in CRM-M-15131-2020 is reproduced

herein below :

“Criminal Appeal received by entrustment. As there are fairly

arguable points involved in the adjudication of the present

appeal, hence, the present appeal is admitted for hearing, subject

to just exceptions and to deposit of 20% of the compensation

amount in view of latest amendment in Section 148 of Negotiable

Instruments Act (applicable w.e.f. 01.09.2018), within one month

from today. It is registered as Criminal Appeal. Now notice of

this appeal be issued to the respondent through ordinary process

as well as speed post on furnishing of speed post charges and

copies of grounds of appeal within a week for 02.07.2020. Trial

Court Record be also called for that date.

Along with the appeal, the appellant has also filed an application

for suspension of sentence and bail during the pendency of the

appeal. Hence, the sentence of the appellant is suspended and the

appellant is directed to submit the personal bond in the sum of

Rs.50,000/- with one surety in the like amount, to the satisfaction

of the Illaqa/Duty Magistrate within 15 days from today and the

appellant shall furnish an affidavit in this court with regard to

furnishing the personal/surety bonds on the next date. Copy of

this order be forwarded to the learned Trial Court with the

direction to send the bail bond and surety bond to this court

immediately.”

3. The learned counsel while assailing the impugned orders dated 28.2.2020

has raised the following three submissions:

(i) that issuance of a direction under provisions of Section 148 of the

Act to deposit an amount not less than 20% of the compensation

amount is ‘discretionary’ and such discretion ought to be

exercised judiciously by the Court having due regard to the

financial position of the accused and that issuance of such a

direction in the instant cases was uncalled for and unwarranted;

(ii) that the impugned order suffers from an illegality inasmuch as

the provisions of Section 148 of the Act specifically mandate that

a period of 2 months, extendable by another month, shall be

afforded to the appellant to deposit the amount as directed to be

deposited whereas vide impugned orders, a period of only one

month has been afforded;

(iii) that a right to challenge conviction by way of filing an appeal, as

enshrined in Section 374 of Cr.P.C., cannot be set at naught by

imposing some unreasonable condition at the time of admission

of appeal and that the admission of appeal cannot be made

subject to any such condition;

4. Opposing the petition, the learned counsel representing the respondent/

complainant has vehemently argued that the lower Appellate Court having

passed the orders in question in exercise of jurisdiction under statutory provisions of Section 148 of the Act, the same cannot be called to question.

The learned counsel for respondent, while relying upon a judgement of

Hon’ble Apex Court in Surinder Singh Deswal vs. Virender Gandhi

(2019)11 SCC 341, has further submitted that the provisions of Section

148 of the Act regarding deposit of amount have been held to be in the

nature of a ‘rule’ and that not awarding compensation would be an

exception for which reasoning should be given by the Appellate Court.

5. I heard both the learned counsel. Each of the aforesaid three submissions

raised above are being discussed individually herein under:

Submission no. (i) :

6. In order to consider as to whether a direction for deposit of a part

compensation before the Appellate Court is a discretion or as to whether it

is in the nature of a mandate, the provisions of the Section 148 of the Act

(as amended in the year 2018) need to be borne in mind, which read as

under:

“148. Power of Appellate Court to order payment pending

appeal against conviction-

(1) Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974), in an appeal by the

drawer against conviction under section 138, the Appellate

Court may order the appellant to deposit such sum which

shall be a minimum of twenty per cent of the fine or

compensation awarded by the trial Court:

Provided that the amount payable under this sub-section

shall be in addition to any interim compensation paid by the

appellant under section 143A.

(2)The amount referred to in sub-section (1) shall be deposited

within sixty days from the date of the order, or within such

further period not exceeding thirty days as may be directed

by the Court on sufficient cause being shown by the

appellant.

(3)The Appellate Court may direct the release of the amount

deposited by the appellant to the complainant at any time

during the pendency of the appeal:

Provided that if the appellant is acquitted, the Court shall

direct the complainant to repay to the appellant the amount

so released, with interest at the bank rate as published by

the Reserve Bank of India, prevalent at the beginning of the

relevant financial year, within sixty days from the date of

the order, or within such further period not exceeding thirty

days as may be directed by the Court on sufficient cause

being shown by the complainant."

7. The language of Section 148 of the Act would show that the amended

provisions vest the Appellate Court with a discretion to direct deposit of an

amount not less than 20% of the compensation amount as awarded by the

trial Court. Although the word ‘may’ has been used in the Section but the

Hon’ble Apex Court in Surinder Singh Deswal vs. Virender Gandhi

(2019)11 SCC 341 has interpreted the said provisions to mean that

issuance of such a direction is more in the nature of a mandate. The

relevant extract from the aforesaid judgement reads as follows:

“8. Now so far as the submission on behalf of the appellants

that even considering the language used in section 148 of

the N.I. Act as amended, the Appellate Court "may" order

the appellant to deposit such sum which shall be a

minimum of 20% of the fine or compensation awarded by

the trial Court and the word used is not "shall" and

therefore the discretion is vested with the first Appellate

Court to direct the appellant - accused to deposit such sum

and the Appellate Court has construed it as mandatory,

which according to the learned Senior Advocate for the

appellants would be contrary to the provisions of section

148 of the N.I. Act as amended is concerned, 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..….…”

8. Thus, as per ratio of Surinder Singh Deswal’s case(supra), the power

vested with the lower Appellate Court, though discretionary is supposed to

be a ‘rule’ and said discretion should be exercised in all the cases unless

there are some exceptional circumstances justifying deviation from the said

rule. In the instant case, there were no such circumstances before the lower

Appellate Court so as to justify non-deposit of an amount as provided

under Section 148 of the Act. As such, the contention raised on behalf of

petitioner in this regard cannot be accepted.

9. Submission no. (ii) :

Section 148 of the Act, while vesting the Appellate Court with a power to

direct the appellants to deposit an amount not less than 20% of the

compensation amount, also specifically prescribes the period during which

such amount is required to be deposited. Sub-section (2) of Section 148 of

the Act, wherein the said period is prescribed reads as under:

“148. Power of Appellate Court to order payment pending

appeal against conviction-

(1) x x x


(2) The amount referred to in sub-section (1) shall be

deposited within sixty days from the date of the order, or

within such further period not exceeding thirty days as

may be directed by the Court on sufficient cause being

shown by the appellant.

(3) x x x”

10. A perusal of the aforesaid provisions of Section 148(2) of the Act would

show that it is provided in unambiguous terms that the amount is required

to be deposited within a period of 60 days which may further be extended

by another 30 days. In the instant case, the lower Appellate Court having

granted one month’s period only for depositing the amount, the same is

contrary to the provisions of the Act. Submission no. (ii), thus, does carry

weight and the error as pointed above, needs to be rectified.

Submission no. (iii) :

11. Since the question raised herein pertains to admission of an appeal against

conviction, it is apposite to first of all refer to the provisions under which a

right to appeal is provided to a convict. The basic provisions as per the

procedure laid down in Code of Criminal Procedure, 1973 are contained in

Sections 372 and 374 of Cr.P.C. which read as under:

372.No appeal to lie unless otherwise provided. –

No appeal shall lie from any judgment or order of a Criminal

Court except as provided for by this Code or by any other law

for the time being in force.

Provided that the victim shall have a right to prefer an appeal

against any order passed by the Court acquitting the accused

or convicting for a lesser offence or imposing inadequate

compensation, and such appeal shall lie to the Court to which

an appeal ordinarily lies against the order of conviction of

such Court.

374.Appeals from convictions. –

(1)Any person convicted on a trial held by a High Court in its

extraordinary original criminal jurisdiction may appeal to the

Supreme Court.

(2) Any person convicted on a trial held by a Sessions Judge or

an Additional Sessions Judge or on a trial held by any other

Court in which a sentence of imprisonment for more than

seven years has been passed against him or against any other

person convicted at the same trial, may appeal to the High

Court.

(3) Save as otherwise provided in sub-section (2), any person, -

(a) convicted on a trial held by a Metropolitan Magistrate or

Assistant Sessions Judge or Magistrate of the first class,

or of the second class, or

(b) sentenced under Section 325, or

(c) in respect of whom an order has been made or a sentence

has been passed under Section 360 by any Magistrate,

may appeal to the Court of Session.

(4) When an appeal has been filed against a sentence passed

under section 376, section 376A, section 376AB, section

376B, section 376C, section 376D, section 376DA, section

376DB or section 376E of the Indian Penal Code, the appeal

shall be disposed of within a period of six months from the

date of filing of such appeal.

12. Section 374 Cr.P.C. as reproduced above does not prescribe any condition for admission of an appeal. In other words, the provisions of the statute which vests a convict with a valuable right to challenge his conviction are not circumscribed by any conditions. Nor does any provision of the Negotiable Instruments Act, 1881 refer to any pre-condition for availing a valuable right of first appeal. Section 148 of the Act just vests the Appellate Court with the power to direct the appellant to deposit an amount not less than 20% of the compensation amount but under no circumstances the same can be interpreted to be a condition pre-requisite for availing the right of appeal. Imposition of any condition at the time of suspending of sentence may be a different matter and the trial Court may in its wisdom, impose such a condition failing which the order suspending sentence may be vacated. In other words, his bail during the pendency of appeal may be cancelled upon failure of the appellant to comply with the direction of deposit of such amount as may have been directed by the Appellate Court.

13. The right to appeal against conviction is an invaluable statutory right vested upon a convict by Cr.P.C. which cannot be allowed to be defeated by imposing any condition for availing such right. In fact, while giving a wider connotation to Article 21 of Constitution of India, it can even be said that depriving a convict of his right to appeal by imposing any pre-requisite for availing his statutory right to challenge conviction in a higher Court would amount to depriving his liberty without adhering to the established procedure of law. Hon’ble Supreme Court in Babu Rajirao Shinde v. The

State of Maharashtra (1971)3 SCC 337 , observed that a convicted person

must be held to be at least entitled to one appeal as a substantial right. In a

subsequent judgement rendered in Dilip S. Dahanukar v. Kotak Mahindra

Co. Ltd (2007)6 SCC 528, the Hon’ble Supreme Court held as under:

“12. An appeal is indisputably a statutory right and an offender

who has been convicted is entitled to avail the right of

appeal which is provided for under Section 374 of the

Code. Right of Appeal from a judgment of conviction

affecting the liberty of a person keeping in view the

expansive definition of Article 21 is also a Fundamental

Right. Right of Appeal, thus, can neither be interfered with

or impaired, nor it can be subjected to any condition.”

14. Even though the Negotiable Instruments Act, 1881 is a special Act and could override provisions of Cr.P.C., but there is no such specific provision in the Act which could be interpreted to mean that availing of right to appeal by a person convicted for an offence under the Act, has been made subject to some conditions. The submission, thus, made in this regard on behalf of the petitioner carries weight and deserves to be accepted .

15. As an upshot of the discussion made above, all the aforesaid three petitions

are accepted in the following terms:

(i) The condition made in the impugned orders wherein the

admission of appeal has been made subject to deposit of 20% of

the compensation amount is set aside and it is ordered that the

appeals shall stand admitted before the lower Appellate Court.

The petitioners are, however, directed to deposit an amount

equivalent to 20% of the amount of compensation awarded by

the trial Court within 60 days from today.

(ii) In case the aforesaid amount is deposited within 60 days from

today, the bail already granted vide order dated 28.2.2020 by

lower Appellate Court shall continue subject to any such fresh

conditions as may be imposed by lower Appellate Court.

(iii) In case bail of any of the petitioner has been cancelled on

account of non-deposit of the amount or has already been taken

into custody, he shall be released forthwith on bail subject to

any such conditions as may be imposed by the lower Appellate

Court. He shall, however, deposit the amount of 20% within 60

days from today.

(iv) In case of failure to deposit the amount in question within a

period of 60 days from today, it shall be open to the lower

Appellate Court to cancel bail and to hear the appeal on merits,

provided however, subject to any such general directions issued

by the High Court in the matter of hearing of cases, having

regard to the present circumstances of spread of pandemic

COVID-19.

16. All the three petitions stand accepted accordingly.

(GURVINDER SINGH GILL)

15.12.2020 

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