An appellate court may waive the Section 148 deposit in exceptional cases for recorded reasons.

The petitioners, convicted under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), were sentenced to pay a fine of ₹2.25 crore.

They appealed under Section 374(3)(a) of the Code of Criminal Procedure, 1973 (CrPC), and sought suspension of sentence under Section 389(1) CrPC.

The Sessions Court suspended the sentence subject to deposit of 20% of the fine under Section 148 of the NI Act, without giving reasons for imposing that condition.

The petitioners challenged the order under Section 482 CrPC, relying on Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Ltd.

Whether the appellate court had power under Section 148 of the NI Act to direct deposit of 20% of the fine while considering an application to suspend sentence under Section 389 CrPC.

Whether the deposit condition could be imposed without reasons addressing whether the case warranted an exception under Jamboo Bhandari.

Section 389(1) CrPC empowers an appellate court to suspend execution of a sentence for reasons recorded in writing.

Section 148(1) of the NI Act authorises the appellate court, in an appeal against conviction under Section 138, to direct deposit of at least 20% of the fine or compensation; under Surinder Singh Deswal v. Virender Gandhi, such a direction is ordinarily the rule, and dispensing with it requires special reasons.

Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Ltd. clarifies that the appellate court may make an exception where the deposit condition would be unjust or would effectively deprive the appellant of the right of appeal, but must specifically record its reasons for doing so.

The High Court accepted that Section 148 permits the appellate court to impose the deposit condition while deciding an application under Section 389 CrPC.

However, the appellate court’s order merely found that the appellants had an arguable case on the merits and made suspension conditional on deposit of 20%; it gave no reasons addressing whether the condition was appropriate or whether the case called for an exception under Jamboo Bhandari.

The order was therefore inadequately reasoned and inconsistent with the governing principles.

It remitted the matter for fresh consideration of the application to suspend sentence and directed that the sentence remain suspended until the appellate court passed a fresh order.