An appellate court must give reasons when directing a 20% deposit under Section 148 of the NI Act.

The applicant was convicted under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to three months’ imprisonment.

On appeal, the First Additional Sessions Judge suspended the conviction and sentence but directed him to deposit 20% of the compensation within 60 days.

The applicant challenged that condition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, contending that the direction was non-speaking and that the appellate court had not considered his financial circumstances or whether the case warranted dispensing with the deposit

1. Whether the appellate court’s direction to deposit 20% of the compensation under Section 148 of the Negotiable Instruments Act could stand when it gave no reasons for imposing that condition

2. Whether the applicant should be permitted to seek waiver of the deposit condition by establishing his financial circumstances

Section 148 of the Negotiable Instruments Act governs an appellate court’s power to direct a deposit when suspending a sentence in an appeal arising from a conviction under Section 138.

Relying on Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd., (2023) 10 SCC 446, and Muskan Enterprises v. State of Punjab, (2024) 20 SCC 85, the court treated the deposit direction as one requiring judicial consideration: the appellate court must consider whether sufficient grounds exist to dispense with deposit and exercise its discretion on the circumstances of the case

The appellate court directed the deposit without recording reasons or addressing whether the circumstances justified dispensing with it.

The High Court therefore found the order non-speaking and insufficient to show that the appellate court had considered the relevant issue under Section 148.

Rather than determine whether the applicant was entitled to waiver, the High Court allowed him to renew his request and directed the appellate court to decide it with reasons, taking account of the cited Supreme Court decisions and proof of the applicant’s financial status

If such an application is filed, the appellate court must decide it by a reasoned order in light of the cited Supreme Court decisions.

The application under Section 528 BNSS was disposed of, without the High Court deciding whether the deposit should ultimately be waived