Appellate Courts must record reasons for determining whether exceptional circumstances warrant waiving the 20% deposit under Section 148 NI Act.

The petitioner was convicted under Section 138 of the Negotiable Instruments Act (N.I. Act) by the Judicial Magistrate First Class, Pandariya, on January 1, 2026

The trial court sentenced the petitioner to one year of simple imprisonment and directed the payment of ₹40,00,000/- as compensation

The petitioner subsequently preferred a Criminal Appeal under Section 415 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, along with an application for suspension of execution under Section 430 of the BNSS

On January 31, 2026, the Second Additional Sessions Judge, Kawardha, allowed the suspension of the sentence subject to the condition that the petitioner deposit 20% of the compensation amount (₹8,00,000/-) within 60 days

The petitioner challenged this condition before the High Court under Section 528 of the BNSS, arguing that the Appellate Court exercised its discretion without providing specific reasons as required by law

1. Whether the Appellate Court is required to record reasons and consider the existence of "exceptional cases" when imposing a condition to deposit 20% of the fine or compensation amount under Section 148 of the N.I. Act.

The court primarily applied Section 148 of the Negotiable Instruments Act, 1881, which empowers an Appellate Court to order a minimum deposit of 20% of the fine or compensation pending appeal

It further relied on the Supreme Court's interpretation in Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd. & Ors. (2023), which established that while the deposit is the norm, the Appellate Court must consider whether the matter constitutes an "exceptional case" warranting suspension without the deposit condition, and must record reasons for its conclusion

This principle was reaffirmed in Muskan Enterprises & Anr. v. State of Punjab & Anr. (2024)

Procedurally, the court applied Sections 430 and 528 of the BNSS regarding the suspension of sentence and inherent powers of the High Court

The High Court observed that Section 148 of the N.I. Act uses the word "may," indicating discretionary power rather than a mandatory imposition

Applying the mandate of Jamboo Bhandari, the court noted that an Appellate Court, when considering a prayer for suspension of sentence under Section 389 of the Cr.P.C. (now Section 430 of the BNSS), must determine if the case is exceptional

In the present matter, the High Court found that the impugned order of the Sessions Court was mechanical; it did not disclose whether the court had considered if the case fell within an exception or why the 20% deposit was necessary despite the petitioner’s objections

The court reasoned that the failure to record such considerations or provide a reasoned order rendered the imposition of the condition legally unsustainable

The court restored the petitioner’s application for suspension of sentence before the Appellate Court and directed the learned Second Additional Sessions Judge to reconsider the application afresh and pass a reasoned order as expeditiously as possible

Pending the fresh decision, the execution of the trial court’s judgment dated January 1, 2026, was ordered to remain suspended

The CRMP was disposed of at the admission stage