Cheque-Bounce Convict Keeps Bail For Now As Uttarakhand HC Sends 10% Deposit Issue Back Under NI Act’s 20% Minimum

The applicant was convicted under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to six months’ simple imprisonment and a fine of ₹31,00,000.

In the applicant’s appeal, the appellate court suspended the sentence and granted bail on condition that he deposit 10% of the fine.

The applicant challenged only that condition, arguing that it was imposed without reasons and was inconsistent with Section 148 of the Act.

The High Court considered whether the condition could stand in light of the statutory minimum deposit.

Section 148 of the Negotiable Instruments Act empowers an appellate court hearing an appeal against conviction under Section 138 to direct the appellant to deposit a sum that is at least 20% of the fine or compensation awarded by the trial court; the provision also allows the court to extend the time for deposit for sufficient cause.

The High Court also directed reconsideration in light of the Supreme Court’s decision in Muskan Enterprises and Another v. The State of Punjab and Another, (2024) 20 SCC 85, which it identified as relevant to the scope of the appellate court’s power under Section 148.

The appellate court had imposed a 10% deposit condition, which fell below the minimum prescribed by Section 148.

The High Court therefore held that the condition required reconsideration under the statutory provision and the applicable Supreme Court law.

It did not itself determine the amount to be deposited; instead, it remitted that question to the appellate court for reconsideration after hearing the parties.

It remitted the question of deposit to the appellate court for fresh consideration under Section 148 and the applicable law, after hearing the parties.

The suspension of sentence and grant of bail otherwise remained unchanged, subject to the fresh order.