Cheque-Bounce Convict’s Financial Hardship Not Enough To Waive 20% Compensation Deposit, P&H High Court Upholds Bail Condition

The petitioners challenged an order of the Additional Sessions Judge, Kurukshetra, dated 23 December 2025, directing the appellant-convict to deposit 20% of the trial court’s compensation award of ₹5,00,000 within 60 days under Section 148 of the Negotiable Instruments Act, 1881 (NI Act).

The appellate court suspended the sentence and granted bail but declined to waive or reduce the deposit.

Before the High Court, the petitioners relied on financial incapacity, disputed liability and alleged misuse of the cheque, and argued that the appellate court had not given specific reasons for rejecting an exception to the deposit requirement.

Section 148 of the NI Act empowers an appellate court hearing an appeal against conviction under Section 138 to direct the appellant to deposit at least 20% of the fine or compensation.

In Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd. & Ors., (2023) 10 SCC 446, the Supreme Court held that the deposit is ordinarily appropriate, but an exception may be made where it would be unjust or would effectively deprive the appellant of the right of appeal; the appellate court must record reasons for finding such exceptional circumstances.

Muskan Enterprises & Anr. v. State of Punjab, 2024 INSC 1046, likewise recognises the appellate court’s discretion not to order a deposit in an exceptional case, for recorded reasons.

The petition was brought under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023; the challenged appellate order referred to Section 430 BNSS in granting suspension of sentence.

The High Court applied the Supreme Court authorities to conclude that waiver is exceptional and must be supported by cogent material.

The petitioners’ asserted financial difficulty did not, by itself, establish exceptional circumstances; nor did the disputed liability and alleged cheque misuse demonstrate that requiring the deposit would be unjust or effectively extinguish the right of appeal.

The Court therefore found no legal infirmity warranting interference with the appellate court’s order.

Any pending applications were also disposed of, with the Court clarifying that its observations did not express an opinion on the merits of the pending appeal.