Gujarat HC Waives Cheque-Bounce Convict’s 20% Deposit, Citing No Lawyer at Two Trials and Acquittal in Third Case From Same Transaction

The petitioner was convicted under Section 138 of the Negotiable Instruments Act, 1881, on 25 June 2026.

In his appeal, the Sessions Court suspended the sentence subject to deposit of 20% of the compensation within 60 days.

The petitioner’s application to waive that condition was rejected.

He submitted that three complaints arose from an alleged borrowing of Rs. 62 lakh; in two cases, convictions were entered when neither he nor his advocate was present, while in the third case, after engaging another advocate and presenting rebuttal evidence, he was acquitted.

He also relied on his limited financial means and argued that the deposit condition would impede his right to appeal.

The complainant opposed waiver, arguing that these circumstances did not justify an exception and that the petitioner remained responsible for monitoring his cases.

Section 148 of the Negotiable Instruments Act empowers the appellate court, when suspending a sentence imposed for an offence under Section 138, to direct the appellant to deposit at least 20% of the fine or compensation.

In Surinder Singh Deswal alias Colonel S.S. Deswal v. Virender Gandhi, as discussed in Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Ltd., (2023) 10 SCC 446, the Supreme Court held that deposit is the normal rule, but the appellate court may dispense with it in an exceptional case where the condition would be unjust or would deprive the appellant of the right of appeal; the court must record reasons for doing so.

The Court found that the convictions in two complaints had been entered without assistance from the petitioner’s advocate, whereas in the third complaint arising from the same transaction, the petitioner was represented and ultimately acquitted after rebuttal evidence was presented.

Considering these circumstances together with the petitioner’s asserted financial inability, the Court concluded that requiring the deposit would risk depriving him of a fair opportunity to pursue his appeals.

It therefore treated the case as exceptional under the principle in Jamboo Bhandari and held that waiver was warranted.

The Court quashed the orders dated 24 July 2026 rejecting the applications below Exhibit 5 in Criminal Appeal Nos. 1659 and 1660 of 2026, and allowed those waiver applications.