Section 148 NI Act deposit requires reasoned orders considering financial capacity rather than mechanical application.

The applicant was convicted under Section 138 of the Negotiable Instruments Act by a Magistrate on 27.09.2025 and sentenced to two months’ simple imprisonment with a compensation of ₹1,40,000

The applicant preferred a criminal appeal before the Sessions Judge, Haridwar, who, on 17.10.2025, admitted the appeal and granted bail but directed the applicant to deposit the ₹5,000 fine and 20% of the compensation amount as per Section 148 of the Act

The applicant challenged this direction before the High Court, contending that he suffers from limited financial means and that the Appellate Court passed the order mechanically without recording reasons or considering his financial capacity

1. Whether the Appellate Court's direction to deposit 20% of the compensation amount under Section 148 of the Negotiable Instruments Act was passed in a mechanical manner without judicial discretion

2. Whether the financial hardship of the accused is a relevant factor to be considered by the Appellate Court while exercising discretion under Section 148 of the Act

The Court applied Section 148 of the Negotiable Instruments Act, which empowers an Appellate Court to direct the deposit of a minimum of 20% of the fine or compensation awarded by the trial court

The Court interpreted this provision as being directory in nature regarding the exercise of judicial discretion, asserting that such power must be exercised judiciously and not in a routine or mechanical manner

The Court held that the Appellate Court is required to assign specific reasons for such directions, particularly when the accused raises a plea of financial hardship

The High Court observed that while Section 148 provides a framework for deposits during the appeal process, it does not mandate a mechanical application of the maximum threshold

Upon reviewing the impugned order dated 17.10.2025, the Court found that the Sessions Judge failed to disclose any reasons for directing the deposit of 20% of the compensation

Crucially, the lower court did not reflect any consideration of the applicant's pleaded financial constraints

The High Court reasoned that the absence of such judicial reasoning renders the order unsustainable to the extent of the deposit requirement

To balance the interests of both the complainant and the accused, the Court determined that the financial constraints of the applicant justified a reduction in the deposit percentage

It held that the mandatory-style direction for a 20% deposit without assigned reasons was improper

The Court ordered the deposit amount to be reduced from 20% to 10% of the compensation, to be paid within the time granted by the trial court

Additionally, the Court directed the Sessions Judge to decide the Criminal Appeal expeditiously, preferably within two months from the production of the certified order

The application was disposed of accordingly