Section 148 NI Act | Deposit is the Norm, Waiver is the Exception: Calcutta High Court Upholds Mandatory Pre-Deposit

"The direction to deposit compensation under Section 148 NI Act is not a curtailment of appellate rights but a statutory discipline — exceptional cases require recorded reasons" - In a significant reaffirmation of the mandatory deposit requirement under Section 148 of the Negotiable Instruments Act, 1881, the Calcutta High Court dismissed a challenge to an appellate court’s conditional order directing the accused to deposit 30% of the compensation amount as a pre-condition for admission of appeal against conviction under Section 138 of the NI Act.

Justice Jay Sengupta, sitting in the Criminal Revisional Jurisdiction, held that the appellate court’s direction was not only legally justified, but also procedurally fair, and rejected the argument that waiver should be the default. The Court observed that Section 148 creates a statutory presumption in favour of deposit, and the burden is on the convict to establish exceptional circumstances, which was not discharged in the present case.

“No Exceptional Circumstances Shown — Conditional Admission of Appeal Was Lawful”

The petitioners had approached the High Court challenging an order dated February 25, 2025, by the City Sessions Court, Calcutta, which had admitted their criminal appeal against conviction under Section 138 NI Act, subject to depositing 30% of the compensation amount awarded by the Trial Court.

It was argued by the petitioners that the appellate court had not granted them an opportunity to oppose the complainant’s application under Section 148, and that their case involved exceptional circumstances, including an alleged lack of legal debt, and the fact that co-accused (wife of accused no. 2) had been acquitted and was suffering from cancer.

Rejecting this, the High Court held:

“First, it does not appear that the petitioners were not heard. In fact, a detailed and reasoned order was passed after hearing of the respective parties.” [Para 7]

The Court further noted that the petitioners did not raise any specific exceptional ground either during the hearing or in the revision petition which could justify waiver of the statutory deposit:

“Neither was any such exceptional reason canvassed by the petitioners nor did the Court find any special reason to act otherwise.” [Para 12]

“Law is Clear — Deposit is the Rule, Waiver is the Exception and Must Be Justified on Record”

Addressing the core legal point, the Court relied heavily on Supreme Court precedent, particularly Surinder Singh Deswal v. Virender Gandhi, (2019) 11 SCC 341, which laid down that Section 148 empowers appellate courts to direct deposit of at least 20% of compensation/fine as a condition for appeal, and dispensation from deposit must be supported by special reasons.

The High Court observed: “Law is quite clear on this point. The norm would be to direct depositing of an amount of the compensation in terms of Section 148… It would only be an exception not to do so and in such event, special reasons are to be recorded.” [Para 10]

Further, the Court harmonised recent rulings of the Supreme Court, stating:

“The decision in Jamboo Bhandari v. M.P. SIDC Ltd. only supplements the view in Surinder Singh Deswal. It emphasizes on the power of the Court to consider any reason so as not to direct deposit… such reason then have to be specifically recorded.” [Para 11]

The Court also referred to Muskan Enterprises v. State of Punjab, 2024 SCC OnLine SC 4107, which clarified that justice can be served through structured discretion, but such discretion cannot be exercised arbitrarily

“Trial Court’s Rejection of Section 91 CrPC Application Was Within Judicial Discretion”

The petitioners also raised a grievance regarding rejection of their application under Section 91 of CrPC, where they had sought production of a Del Credere agency agreement, which they claimed was essential to demonstrate that there was no legal debt or liability.

The Trial Court had rejected the application, stating that the burden lay on the complainant to prove the case, and the document sought was irrelevant to the core question of dishonour of cheque.

The High Court agreed with the Trial Court’s reasoning and held:

“The petitioners’ contention as regards a prayer under Section 91 of the Code of 1973 was rejected… I do not find any miscarriage of justice on this count.” [Para 5]

It observed that the accused had every opportunity during trial to mount a defence, and the mere non-acceptance of an evidentiary request does not vitiate the trial, especially in the absence of demonstrable prejudice.

“Delay in Trial Justified Deposit Order — Cheque Dishonoured in 2009, Conviction in 2024”

The Court also took into account the inordinate delay in the matter. The cheque in question was dishonoured in 2009, while the complaint case concluded with conviction only in 2024. The Court held that this 15-year delay justified the stringent approach of the appellate court.

“In view of the detailed judgement and order of conviction and the delay in culmination of the proceeding before the Trial Court… it was not unreasonable for the Appellate Court to direct the convicts to pay 30% of the compensation.” [Para 9]

It further noted that issuance of the cheque was admitted, shifting the burden of proof under Section 139 NI Act onto the accused.

Court Grants Limited Relief — Extended Time of 60 Days to Make Deposit

Although it dismissed the revisional application and upheld the deposit condition, the High Court showed judicial pragmatism by granting the petitioners an extended timeline of 60 days to comply with the appellate court’s condition.

The Court modified the order to the extent:

“In the event the petitioners deposit the said sum amounting to 30% of the compensation amount before the learned Appellate Court within 60 days from this date, the appeal would be heard in accordance with law.” [Para 15]

This ensured that the right to appeal remains protected, provided the statutory deposit requirement is fulfilled.

Statutory Right to Appeal Under NI Act Subject to Statutory Conditions — No Automatic Waiver of Section 148 Deposit

The ruling reiterates the settled legal position that Section 148 NI Act is not merely a procedural formality, but a substantive statutory mechanism introduced to curb frivolous appeals and secure prompt recovery for complainants.

The High Court's judgment ensures fidelity to the Supreme Court’s directive that deposit is the rule, not the exception, and that waiver must be a well-reasoned judicial exception, not a routine indulgence. The Court also reaffirmed the principle that statutory safeguards for complainants cannot be lightly diluted, especially in cheque dishonour cases, where commercial integrity and judicial efficiency must be preserved.

As Justice Sengupta concluded by modifying but upholding the core direction:

“With these observations and directions, the revisional application is disposed of.”

Date of Decision: 26 September 2025