{"id":363532,"date":"2025-10-13T09:00:18","date_gmt":"2025-10-13T03:30:18","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=363532"},"modified":"2025-10-15T09:53:10","modified_gmt":"2025-10-15T04:23:10","slug":"20-percent-compensation-deposit-u-s-148-ni-act-not-absolute-rule-guj-hc","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/13\/20-percent-compensation-deposit-u-s-148-ni-act-not-absolute-rule-guj-hc\/","title":{"rendered":"20% compensation deposit under S. 148 of NI Act is not mandatory, Appellate Courts have discretion: Gujarat HC"},"content":{"rendered":"
\n

Gujarat High Court:<\/span> In a criminal revision application challenging the order dated 17-8-2024 (‘impugned order’) wherein the Appellate Court, in exercise of its power under Section 148<\/a> of the Negotiable Instruments Act, 1881<\/a> (‘the Act’), had directed the appellant to deposit 20 percent of the compensation payable by it, the Single Judge Bench of R.T. Vachhani, J, upheld the impugned order and held that the Appellate Court had the jurisdiction to exercise discretion under Section 148 of the Act in imposing the condition of deposit of 20 percent of compensation amount.<\/p>\n

Background<\/h3>\n

The petitioner, aggrieved by the order dated 17-8-2024, had sought to keep the execution of the sentence in abeyance and had simultaneously moved an application under Section 389 (3)<\/a> of the Code of Criminal Procedure, 1973<\/a> (‘CrPC’). The Appellate Court directed the petitioner to deposit 20 percent of the compensation amount under Section 148 of the Act. Hence, the instant revision application had been filed.<\/p>\n

The issue for consideration before the Court was whether the imposition of condition by the appellate Court to deposit 20 percent of the compensation amount awarded by the trial Court was sustainable or not?<\/p>\n

The petitioner had averred that once the order for suspension of sentence had been passed, the first appellate Court was not justified in ordering a deposit of 20 percent of the compensation amount.<\/p>\n

Analysis, Law and Decision<\/h3>\n

The Court relied on two Supreme Court decisions wherein the imposition of deposit amount under Section 148 of the Act had been in contention. In the case of Jamboo Bhandari<\/span> v. M.P. SIDC Ltd.<\/span>, (2023) 10 SCC 446<\/a>, the Supreme Court had held that while the appellate Courts would ordinarily be permitted to direct the appellant to deposit 20 percent of the amount awarded, there could be exceptional circumstances. Such circumstance would apply only when they would unfairly hinder or effectively block the appellant’s right to appeal. The Supreme Court had further stated that such exceptions must be backed by properly recorded reasons.<\/p>\n

The Court further noted that in the second case of Muskan Enterprises<\/span> v. State of Punjab<\/span>, 2024 INSC 1046, the Supreme Court had laid to rest the controversy on the usage of ‘may’ and ‘shall’ under Section 148 of the Act. According to the Supreme Court, the usage of the word ‘may’ grants the appellate Court the discretion to decide whether to order the deposit or not. But as soon as the appellate Court exercises its discretion, the mandate of ‘shall’ kicks in, i.e., the Court must necessarily direct deposit of at least 20 percent of the amount awarded.<\/p>\n

The Court further opined that the purpose of Section 148 of the Act is to offer some interim relief to complainants in cheque dishonour cases while the appeal is pending. Furthermore, the Courts are required to exercise discretion while being mindful of the specific facts of each case.<\/p>\n

Thus, the Court held that the first Appellate Court was well within its jurisdiction to direct the appellants to deposit 20 percent of the compensation amount and accordingly dismissed the revision petition.<\/p>\n

[Mahadev Enterprise v. State of Gujarat, 2025 SCC OnLine Guj 4371<\/a>, decided on 22-9-2025<\/span>]<\/p>\n\n

Advocates who appeared in this case:<\/p>\n

For the Appellant:<\/span> Vicky B. Mehta, Advocate<\/p>\n

For the Respondent:<\/span> H.K. Patel, APP, Nrup H. Panchal, Parichay N. Ashar, Advocates<\/p>\n

Buy Code of Criminal Procedure, 1973  HERE<\/a><\/h3>\n

\"Code<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“The purpose behind directing to deposit as enumerated under Section 148 of the NI Act in appeal is at least to recover plausible compensation amount to provide some relief so as to save his business.”<\/p>\n","protected":false},"author":67011,"featured_media":363563,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[90757,2728,68909,90758,3096,85822,50074],"class_list":["post-363532","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-20-per-cent-deposit-amount","tag-compensation","tag-deposit-amount","tag-deposit-compensation","tag-Gujarat_High_Court","tag-justice-r-t-vachhani","tag-negotiable-instruments-act-1881"],"yoast_head":"\n20% deposit under S. 148 NI Act not mandatory: Guj HC | SCC Times<\/title>\n<meta name=\"description\" content=\"Gujarat High Court held that the requirement of deposit of 20 percent of compensation in appeal under Section 148 NI Act is not mandatory\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/13\/20-percent-compensation-deposit-u-s-148-ni-act-not-absolute-rule-guj-hc\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"20% compensation deposit under S. 148 of NI Act is not mandatory, Appellate Courts have discretion: Gujarat HC\" \/>\n<meta property=\"og:description\" content=\"Gujarat High Court held that the requirement of deposit of 20 percent of compensation in appeal under Section 148 NI Act is not mandatory\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/13\/20-percent-compensation-deposit-u-s-148-ni-act-not-absolute-rule-guj-hc\/\" \/>\n<meta property=\"og:site_name\" content=\"SCC Times\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/scc.online\/\" \/>\n<meta property=\"article:published_time\" content=\"2025-10-13T03:30:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-10-15T04:23:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Compensation-deposit-S.-148-NI-Act.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"886\" \/>\n\t<meta property=\"og:image:height\" content=\"590\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Editor\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"20% compensation deposit under S. 148 of NI Act is not mandatory, Appellate Courts have discretion: Gujarat HC\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Editor\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/post\\\/2025\\\/10\\\/13\\\/20-percent-compensation-deposit-u-s-148-ni-act-not-absolute-rule-guj-hc\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/post\\\/2025\\\/10\\\/13\\\/20-percent-compensation-deposit-u-s-148-ni-act-not-absolute-rule-guj-hc\\\/\"},\"author\":{\"name\":\"Editor\",\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/#\\\/schema\\\/person\\\/84e42bab48238baf12c7e33b3d9761fe\"},\"headline\":\"20% compensation deposit under S. 148 of NI Act is not mandatory, Appellate Courts have discretion: Gujarat HC\",\"datePublished\":\"2025-10-13T03:30:18+00:00\",\"dateModified\":\"2025-10-15T04:23:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/post\\\/2025\\\/10\\\/13\\\/20-percent-compensation-deposit-u-s-148-ni-act-not-absolute-rule-guj-hc\\\/\"},\"wordCount\":556,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/post\\\/2025\\\/10\\\/13\\\/20-percent-compensation-deposit-u-s-148-ni-act-not-absolute-rule-guj-hc\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.scconline.com\\\/blog\\\/wp-content\\\/uploads\\\/2025\\\/10\\\/Compensation-deposit-S.-148-NI-Act.webp\",\"keywords\":[\"20 per cent deposit amount\",\"compensation\",\"deposit amount\",\"deposit compensation\",\"Gujarat High Court\",\"Justice R.T. 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