20% Deposit Not Automatic: Punjab & Haryana High Court Waives Mandatory Pre-Deposit in ₹80 Lakh Cheque Bounce Appeal
Case Name: Arjun Walia v. Tarun Batra and Another
Date of Judgment: 17 February 2026
Citation: CRM-M-38548-2025
Bench: Hon’ble Mr. Justice Sumeet Goel
Held: The Punjab and Haryana High Court held that although Section 148 of the Negotiable Instruments Act, 1881 ordinarily mandates deposit of a minimum of 20% of the compensation amount for suspension of sentence in cheque dishonour appeals, such requirement is not absolute. The appellate Court must record reasons while imposing the condition, and in exceptional circumstances such as advanced age, serious medical condition, and demonstrated financial incapacity the condition may be waived or modified.
Summary: The petitioner invoked Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 seeking quashing of order dated 04.06.2025 passed by the learned Additional Sessions Judge, Nuh, whereby while admitting his appeal in a complaint under Section 138 of the Negotiable Instruments Act, 1881, he was directed to deposit 20% of the compensation amount awarded by the trial Court as a pre-condition for suspension of sentence .
The petitioner had been convicted by the learned Judicial Magistrate First Class, Ferozepur Jhirka, and sentenced to undergo simple imprisonment for 10 months and to pay compensation of ₹80,00,000/-, with a default sentence of three months’ simple imprisonment . Aggrieved, he preferred an appeal, during which the Sessions Court imposed the condition of depositing 20% of the compensation amount.
Before the High Court, the petitioner contended that he was approximately 69 years of age and suffering from serious medical ailments. Medical records were appended to substantiate his condition. It was argued that due to financial difficulty coupled with deteriorating health, he was unable to comply with the deposit condition. It was further contended that the impugned order imposed the 20% condition without assigning cogent reasons, thereby effectively fettering his statutory right of appeal .
The respondent opposed the petition, submitting that the cheque had been dishonoured with the remark “Exceeds Arrangement” and that the impugned order did not suffer from any illegality. The State submitted that it was not a contesting party in proceedings arising out of a complaint under Section 138 NI Act .
The High Court examined Section 148 of the NI Act, which empowers the appellate Court to direct deposit of a minimum of 20% of fine or compensation while considering suspension of sentence. The Court referred to the judgments of the Hon’ble Supreme Court in Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd. and Muskan Enterprises & Anr. v. State of Punjab, holding that while deposit is the general rule, departure is permissible in exceptional cases where reasons are recorded .
The Court observed that the impugned order was bereft of reasoning while directing deposit of 20% of the compensation amount. It further noted that the petitioner had placed on record material indicating circumstances beyond his control, including advanced age and serious medical condition, which prima facie impaired his ability to comply with the condition .
Considering these factors, the Court held that the present case warranted modification of the condition relating to deposit.
Decision: The impugned order dated 04.06.2025 was modified to the extent of setting aside the condition requiring deposit of 20% of the compensation amount.