Col. S.S. Deswal and Others vs Virender Gandhi - Supreme Court Important Judgment 2019

 Surinder Singh Deswal @ Col. S.S. Deswal and Others vs Virender Gandhi - Supreme Court Important Judgment 2019 - 

On 29th May, 2019, in the case of Surinder Singh Deswal @ Col. S.S. Deswal and Others v. Virender Gandhi [Criminal Appeal Nos. 917-944 of 2019], the issue for consideration was whether Section 148 of the Negotiable Instruments Act, 1881, as amended by Act No. 20/2018, was retrospectively applicable with respect to criminal proceedings already initiated prior to the said amendment in Section 148 i.e. prior to 01.09.2018, as in the present case. Consequently, the further issue was whether, on facts, the first appellate court and the High Court were justified in directing the appellants (who were convicted by the trial court under Section 138 and sentenced to imprisonment for two years alongwith fine) to deposit 25% of the amount of compensation/fine imposed by the trial Court, pending appeals challenging the order of conviction and sentence and while suspending the sentence under Section 389 Cr.P.C., considering Section 148 of the N.I. Act as amended.

The Supreme Court held that “having observed and found that because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of Section 138 of the N.I. Act was being frustrated, the Parliament has thought it fit to amend Section 148 of the N.I. Act, by which the first appellate Court, in an appeal challenging the order of conviction under Section 138 of the N.I. Act, is conferred with the power to direct the convicted accused – appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. By the amendment in Section 148 of the N.I. Act, it cannot be said that any vested right of appeal of the accused – appellant has been taken away and/or affected. Therefore, submission on behalf of the appellants that amendment in Section 148 of the N.I. Act shall not be made applicable retrospectively and more particularly with respect to cases/complaints filed prior to 1.9.2018 shall not be applicable has no substance and cannot be accepted, as by amendment in Section 148 of the N.I. Act, no substantive right of appeal has been taken away and/or affected.”

Considering the Statement of Objects and Reasons of the amendment in Section 148 of the N.I. Act, on purposive interpretation of Section 148 of the N.I. Act as amended, the Supreme Court held that “Section 148 of the N.I. Act as amended, shall be applicable in respect of the appeals against the order of conviction and sentence for the offence Under Section 138 of the N.I. Act, even in a case where the criminal complaints for the offence Under Section 138 of the N.I. Act were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018.” Accordingly, it was held that no error had been committed by the first appellate court in “directing the appellants to deposit 25% of the amount of fine/compensation as imposed” by the “trial Court considering Section 148 of the N.I. Act, as amended.”

It was held that “though it is true that in amended Section 148 of the N.I. Act, the word used is “may”, it is generally to be construed as a “rule” or “shall” and not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned. Therefore amended Section 148 of the N.I. Act confers power upon the Appellate Court to pass an order pending appeal to direct the Appellant-Accused to deposit the sum which shall not be less than 20% of the fine or compensation either on an application filed by the original complainant or even on the application filed by the Appellant-Accused under Section 389 of the Cr.P.C. to suspend the sentence.”

It was held that the submission on behalf of the appellants, relying upon Section 357(2) of the Cr.P.C. that once the appeal against the order of conviction is preferred, fine is not recoverable pending appeal and therefore such an order of deposit of 25% of the fine ought not to have been passed, has no substance. The Supreme Court observed that the opening word of amended Section 148 of the N.I. Act is that “notwithstanding anything contained in the Code of Criminal Procedure.....” and “therefore irrespective of the provisions of Section 357(2) of the Cr.P.C., pending appeal before the first appellate court, challenging the order of conviction and sentence under Section 138 of the N.I. Act, the appellate court is conferred with the power to direct the appellant to deposit such sum pending appeal which shall be a minimum of 20% of the fine or compensation awarded by the trial Court.”