Recently, the Supreme Court of India had passed a Judgment dated 29-05-2019 in Surinder Singh and others vs Virender Gandhi 2019, whereby, the Apex Court held that Section 148 of the Negotiable Instruments Act 1881 (Act) as amended in 2018 would have a retrospective effect to cases where appeals lie from orders of conviction for offence under Section 138 of the Act, arising out of criminal proceedings initiated prior to the 2018 Amendment.
Herein, the Respondent had filed a complaint against the Accused-Appellants in the Trial Court pertaining to dishonour of cheque for insufficiency, etc., of funds in their account, sometime prior to 02-08-2018 (Complaint). During the pendency of the said proceedings, the Act was amended on 02-08-2018 (Amended Law), whereunder, Section 148 provided that the Appellate Courts may direct the appellant (accused) to deposit at least 20% of fine imposed by a trial court.
Thereafter, the Trial Court convicted the Accused-Appellants under Section 138 of the Act, and thereby, imposed a punishment of 2 years imprisonment with fine. Thereafter, in an Appeal before the Additional Sessions Judge, Panchkula, the Appellate Court suspended the sentence and directed the Accused-Appellants to deposit 25% of the fine amount in the Court as per Section 148 of the Amended Law. Subsequently, in an Appeal before the Punjab and Haryana Court, the Appellate Court upheld the said Order of the Additional Sessions Judge, Panchkula.
Aggrieved by the said Order of the High Court, the Accused-Appellants filed an appeal before the Supreme Court. Herein, the Accused argued that the provisions of the Amended Law would not be applicable to criminal proceedings that were initiated under the older Act. But the Supreme Court rejected the said contention on the following grounds:
1- The object of introducing the Amended Law is speedy disposal of cases relating to offence of dishonour of cheques. Earlier, a convict under Section 138 of the Act could easily file an appeal and obtain a stay on the proceedings. As a result of which the payee of the dishonoured cheque had to suffer considerable loss of time and money due to such frivolous and unscrupulous litigation. Thus, the Amended Law provided for certain amendments such as deposit of at least 20% of fine imposed by trial court, etc, in order to strengthen the credibility of cheques and to develop the trade and commerce sector.
2- That although at the time when the Complaint was filed, the Amended Law was not in force, but by the time the Appeals were filed and orders were passed by the Appellate Courts, the Amended Law had already come into force.
Thus, based on the aforesaid grounds, the Supreme Court held that Section 148 of the Amended Law would have a retrospective effect and be applicable to cases where appeals have been filed against orders of conviction for offence under Section 138 of the Act, arising out of criminal proceedings initiated prior to the Amended Law, i.e. on or before 01-08-2018. Therefore, the Supreme Court upheld the Orders of both the Appellate Courts and directed the Accused-Appellants to deposit 25% of the amount of fine imposed by the Trial Court in this case.
Senior Legal Associate
The Indian Lawyer