DATE: 29/05/2019
COURT: Supreme Court of India
BENCH: Justice M.R. Shah and Justice A.S. Bopanna
FACTS:
The case arose out of proceedings initiated under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), concerning the dishonour of cheques issued by the appellants to the respondent, Virender Gandhi. These cheques, issued in discharge of legal liability, were dishonoured due to “insufficient funds,” leading the respondent to file complaints under Section 138 NI Act. The trial court, after examining the evidence, found the appellants guilty and convicted them. The appellants were sentenced to undergo imprisonment and were also directed to pay compensation to the complainant under Section 357(3) of the Cr.P.C.
The appellants then filed appeals before the Sessions Court under Section 374 Cr.P.C. and simultaneously applied for suspension of sentence under Section 389 Cr.P.C. The Sessions Court rejected the applications for suspension of sentence due to non-compliance with the mandate of Section 148 of the NI Act, as amended by the Negotiable Instruments (Amendment) Act, 2018. The High Court of Punjab and Haryana also dismissed the appellants’ revision petitions. Aggrieved by the High Court’s decision and the interpretation of the newly inserted Section 148—which mandates deposit of at least 20% of the fine or compensation awarded by the trial court for a stay on the sentence—the appellants approached the Supreme Court, challenging the constitutional validity and retrospective applicability of Section 148 NI Act.
ISSUES:
The main issue was the constitutional validity of Section 148 of the Negotiable Instruments Act, 1881, which requires a person convicted under Section 138 to deposit 20% of the fine or compensation to seek suspension of sentence. The appellants challenged its retrospective application, arguing it imposed undue hardship, particularly for appeals pending before the amendment.
JUDGEMENT WITH REASONING:
The Supreme Court upheld the constitutional validity of Section 148 of the Negotiable Instruments Act, 1881, which mandates the deposit of 20% of the fine or compensation amount by a person convicted under Section 138 to seek suspension of the sentence. The Court clarified that the provision applies prospectively, meaning it would only affect cases after its enactment and not pending appeals. It also emphasized the need for a balanced approach, ensuring that the provision does not result in undue hardship to the accused.
The Supreme Court carefully examined the constitutional validity of Section 148 of the Negotiable Instruments Act, 1881, which mandates the deposit of 20% of the fine or compensation amount as a condition for seeking suspension of a sentence. The Court reasoned that the provision was a legitimate legislative measure intended to encourage the enforcement of the payment of compensation to the complainant in cases of dishonor of cheques under Section 138 of the Act. The Court noted that the provision aimed to strike a balance between protecting the interests of the complainant and safeguarding the rights of the accused. It observed that the provision does not violate the right to appeal but ensures that the accused does not abuse the legal process by prolonging the proceedings and delaying the payment of compensation.
The Court further emphasized that the application of Section 148 should be prospective, meaning it would apply only to cases filed after the enactment of the provision and not to appeals that were pending at the time of its introduction. The reasoning behind this approach was that the legislative intent was to deter the delay in the enforcement of compensation and not to punish individuals retroactively. The Court also took into account that the provision allows the accused to request the suspension of the sentence, subject to the condition of depositing 20% of the compensation. It concluded that this condition was fair and reasonable, striking an appropriate balance between the interests of both parties—ensuring that the complainant is not left without remedy while preserving the accused's right to appeal the conviction. Thus, the Court upheld the constitutional validity of Section 148, ensuring its application in a manner that did not cause undue hardship to the accused.
ANALYSIS:
In Surinder Singh Deswal v. Virender Gandhi (2019), the Supreme Court addressed the constitutional validity of Section 148 of the Negotiable Instruments Act, 1881, which mandates a person convicted under Section 138 of the Act to deposit 20% of the fine or compensation amount as a condition for seeking the suspension of sentence. The Court upheld the provision, reasoning that it was a legislative measure aimed at ensuring that the complainant receives the compensation owed in cases of dishonor of cheques. The Court balanced the interests of the complainant and the rights of the accused by clarifying that the provision would apply prospectively, meaning it would only affect cases after the enactment of the provision, not pending appeals. This prospective application was essential to avoid undue hardship for individuals whose appeals were filed before the amendment.
The Court further emphasized that Section 148 was intended to prevent delays in the enforcement of compensation and discourage misuse of the legal process by the accused. It acknowledged that the provision was not unconstitutional or an infringement on the right to appeal, as it allowed the accused to request a suspension of sentence while ensuring that the complainant's remedy was not delayed. The condition of depositing 20% of the fine or compensation was found to be fair and reasonable, providing a balanced approach that protected both the complainant's right to receive compensation and the accused's right to appeal. Thus, the Court upheld Section 148’s constitutional validity and its application, while ensuring that it did not result in excessive hardship for the accused.
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