Negotiable Instruments Act, Section 148

Negotiable Instruments Act, Section 148: Power of Appellate Court to Order Payment Pending Appeal Against Conviction

Section 148 of the Negotiable Instruments Act, 1881 empowers the Appellate Court to direct a drawer convicted under Section 138 and challenging the conviction in appeal to deposit a portion of the fine or compensation awarded by the trial court during the pendency of the appeal.

The provision was introduced to discourage unnecessary delays in cheque dishonour litigation, protect the complainant’s interests during appellate proceedings, and ensure partial payment while the appeal remains pending.

1. Purpose of Section 148

The main object of Section 148 is to prevent misuse of appellate proceedings for delaying payment, protect complainants from prolonged hardship, and encourage the speedy settlement of cheque dishonour disputes.

The provision strengthens confidence in cheque transactions and recognizes that convicted drawers may sometimes file appeals primarily to delay the execution of the trial court’s order.

2. Applicability of the Provision

Section 148 applies where a person has been convicted under Section 138 and the convicted drawer has filed an appeal before the Appellate Court.

The provision becomes operative during the pendency of the appeal and governs the deposit of amounts directed by the Appellate Court.

3. Power of Appellate Court

Sub-section (1) empowers the Appellate Court to direct the appellant to deposit a sum during the pendency of the appeal.

The court may order the deposit of not less than twenty per cent of the fine or compensation awarded by the trial court, thereby securing part payment for the complainant pending the final decision.

4. Minimum Deposit Requirement

The section specifically provides that the amount deposited under Section 148 shall not be less than twenty per cent of the fine or compensation awarded.

While the Appellate Court may direct the deposit of a higher amount where appropriate, the amount ordered cannot ordinarily be below the prescribed statutory minimum.

5. Additional to Interim Compensation

The proviso clarifies that the amount payable under Section 148 is separate from the interim compensation that may have been paid under Section 143A during the trial.

Accordingly, the deposit ordered during the appeal is in addition to any interim compensation already paid, thereby ensuring continued financial protection to the complainant.

6. Time for Deposit

Sub-section (2) provides that the amount ordered by the Appellate Court must be deposited within sixty days from the date of the order.

The court may extend this period by a further thirty days upon sufficient cause being shown by the appellant, thereby ensuring timely compliance while allowing limited flexibility.

7. Release of Deposited Amount

Sub-section (3) empowers the Appellate Court to release the deposited amount to the complainant during the pendency of the appeal.

Accordingly, the complainant may receive partial financial relief before the final disposal of the appeal, thereby preventing undue hardship caused by delayed appellate proceedings.

8. Refund in Case of Acquittal

The proviso to sub-section (3) protects the appellant by requiring repayment of the amount released if the conviction is later overturned and the appellant is acquitted.

In such a case, the complainant must repay the amount with interest at the bank rate published by the Reserve Bank of India, ordinarily within sixty days, extendable by a further thirty days for sufficient cause.

9. Balance Between Rights of Parties

Section 148 balances the interests of both sides by providing the complainant with partial payment during the appeal and financial relief without waiting for its final disposal.

At the same time, it protects the appellant through refund with interest in the event of acquittal and preserves the right to challenge the conviction while discouraging delay tactics.