Deposit of 20% not absolute in Cheque Appeal

Deposit of 20 % is not compulsory in cheque appeal

Deposit of a minimum 20% of the cheque amount when the appeal court considers an appeal of an accused person convicted for dishonour of cheque under Section 148 of Negotiable Instruments Act, is not an absolute matter, but an exceptional one, says the Supreme Court (SC) in Jamboo Bhandari v MP State Industrial Development Corporation Ltd.

The SC adds that the appeal court is at liberty to grant suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount.

Facts of this case

In this case the accused were convicted under Section 138 NI Act.

In appeal, relying upon Section 148 NI Act, the Sessions Court granted relief under Section 389 CrPC subject to condition of appellants depositing 20% of the amount of compensation.

The Madhya Pradesh High Court confirmed this order. According to the High Court, relief of suspension of sentence under Section 389 of the Code of Criminal Procedure (CrPC) can be granted only by directing the accused to deposit minimum of 20% of the compensation/fine amount.

Appeal court can exercise discretion on deposit

Normally, Appellate Court will be justified in imposing the condition of deposit as provided in Section 148 of the Negotiable Instruments Act.

However, in a case where the Appellate Court is satisfied that the condition of deposit of 20% will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded.

Kerala HC also took a similar view

Kerala High Court has also ruled in the case Baiju v State of Kerala  that the appellate court has to pass a speaking order by applying its mind for ordering deposit of minimum 20% compensation/fine amount under Section 148 of NI Act as a condition to suspend sentence.


  1. Jamboo Bhandari v MP State Industrial Development Corporation Ltd
  2. Baiju v State of Kerala