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REPORTABLE IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS.1936-1963 OF 2019

SURINDER SINGH DESWAL @ COL. S.S. DESWAL & ORS. ... APPELLANTS

VERSUS

VIRENDER GANDHI & ANR. ... RESPONDENTS

J U D G M E N T

ASHOK BHUSHAN, J.

These appeals have been filed against a common

judgment of the Punjab and Haryana High Court dated

10.09.2019  dismissing  28  petitions  filed  by  the

appellants under Section 482 of Cr.P.C.

2. Brief  facts  of  the  case  giving  rise  to  these

appeals are:

Appellant Nos. 1 and 2 are partners of appellant

No.3, M/s. Bhoomi Infrastructure Co., now known as

GLM  Infratech  Private  Limited.  Respondent  No.1,

Virender Gandhi, who was also a partner of the Firm

retired  with  respect  of  which  Memorandum  of

Understanding  dated  30.11.2013  was  entered  into.  A

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cheque  No.665643  dated  31.03.2014  drawn  on  Canara

Bank amounting to Rs.45,84,915/- was issued by the

appellant to respondent No.1 against the part payment

of the retirement dues. Similarly, 63 other cheques

were issued by the appellants in favour of respondent

arising out of the same transaction. On 06.04.2015,

respondent  No.1  deposited  cheque  No.665643  in  his

Bank  that  is  Karnataka  Bank  Ltd.,  Sector-11,

Panchkula.  The  cheque  was  dishonoured  and  returned

vide memo dated 07.04.2015 with the remarks “funds

insufficient”.  Other  63  cheques  were  also

dishonoured.

3. Respondent No.1 sent the statutory demand notice

under Section 138 of the Negotiable Instruments Act,

1881  (hereinafter  referred  to  as  “NI  Act”)  on

06.05.2015.  Complaints were filed by respondent No.1

against the appellants under Section 138 of the NI

Act  before  the  Judicial  Magistrate,  Ist  Class,

Panchkula.  In  all  28  complaints  were  filed.  The

complaints were decided by Judicial Magistrate vide

his judgment dated 30.10.2018 holding the appellant

Nos.1 and 2 guilty for the offence punishable under

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Section  138  of  the  NI  Act,  who  were  accordingly

convicted. By order dated 13.11.2018 the appellants

were sentenced to undergo imprisonment for a period

of  two  years  and  to  pay  jointly  and  severally  an

amount equal to the amount involved in the present

case i.e. cheque amount plus 1% of this amount as

interest as well as litigation expenses.  

4. The appeal was filed by the appellants against

the  judgment  dated  30.10.2018  and  sentence  dated

30.11.2018 in the Court of Sessions Judge, Panchkula.

In the appeal the appellants had filed an application

under  Section  389  of  Cr.P.C.  for  suspension  of

sentence. The learned trial court has suspended the

sentence of the appellants by order dated 13.11.2018

for 30 days. The Appellate Court vide order dated

01.12.2018 entertained the appeal and suspended the

sentence during the pendency of the appeal, subject

to furnishing of bail bond and surety bond in the sum

of Rs.50,000/- with one surety in the like amount and

also  subject  to  deposit  of  25%  of  the  amount  of

compensation awarded by the learned trial court in

favour  of  the  complainant.  The  appellants  were

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directed to deposit the amount within four weeks by

way of demand draft in the name of the Court.  

5. The appellants were convicted in all 28 cases and

the total amount to be deposited under the order of

the  Appellate  Court  was,  in  all  cases,

Rs.9,40,24,999/-.  The  appellants  preferred  an

application seeking extension of time to deposit the

amount of 25% of the compensation amount. The learned

Sessions Judge allowed the application on 19.12.2018

granting time to deposit the amount till 28.01.2019.

The appellants filed an application under Section 482

Cr.P.C. seeking quashing of the part of the order

dated  01.12.2018  passed  by  the  learned  Additional

Sessions Judge, Panchkula, whereby the said Court has

imposed a condition to deposit 25% of the amount of

compensation while suspending the sentence.  

6. The High Court vide its judgment dated 24.04.2019

dismissed  the  petition  of  the  appellants  under

Section  482  Cr.P.C.  and  other  connected  petitions.

The  appellants  preferred  Special  Leave

Petition(Criminal)  Nos.4948-4975/2019  before  this

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Court against the judgment dated 24.04.2019 of the

Hight Court of Punjab and Haryana at Chandigarh.  

7. This  Court  vide  its  judgment  dated  29.05.2019

dismissed  the  criminal  appeals  arising  out  of  the

SLPs(Criminal).  Learned  Additional  Sessions  Judge,

Panchkula in view of the non-compliance of the order

dated 20.07.2019 directed the appellants to surrender

in the trial court within four days. The appellants

were also not present when the case was taken by the

Additional  Sessions  Judge  on  20.07.2019.  Another

petition under Section 482 Cr.P.C. was filed by the

appellants  challenging  the  order  dated  20.07.2019

passed  by  the  Additional  Sessions  Judge.  The  28

petitions  under  Section  482  Cr.P.C.  filed  by  the

appellants  have  been  dismissed  by  the  impugned

judgment of the Punjab and Haryana High Court dated

10.09.2019. Aggrieved by which judgment these appeals

have been filed by the appellants.

8. Shri  Balbir  Singh,  learned  senior  counsel

appearing for the appellants questioning the order of

the  Additional  Sessions  Judge  dated  20.07.2019  and

judgment of the High Court submits that by mere non-

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deposit  of  25%  of  the  amount  of  compensation  as

directed on 01.12.2018 cannot result in vacation of

suspension of sentence. Learned counsel submits that

the direction to deposit 25% of the compensation as

directed by the trial court could not have been made

under Section 148 of the NI Act. Section 148 of the

NI Act having come into force on 01.09.2018 could not

have  been  relied  by  the  Courts  below.  Since,  the

complaint was filed in the year 2015 alleging offence

under Section 138 of the NI Act which was much before

the  enforcement  of  Section  148  of  the  NI  Act.  He

further submits that non-deposit of 25% of the amount

of compensation could not lead to vacation of the

order suspending the sentence rather it was open to

the respondents to recover the said amount as per the

procedures prescribed under Section 421 Cr. P.C.  

9. Learned counsel for the appellants submits that

this Court in  Criminal Appeal No.1160 of 2019 (G.J.

Raja  vs.  Tejraj  Surana) decided  on  30.07.2019  has

held the provisions of Section 143A of NI Act to be

prospective only that is to apply with respect to

offence  committed  after  insertion  of  Section  143A

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w.e.f. 01.09.2018. He submits that both Sections 143A

and Section 148 inserted in NI Act by amendment Act

20 of 2018, hence Section 148 was not attracted in

the present case which was only prospective and could

have been utilised in offences which were committed

after 01.09.2018. He has also placed reliance on the

judgment of Bombay High Court in  Ajay Vinodchandra

Shah vs. State of Maharashtra, (2019) 4 Mah LJ 705

and another judgment of Punjab and Haryana High Court

at  Chandigarh  dated  18.07.2019  in  CRM-M-29187  of

2019(O&M)(Vivek Sahni and another vs. Kotak Mahindra

Bank Ltd.).

10. We  have  considered  the  submissions  of  learned

counsel for the parties and have perused the records.

11. The  appellants  had  challenged  the  order  dated

01.12.2018 passed by the Additional Sessions Judge,

Panchkula  by  which  while  entertaining  the  criminal

appeal  of  the  appellants,  Appellate  Court  has

suspended the substantive sentence of the appellants

subject to deposit 25% of the compensation awarded by

the trial court in favour of the complainant. The

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petitions  under  Section  482  Cr.P.C.  filed  by  the

appellants  questioning  the  order  dated  01.12,2019

were dismissed by the High Court vide its judgment

dated  24.04.2019  against  which  judgment  the

appellants have also filed SLP(Criminal)Nos.4948-4975

of  2019)  which  were  dismissed  by  this  Court  on

29.05.2019.  All  arguments  raised  by  the  appellants

questioning  the  order  dated  01.12.2018  have  been

elaborately dealt with by this Court and rejected.

The  submissions  regarding  challenge  to  the  order

dated 01.12.2018 of the learned Additional Sessions

Judge which have been addressed before us have been

considered by this Court and rejected. It is useful

to refer paragraph 8., 8.1 and 9 of the judgment of

this Court which are to the following effect:

“8. It is the case on behalf of the Appellants that as the criminal complaints against the Appellants Under Section 138 of the N.I. Act were lodged/filed before the amendment Act No. 20/2018 by which Section 148 of the N.I. Act came to be amended and therefore amended Section 148 of the N.I. Act shall not be made applicable. However, it is required to be noted that at the time when the appeals against the conviction of the  Appellants  for  the  offence  Under Section 138 of the N.I. Act were preferred, Amendment Act No. 20/2018 amending Section 148 of the N.I. Act came into force w.e.f.

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1.9.2018.  Even,  at  the  time  when  the Appellants  submitted  application/s  Under Section  389  of  the  Code  of  Criminal Procedure to suspend the sentence pending appeals  challenging  the  conviction  and sentence, amended Section 148 of the N.I. Act  came  into  force  and  was  brought  on statute  w.e.f.  1.9.2018.  Therefore, considering  the  object  and  purpose  of amendment in Section 148 of the N.I. Act and  while  suspending  the  sentence  in exercise of powers Under Section 389 of the Code of Criminal Procedure, when the first appellate court directed the Appellants to deposit  25%  of  the  amount  of fine/compensation as imposed by the learned trial Court, the same can be said to be absolutely in consonance with the Statement of  Objects  and  Reasons  of  amendment  in Section 148 of the N.I. Act.

8.1.  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

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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. Therefore the decisions of this Court in the cases of Garikapatti Veeraya (supra) and Videocon International Limited (supra), relied upon by the learned senior Counsel  appearing  on  behalf  of  the Appellants shall not be applicable to the facts  of  the  case  on  hand.  Therefore, considering  the  Statement  of  Objects  and Reasons of the amendment in Section 148 of the  N.I.  Act  stated  hereinabove,  on purposive interpretation of Section 148 of the  N.I.  Act  as  amended,  we  are  of  the opinion 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.  If  such  a purposive interpretation is not adopted, in that  case,  the  object  and  purpose  of amendment in Section 148 of the N.I. Act would be frustrated. Therefore, as such, no error  has  been  committed  by  the  learned first  appellate  court  directing  the Appellants to deposit 25% of the amount of fine/compensation as imposed by the learned trial Court considering Section 148 of the N.I. Act, as amended.

9.  Now  so  far  as  the  submission  on behalf  of  the  Appellants  that  even considering  the  language  used  in  Section 148  of  the  N.I.  Act  as  amended,  the appellate Court "may" order the Appellant to  deposit  such  sum  which  shall  be  a

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minimum of 20% of the fine or compensation awarded  by  the  trial  Court  and  the  word used  is  not  "shall"  and  therefore  the discretion  is  vested  with  the  first appellate court to direct the Appellant - Accused  to  deposit  such  sum  and  the appellate  court  has  construed  it  as mandatory, which according to the learned Senior Advocate for the Appellants would be contrary to the provisions of Section 148 of the N.I. Act as amended is concerned, considering the amended Section 148 of the N.I. Act as a whole to be read with the Statement  of  Objects  and  Reasons  of  the amending  Section  148  of  the  N.I.  Act, 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  Code  of  Criminal Procedure  to  suspend  the  sentence.  The aforesaid  is  required  to  be  construed considering  the  fact  that  as  per  the amended  Section  148  of  the  N.I.  Act,  a minimum of 20% of the fine or compensation awarded by the trial court is directed to be deposited and that such amount is to be deposited within a period of 60 days from the  date  of  the  order,  or  within  such further period not exceeding 30 days as may be  directed  by  the  appellate  court  for sufficient  cause  shown  by  the  Appellant. Therefore,  if  amended  Section  148  of  the

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N.I. Act is purposively interpreted in such a  manner  it  would  serve  the  Objects  and Reasons  of  not  only  amendment  in  Section 148 of the N.I. Act, but also Section 138 of the N.I. Act. Negotiable Instruments Act has been amended from time to time so as to provide,  inter  alia,  speedy  disposal  of cases  relating  to  the  offence  of  the dishonoured of cheques. So as to see that due  to  delay  tactics  by  the  unscrupulous drawers of the dishonoured cheques due to easy  filing  of  the  appeals  and  obtaining stay in the proceedings, an injustice was caused to the payee of a dishonoured cheque who  has  to  spend  considerable  time  and resources  in  the  court  proceedings  to realise the value of the cheque and having observed  that  such  delay  has  compromised the  sanctity  of  the  cheque  transactions, the Parliament has thought it fit to amend Section  148  of  the  N.I.  Act.  Therefore, such a purposive interpretation would be in furtherance of the Objects and Reasons of the amendment in Section 148 of the N.I. Act and also Section 138 of the N.I. Act.”

12. This Court having already upheld the order of the

Appellate  Court  dated  01.12.2018  suspending  the

sentence  subject  to  deposit  25%  of  the  amount  of

compensation any submission questioning the order of

the  Appellate  Court  directing  the  suspension  of

sentence  subject  to  deposit  of  25%  of  the

compensation amount needs no further consideration.

By  dismissal  of  the  criminal  appeals  of  the

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appellants on 29.05.2019 by this Court the challenge

stands repelled and cannot be allowed to be reopened.

13. The  second  round  of  litigation  which  was

initiated  by  the  appellant  by  filing  application

under Section 482 Cr.P.C. was against the order dated

20.07.2019 passed by the Additional Sessions Judge,

Panchkula  by  which  Additional  Sessions  Judge  held

that  the  appellant  having  not  complied  with  the

direction  dated  01.12.2018  to  deposit  25%  of  the

amount of compensation, the order of suspension of

sentence shall be deemed to have been vacated. The

order dated 20.07.2019 was an order passed by the

Additional Sessions Judge on account of failure of

the  appellant  to  deposit  25%  of  the  amount  of

compensation.  The  suspension  of  sentence  on

01.12.2018 was subject to the condition of deposit of

25% of the amount of compensation, when the condition

for  suspension  of  sentence  was  not  complied  with,

learned Additional Sessions Judge was right in taking

the view that order of suspension of sentence shall

be deemed to have been vacated. Challenge to order

dated  20.07.2019  has  rightly  been  repelled  by  the

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High  Court  by  its  elaborate  and  well  considered

judgment dated 10.09.2019.

14. Learned  counsel  for  the  appellant  has  placed

reliance  on  the  judgment  of  this  Court  dated

30.07.2019 in  Criminal Appeal No.1160 of 2019 (G.J.

Raja vs. Tejraj Surana). This Court in the above case

was  considering  provisions  of  Section  143A  of  the

N.I. Act which was inserted by the same Amendment Act

20 of 2018 by which Section 148 of the N.I. Act has

been inserted. This Court took the view that Section

143A is prospective in nature and confined to cases

where offences were committed after the introduction

of Section 143A i.e. after 01.09.2018. In paragraph

22 of the judgment following has been held:

“22.  In  our  view,  the  applicability  of Section 143A of the Act must, therefore, be held  to  be  prospective  in  nature  and confined  to  cases  where  offences  were committed after the introduction of Section 143A, in order to force an accused to pay such interim compensation.”

15. The judgment of this Court which was delivered in

the  case  of  the  present  appellants  i.e.  Criminal

Appeal Nos.917-944 of 2019 (Surinder Singh Deswal @

Col. S.S. Deswal and others vs. Virender Gandhi) (in

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which one of us M.R.Shah, J was also a member)  was

also cited before the Bench deciding the case of G.J.

Raja. This Court in its judgment dated 29.05.2019 has

rejected  the  submission  of  the  appellants  that

Section 148 of N.I. Act shall not be made applicable

retrospectively. This Court held that 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,  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.

16. The Bench deciding  G.J. Raja’s case has noticed

the judgment of this Court in the appellants’ case

i.e. Surinder Singh Deswal’s case and has opined that

the decision of this Court in Surinder Singh Deswal’s

case was on Section 148 of the N.I. Act which is a

stage  after  conviction  of  the  accused  and

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distinguishable from the stage in which the interim

compensation was awarded under Section 143A of the

N.I.Act.  When  the  Bench  deciding  G.J.  Raja’s

case(supra) itself has considered and distinguished

the judgment of this Court in appellants’ own case

i.e. Surinder Singh Deswal’s, reliance by the learned

counsel for the appellants on the judgment of this

Court in G.J. Raja’s case is misplaced. It is useful

to  refer  to  paragraph  23  of  the  judgment  in  G.J.

Raja’s case which is to the following effect:

“23.  We  must,  however,  advert  to  a decision  of  this  Court  in  Surinder  Singh Deswal and Ors. v. Virender Gandhi (2019) 8 SCALE  445  where  Section  148  of  the  Act which  was  also  introduced  by  the  same Amendment  Act  20  of  2018  from  01.09.2018 was held by this Court to be retrospective in  operation.  As  against  Section  143A  of the Act which applies at the trial stage that  is  even  before  the  pronouncement  of guilt or order of conviction, Section 148 of the Act applies at the appellate stage where the Accused is already found guilty of  the  offence  Under  Section  138  of  the Act.  It  may  be  stated  that  there  is  no provision in Section 148 of the Act which is  similar  to  Sub-Section  (5)  of  Section 143A of the Act. However, as a matter of fact, no such provision akin to Sub-section (5)  of  Section  143A  was  required  as Sections  421  and  357  of  the  Code,  which apply post-conviction, are adequate to take care  of  such  requirements.  In  that  sense said Section 148 depends upon the existing

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machinery  and  principles  already  in existence  and  does  not  create  any  fresh disability  of  the  nature  similar  to  that created  by  Section  143A  of  the  Act. Therefore,  the  decision  of  this  Court  in Surinder  Singh  Deswal  (2007)  13  SCC  492 stands on a different footing.”

In view of the above, the judgment of this Court in

the case of G.J. Raja does not help the appellants.

17. The judgment of Punjab and Haryana High Court in

Vivek Sahni and another(supra) which has been relied

by the learned counsel for the appellants has been

noted and elaborately considered by the High Court in

the impugned judgment. In paragraph 14 and 15 of the

impugned judgment of the High Court reasons have been

given for distinguishing the Vivek Sahni’ case.

18. The  High  Court  is  right  in  its  opinion  that

question No.2 as framed in Vivek Sahni’s case was not

correctly considered. When suspension of sentence by

the  trial  court  is  granted  on  a  condition,  non-

compliance of the condition has adverse effect on the

continuance  of  suspension  of  sentence.  The  Court

which  has  suspended  the  sentence  on  a  condition,

after  noticing  non-compliance  of  the  condition  can

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very well hold that the suspension of sentence stands

vacated  due  to  non-compliance.  The  order  of  the

Additional Sessions Judge declaring that due to non-

compliance  of  condition  of  deposit  of  25%  of  the

amount of compensation, suspension of sentence stands

vacated  is  well  within  the  jurisdiction  of  the

Sessions Court and no error has been committed by the

Additional Sessions Judge in passing the order dated

20.07.2019.

19. It is for the Appellate Court who has granted

suspension of sentence to take call on non-compliance

and take appropriate decision. What order is to be

passed by the Appellate Court in such circumstances

is for the Appellate Court to consider and decide.

However,  non-compliance  of  the  condition  of

suspension  of  sentence  is  sufficient  to  declare

suspension of sentence as having been vacated.

20. Insofar as the judgment of the Bombay High Court

in  Ajay  Vinodchandra  Shah  (supra) which  has  been

relied by the learned counsel for the appellant, it

is sufficient to observe that the High Court did not

have  benefit  of  judgment  of  this  Court  dated

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29.05.2019  in  Surinder  Singh  Deswal’s  case.  The

judgment of the Bombay High Court was delivered on

14.03.2019  whereas  judgment  of  this  Court  in

appellants’ case is dated 29.05.2019. In view of the

law  laid  down  by  this  Court  in  Surinder  Singh

Deswal’s case decided on 29.05.2019, the judgment of

Bombay High Court in  Ajay Vinodchandra Shah’s case

cannot  be  said  to  be  a  good  law  insofar  as

consequences  of  non-compliance  of  condition  of

suspension of sentence is concerned.  

21. It is further to note that even Bombay High Court

while modifying the direction to deposit 25% of the

amount of total compensation directed the accused to

deposit 20% of the amount of compensation within 90

days.

22. In view of the foregoing discussion, we do not

find any merit in the submission of the appellants.

The appeals are dismissed.

......................J.                                   ( ASHOK BHUSHAN )

......................J.                                   ( M.R. SHAH ) New Delhi, January 08, 2020.