The Andhra Pradesh High Court has clarified that courts possess discretion to reduce the mandatory 20% deposit condition under Section 148 of the Negotiable Instruments Act in exceptional circumstances, such as financial hardship or health ailments. This judgment provides relief to accused persons unable to comply with the stringent deposit requirement while balancing the interests of complainants.
Background & Facts
The Dispute
The petitioner, V Reddappa Naidu, was directed by the V Additional District and Sessions Judge, Tirupati, to deposit 20% of the cheque amount as a condition for suspending the sentence in a cheque bounce case under Section 138 of the Negotiable Instruments Act. The petitioner challenged this condition before the High Court, citing severe health ailments and financial distress.
Key Facts
- The petitioner was accused in a cheque bounce case, with the trial court imposing a sentence that included a condition to deposit 20% of the cheque amount.
- The petitioner filed Crl.M.P. No. 104 of 2026 in Crl.A. No. 71 of 2026 before the V Additional District and Sessions Judge, Tirupati, seeking modification of the deposit condition.
- The impugned order dated 23.04.2026 directed the petitioner to deposit 20% of the cheque amount within a stipulated time.
- The petitioner argued that he was suffering from severe health ailments and was burdened with debts, rendering him unable to comply with the deposit condition.
Procedural History
- 23.04.2026: The V Additional District and Sessions Judge, Tirupati, passed an order in Crl.M.P. No. 104 of 2026 directing the petitioner to deposit 20% of the cheque amount.
- 01.07.2026: The petitioner filed Criminal Revision Case No. 707/2026 before the Andhra Pradesh High Court under Section 482 Cr.P.C/Section 528 BNSS, challenging the deposit condition.
Relief Sought
The petitioner sought modification of the impugned order to reduce the deposit condition from 20% to a more manageable amount, citing financial hardship and health issues.
The Legal Issue
The central question before the court was whether Section 148 of the Negotiable Instruments Act permits courts to reduce the mandatory 20% deposit condition in exceptional circumstances, such as financial hardship or health ailments.
Arguments Presented
For the Petitioner
The learned counsel for the petitioner relied on the judgment of the Supreme Court in Jamboo Bhandari v. M.P. SIDC Ltd ((2023) 10 SCC 446), wherein it was held that courts may, in exceptional cases, suspend the sentence without imposing the condition of depositing 20% of the cheque amount. The petitioner argued that his financial and health conditions warranted such an exception.
For the Respondent
The learned Assistant Public Prosecutor did not oppose the petitioner's request for modification, as the impugned order pertained solely to the deposit condition and did not require notice to Respondent No. 2.
The Court's Analysis
The court examined the principles laid down in Jamboo Bhandari v. M.P. SIDC Ltd, wherein the Supreme Court recognized that courts possess discretion to modify the deposit condition under Section 148 of the NI Act in exceptional circumstances. The High Court noted that the petitioner's financial hardship and health ailments constituted such exceptional circumstances.
"The court under exceptional cases may grant suspension of sentence without imposing the condition of deposit of 20% of the fine/compensation amount/cheque amount."
The court observed that the petitioner's inability to comply with the 20% deposit condition was genuine and warranted relief. Accordingly, it modified the impugned order to reduce the deposit condition to 10% of the cheque amount, to be deposited within two weeks from the date of receipt of the order.
The Verdict
The High Court partly allowed the criminal revision case. The impugned order dated 23.04.2026 was modified to reduce the deposit condition from 20% to 10% of the cheque amount, to be deposited within two weeks from the date of receipt of the order. Upon such deposit, Respondent No. 2 was permitted to withdraw the amount upon furnishing sufficient surety to the satisfaction of the trial court.
What This Means For Similar Cases
Courts Can Exercise Discretion in Exceptional Circumstances
This judgment reinforces that courts possess discretion under Section 148 of the NI Act to reduce the mandatory 20% deposit condition in cases involving:
- Severe financial hardship
- Health ailments or disabilities
- Other exceptional circumstances that render compliance burdensome
Practitioners should argue for such modifications by demonstrating the accused's inability to comply with the deposit condition, supported by medical records, financial statements, or other relevant evidence.
Balancing Interests of Complainants and Accused
- The court balanced the interests of the complainant (Respondent No. 2) by permitting withdrawal of the deposited amount upon furnishing sufficient surety.
- This ensures that the complainant's rights are not unduly prejudiced while providing relief to the accused.
- Practitioners must emphasize the need for such balancing acts in cases where strict compliance with Section 148 would cause undue hardship to the accused.
