The Rajasthan High Court has invalidated deposit conditions imposed under Section 148 of the Negotiable Instruments Act after the repeal of the 2018 Amendment, clarifying that appellate courts cannot enforce such conditions once the enabling provisions are no longer part of the statute. This ruling has immediate implications for all pending appeals involving similar deposit orders.
Background & Facts
The Dispute
Multiple petitioners in six separate Criminal Miscellaneous Petitions challenged orders passed by Appellate Courts that imposed conditions of depositing 20% or more of the awarded fine or compensation as a prerequisite for suspending sentences under Section 148 of the Negotiable Instruments Act. These orders were issued in cases involving dishonoured cheques under Section 138 NI Act.
Key Facts
- Section 148 of the Negotiable Instruments Act was introduced by the Negotiable Instruments (Amendment) Act, 2018 (Act No. 20 of 2018), effective from 02.08.2018
- The provision empowered Appellate Courts to direct deposit of at least 20% of the fine or compensation awarded by the trial court while suspending sentence
- The Repealing and Amendment Act, 2025 (Act No. 37 of 2025) came into force on 20.12.2025
- This Act explicitly repealed the Negotiable Instruments (Amendment) Act, 2018, thereby removing Sections 143-A and 148 from the statute book
- All impugned orders were passed between 2018 and May 2026, after the 2018 Amendment but before its repeal
- The Appellate Courts imposing deposit conditions were unaware of the 2025 repeal at the time of passing orders
Procedural History
- 02.08.2018: Negotiable Instruments (Amendment) Act, 2018 came into force, introducing Section 148
- 20.12.2025: Repealing and Amendment Act, 2025 came into effect, repealing Sections 143-A and 148 of the NI Act
- Between 2018 and 19.05.2026: Multiple Appellate Courts issued orders directing deposit of 20% or more of fine/compensation under Section 148
- 19.05.2026: Six Criminal Misc. Petitions filed before the Rajasthan High Court challenging these deposit conditions
- 19.05.2026: Hearing conducted at admission stage with consent of all parties
The Parties' Positions
Relief Sought
The petitioners sought quashing of the impugned orders imposing deposit conditions under Section 148 NI Act, arguing that the provision had been repealed and could no longer form the basis for any judicial direction.
The Legal Issue
The central question was whether Appellate Courts may impose a deposit condition under Section 148 of the Negotiable Instruments Act after the repeal of that provision by the Repealing and Amendment Act, 2025.
Arguments Presented
For the Appellant/Petitioner
The petitioners relied on Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Limited (2023) 10 SCC 446, Muskan Enterprises v. State of Punjab, and two coordinate bench decisions of the Rajasthan High Court (Hemant Kumar Laddha v. State of Rajasthan and Kunaram v. State of Rajasthan) to argue that once a statutory provision is repealed, it ceases to have any legal effect, even prospectively. They contended that the imposition of deposit conditions under a repealed provision is ultra vires and violates the principle of legality.
For the Respondent/State
The Public Prosecutor acknowledged the enactment of the Repealing and Amendment Act, 2025, and conceded that Sections 143-A and 148 were no longer part of the statute. However, the State initially argued that the deposit conditions were justified as a matter of judicial discretion under general principles of equity. This argument was abandoned upon recognition of the statutory repeal.
The Court's Analysis
The Court undertook a strict textual and statutory interpretation of the Repealing and Amendment Act, 2025. It noted that the Act explicitly repealed the Negotiable Instruments (Amendment) Act, 2018, which had introduced Sections 143-A and 148. The Court emphasized that repeal extinguishes the legal authority of the repealed provision entirely.
"By virtue of Repealing & Amendment Act of 2025, Sections 143-A and 148 of Negotiable Instruments Act are no more on the statute books. Thus, the Courts are duty-bound to take notice of such effect of repealing and pass appropriate orders therein."
The Court held that the Appellate Courts, while passing the impugned orders, acted without awareness of the legislative change. This failure to take judicial notice of a repealed statute rendered the deposit conditions legally unsustainable. The Court further observed that even if the deposit condition was intended as a procedural safeguard, it could not survive the removal of its statutory foundation. The principle that "no court can derive power from a repealed statute" was applied without exception.
The Court distinguished between substantive rights and procedural conditions, holding that Section 148 was not merely procedural but a statutory grant of power that ceased to exist upon repeal. The Court also rejected any argument that the repeal should be applied prospectively only, noting that repeal operates retrospectively to extinguish the provision from the date of its enactment.
The Verdict
The petitioners succeeded. The Rajasthan High Court allowed all six Criminal Misc. Petitions. The impugned orders imposing deposit conditions under Section 148 of the Negotiable Instruments Act are hereby quashed and set aside. The matters are remitted to the respective Appellate Courts to pass fresh orders in light of the repeal of Section 148, without any reference to the now-defunct provision.
What This Means For Similar Cases
Deposit Conditions Under Repealed Provisions Are Void
- Practitioners must immediately challenge any pending deposit orders under Section 148 NI Act as legally invalid
- No court may impose a deposit condition under Section 148 after 20.12.2025, regardless of when the appeal was filed
- Any order passed after 20.12.2025 relying on Section 148 is void ab initio
Repeal Trumps Judicial Discretion
- Judicial discretion cannot revive a repealed statutory power
- Courts must take judicial notice of legislative repeal; ignorance is not an excuse
- Pending appeals must be reconsidered without reference to Sections 143-A and 148
Procedural Safeguards Must Find New Basis
- Appellate courts may still impose conditions under general criminal procedure (e.g., CrPC 389) but not under the now-repealed NI Act provisions
- Any future deposit conditions must be grounded in existing, operative law, not repealed statutes
