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The Supreme Court referred to the Statement and Object of the amendment Act.
While deciding
the appeal and the court noticed that the amended Section 148 was introduced by the parliament
due to delay tactics of the unscrupulous drawer of dishonored cheques due to the easy filing of
the appeal, and obtained a stay on the proceedings, thereby violating the object and purpose of
Section 138. It was also said that the alteration in Section 148 does not infringe on the right of
appeal; hence, the Appellant's position cannot be relevant to complaints lodged before the Act's
amendment.
In reply to the second objection, the Supreme Court ruled that the term "may" is ordinarily meant
as a rule or shall and not as an exception. Still, The brief facts of the matter that gave rise to
these appeals are as follows:
In this case, appellant no.1 and appellant no.2 were partners in the firm (appellant no.3) named
M/S Bhoomi Infrastructure co; now, this firm is known as GLM Infratech Private Limited. Mr.
Virender Gandhi, Respondent no. 1, was also a partner in the firm. And A cheque was drawn on
Canara Bank for Rs.45,84,915/- dated 31.3.2014. The Appellant issued it against the part
payment of the retirement dues to respondent no. 1. In the same way, 63 other cheques were also
issued by the defendants in favor of the respondent arising out of the same transaction. On
6.4.2015, the respondent no1 deposit the cheque in his bank. But the cheque was dishonored due
to insufficient funds and returned with a memo on 7.4.2015. after this, the respondent sent a
demand notice to the appellants u/138. And when the respondent received no response, he filed a
complaint before the judicial magistrate 1st class, Panchkula, Haryana.
In total, 28 complaints were filed against them. The judicial magistrate decided that they were
guilty of offense u/138. Accordingly, the court convicted them for two years and ordered them to
pay an amount equal to involvement in the case plus 1% interest and pay litigation expenses to
the respondent. In total, 28 complaints were filed against them. The judicial magistrate decided
that they were guilty of offense u/138. Accordingly, the court convicted them for two years and
ordered them to pay an amount equal to involvement in the case, which was 9,40,24,999/- plus
1% interest, and pay litigation expenses to the respondent. Appellants then, on 30.10.2018,
applied u/sec 389 crpc for the suspension of the sentence before the session judge. The Session
court suspended their sentence for 30 days. Again, the Session court, by an order on 1.12.2018,
suspended the sentence during pendency but with the condition of bail bond and surety bond of
50000. also ordered them to deposit 25% of the compensation awarded by the trial court and
directed them to deposit within four weeks. Again they asked for an extension of the time to
deposit this 25% of the compensation amount. Session court extended time by one month.
Meanwhile, appellants applied u/sec482 crpc for quashing the imposed condition to pay 25% of
the amount of compensation while suspending the sentence. But the high court dismissed their
petition. They went to the supreme court through SLP against this judgment. The top court also
rejected their criminal appeals.
Meanwhile, the additional session judge ordered them to surrender within four days in court due
to non-compliance with the order dated 20.7.19. but again, they challenged this order by filing
another petition, u/sec482, which was also dismissed. They are here in the supreme court in
appeal. Dissatisfied with the High Court's ruling, the Appellant filed an appeal with the Supreme
Court.
ISSUES INVOLVED
The prime issue considered by the Supreme Court bench was
1. whether the original appellate court was correct in ordering the defendants – the original
accused who has been convicted for the offense u/Sec 138 of the N.I. Act to deposit 25% of
compensation imposed by the trial Court since the amendment of sec 148 of the Negotiable
Instruments Act was done after the case arose, and why does it have a retrospective effect when
sec. 143 A, brought in the same amendment, has a prospective effect.
2. The second issue raised by the appellants was that the first appellate court had interpreted the
word "may" in section 148 has been interpreted as "shall," by the first appellate court and hence,
It has proceeded on the ground that the appellate court must direct to deposit a minimum of 25%
of the compensation ordered by the trial court for the sentence of suspension.
Contentions raised by Mr. Balbir Singh ( appearing for APPELLANT):

The contentions put forward by the Appellant before the Supreme Court by way of appeal were –
1. The Appellant said that both the High Court and the first appellate court have directed to
deposit 25% of compensation as per Section 148 of the Act, and complaints were filed by the
Appellant u/Sec-138 of the NI Act prior to the amended Section 148 of the Act.
2. The Appellant said that the first appellate court interpreted the word may as shall under
Section 148 of the Act and directed the deposit of a minimum of 25% of the fine awarded by the
trial court for the suspension of the sentence.
Contentions raised by Mr. Alok Sangwan (appearing for Complainant):

 Submitted that the first appellate Court's order directed the appellants to deposit 25% of
the compensation ordered by the trial court in the pending appeal. The suspension of the
sentence imposed by the trial Court is entirely consistent with the Statement of Objects &
reasons of the amendment in Sec-148 of the N.I. Act.
 It was further contended that because of the ease with which unscrupulous drawers of
dishonoured cheque could file appeals and obtain stay of proceedings, the object, and aim
of the N.I. Act was being hindered.and having observed that such delay tactics create
unfairness to the payee of a dishonoured cheque, who must spend significant time and
money in court actions to recover the value of the cheque,The Parliament deemed it
necessary to alter Section 148 of the N.I. Act, which empowers the first appellate court to
order the Appellant to submit such amount. which shall be a minimum of 20% of
the compensation granted by trial court.
 It was also contended that therefore The High Court has correctly denied to interfere with
the first appellate court's ruling, which was in accordance with Section 148 of the N.I.
Act as revised.
 It is further submitted by The appellants' - original accused' - position that Section 148 of
the N.I. Act would not be made retroactively applicable and would not be relevant to
appeals arising out of criminal proceedings commenced far prior to the alteration in
Section 148 of the N.I. Act is concerned, according to the Counsel appearing on behalf of
the original complainant.
 , it is submitted that the aforesaid submission has no value.
 It is contended that, first and foremost, the alteration to Section 148 of the N.I. Act is
procedural in character and hence cannot be applied retroactively.
 As a result, it is contended, no vested right of appeal of the appellants has been taken
away or impaired by the revision to Sec-148 of the N.I. Act.
 It is contended that in the current instance, the appeals were filed after the change to
Section 148 of the N.I. Act went into effect, and thus the honorable first appellate Court
correctly applied Sec-148 of the N.I. Act, as revised.
 It is contended that the modification made to the Act by inserting Section 148 of the N.I.
Act is solely procedural in nature and does not impact the appellants' vested rights; as
such, it can have a retrospective effect and can be used in this case as well.
Now, in terms of the reliance on Section 357(2) of the Cr.P.C. and the submission of the Counsel
appearing on behalf of the appellants that the compensation during the pendency of the appeal is
not recoverable, it is contended that in the present case, Section 148 of the N.I. Act as amended
expressly states that "Notwithstanding anything contained in the Code of Criminal Procedure,
1973......"
It is accordingly contended that Sec-148 of the N.I. Act, as revised, shall apply, and the
appellate court may always direct deposit such amount, but not less than 20% of compensation
ordered by the trial court.
Held/Judgement:
The Supreme Court referred to the Statement and Object of the amendment Act. While deciding
the appeal and the court noticed that the amended Section 148 was introduced by the parliament
due to delay tactics of the unscrupulous drawer of dishonored cheques due to the easy filing of
the appeal, and obtained a stay on the proceedings, thereby violating the object and purpose of
Section 138. It was also said that the alteration in Section 148 does not infringe on the right of
appeal; hence, the Appellant's position cannot be relevant to complaints lodged before the Act's
amendment.
In reply to the second objection, the Supreme Court ruled that the term "may" is ordinarily meant
as a rule or shall and not as an exception. Still,

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The Supreme Court referred to the Statement and Object of the amendment Act.

Contentions raised by Mr. Balbir Singh ( appearing for APPELLANT):

Contentions raised by Mr. Alok Sangwan (appearing for Complainant):

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