Dishonour of Cheque - Appellate court's direction to deposit 30 percent of the compensation held reasonable

Calcutta High Court Upholds Compensation Deposit Order in Cheque Dishonor Case, Court dismisses plea against 30% compensation deposit directive in appeal under Negotiable Instruments Act

In a recent judgment, the Calcutta High Court dismissed a revisional application filed by Rita Plastic Private Limited challenging an appellate court's order that directed the company to deposit 30% of the compensation amount as a condition for hearing their appeal. The case stems from a conviction under Section 138 of the Negotiable Instruments Act related to dishonored cheques issued by the company.

The judgment, delivered by Justice Jay Sengupta on September 26, 2025, addressed the dispute involving Rita Plastic Private Limited and the State of West Bengal. The company had been convicted by the Judicial Magistrate, 8th Court, Calcutta, in 2024 for failing to honor cheque payments, leading to the current appeal.

The appellate court had mandated the deposit of 30% of the compensation amount, aligning with Section 148 of the Negotiable Instruments Act, which typically requires such a deposit unless exceptional circumstances are demonstrated. The petitioners argued that this condition unfairly restricted their right to appeal, but the High Court found no merit in their application, indicating that the appellate court's directive was reasonable and in line with legal norms.

The petitioners had previously attempted to challenge the production of certain documents under Section 91 of the Code of Criminal Procedure, which they believed were essential to their defense. However, the trial court rejected this request, stating that the complainant had the duty to prove their case with sufficient evidence.

During the appeal process, the petitioners also sought to contest the compensation amount but faced opposition from the complainant, who cited precedents emphasizing the necessity and reasonableness of the compensation awarded. The complainant argued that the compensation served as a deterrent against similar offenses, a stance supported by past judgments, including the Supreme Court ruling in R. Vijayan v. Baby.

Justice Sengupta, in his judgment, highlighted the established legal principle that requires the deposit under Section 148 to be the norm, with deviations necessitating specific reasons. The judge noted that the petitioners failed to present any exceptional circumstances that would justify waiving the deposit requirement. Consequently, the High Court upheld the appellate court's order, dismissing the revisional application.

The judgment also referred to key Supreme Court cases, including Surinder Singh Deswal v. Virender Gandhi and Muskan Enterprises v. State of Punjab, which reinforce the statutory obligation for appellants to deposit a portion of the compensation amount in similar cases.

The ruling provides that if the petitioners deposit the required sum within 60 days, the appellate court would proceed to hear the appeal expeditiously. The decision underscores the legal framework aimed at ensuring timely resolution of appeals while balancing the rights of the accused and the complainant.

Bottom Line:

Dishonour of Cheque - Deposit under Section 148 - The appellate court's direction to deposit 30% of the compensation amount for hearing of the appeal is reasonable unless exceptional circumstances are shown. The norm is to direct deposit under Section 148, and deviation from this requires special reasons to be recorded.

Statutory provision(s): Section 138, Section 148, Section 91 of the Negotiable Instruments Act, Code of Criminal Procedure

Rita Plastic Private Limited v. State of West Bengal, (Calcutta) : Law Finder Doc Id # 2784706