“Supreme Court: Deposit of Minimum 20% Amount under Section 148 of NI Act Not Absolute; May Be Relaxed in Exceptional Cases”


The Supreme Court, in a recent observation, has emphasized that the mandatory deposit of a minimum of 20% of the cheque amount under Section 148 of the Negotiable Instruments Act is not an inflexible rule. This provision often comes into play when an accused seeks suspension of their sentence under Section 389 of the Criminal Procedure Code (Cr.P.C.) after being convicted for an offense under Section 138 of the Negotiable Instruments Act.

Section 148 of the Negotiable Instruments Act stipulates that as a condition for suspending the sentence and granting bail to the accused, they must deposit a minimum of 20% of the cheque amount with the trial court. However, the recent Supreme Court observation highlights that this requirement should not be mechanically enforced.

The Court’s stance emphasizes the importance of considering the specific circumstances of each case when imposing this condition. It acknowledges that in certain exceptional cases, rigid adherence to the 20% deposit requirement may not be just or feasible. This nuanced approach ensures that justice is served on a case-by-case basis, taking into account the unique facts and complexities of each matter, while upholding the principles of equity and fairness in the process.

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