Delhi High Court Waives 20% Deposit in Cheque Bounce Appeal; Recalls Coercive Process and Directs Appellate Court to Decide Case Within Six Weeks
Delhi High Court Waives Section 148 NI Act Pre-Deposit and Recalls Coercive Process; Orders Six-Week Disposal of Pending Cheque Bounce Appeal
Facts
Chander Mohan approached the Delhi High Court in a petition arising from his conviction under Section 138 of the Negotiable Instruments Act, 1881. He had been sentenced to 16 months’ simple imprisonment and a fine of ₹70.50 lakh. He challenged that conviction by filing Criminal Appeal No. 209/2025.
During pendency of the appeal, the First Appellate Court passed an order dated 3 December 2025 under Section 148 of the NI Act, directing the petitioner to deposit 20% of the compensation amount. He did not comply with the direction, which subsequently resulted in issuance of non-bailable warrants against him.
The petitioner therefore approached the High Court seeking setting aside of the deposit direction and waiver of the amount, principally on the ground of severe financial hardship. He pointed out that he had even undergone civil imprisonment in connection with an execution proceeding as an indication of his financial condition.
Issues
The principal issues before the Delhi High Court were:
- Whether the petitioner could be permitted to prosecute his appeal against conviction under Section 138 NI Act without first depositing 20% of the compensation amount under Section 148.
- Whether the petitioner’s alleged financial hardship justified waiver of the appellate deposit.
- Whether the coercive process issued because of non-compliance with the deposit direction should continue.
- Whether the interests of the complainant could instead be protected by directing the First Appellate Court to decide the pending appeal within a fixed period.
Petitioner’s Arguments
The petitioner sought waiver of the deposit requirement primarily on account of his poor financial condition.
He submitted that his inability to comply was genuine and highlighted that he had already been sent to civil imprisonment in connection with an execution petition, which according to him demonstrated his lack of financial means.
The petitioner relied upon the Supreme Court decisions in:
- Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd. & Ors., (2023) 10 SCC 446; and
- Muskan Enterprises & Anr. v. State of Punjab & Anr., 2024 SCC OnLine SC 4107.
His case was therefore that the Section 148 deposit should not operate in a manner that effectively prevented him from pursuing the statutory appeal.
Respondent’s Arguments
The respondent-complainant appeared through video conferencing.
During hearing, the High Court specifically asked whether, without prejudice to his rights and contentions, the complainant would agree to the First Appellate Court deciding the appeal expeditiously without insisting upon the 20% deposit.
The complainant’s counsel expressly agreed and stated that, if such a time-bound direction were issued, he would not insist upon deposit of the 20% compensation amount.
This concession became central to the manner in which the High Court resolved the petition.
Analysis of the Law
Section 148 NI Act Deposit
Section 148 of the Negotiable Instruments Act empowers the Appellate Court, in an appeal by a drawer against conviction under Section 138, to direct deposit of a portion of the fine or compensation awarded by the Trial Court.
In the present case, the First Appellate Court had exercised that jurisdiction and directed deposit of 20% of the compensation amount.
The High Court, however, did not undertake an elaborate determination of whether Section 148 required waiver on account of financial hardship as an independent proposition of law.
Instead, the case was resolved in light of the consensual position taken by the complainant that he would not insist upon the deposit if the appeal was disposed of expeditiously.
Precedent Analysis
Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd.
The petitioner relied upon Jamboo Bhandari, which concerns the operation of Section 148 NI Act and the circumstances in which appellate deposit directions are made.
However, the High Court did not undertake a detailed examination or application of the ratio of that decision because the respondent ultimately agreed to waive insistence upon the deposit in exchange for a time-bound disposal of the appeal.
Muskan Enterprises v. State of Punjab
The petitioner similarly relied upon Muskan Enterprises in support of his request for waiver.
Again, the judgment did not pronounce a detailed legal ruling on the precedent because the controversy was resolved through the consensual arrangement accepted by both sides.
Accordingly, the judgment is best understood as a fact-specific procedural order rather than a broad declaration that Section 148 deposits must be waived whenever financial hardship is pleaded.
Petitioner’s Undertaking Not to Delay Appeal
An important part of the arrangement was the petitioner’s own undertaking.
His counsel stated, on instructions, that the petitioner would address arguments before the First Appellate Court on the very next date and would not seek any adjournment on any ground whatsoever.
He also undertook to appear before the Appellate Court whenever directed unless exempted from personal appearance by that Court.
Thus, the waiver of deposit was accompanied by a corresponding obligation upon the petitioner to facilitate prompt disposal of the appeal.
Court’s Reasoning
The High Court adopted a pragmatic approach.
The petitioner had failed to comply with the 20% deposit order and consequently faced non-bailable warrants. At the same time, his substantive criminal appeal remained pending.
Since the complainant himself stated that he would not insist upon the deposit provided the appeal was decided expeditiously, the Court found it appropriate to remove the procedural obstacle and ensure an early adjudication on merits.
The arrangement balanced both sides:
- the petitioner was relieved from the immediate financial burden and coercive process;
- the complainant obtained a direction for accelerated disposal of the appeal; and
- the petitioner was bound by his undertaking not to seek adjournments.
The Court therefore did not finally adjudicate the petitioner’s conviction or his substantive defence under Section 138 NI Act.
Conclusion
The Delhi High Court disposed of the petition by waiving the direction requiring deposit of 20% of the compensation amount.
As a necessary consequence, the coercive process issued against the petitioner was recalled.
The First Appellate Court was requested to decide Criminal Appeal No. 209/2025 as expeditiously as possible and preferably within six weeks.
Both parties were directed to extend full assistance and cooperation so that the appeal could be concluded within the stipulated period.
Key Ratio
Where the complainant expressly agrees not to insist upon the Section 148 NI Act deposit provided the appeal is decided expeditiously, the High Court may waive the deposit, recall consequential coercive process and direct time-bound disposal of the appeal.
Importantly, the judgment does not lay down an unrestricted rule that financial hardship by itself automatically entitles every Section 138 convict to waiver of the statutory appellate deposit.
Case Details
Case: Chander Mohan v. Sanjeev Kumar Tyagi
Court: High Court of Delhi at New Delhi
Case Number: CRL.M.C. 1728/2026
CNR: DLHC010082212026
Judge: Justice Manoj Jain
Date: 19 August 2026
Underlying Appeal: CRL.A. 209/2025
Offence: Section 138, Negotiable Instruments Act, 1881
Sentence Challenged: 16 months’ simple imprisonment and ₹70.50 lakh fine
Result: 20% deposit requirement waived; coercive process recalled; First Appellate Court requested to decide the appeal preferably within six weeks.
