Quick answer: Under Section 148 of the NI Act, an appellate court may direct a convicted drawer to deposit at least 20% of the fine or compensation while the appeal is pending. The deposit is the normal rule, but courts can waive it in exceptional cases for recorded reasons. The 2025 repeal of the 2018 amending Act does not remove Section 148.
A cheque bounce conviction is rarely the end of the fight. Most accused persons appeal at once. For banks, NBFCs and businesses, the Section 148 NI Act deposit is often the first real money they recover. Here is how it works, and why a recent repeal argument failed.
What the Section 148 NI Act Deposit Requires
Parliament inserted Section 148 through the Negotiable Instruments (Amendment) Act, 2018, with effect from 1 September 2018. The provision works in three steps:
- Minimum deposit: In an appeal against a Section 138 conviction, the appellate court may order the drawer to deposit at least 20% of the fine or compensation. This comes on top of any interim compensation paid under Section 143A.
- Time limit: The appellant must pay within 60 days of the order. The court may allow 30 more days for sufficient cause.
- Release and refund: The court may release the money to the complainant during the appeal. If the appellant wins an acquittal, the complainant must repay it with interest at the RBI bank rate.
Appeals against conviction now lie under Section 415 of the BNSS (old Section 374 CrPC). Suspension of sentence falls under Section 430 BNSS (old Section 389 CrPC).
Is the 20% Deposit Still Valid After the Repealing and Amending Act, 2025?
The Repealing and Amending Act, 2025 received Presidential assent on 20 December 2025. Its list of 71 repealed Acts includes the NI (Amendment) Act, 2018. Some convicts then argued that Section 148 had vanished with it.
The Rajasthan High Court rejected this argument in A.L.D. Infratech Pvt. Ltd. v. Baljeet Singh (2026 LiveLaw (Raj) 426). Justice Anil Kumar Upman held that an amendment, once absorbed into the parent Act, survives the repeal of the amending law. It relied on Section 6A of the General Clauses Act and the Supreme Court’s view in Independent Schools’ Federation of India v. Union of India. It also held that financial hardship alone is not an exceptional circumstance.
Key Case Law on Waiver of the Deposit
- Surinder Singh Deswal v. Virender Gandhi (SC, 2019): The court applied Section 148 to complaints filed before 2018. It treated the deposit as the general rule despite the word “may”.
- Jamboo Bhandari v. M.P. State Industrial Development Corporation (2023 INSC 822, 4 September 2023): The Supreme Court held that the 20% condition is not absolute. A court may grant an exception where the deposit would be unjust or would defeat the right of appeal. However, it must record specific reasons.
- Muskan Enterprises v. State of Punjab (2024 INSC 1046, 19 December 2024): The Supreme Court sent the deposit question back to the Sessions Court for fresh consideration under Jamboo Bhandari.
- Anuj Ahuja v. Sumitra Mittal (2025 LiveLaw (Del) 342): The Delhi High Court held that a conviction alone cannot justify the deposit order. Instead, the court must weigh the transaction, the parties’ relationship, the amount and each side’s paying capacity.
Practical Checklist for Lenders and Complainants
- Appear in the appeal on the first date and press for a Section 148 direction.
- Point out any Section 143A interim compensation the accused has not paid.
- File records showing the accused’s paying capacity.
- Ask the court to record a firm deadline within the 60-day limit.
- Apply for release of the deposit once the accused pays it.
- If the accused defaults, seek vacation of the suspension order and coercive steps.
For a wider overview of cheque bounce prosecution, see our complete guide to cheque bounce cases under Section 138 NI Act.
Frequently Asked Questions
Is the 20% deposit under Section 148 NI Act mandatory?
It is the normal rule, not an absolute one. After Jamboo Bhandari, courts may relax it in exceptional cases for recorded reasons.
Can an appellate court waive the Section 148 deposit?
Yes. It may do so where the deposit would be unjust or would effectively deny the right of appeal. Financial hardship alone usually does not qualify.
Is Section 148 NI Act still valid after the Repealing and Amending Act, 2025?
Yes. The Rajasthan High Court held that the provision survives because it already forms part of the parent NI Act.
What is the time limit for the 20% deposit?
The appellant must deposit within 60 days of the order. The court may extend this by up to 30 days for sufficient cause.
Can the complainant withdraw the deposit during the appeal?
Yes. The appellate court may release the amount to the complainant at any time while the appeal is pending.
What happens to the deposit if the court acquits the accused?
The complainant must return the released amount with interest at the RBI bank rate, ordinarily within 60 days.
Lex Pleaders advises banks, NBFCs, businesses and individuals on cheque bounce prosecutions, Section 148 deposit applications and criminal appeals from trial courts to the Supreme Court. Write to us at lexpleadersindia@gmail.com to discuss your matter.
Disclaimer: This article offers general information only and does not constitute legal advice.