NAVDURGA STEEL TRADERS AND ANR.versusM/S Z V STEELS PVT LTD AND ANR.

                                                                              11-IA-3040-2026.doc


                                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                      CRIMINAL APPELLATE JURISDICTION
                                     CRIMINAL APPLICATION NO.1644 OF 2026
ARJUN
VITTHAL               Navdurga Steel Traders & Anr.                         ...Applicants
KUDHEKAR
Digitally signed by
                               Versus
ARJUN VITTHAL
KUDHEKAR              M/s. Z. V. Steels Pvt. Ltd. & Anr.                    ...Respondents
Date: 2026.09.08
20:26:21 +0530

                                                     WITH
                                      INTERIM APPLICATION NO.3040 OF 2026
                                                      IN
                                     CRIMINAL APPLICATION NO.1644 OF 2026
                      Navdurga Steel Traders & Anr.                         ...Applicants
                               Versus
                      M/s. Z. V. Steels Pvt. Ltd. & Anr.                    ...Respondents

                                                ——————
                      Mr. Nadeem Shama a/w Hubab Sayyed i/b Sahil Sayyed, for the Applicants.
                      Mr. Niraj Shah (Through Video Conferencing), for Respondent No.1.
                      Mr. P. P. Jadhav, APP, for the Respondent-State.
                                                      ——————
                                                         Coram: Madhav J. Jamdar, J.
                                                         Date: 08 September 2026
                      P.C.:

                      1.      Heard Mr. Nadeem Shama, learned Counsel appearing for the

                      Applicants and Mr. Niraj Shah, learned Counsel appearing for

                      Respondent No.1.

                      2.      By the Criminal Application filed under Section 528 of the

                      Bharatiya Nagarik Suraksha Sanhita, 2023, the Applicants are challenging

                      the legality and validity of the Order dated 9th July 2026 passed by the

                      learned Additional Sessions Judge, 88th Court, City Sessions Court,


                      Arjun                                1
                                                             11-IA-3040-2026.doc


Mumbai in Cri. M.A. No.0100327 of 2026 filed in Appeal No.179 of 2026

(“impugned Order”). The said Order dated 9th July 2026 reads as under:

          “Adv. Sahil Sayyed for the applicant is present. Adv. Renu
          Dubey for the respondent is present through VC. Reply not
          filed. Stay is continued subject to deposit of 20 percent
          compensation amount vide 148 of NI Act. Matter is
          adjourned to 31.08.2026 for reply/hearing.”

Thus, it is clear that the impugned Order is the unreasoned Order.

3.       The Supreme Court in the decision of Jamboo Bhandari v. M.P.

SIDC Ltd.1, has set out various aspects which are required to be taken

into consideration while exercising power under Section 148 of the

Negotiable Instruments Act, 1881 (“NI Act”). Paragraph Nos.5 to 10 of

the said decision are very relevant, which read as under:

          “5. Para 8 of the decision of this Court in Surinder Singh
          Deswal [Surinder Singh Deswal v. Virender Gandhi, (2019)
          11 SCC 341 : (2019) 3 SCC (Cri) 461 : (2019) 3 SCC (Civ) 765]
          reads thus : (SCC p. 350)

             “8. Now so far as the submission on behalf of the
             appellants that even considering the language used in
             Section 148 NI Act as amended, the appellate court
             “may” order the appellant to deposit such sum which
             shall be a minimum of 20% of the fine or compensation
             awarded by the trial court and the word used is not
             “shall” and therefore the discretion is vested with the
             first appellate court to direct the appellant-accused to
             deposit such sum, and the appellate court has construed
             it as mandatory, which according to the learned Senior
             Advocate for the appellants would be contrary to the
             provisions of Section 148 NI Act as amended is
             concerned, considering the amended Section 148 NI
             Act as a whole to be read with the Statement of
             Objects and Reasons of the amending Section 148 NI
1    (2023) 10 SCC 446


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                                                       11-IA-3040-2026.doc


        Act, though it is true that in the amended Section 148
        NI Act, the word used is “may”, it is generally to be
        construed as a “rule” or “shall” and not to direct to
        deposit by the appellate court is an exception for
        which special reasons are to be assigned. Therefore
        amended Section 148 NI Act confers power upon the
        appellate court to pass an order pending appeal to direct
        the appellant-accused to deposit the sum which shall not
        be less than 20% of the fine or compensation either on
        an application filed by the original complainant or even
        on the application filed by the appellant-accused under
        Section 389CrPC to suspend the sentence. The aforesaid
        is required to be construed considering the fact that as
        per the amended Section 148 NI Act, a minimum of 20%
        of the fine or compensation awarded by the trial court is
        directed to be deposited and that such amount is to be
        deposited within a period of 60 days from the date of the
        order, or within such further period not exceeding 30
        days as may be directed by the appellate court for
        sufficient cause shown by the appellant. Therefore, if
        amended Section 148 NI Act is purposively interpreted in
        such a manner it would serve the Objects and Reasons of
        not only amendment in Section 148 NI Act, but also
        Section 138 NI Act. The Negotiable Instruments Act
        has been amended from time to time so as to provide,
        inter alia, speedy disposal of cases relating to the
        offence of the dishonour of cheques. So as to see that
        due to delay tactics by the unscrupulous drawers of
        the dishonoured cheques due to easy filing of the
        appeals and obtaining stay in the proceedings, an
        injustice was caused to the payee of a dishonoured
        cheque who has to spend considerable time and
        resources in the court proceedings to realise the value
        of the cheque and having observed that such delay
        has compromised the sanctity of the cheque
        transactions, Parliament has thought it fit to amend
        Section 148 NI Act. Therefore, such a purposive
        interpretation would be in furtherance of the Objects
        and Reasons of the amendment in Section 148 NI Act and
        also Section 138 NI Act.”

                                             (emphasis supplied)



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        6. What is held by this Court is that a purposive
        interpretation should be made of Section 148 NI Act.
        Hence, normally, the appellate court will be justified in
        imposing the condition of deposit as provided in Section
        148. However, in a case where the appellate court is
        satisfied that the condition of deposit of 20% will be
        unjust or imposing such a condition will amount to
        deprivation of the right of appeal of the appellant,
        exception can be made for the reasons specifically
        recorded.
        7. Therefore, when the appellate court considers the
        prayer under Section 389CrPC of an accused who has been
        convicted for offence under Section 138 NI Act, it is always
        open for the appellate court to consider whether it is an
        exceptional case which warrants grant of suspension of
        sentence without imposing the condition of deposit of 20%
        of the fine/compensation amount. As stated earlier, if the
        appellate court comes to the conclusion that it is an
        exceptional case, the reasons for coming to the said
        conclusion must be recorded.
        8. The submission of the learned counsel appearing
        for the original complainant is that neither before the
        Sessions Court nor before the High Court, there was a
        plea made by the appellants that an exception may be
        made in these cases and the requirement of deposit or
        minimum 20% of the amount be dispensed with. He
        submits that if such a prayer was not made by the
        appellants, there were no reasons for the courts to
        consider the said plea.
        9. We disagree with the above submission. When an
        accused applies under Section 389CrPC for suspension
        of sentence, he normally applies for grant of relief of
        suspension of sentence without any condition.
        Therefore, when a blanket order is sought by the
        appellants, the court has to consider whether the case
        falls in exception or not.
        10. In these cases, both the Sessions Courts and the High
        Court have proceeded on the erroneous premise that
        deposit of minimum 20% amount is an absolute rule which
        does not accommodate any exception.”
                                                 (Emphasis added)


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4.      Thus, what is contemplated is that, in exceptional circumstances,

20% of the deposit amount as contemplated under Section 148 of the

NI Act can be waived or reduced. Therefore, it is absolutely essential

that the Sessions Court should have recorded the reasons.

5.      Accordingly, the impugned Order dated 9th July 2026 passed by

the learned Additional Sessions Judge, 88th Court, City Sessions Court,

Mumbai in Cri. M.A. No.0100327 of 2026 filed in Appeal No.179 of 2026,

is quashed and set aside only on the ground that the same is

unreasoned Order and the matter is remanded back to the learned

Additional Sessions Judge for passing fresh Order by granting

opportunity of hearing to both the parties.

6.      The Criminal Application is disposed of in above terms.

7.      It is clarified that this Court has not considered the merits as far

as the deposit of 20% amount as contemplated by Section 148 of the NI

Act and all contentions in that behalf are expressly kept open.

8.      As the Criminal Application No.1644 of 2026 is disposed of,

nothing survives in the Interim Application and the same is also

disposed of.


                                                  [Madhav J. Jamdar, J.]




Arjun                                5