Section 148 of NI Act: Condition of 20% Deposit of Compensation Must Not Be Unjust or Deprive Right to Appeal, Says Allahabad High Court

The Allahabad High Court in the case Rajesh Kumar Gupta v. State of U.P. and Another observed and has reiterated that while passing an order imposing the condition of depositing 20% of the compensation amount under Section 148 of the Negotiable Instruments Act, the court has to consider that such a condition won't be unjust or would deprive the individual's right of appeal.

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The court in the case stated that the imposition of the condition is not mandatory and the court has the discretion to reduce or exempt it in appropriate cases.

The section 148(1) provides that notwithstanding anything contained in the Code of Criminal Procedure, CrPC when an appeal is to be filed against conviction for cheque dishonour under Section 138 NI Act, the Appellate Court may order the appellant to deposit a minimum of 20% of the compensation awarded in proceedings under Section 138.