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Going tough on cheque bouncing cases, the NDA government plans to make it mandatory for a convicted defaulter to deposit half of the imposed fine or compensation as a pre-condition for admitting his appeal before an appellate court.
“Notwithstanding anything contained in the Code of Criminal Procedure (CrPC), no appeal against conviction will be entertained by the Appellate Court unless the appellant deposits 50 per cent of the fine or compensation awarded by the Trial Court,” says the proposed amendment in the Negotiable Instrument Act.
The appellate court could waive the pre-deposit “in an appropriate case” but would have to provide reasons for the exemption in writing. It would also have the discretion to release the deposited amount to the aggrieved complainant in the case.
These changes override a Supreme Court 2007 direction forbidding collection of fine when a defaulter files an appeal against a trial court order. The apex court had then said that an appellate court could set aside the trial court order and specify terms, but the latter would not be a pre-condition for entertaining an appeal.
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However, just in case the above amendment fails to pass the judicial scrutiny, the finance ministry has prepared an alternative with similar pre-deposit condition but giving jurisdiction to the appellate court to issue directions.
The second option says: “Notwithstanding anything contained in the CrPC in an appeal by a person convicted under Section 138 (of the Negotiable Instrument Act), the Appellate Court may direct the appellant to pay such part of the fine or compensation as a condition for suspension of sentence pending appeal”.
“The amount ordered shall not exceed 50 per cent of the fine or compensation awarded in the judgement under appeal,” it adds. “The appellate shall record reasons for directing the payment pending appeal.”
Irrespective of the option chosen, the amendment would act as a deterrent to the endless litigation as defaulters evade paying fine or jail by keeping the trial on through appeals even when Section 138 of the Act provides fine up to double the dishonoured amount and/or imprisonment of up to two years.
More than 18 lakh cases are pending in courts across the country, of which about 38,000 are with the high courts. A large number of these cases are over five years old.
While announcing this year’s Budget, finance minister Arun Jaitley promised further amendments to reduce the time taken to redress such cases. “After cheque bounce, the litigation process is very complex and takes time. So, for traders with a bounced cheque, litigation takes a long time to recover the money,” he said.
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