Surinder Singh Deswal & Ors. V/s Virender Gandhi & Anr.

Court – Supreme Court

Citation – AIR 2020 SC 415

Appellant – Surinder Singh Deswal

Respondent – Virender Gandhi

Bench – Justice Ashok Bhushan, Justice M.R.Shah


The appellants were partners at Bhoomi Infrastructure Co., now GLM Infratech Private Limited, when it was in business. The appellant issued a cheque to respondent No. 1 on March 31, 2014, with a cheque drawn on Canara Bank in the amount of Rs. 45,84,915 to cover part of the retirement obligations. Respondent No. 1 was a partner at the same firm and retired. Similarly, the appellants issued 63 more checks in favour of the respondent as a result of the same transaction. Respondent No. 1 placed a cheque at his bank, Karnataka Bank Ltd., Sector-11, Panchkula, on April 6, 2015. The cheque was returned with the notation that the funds were insufficient in accordance with a memo dated April 7, 2015. 63 other checks were also returned unpaid. Respondent No. 1 brought complaints against the appellants before the Judicial Magistrate, Ist Class, Panchkula, pursuant to Section 138 of the NI Act. There were 28 complaints total. The complaints were resolved by the Judicial Magistrate, who found the appellant Nos. 1 and 2 guilty of the offence punishable under Section 138 of the NI Act in his judgement dated 30.10.2018. They were subsequently found guilty. The appellants filed an appeal with the Court of Sessions Judge in Panchkula in opposition to the sentences of 30.11.2018 and 30.10.2018. The sentence was suspended while the appeal was pending, subject to the appellants providing a bail bond and surety bond in the amount of Rs. 50,000/- with one surety in the same amount, as well as subject to the deposit of 25% of the amount of compensation granted by the learned court of appeal in favour of the complainant. The appellants sought the suspension of the sentence under section 389 of the Cr.P.C. As a result of their failure to comply, the appellants filed a second petition under Section 482 of the Criminal Procedure Code contesting the Additional Sessions Judge’s ruling dated 20.07.2019.


Whether the trail court can direct to deposit 25% of the compensation under section 148 of the N.I.Act ?


  • The appellants’ counsel questions the additional session judge’s order and the high court’s ruling, arguing that failure to deposit 25% of the compensation as required cannot result in the suspension of the sentence being lifted.
  • The council also contests the trial court’s ruling in accordance with section 148 of the N.I.Act.
  • The council added that the complaint was made under section 138 of the N.I.Act, which was substantially earlier than the effective date of section 148 of the N.I.Act.
  • Council further argued that failure to deposit 25% of the compensation sum would not result in a revocation of the order suspending the sentence, but rather would leave it up to the respondent to pursue recovery of the money in question using the procedures outlined in section 421 of the Criminal Procedure Code.
  • By citing a case precedent, the appellants’ counsel claims that it is prospective and cannot be applied to crimes committed prior to the Act.


The Supreme Court’s bench, made up of Justice Ashok Bhushan and Justice M.R. Shah, unanimously found that the appellants’ arguments lacked validity, hence the appeals were dismissed and Section 148 of the N.I.Act was retroactive in nature.The Supreme Court noted that the amended Section 148 was introduced by the parliament in response to the dishonest drawer of a dishonoured check’s delay strategies as a result of the ease of filing an appeal and obtaining a stay of the proceedings, which violates the Statement and Object of Section 138 while making its decision on the appeal. Additionally, it was stated that the change to Section 148 does not violate the right to appeal, hence the appellant’s argument cannot be used to support complaints that were filed before the Act’s change. In answer to the second argument, the Supreme Court ruled that although the appeal court must provide a specific justification for directing the payment of the deposit under Section 148 of the Act, the word “may” is normally employed as a rule or shall and not as an exception. According to the modified Section, either the complainant or the appellant must file an application under Section 368 of the CrPC, 1973, to have the sentence suspended, or the court must issue an order directing the appellant to pay a sum that must equal at least 20% of the compensation. The Supreme Court has drawn attention to the need to alter Section 148 of the Act in order to right the wrong done to the payee. A payee is a person who invested a lot of time and money in legal processes as a result of delay strategies used to dishonour the cheque, which contradicted the Act’s intended outcome.

Therefore, in regards to appeals against the judgement of conviction under Section 138 of the Act, consideration of the Declaration of Object and Reason for the Amendment in Section 148 is appropriate. Additionally, in situations where criminal complaints were brought under Section 138 of the Act before the Negotiable Instrument Amendment Act.


Negotiable Instruments are utilised as models in the business sector and are regarded as the most practical way to move money. This device aids in lowering the likelihood of theft and robbery, however it has resulted in civil liability due to cheque dishonour. The dishonour of the cheque has been constituted a criminal offence in order to safeguard the drawee from loss. In the event that a cheque bounces due to insufficient money, the drawer is now responsible for the penalties with sufficient precautions to avoid complications for the drawee. Due to the numerous cases involving bounced checks that are currently pending in court, a modification to the Act has been started. The Supreme Court ruled in Surinder Singh deswal v. Virendra Gandhi that the change to the act was made to correct an injustice to the payee.    

The Negotiable Instruments Act was amended in a significant effort to strengthen the prompt resolution of cases and reduce pointless litigation. By offering interim compensation and requiring payment from the accused in the event of a conviction appeal, it aids the complainant. It is a step in the right direction for boosting the legitimacy of checks.