The Supreme Court on Thursday questioned two earlier rulings which held that a company's director or authorised signatory, if convicted in a cheque bounce case, cannot be asked to deposit money under Section 148 of the Negotiable Instruments (NI) Act while seeking suspension of sentence.
When hearing an appeal against a conviction under Section 138 (cheque bounce), Section 148 empowers an appellate court to order the accused (appellant) to deposit a minimum of 20 per cent of the fine or compensation awarded by the trial court, as a condition for suspending the sentence, to provide interim relief to the complainant.
This deposit must typically be made within 60 days, with a possible 30-day extension.
A bench of Justices Aravind Kumar and N V Anjaria said such persons cannot be given a blanket exemption from making the deposit. Whether the requirement should apply must depend on the facts of each case, the top court observed.
However, since the earlier rulings were delivered by benches of equal strength, the court did not overturn them. Instead, it referred the issue to a larger bench for a final and authoritative decision.
Recently, Justice B V Nagarathna expressed displeasure regarding the practice of Supreme Court benches passing orders that seemingly overrule previous decisions of coordinate benches, leading to potential legal uncertainty.
On Thursday, the court expressed its disagreement with two 2024 judgements which had held that a companys authorised signatory is not the 'drawer' of the cheque and, therefore, s/he cannot be directed to make a deposit under Sections 143A or 148 of the NI Act.
The present case arose from an appeal filed by Bharat Mittal, a former director of Ispat Private Ltd, challenging the Rajasthan high courts refusal to exempt him from making a deposit under Section 148.
-- Bhavini Mishra, Business Standard