Safiya Malik

The Delhi High Court, Single Bench of Justice Saurabh Banerjee has remanded two applications seeking a waiver of the mandatory 20% pre-deposit under Section 148 of the Negotiable Instruments Act, 1881 (NI Act). The matter arose from two appeals filed by Anuj Ahuja challenging his conviction and sentence under Section 138 of the NI Act. The judgment, pronounced on March 17, 2025, set aside the orders of the Additional Sessions Judge, Rohini Courts, Delhi, and directed a fresh consideration of the applications.

The dispute arose from a series of financial transactions between the petitioner, Anuj Ahuja, a real estate businessman, and the respondents, Sumitra Mittal and Rajesh Mittal. According to the respondents, Ahuja had borrowed a total of Rs. 53,00,000, which was advanced as a monetary loan by Sumitra Mittal and Rajesh Mittal collectively. Ahuja issued two post-dated cheques as security—one for Rs. 25,00,000 in favor of Sumitra Mittal and another for Rs. 28,00,000 in favor of Rajesh Mittal, both drawn on IDBI Bank, Azadpur, Delhi.

Also Read: No offence U/s 138 NI Act on dishonour of cheque alone-Offence kicks in on default of payment within 15 days of demand notice

Upon presentation, both cheques were dishonoured due to "insufficient funds." Consequently, the respondents filed separate criminal complaints under Section 138 of the NI Act before the Metropolitan Magistrate (MM), Rohini Courts. After considering the evidence, the MM convicted Ahuja on July 1, 2024, and sentenced him accordingly.

Subsequently, Ahuja filed two appeals (C.A. No. 138/2024 and C.A. No. 139/2024) before the Additional Sessions Judge (ASJ). On August 7, 2024, the ASJ suspended the sentence, conditional upon Ahuja depositing 20% of the compensation amount in both cases within 60 days. However, Ahuja did not comply with this condition. When the matter was heard again on September 23, 2024, the ASJ reiterated the direction for the 20% deposit.

Ahuja later filed applications seeking a waiver of the deposit requirement, citing financial incapacity and alleging that the ASJ had erroneously attributed a saree business to him, which he claimed was owned by Sumitra Mittal. On January 27, 2025, the ASJ dismissed both waiver applications, prompting Ahuja to approach the Delhi High Court.

The Delhi High Court examined Section 148 of the NI Act, which was introduced via the Negotiable Instruments (Amendment) Act, 2018. The judgment stated:

"… the appellate Court (like the learned ASJ herein) ‘may’ order the appellant to deposit… the minimum deposit of 20% of the fine or compensation awarded by the learned MM, the same is clearly, subject to exercise of discretion by the appellate Court…"

The Court referred to Surinder Singh Deswal v. Virender Gandhi (2019) and Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd. (2023), affirming that the pre-deposit requirement is generally applicable but may be waived in exceptional circumstances where enforcing it would be unjust or deprive the appellant of the right to appeal.

The High Court noted that the ASJ had denied the waiver based on a "prima facie case" favouring the complainants and had erroneously assumed that Ahuja owned a saree business. The judgment recorded that this assumption was incorrect, as even the respondents later admitted in their reply that the reference to Ahuja’s saree business was a "typographical error."

The Court further observed:

"… the appellate Court (like the learned ASJ herein) has to bear in mind various surrounding circumstances like those relating to the nature of transaction(s) involved; the relationship(s) inter-se the parties involved; the quantum of amount involved; the financial capacity of the parties…"

The judgment also stated that an order requiring a 20% deposit must reflect due application of mind, rather than being imposed mechanically. It was noted that:

"… the appellate Court while suspending a sentence cannot pass a blanket order in all cases to deposit 20% of the fine or compensation without assigning any reason. Moreover, once the court has decided to order deposit as per Section 148(1) of the Negotiable Instruments Act, the amount of deposit ordered by the Court can be varied from the minimum 20% of the fine or compensation to a higher percent of the fine or compensation. That also shows that a speaking order is necessary."

Also Read: "No Sufficient Grounds for Intervention": Kerala High Court Dismisses Appeals against Sree Padmanabhaswamy Temple Administration

The Court held that the ASJ’s reasoning was insufficient and did not provide clear grounds for refusing the waiver. The judgment recorded:

"… neither the presumptions of/ in the NI Act nor the appellant being pronounced as ‘guilty’, per se, can be held sufficient for calling upon any such ‘guilty’ like the appellant thereto/ petitioner herein to deposit the 20% of compensation amount as awarded by the learned MM at the very threshold of the appeal itself."

The High Court set aside the ASJ's orders dated January 27, 2025, and remanded the waiver applications for reconsideration. It directed that:

"… the earlier orders dated 07.08.2024 and 23.09.2024 shall not be given effect to by the learned ASJ till the disposal of the aforesaid two application(s) of the petitioner, seeking waiver of deposit of 20% of the compensation amount…"

Advocates Representing the Parties

For the Petitioner: Dr. Amit George, Ms. Ananya Sikri, Ms. Medhavi Bhatia, Ms. Ibansara Syiemlieh, Mr. Dushyant K. Kaul, and Ms. Rupam Jha.

For the Respondents: Mr. F. K. Jha and Mr. Gaurav Jha.

Case Title: Anuj Ahuja v. Sumitra Mittal & Anuj Ahuja v. Rajesh Mittal

Neutral Citation: 2025: DHC:1687

Case Number: CRL.M.C. 1327/2025 & CRL.M.C. 1341/2025

Bench: Justice Saurabh Banerjee

[Read/Download order]