Andhra Pradesh HC: no reasons needed for 20% cheque-bounce deposit, but a waiver needs them
Justice Sunitha Gandham held that an appellate court need give no reasons for imposing the Section 148 deposit, only for waiving it, but sent a transport firm and its proprietor back to the sessions court because their financial plea was never argued there.
A convict who tells the High Court he cannot afford the 20% deposit in a cheque-bounce appeal must first have told the appellate court so. On 12 November 2026 the Andhra Pradesh High Court sent a transport firm and its proprietor back to the sessions court to argue exactly that.
Justice Sunitha Gandham held that the court imposing the deposit under Section 148 of the Negotiable Instruments Act need not give reasons. A court that waives it must. Until the appellate court decides afresh, the trial court's sentence stays suspended.
From a Salur conviction to a 20% condition
The petitioners are Sri Rama Transport, represented by its proprietor Giri Gopi, and Mr Gopi himself. They were accused Nos. 1 and 2 in a cheque dishonour complaint by Shriram City Union Finance Limited, Salur branch, in Vizianagaram district.
On 22 December 2025 the Judicial Magistrate of First Class, Salur convicted them under Section 138. They were ordered to pay one and a half times the cheque amount by 23 March 2026, with 6% annual interest from the date of the cheque to the date of judgment.
In default, accused No. 2 faced 18 months of simple imprisonment. The petitioners appealed to the II Additional District and Sessions Judge, Parvathipuram, as Crl.A. No. 15 of 2026, and asked in Crl.M.P. No. 52 of 2026 for suspension of sentence.
On 24 March 2026 the appellate court granted suspension on two conditions. The petitioners were to deposit 20% of the cheque amount and give a self-bond of Rs 25,000 each with two sureties for the same sum, to the Salur magistrate's satisfaction.
The petitioners: unreasoned and unaffordable
The petitioners came to the High Court under Section 482 of the Code of Criminal Procedure and Section 528 of the BNSS. They asked it to quash the order only to the extent of the 20% deposit, and to stay the Salur judgment meanwhile.
They said the appellate court gave no reasons for the deposit and that they have no financial capacity to pay it. They relied on Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd.
Counsel R. Siva Sai Swarup appeared for the petitioners and O. Udaya Kumar for the complainant. The complainant's counsel said the petitioners never told the appellate court they had difficulty paying, and that waiver is for exceptional cases.
The question the court framed
Justice Gandham framed one point for consideration:
“Whether the petitioners established their case to give exemption in depositing 20% of cheque amount, to suspend the sentence vide judgment dated 22.12.2025?” (para 4)
Section 148 and the general rule
The court read Section 148, inserted by the Negotiable Instruments (Amendment) Act, 2018, as letting the appellate court order a deposit of a minimum of 20% of the fine or compensation. The word “may” gives discretion, but within a statutory minimum.
The aim, it said, is to curb prolonged litigation in cheque cases and to keep the complainant from being left without the fruits of the judgment during the appeal. The deposit may, subject to conditions, be released to the complainant while the appeal is pending.
It quoted Jamboo Bhandari, where the Supreme Court said an appellate court is normally justified in imposing the deposit. An exception can be made only if the 20% would be unjust or would amount to deprivation of the right of appeal, and then for reasons specifically recorded.
The same judgment rejected the argument that no exception can be considered where the accused never asked for one. An accused who seeks suspension without any condition, it said, obliges the court to consider whether the case is an exception.
The court also quoted Muskan Enterprises v. State of Punjab (2024 INSC 1046). It says the appellate court normally leans towards requiring a deposit, but keeps the power to order none in an exceptional case, for recorded reasons.
Who must show the exception
From the two rulings Justice Gandham drew a rule. The convict bears the onus of showing special, exceptional or compelling circumstances. They must be shown through credible, cogent and substantiated material placed on the record.
Absent that, she said, the legislative mandate prevails. The 20% deposit is the general rule and departure from it needs exceptional circumstances duly demonstrated before the appellate court.
Why the case went back
On the facts, the petitioners said a financial crisis prevented the deposit. The appellate order, the court noted, does not show whether their counsel argued any such difficulty, and the petitioners did not say they had raised it there.
The court agreed with the complainant that only exceptional circumstances, with justifiable reasons, warrant a waiver. Reasons need not be given for imposing the 20%, it said, but must be given for waiving it.
The petitioners should have explained their financial condition to the appellate court. Because the impugned order also does not reveal the arguments made, the court held it fit to send the matter back so that they could be heard.
Order
The criminal petition was disposed of. The petitioners must appear before the II Additional District and Sessions Judge, Parvathipuram within ten days of receiving a copy of the order.
The appellate court is to hear the petitioners and the complainant on the deposit, apply the principles set out and decide Crl.M.P. No. 52 of 2026 in Crl.A. No. 15 of 2026 afresh. Until then the sentence imposed by the trial court stays suspended.
Pending miscellaneous petitions stood closed.