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[13/05, 18:27] sekarreporter1: [13/05, 18:17] sekarreporter1: % Deposit in Cheque Bounce Appeals Not Automatic, Sends Case Back for Fresh Review
Madras High Court Says 20% Deposit in Cheque Bounce Appeals Not Automatic, Sends Case Back for Fresh Review
Court Book
13 May 2026 at 13:17:06 IST
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Madras High Court held that directing a 20% deposit in cheque bounce appeal cases is not automatic and requires judicial application of mind. – Shajin vs Gopaladhas
Madras High Court Says 20% Deposit in Cheque Bounce Appeals Not Automatic, Sends Case Back for Fresh Review
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The Madurai Bench of the Madras High Court has ruled that appellate courts cannot mechanically direct accused persons to deposit 20% of the compensation amount while suspending sentence in cheque bounce cases.
Justice S. Srimathy observed that courts must examine the specific facts of each case and provide reasons before imposing such a condition.
Background of the Case
The case arose from a petition filed by Shajin challenging a condition imposed by the Principal Sessions Judge, Kanyakumari District, Nagercoil. The lower appellate court had directed him to deposit 20% of the compensation amount – Rs.60,000 – while granting suspension of sentence in a cheque dishonour appeal.
According to court records, the petitioner had earlier been convicted under Section 138 of the Negotiable Instruments Act by the Judicial Magistrate No.II, Kuzhithurai, in 2025. The trial court sentenced him to six months’ simple imprisonment and directed payment of Rs.3 lakh as compensation.
The petitioner later approached the sessions court in appeal and sought suspension of sentence. While granting relief, the appellate court imposed the disputed deposit condition.
Counsel appearing for the petitioner argued that an insolvency petition had already been filed before the competent court and that the complainant allegedly misused the cheque despite knowledge of those proceedings. This issue, the petitioner claimed, formed one of the principal grounds in the appeal.
It was argued that the appellate court failed to consider these circumstances and imposed the 20% deposit condition without proper reasoning.
Justice S. Srimathy referred to earlier rulings of the Supreme Court of India and the Kerala High Court dealing with Section 148 of the Negotiable Instruments Act. The High Court noted that the requirement to deposit 20% of the compensation amount is not an “absolute rule.”
“The accused person is able to make out a ground for reduction of this percentage or for exemption of deposit, the same has to be considered by the appellate Court,” the bench observed.
The Court further said that there must be “application of mind” while directing such deposits and that appellate courts are expected to pass reasoned orders after considering the objections raised by the accused.
After examining the records, the High Court found that the petitioner had raised a prima facie ground seeking exemption from depositing the amount, but the appellate court had not properly addressed it.
The High Court therefore remanded the matter back to the Principal Sessions Judge, Kanyakumari District at Nagercoil, directing the lower court to reconsider the request for exemption and pass fresh orders on merits within four weeks.
Case Details:
Case Title: Shajin vs Gopaladhas
Case Number: Crl.OP(MD) No.9164 of 2026
Judge: Justice S. Srimathy
Decision Date: May 7, 202
[13/05, 18:17] sekarreporter1: Madras High Court Says 20% Deposit in Cheque Bounce Appeals Not Automatic, Sends Case Back for Fresh Review https://courtbook.in/posts/madras-hc-20-percent-deposit-ni-act-appeal
