The Rajasthan High Court has held that Section 148 of the Negotiable Instruments Act, 1881, continues to remain in force despite the repeal of the Negotiable Instruments (Amendment) Act, 2018. Justice Anil Kumar Upman dismissed four connected petitions filed by A.L.D. Infratech Pvt. Ltd. and its director, Deepak Kumar, challenging orders directing them to deposit 20% of the compensation awarded in cheque dishonour cases.
Background
The petitions arose from commercial dealings between A.L.D. Infratech and Baljeet Singh concerning real estate and project development, including the Royal Square commercial project in Neemrana. Singh initiated proceedings under Section 138 of the NI Act, alleging dishonour of cheques.
The trial court convicted the petitioners and awarded compensation of ₹3.05 crore in one case and ₹2.84 crore in each of the other three cases. The total compensation across all four matters amounted to ₹11.57 crore.
During their appeals against conviction, the petitioners challenged the appellate court's orders dated May 1, 2026, requiring them to deposit 20% of the compensation.
The petitioners argued that the 2018 Amendment Act had been repealed by the Repealing and Amending Act, 2025, and Section 148 could no longer support the deposit directions. They also contended that the appellate court had failed to adequately consider their financial circumstances and the disputed nature of the underlying transactions.
Relying on the Supreme Court's decision in Jamboo Bhandari v. M.P. State Industrial Development Corporation Ltd., they argued that an exception could be made where the deposit condition would be unjust or effectively deprive a person of the right to appeal.
The respondent opposed the petitions, maintaining that the deposit requirement protected the complainant's interests and that the statutory condition remained applicable.
The High Court examined whether repeal of the 2018 amending legislation had extinguished Section 148, which had already been incorporated into the parent Act. Referring to the Supreme Court's decision in Independent Schools' Federation of India v. Union of India and Section 6-A of the General Clauses Act, 1897, the Court held that repeal of an amending statute does not automatically remove amendments already incorporated into the principal legislation.
The Court observed:
“It is a settled principle of statutory interpretation that an amendment once incorporated into the parent Act, the amendment becomes a part thereof and derives its force from the parent legislation. Consequently, repeal of the amending Act merely brings the amending enactment to an end as an independent legislative measure; it does not efface the amendments already incorporated into the parent Act.”
On the request for exemption, the Court noted that Deepak Kumar had acknowledged issuing the cheque and signing it during his testimony. It also considered his statement that he owned two companies with assets valued at more than ₹100 crore. The Court held that the financial hardship claimed by the petitioners did not establish exceptional circumstances warranting exemption from the deposit requirement.
The High Court dismissed all four petitions, finding no illegality or exceptional circumstances justifying interference with the appellate court's orders.
It also directed the appellate court to expedite the pending appeals and make every effort to conclude them within three months of receiving a certified copy of the order.
