Judgment Intelligence
Referred to Larger Bench- Court
- Supreme Court of India
- Date of Decision
- 18 December 2025
- Bench
- Justices Aravind Kumar and N.V. Anjaria
- Relevant Acts & Sections
- Negotiable Instruments Act, 1881 — Sections 7, 138, 141, 143A, 148; Code of Criminal Procedure, 1973 — Sections 357(3), 374, 389; Bharatiya Nagarik Suraksha Sanhita, 2023 — Section 528
Question referred to a Larger Bench: whether the Section 148 deposit may be directed against a convicted director or authorised signatory, or is confined to the juristic drawer or company; papers placed before the Chief Justice (paras 74-75).
Source Supreme Court of India, www.sci.gov.in — judgment dated 18 December 2025 · Court's copy
Key holdings
- The Bench reaffirmed a limited appellate discretion to waive the Section 148 deposit only in exceptional circumstances (para 22).
- Where a legal impediment such as winding up bars prosecuting the company, its directors may be tried, convicted and may appeal alone (paras 17-19).
- In the Bench's view, Sections 143A and 148 are compensatory and call for a purposive reading of 'drawer' (paras 59, 63).
- Its disagreement was confined to the blanket exemption; corporate separateness and the signatory-is-not-drawer rule for prosecution were not doubted (para 73).
- Being of co-equal strength, the Bench could not depart from Gurudatta and Bijay Agarwal and sought a Larger Bench (para 72).
Case explainer by NyayVidhan: an account of this judgment and the law it laid down, not the court's text. The judgment itself is the authoritative version.
Brief Facts
Court's Findings
Legal Principle
NyayVidhan's view · Practice note
Why It Matters
A reference does not change the law by itself. The Bench said it could not take a different view on its own (para 72), so Gurudatta and Bijay Agarwal continued to bind courts pending the Larger Bench's decision. Directors and signatories convicted where the company could not be prosecuted could still rely on them, while complainants can cite this judgment's reasoning (paras 63-71). Either way, an appellate court asked to waive the deposit must record reasons for treating the case as exceptional (paras 20, 22). The judgment records no interim direction on the appellant's own deposit. For a Rajasthan High Court ruling that the deposit is not a routine condition for suspending sentence, see Kunaram v. State of Rajasthan.
Editorial comment by the NyayVidhan Editorial Desk. It is not part of the Court's judgment and is not legal advice.
Precedents Relied Upon
- Shri Gurudatta Sugars Marketing Pvt. Ltd. v. Prithviraj Sayajirao Deshmukh & Ors. 2024 SCC OnLine SC 1800
Held that the drawer in Section 143A is the company alone, so a director or authorised signatory cannot be directed to pay interim compensation; the Bench found its reasoning unduly literal, was unable to concur with its outcome on the deposit question and, being of co-equal strength, referred the question to a Larger Bench.
- Bijay Agarwal v. Medilines 2024 SCC OnLine SC 4094
Extended Gurudatta to Section 148: an authorised signatory is not the drawer and cannot be directed to make the appellate deposit; the Bench was unable to concur, held that a director cannot get a blanket exemption, and referred the question to a Larger Bench.
- Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Ltd. & Ors. (2023) 10 SCC 446
Section 148 is to be applied normally, but the appellate court may, for reasons specifically recorded, suspend the sentence without the 20% deposit in an exceptional case; the Bench concurred.
View all precedents (12)
- Muskan Enterprises v. State of Punjab & Anr (2024) SCC OnLine SC 4107
Reiterated that Section 148 is generally mandatory but leaves the appellate court a discretion to exempt in exceptional circumstances; the Bench concurred.
- Surinder Singh Deswal & Ors. v. Virender Gandhi (2019) 11 SCC 341
The word 'may' in Section 148 is to be read as 'shall', making the provision mandatory.
- Aneeta Hada v. Godfather Travels & Tours Pvt. Ltd. (2012) 5 SCC 661
A complaint under Section 138 read with Section 141 cannot proceed against the persons in charge alone unless the company is also arraigned, save where a legal impediment prevents the company being prosecuted.
- Anil Hada v. Indian Acrylic Ltd (2000) 1 SCC 1
Partially overruled by Aneeta Hada to the extent it allowed prosecution of the persons in charge without arraigning the company; its legal-snag exception, where the company cannot be prosecuted, was upheld.
- SMS Pharmaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89
Vicarious liability under Section 141 needs a specific averment that the accused was in charge of and responsible for the business; the signatory of a dishonoured cheque is covered by Section 141(2).
- P.Mohanraj and Ors v. Shah Brothers Ispat Private Ltd (2021) 6 SCC 258
Section 138 proceedings are quasi-criminal; the Bench used this to prefer a purposive over a strict reading of 'drawer' in Sections 143A and 148.
- R. Vijayan v. Baby and another (2012) 1 SCC 260
The object of Section 138 is both punitive and compensatory and restitutive.
- Meter and Instruments (P) Ltd. v. Kanchan Mehta (2018) 1 SCC 560
Section 138 is a remedial provision whose primary object is compensatory, the punitive element serving to enforce it.
- Abhilash Vinodkumar Jain v. Cox & Kings (India) Ltd. (1995) 3 SCC 732
In quasi-criminal proceedings a purposive interpretation in furtherance of the legislative intent is to be preferred.
