Under Section 148, when a drawer convicted under Section 138 files an appeal, the appellate court may order the appellant to deposit a sum that is not less than 20% of the fine or compensation awarded by the trial court, within 60 days (extendable by 30 days). The court may release the deposit to the complainant during the appeal. If the appellant is acquitted, the complainant repays it with interest at the bank rate.
How Section 148 works in India
The trial magistrate convicts the drawer and typically orders compensation equal to the cheque amount or more, often with interest, under Section 357 CrPC. The drawer appeals to the Sessions Court. On the appeal being filed, the appellate court, usually when considering suspension of sentence, directs the deposit under Section 148. The Supreme Court has clarified that the word "may" is to be read as generally "shall", so a deposit is ordered unless the court records special reasons. The complainant can apply to withdraw the deposited amount, usually on furnishing an undertaking to repay with interest if the appeal succeeds.
Why it matters for getting paid
Before 2018 a convicted drawer could appeal and keep the supplier waiting several more years. Now the appeal costs real money up front, with the 143A interim payment making it a minimum of around 40% of the cheque amount in a typical case. Combined with the possible release of the deposit to the complainant, Section 148 makes the appeal stage a strong moment for settlement. See Section 143A interim compensation for the first-stage payment.
How FundRaksha uses it
When a FundRaksha client's Section 138 conviction is appealed, the advocate immediately applies for the Section 148 deposit and for its release to the client. The pressure typically converts into a final settlement. FundRaksha has handled ₹50 Cr+ of invoices across 1,000+ businesses; the 30% success fee is charged only on money actually received.
Worked example (hypothetical)
A Surat textile trader obtains a conviction on a ₹8,00,000 cheque; the magistrate awards compensation of ₹8,00,000 and the drawer has already paid ₹1,60,000 interim compensation under Section 143A. The drawer appeals. The Sessions Court orders a deposit of 20% of the compensation, ₹1,60,000, within 60 days, and later allows the trader to withdraw it against an undertaking. The trader now holds ₹3,20,000 (40% of the cheque amount) while the appeal is pending. The drawer offers to pay the remaining ₹4,80,000 in return for the trader's consent to compounding the offence; the trader accepts.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.