Karnataka HC: Revision Petition Before Sessions Court Against Order Passed By Magistrate U/S 143A NI Act Maintainable U/S.397 CrPC

All these judgments considered the purport of an application under Section 143A of the Act and its closure and would hold that revision before the Court of Sessions under Section 397 of the Cr.P.C. would be maintainable as an order on the application filed under Section 143A of the Act is not an interlocutory order but an intermediate order. Therefore, I answer the issue that has arisen for consideration holding that an order passed on an application filed under Section 143A of the Act, is not interlocutory order, but an intermediate order, as the application is filed, and the application is closed, under the said provision, determining the rights and liabilities of parties qua the application and revision petition before the Court of Sessions on the order passed by the learned Magistrate under Section 143A either allowing the application, or rejecting it, would be maintainable for the aggrieved party, be it the complainant or the accused to approach.{Para 11}

 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

Criminal Petition No. 5944 of 2023

Decided On: 28.07.2023

Sanjay P.S. Vs. Abhishek M.

Hon'ble Judges/Coram:

Maheshan Nagaprasanna, J.

Citation:  MANU/KA/1977/2023.

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Bombay HC: When substantive rights of accused are violated, said order will be intermediate order and criminal revision is maintainable against said order

 Here in this case, the learned Magistrate applied that provision of law which was not at all applicable to the case in hand before him, therefore, definitely it had affected the right of the accused. Consequently it cannot be said that, the order which was passed by the learned Magistrate was purely "interlocutory order" as contemplated under Section 397 (2) of Code of Criminal Procedure. The learned Additional Sessions Judge was justified in setting aside the said order by exercising his power under Section 397 (1) of Code of Criminal Procedure. There is no merit in the present writ petition much less to invoke the constitutional powers of this Court under Article 226 and 227, hence the writ petition is hereby dismissed. Rule is discharged. {Para 11}

 IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)

Criminal Writ Petition No. 1848 of 2019

Decided On: 11.12.2019

Hitendra Vs. Shankar and Ors.

Hon'ble Judges/Coram:

Vibha Kankanwadi, J.

Citation:  MANU/MH/3561/2019.

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Interim Compensation In Cheque Dishonour Cases U/S 143A NI Act Isn't Mandatory : Supreme Court Lays Down Broad Parameters

19. Subject to what is held earlier, the main conclusions can be summarised as follows:

a. The exercise of power Under Sub-section (1) of Section 143A is discretionary. The provision is directory and not mandatory. The word "may" used in the provision cannot be construed as "shall."

b. While deciding the prayer made Under Section 143A, the Court must record brief reasons indicating consideration of all relevant factors.

c. The broad parameters for exercising the discretion Under Section 143A are as follows:

i. The Court will have to prima facie evaluate the merits of the case made out by the complainant and the merits of the defence pleaded by the Accused in the reply to the application. The financial distress of the Accused can also be a consideration.

ii. A direction to pay interim compensation can be issued, only if the complainant makes out a prima facie case.

iii. If the defence of the Accused is found to be prima facie plausible, the Court may exercise discretion in refusing to grant interim compensation.

iv. If the Court concludes that a case is made out to grant interim compensation, it will also have to apply its mind to the quantum of interim compensation to be granted. While doing so, the Court will have to consider several factors such as the nature of the transaction, the relationship, if any, between the Accused and the complainant, etc.

v. There could be several other relevant factors in the peculiar facts of a given case, which cannot be exhaustively stated. The parameters stated above are not exhaustive.

 IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 741 of 2024

Decided On: 15.03.2024

Rakesh Ranjan Shrivastava Vs. The State of Jharkhand and Ors.

Hon'ble Judges/Coram:

Abhay Shreeniwas Oka and Ujjal Bhuyan, JJ.

Author: Abhay Shreeniwas Oka, J.

 Citation: 2024 INSC 205,MANU/SC/0204/2024.

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Whether Magistrate must give reasons for grant of twenty percent interim compensation To Complainant In Cheque Dishonour Case?

Mr. Bhavin Suchak, the learned Counsel for the respondent/ complainant has rightly argued that, in fact, the trial Court has considered the judgment passed by this Court, in Ashwin's case (supra) and has in paragraph 6 reproduced that part of the order passed by this Court which deals with the probable considerations while passing interim order, which reads thus:

" 6...... Grant of interim compensation, would be at the discretion of the Court, based upon consideration of various factors, such as (a) whether the requirements of Section 138 of the N.I. Act were fulfilled, (b)whether the pleadings disclose the drawing of the presumption, (c) whether the proceedings were within limitation and, (d) whether prima facie a legal debt or liability was disclosed from the complaint or the notice of demand preceding it."

The trial Court has then noted that the complainant before it fulfills all the requirements as quoted under clause (a) to (d) above.{Para 7}

9. One of the reasons of introducing Section 143A of the N.I. Act, by amending Act of 20 of 2018 is to curtail delaying tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings and that the payee of dishonoured cheque has to spend considerable time and resources in court proceedings to realise the value of the cheque. The amendment was introduced with a view to address the issue of undue delay in final resolution of cheque dishonour cases so as to provide relief to payees of dishonoured cheques and to discourage frivolous and unnecessary litigation which would save time and money. If this amendment is to be given effect to in its letter and spirit, in my considered view, once the factors enumerated in clauses (a) to (d) above are satisfied/ fulfilled, then those are reasons enough and thus case for awarding interim compensation exists. In such circumstances, the learned Magistrate will be fully justified in awarding 20% interim compensation. To expect the learned Magistrate to assign additional reasons, in a way, will defeat the amendment for the reason that every order passed under Section 143A will then be challenged on the ground that there are no additional reasons assigned by the learned Magistrate and if additional reasons are assigned, the challenge will be that the reasons assigned are not adequate etc. thereby opening flood-gates of litigations. However, to reduce the interim compensation, additional reasons may be necessary indicating why it was being so done. 

10. The interim compensation is granted at a stage of the proceedings where the accused pleads not guilty to the charges. Thus, despite the requirements in clause (a) to (d) above being fulfilled, if the accused pleads not guilty, to not award interim compensation @ 20% of the cheque amount will only defeat the intent of Sec. 143A. To my mind, it is only in case of doubt as regards fulfillment of any requirement under clause (a) to (d) above, the learned Magistrate may reduce the interim compensation below 20% of the cheque, or not grant it at all.

 IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Criminal Writ Petition No. 83/2023

Decided On: 21.09.2023

Guljama Shah Jahir Shah  Vs. Shri Sadguru Kaka Stone Crusher

Hon'ble Judges/Coram:

Anil L. Pansare, J.

Citation:  MANU/MH/3896/2023.

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Is the Company's Authorized Signatory, as the Drawer of a Cheque, Liable to Pay Interim Compensation U/S 143A of the NI Act?

 For the reasons stated above questions framed above are answered as below:-

(i) The signatory of the cheque, authorized by the "Company", is not the drawer in terms of section 143A of the NI Act and cannot be directed to pay interim compensation under section 143A.

(ii) In an appeal under section 148 of NI Act filed by persons other than "drawer" against the conviction under section 138 of the NI Act, a deposit of a minimum sum of 20% of the fine or compensation is not necessary.

However, in an appeal filed by persons other than "drawer" against the conviction under section 138 of the NI Act such power to direct deposit of compensation is available with the Appellate Court while suspending sentence under section 389 of code of criminal procedure. {Para 51}

IN THE HIGH COURT OF BOMBAY

Criminal Application No. 886 of 2022, 

Decided On: 08.03.2023

Lyka Labs Limited and Ors.  Vs. The State of Maharashtra and Ors.

Hon'ble Judges/Coram:

Amit B. Borkar, J.

Citation: MANU/MH/0799/2023,2023 Lawweb (Bom HC ) 19.

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Whether the court must direct accused to pay interim compensation to complainant as per S 143A of NI Act?

The next question that arises for consideration is the manner in which this provision is to be put into operation in the pending proceedings. It will be relevant to extract Section 143A(1) as follows:

"143A.(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Court trying an offence under Section 138 may order the drawer of the cheque to pay interim compensation to the complainant--

(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and

(b) in any other case, upon framing of charge."

7. A reading of the above provision makes it clear that the Court trying an offence under Section 138 of the Negotiable Instruments Act "may" (emphasis supplied) order the drawer of the cheque to pay interim compensation to the complainant. The provision itself shows that the discretion is vested with the Trial Court to direct interim compensation to be paid by the complainant. It is not necessary that in all cases, the trial Court must necessarily direct the complainant to pay interim compensation and such a direction should be given only on a case to case basis, by taking into consideration the facts of each case. The legislature has intentionally not used the word "shall", since it would have prevented the accused persons, even in genuine cases, from defending themselves without paying 20% as interim compensation amount to the complainant. This would have directly affected the fundamental right of an accused person to defend himself in a criminal case. This is the reason why the legislature had thoughtfully used the word "may" under Section 143A(1) of the Negotiable Instruments Act. Therefore, it is not possible to read the word "shall" into the word "may" which is used in the provision.

8. In view of the above finding, the word "may", gives the discretion to the Trial Court to direct the accused to pay interim compensation to the complainant. The exercise of discretion must always be supported by reasons, failing which the exercise of discretion will become arbitrary.

IN THE HIGH COURT OF MADRAS

Crl. O.P. Nos. 15438, 15440 of 2019 and Crl. M.P. Nos. 7576, 7578 of 2019

Decided On: 12.07.2019

L.G.R. Enterprises  Vs.  P. Anbazhagan

Hon'ble Judges/Coram:

N. Anand Venkatesh, J.

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Bom HC: Magistrate can make order U/ S. 143-A of NI Act even when plea of not guilty recorded by Advocate and not by accused himself

 It is the case of the petitioner that, summons was issued to the accused returnable on 11.12.2018 The summons was served upon the accused on or about 01.11.2018 The petitioner, owing to unavailability of a confirmed travel ticket was unable to travel from Gurgaon to Mumbai and attend the Trial Court on 11.12.2018 but instructed an advocate to attend the proceedings and take appropriate steps in the interest of the petitioner. The advocate of the petitioner appeared before the Trial Court on 11.12.2018 and presented an application for personal exemption of the petitioner. The learned Magistrate passed a conditional order thereby allowing the exemption application on a condition that the Advocate for the accused shall record plea on behalf of the accused and if the advocate is pleading not guilty then the accused shall secure his presence for bail and deposit 20% of the cheque amount as interim compensation within 60 days from the date of the order. It is further stated that, the impugned order dated 11.12.2018 is passed by the learned Magistrate in exercise of his powers under Section 143A of the said Act, inserted by the Negotiable Instruments (Amendment) Act, 2018. The section 143A of the said Act empowers the Magistrate to order the accused to deposit 20% of the cheque amount as interim compensation in a summons case when the accused pleads not guilty to the accusations made in the complaint. It is pertinent to note that the Section 143A of the said Act, does not contemplate recording plea of accused through his pleader. The provision of section 143A of the said Act, also does not allow the learned Magistrate to order deposit of interim compensation as a conditional order. More particularly, such order under Section 143A of the said Act, cannot be passed on an application preferred on behalf of the accused seeking exemption from personal appearance before the Court. Hence the present writ petition.

 Therefore, keeping in view the mandate of Section 143 of the said Act and also judgment of Hon'ble Supreme Court in the case of Indian Bank Association(supra), the learned Metropolitan Magistrate was right in passing the impugned order. Prima facie it appears that the petitioner is trying to delay the proceedings pending before the learned Metropolitan Magistrate. In that view of the matter no case is made out to cause interference in the impugned order. Hence, petition stands rejected.

In the High Court of Bombay

(Before S.S Shinde, J.)

Sidharth Chauhan  v.  Aditya Birla Real Estate Fund 

Criminal Writ Petition No. 762 of 2019

Decided on July 19, 2019, 

Citation: 2019 SCC OnLine Bom 1297,2020(1) MHLJ 277

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Supreme Court: Section 143A of Negotiable Instruments Act on Interim Compensation is not retrospective

In our view, the applicability of Section 143A of the Act must, therefore, be held to be prospective in nature and confined to cases where offences were committed after the introduction of Section 143A, in order to force an Accused to pay such interim compensation.

23. We must, however, advert to a decision of this Court in Surinder Singh Deswal and Ors. v. Virender Gandhi MANU/SC/0793/2019 : (2019) 8 SCALE 445 where Section 148 of the Act which was also introduced by the same Amendment Act 20 of 2018 from 01.09.2018 was held by this Court to be retrospective in operation. As against Section 143A of the Act which applies at the trial stage that is even before the pronouncement of guilt or order of conviction, Section 148 of the Act applies at the appellate stage where the Accused is already found guilty of the offence Under Section 138 of the Act. It may be stated that there is no provision in Section 148 of the Act which is similar to Sub-Section (5) of Section 143A of the Act. However, as a matter of fact, no such provision akin to Sub-section (5) of Section 143A was required as Sections 421 and 357 of the Code, which apply post-conviction, are adequate to take care of such requirements. In that sense said Section 148 depends upon the existing machinery and principles already in existence and does not create any fresh disability of the nature similar to that created by Section 143A of the Act. Therefore, the decision of this Court in Surinder Singh Deswal MANU/SC/8202/2007 : (2007) 13 SCC 492 stands on a different footing.

24. In the ultimate analysis, we hold Section 143A to be prospective in operation and that the provisions of said Section 143A can be applied or invoked only in cases where the offence Under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book. Consequently, the orders passed by the Trial Court as well as the High Court are required to be set aside. The money deposited by the Appellant, pursuant to the interim direction passed by this Court, shall be returned to the Appellant along with interest accrued thereon within two weeks from the date of this order.

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 1160 of 2019 

Decided On: 30.07.2019

 G.J. Raja Vs. Tejraj Surana

Hon'ble Judges/Coram:

U.U. Lalit and Vineet Saran, JJ.

Citation: AIR 2019 SC 3817,2019(5) MHLJ 761

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