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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Whether the appellate court should vacate suspension of sentence granted to convict if he fails to comply its order regarding payment of compensation in cheque dishonour case?

 The High Court is right in its opinion that question No. 2 as framed in Vivek Sahni's case was not correctly considered. When suspension of sentence by the trial court is granted on a condition, non-compliance of the condition has adverse effect on the continuance of suspension of sentence. The Court which has suspended the sentence on a condition, after noticing non-compliance of the condition can very well hold that the suspension of sentence stands vacated due to non-compliance. The order of the Additional Sessions Judge declaring that due to non-compliance of condition of deposit of 25% of the amount of compensation, suspension of sentence stands vacated is well within the jurisdiction of the Sessions Court and no error has been committed by the Additional Sessions Judge in passing the order dated 20.07.2019.

19. It is for the Appellate Court who has granted suspension of sentence to take call on non-compliance and take appropriate decision. What order is to be passed by the Appellate Court in such circumstances is for the Appellate Court to consider and decide. However, non-compliance of the condition of suspension of sentence is sufficient to declare suspension of sentence as having been vacated.

IN THE SUPREME COURT OF INDIA

Criminal Appeal Nos. 1936-1963 of 2019

Decided On: 08.01.2020

 Surinder Singh Deswal  Vs.  Virender Gandhi 

Hon'ble Judges/Coram:

Ashok Bhushan and M.R. Shah, JJ.

Citation: AIR 2020 SC 415

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Supreme Court reiterates that S 148 of NI Act is retrospective in nature

 Learned counsel for the appellant has placed

reliance on the judgment of this Court dated

30.07.2019 in Criminal Appeal No.1160 of 2019 (G.J.

Raja vs. Tejraj Surana). This Court in the above case

was considering provisions of Section 143A of the

N.I. Act which was inserted by the same Amendment Act

20 of 2018 by which Section 148 of the N.I. Act has

been inserted. This Court took the view that Section

143A is prospective in nature and confined to cases

where offences were committed after the introduction

of Section 143A i.e. after 01.09.2018. In paragraph

22 of the judgment following has been held:

“22. 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.”

15. The judgment of this Court which was delivered in

the case of the present appellants i.e. Criminal

Appeal Nos.917-944 of 2019 (Surinder Singh Deswal @

Col. S.S. Deswal and others vs. Virender Gandhi) (in

which one of us M.R.Shah, J was also a member) was

also cited before the Bench deciding the case of G.J.

Raja. This Court in its judgment dated 29.05.2019 has

rejected the submission of the appellants that

Section 148 of N.I. Act shall not be made applicable

retrospectively. This Court held that considering the

Statement of Objects and Reasons of the amendment in

Section 148 of the N.I. Act, on purposive

interpretation of Section 148 of the N.I. Act as

amended, shall be applicable in respect of the

appeals against the order of conviction and sentence

for the offence under Section 138 of the N.I. Act,

even in a case where the criminal complaints for the

offence under Section 138 of the N.I. Act were filed

prior to amendment Act No.20/2018 i.e. prior to

01.09.2018.

16. The Bench deciding G.J. Raja’s case has noticed

the judgment of this Court in the appellants’ case

i.e. Surinder Singh Deswal’s case and has opined that

the decision of this Court in Surinder Singh Deswal’s

case was on Section 148 of the N.I. Act which is a

stage after conviction of the accused and

distinguishable from the stage in which the interim

compensation was awarded under Section 143A of the

N.I.Act. When the Bench deciding G.J. Raja’s

case(supra) itself has considered and distinguished

the judgment of this Court in appellants’ own case

i.e. Surinder Singh Deswal’s, reliance by the learned

counsel for the appellants on the judgment of this

Court in G.J. Raja’s case is misplaced. It is useful

to refer to paragraph 23 of the judgment in G.J.

Raja’s case which is to the following effect:

“23. We must, however, advert to a

decision of this Court in Surinder Singh

Deswal and Ors. v. Virender Gandhi (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 (2007) 13 SCC 492

stands on a different footing.”

In view of the above, the judgment of this Court in

the case of G.J. Raja does not help the appellants.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS.1936-1963 OF 2019

SURINDER SINGH DESWAL @ COL. S.S. DESWAL Vs  VIRENDER GANDHI & ANR. 

ASHOK BHUSHAN, J.

Dated:January 08, 2020.

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Supreme Court: S 148 of N I Act as amended in 2018 has retrospective effect

 Having observed and found that because of the delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings, the object and purpose of the enactment of Section 138 of the N.I. Act was being frustrated, the Parliament has thought it fit to amend Section 148 of the N.I. Act, by which the first appellate Court, in an appeal challenging the order of conviction Under Section 138 of the N.I. Act, is conferred with the power to direct the convicted Accused - Appellant to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial Court. By the amendment in Section 148 of the N.I. Act, it cannot be said that any vested right of appeal of the Accused - Appellant has been taken away and/or affected. Therefore, submission on behalf of the Appellants that amendment in Section 148 of the N.I. Act shall not be made applicable retrospectively and more particularly with respect to cases/complaints filed prior to 1.9.2018 shall not be applicable has no substance and cannot be accepted, as by amendment in Section 148 of the N.I. Act, no substantive right of appeal has been taken away and/or affected. Therefore the decisions of this Court in the cases of Garikapatti Veeraya (supra) and Videocon International Limited (supra), relied upon by the learned senior Counsel appearing on behalf of the Appellants shall not be applicable to the facts of the case on hand. Therefore, considering the Statement of Objects and Reasons of the amendment in Section 148 of the N.I. Act stated hereinabove, on purposive interpretation of Section 148 of the N.I. Act as amended, we are of the opinion that Section 148 of the N.I. Act as amended, shall be applicable in respect of the appeals against the order of conviction and sentence for the offence Under Section 138 of the N.I. Act, even in a case where the criminal complaints for the offence Under Section 138 of the N.I. Act were filed prior to amendment Act No. 20/2018 i.e., prior to 01.09.2018. If such a purposive interpretation is not adopted, in that case, the object and purpose of amendment in Section 148 of the N.I. Act would be frustrated. Therefore, as such, no error has been committed by the learned first appellate court directing the Appellants to deposit 25% of the amount of fine/compensation as imposed by the learned trial Court considering Section 148 of the N.I. Act, as amended.

IN THE SUPREME COURT OF INDIA

Criminal Appeal Nos. 917-944 of 2019 

Decided On: 29.05.2019

 Surinder Singh Deswal  Vs.  Virender Gandhi

Hon'ble Judges/Coram:

M.R. Shah and A.S. Bopanna, JJ.

Citation: AIR 2019 SC 2956

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Whether Negotiable instruments (amendment) Act 2018 has retrospective effect?

See Negotiable Instrument amendment Act 2018: Click here

Therefore, it has to be held that Section 143-A of the Act cast a substantive
obligation upon the accused and thereby effect the substantive right of the
accused. Since the Amendment Act has not made the provision applicable
retrospectively, specifically, to pending cases, hence, it cannot be applied
retrospectively, to pending cases; which arose from the default of the
accused which has taken place before coming into force of this provision.
It permits the Appellate Court to
order the convict to deposit only 20% of the fine or compensation, leaving
the remaining amount to be paid beyond a period of 90 days; or not to be
paid even till conclusion of the appeal.
In view of the above discussion, it is quite clear that the
procedure of recovery of fine or compensation from a convict-appellant of
pending appeal already existed in CR.P.C; before advent of the provision as
contained in Section 148 of the Act. Hence, no new aspect of coercive
recovery of fine or compensation from the appellant is being created
through this amended provision. On the contrary, this provision provides

more breathing space to the convict/appellant; as compared to the other
procedures of recovery, as contemplated under Sections 421 and 424 of
Cr.P.C, which is for more onerous in terms of time limit and the
consequences. Since the provisions for recovery of fine or compensation
from the appellant/convict already existed in the existing procedure relating
to the recovery, therefore, the provision introduced vide Section 148 of the
Act; which relates only to recovery of amount partly, as interim measure,
has to be treated purely procedural only, which is otherwise also beneficial
for the appellant as compared to the pre-existing provisions. Hence it has to
be held that provision of Section 148 of the Act shall govern all the appeals

pending on date of enforcement of this provision or filed thereafter.
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CRR No.9872-2018(O&M)
Date of decision:04.04.2019

M/s Ginni Garments Vs M/s Sethi Garments 

Coram: Hon’ble Mr. Justice Rajbir Sehrawat

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Good legal article on Negotiable Instruments (Amendment) Act, 2018’

With the latest ‘The Negotiable Instruments (Amendment) Act, 2018’ being notified on 02-08-2018.

The following amendments have been made —

With respect to the Section 143 — now introduces a new proviso 143A, giving power to a Court to try an offence under S. 138 to order the drawer of cheque to pay interim compensation to the complainant in summary trials/summons case where he pleads not guilty to the accusations in the complaint. Furthermore, the interim compensation shall not exceed 20 % of amount of the cheque and shall be payable within 60 days from date of the order.

Recovery of fine shall be same as under Section 421 of the Code of Criminal Procedure, 1973.

In cases of acquittal, the Court is now empowered to direct the complainant to repay to the appellant the amount so released, at interest rates as prescribed by RBI.

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