Section 143-A of the Negotiable Instruments Act requires courts to evaluate both parties' merits before ordering interim compensation, emphasizing the necessity for reasoned decisions.

JUDGMENT /ORDER :

This criminal petition is filed by the petitioner herein/accused under Section 482 of Cr.P.C., to quash the docket order dated 09.08.2023 in CC No.608 of 2022 on the file of the learned Judicial First Class Magistrate, Kamalapuram, wherein the learned Magistrate is directed the petitioner/accused to deposit 20% of cheque amount as per Section 143 of the Negotiable Instruments Act, 1881.

2. Heard Sri K. Ratangapani Reddy, learned Counsel appearing on behalf of Sri B. Shiva Ram Sharma, learned Counsel for the petitioner, learned Additional Public Prosecutor appearing for the State and Sri C. Prakash Reddy, learned Counsel for the unofficial respondent No.2.

3. Sri K. Ratangapani Reddy, learned Counsel appearing on behalf of Sri B. Shiva Ram Sharma, learned Counsel for the petitioner would submit that the Hon'ble Apex Court in Rakesh Ranjan Shrivastava v. State of Jharkhand and another reported in, 2024 SCC Online SC 309, has a call on to consider Section 143 -A of the Negotiable Instruments Act, 1881 and quoted Para Nos.21 to 24 of the said judgment in support of his contention. He would submit that the present impugned order is not in accordance with the guidelines laid down by the Hon'ble Apex Court and therefore, it is not sustainable under law.

4. Per contra, Sri C. Prakash Reddy, learned Counsel for the unofficial respondent No.2 would submit that the impugned order referred was dated 09.08.2023 and the present criminal petition is filed in the month of January, 2024, even without complying the order of the learned Magistrate and he would argue that the learned Magistrate has not violated Section 143 -A of the Negotiable Instruments Act and the order of the learned Magistrate does not require any interference by this Court.

5. Undisputedly, the Hon'ble Apex Court in Rakesh Ranjan Shrivastava's case (supra), considered Section 143 -A of the Negotiable Instruments Act and power of the learned Magistrate and held that Section 143 -A of the Negotiable Instruments Act can be invoked before the conviction of the accused, and therefore, the word "may" used therein can never be construed as "shall". The tests applicable for the exercise of jurisdiction under sub-section (1) of Section 148 can never apply to the exercise of jurisdiction under sub-section (1) of Section 143 -A of the Negotiable Instruments Act. The Hon'ble Apex Court in Para No.22 of the above judgment further held that when the Court deals with an application under Section 143 -A of the N.I. Act, 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 under sub-section (1) of Section 143 -A. The presumption under Section 139 of the N.I. Act, by itself, is no ground to direct the payment of interim compensation. The reason is that the presumption is rebuttable. If the complainant makes out a prima facie case, a direction can be issued to pay interim compensation and the fact that the accused is in financial distress can also be a consideration. Further, even if the Court concludes that a case is made out for grant of interim compensation, the Court will have to apply its mind to the quantum of interim compensation to be granted. Even at this stage, the Court will have to consider various factors such as the nature of transaction, the relationship, if any, between the accused and the complainant and the paying capacity of the accused. If the defence of the accused is found to be prima facie a plausible defence, the Court may exercise discretion in refusing to grant interim compensation. The Hon'ble Apex Court held that the above factors requir