ORDER :

The petitioner is before this Court calling in question order dated 12-10-2021 passed by the XXVIII Additional Chief Metropolitan Magistrate, Bangalore in C.C.No.15681 of 2020, in a proceeding instituted by the respondent/complainant for offences punishable under Section 138 of the Negotiable Instruments Act, 1881 (‘the Act’ for short). The order challenged is an order granting 10% interim compensation in terms of Section 143A of the Act.

2. Heard Sri Maruthi, learned counsel appearing for the petitioner and Sri S.K.Dinesh, learned counsel appearing for the respondent.

3. Brief facts leading to the filing of the present petition, as borne out from the pleadings, are as follows:

The petitioner is a retailer and the respondent/complainant is a producer of Ice Cream. The petitioner and the respondent entered into an agreement in the year 2017 for distribution of Ice Cream and frozen dessert products manufactured by the respondent/complainant, in and around city of Coimbatore. Pursuant to the agreement, it is the case of the petitioner that the complainant had demanded the petitioner for issuance of blank cheques as security in lieu of proposed supply to be made to the petitioner for the purpose of such distribution. Accordingly, the petitioner claims that he had handed over several blank cheques, one of which, was cheque bearing No.011226, as security to the respondent and not towards any liability which the petitioner owed to the complainant. The respondent/complainant had been supplying Ice Creams and frozen products more than the quantity of the order placed by the petitioner which was brought to the notice of the complainant and in the light of reduced demand it was indicated that the supply of the products be reduced and further the petitioner refused to accept the stock as it was a perishable commodity with a short shelf life. Despite refusal of the order, the complainant went on supplying the stock.

4. It appears that the petitioner represented to the complainant that payment would be made only after sales take place as potential for selling Ice Cream had come down and with the onset of COVID-19 entire business of the petitioner was in doldrums. It is the further case of the petitioner that despite the talks between the petitioner and the respondent, the complainant misused blank cheque bearing No.011226 issued by the petitioner as security, by depositing the same with the banker. The cheque that was deposited was for an amount of Rs.5,56,71,208/-which came to be dishonoured on the ground of want of sufficient funds in the account of the petitioner. Pursuant to the dishonor of the cheque, the complainant takes up legal proceedings against the petitioner by registration of complaint invoking Section 200 of the Cr.P.C. for offences punishable under Section 138 of the Act.

5. The issue before this Court is not whether the cheque was issued for the purpose of security or otherwise. It is a matter of evidence that is pending adjudication before the competent criminal Court. In the said proceedings, the complainant files an application under Section 143A of the Act seeking interim compensation as permissible under the statute to the tune of 20% of the cheque amount. The learned Magistrate considering the application filed by the complainant and objections filed thereto allows the application by granting interim compensation of 10% of the cheque amount to be paid within 60 days of the order. It is this order that drives the petitioner to this Court in the subject petition.

6. The learned counsel appearing for the petitioner would vehemently argue and contend that the cheque that was issued in the name of the complainant was a blank cheque that was given as security, in furtherance of the agreement between the parties for distribution and sale of Ice Cream produced by the respondent/complainant, which has been misused by the complainant by entering an amount of Rs.5,56,71,208/-thereto. The order directing payment of 10% of the c