The main legal point established in the judgment is that the learned Magistrate must exercise discretion in granting interim compensation under Section 143-A of the Negotiable Instruments Act, 1881, considering factors such as the conduct of the accused and the amount involved in the transaction. Reasoned orders demonstrating application of mind are necessary for granting such compensation.

ORDER

1. The petitioner is before this Court calling in question the entire proceedings in C.C.No.174242/2020 as also the order dated 09.11.2021, directing the petitioner to pay 10% of the Cheque amount involved in the transaction.

2. Heard the learned Senior counsel, Sri D.R. Ravishankar, appearing for the petitioner and the learned Senior counsel, Sri. Murthy D. Naik appearing for the respondent.

3. Learned Senior counsel Sri D.R.Ravishankar appearing for the petitioner would submit that though he has challenged the entire proceedings, he would restrict his challenge insofar as the order dated 09.11.2021, by which the learned Magistrate directs payment of 10% of the amount of the instrument - cheque in terms of Section 143-A of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the said Act' for short). Without prejudice or reserving liberty to urge all the contentions that are urged in support of the challenge to the entire proceedings before the learned Magistrate. Learned senior counsel would further contend that giving up the challenge should not become an impediment while calling in question the impugned proceedings at later point in time.

4. It is needless to observe that the petitioner has every right to urge every contentions before the trial Court, notwithstanding, it being given up before this Court in these proceedings and liberty as sought by the learned senior counsel to challenge the entire proceedings at a later time on any other circumstance, shall stand protected. Therefore, the only issue that falls for consideration is the order dated 09.11.2021 passed under Section 143-A of the Act.

5. The issue that led to the respondent registering the crime or the order of the learned Magistrate taking cognizance of the offence punishable under Section 138 of the Act, is not necessary to be gone into.

6. In C.C.No.17424/2020 between the present parties, the respondent - complainant files an application seeking interim compensation in terms of Section 143-A of the Negotiable Instrument (Amendment) Act, 2018. The learned Magistrate on consideration of the application and the objections, directs payment of 10% of the instrument amount. The order allowing the application, reads as follows:

"REASONS

7. Point No.1:- The complainant has filed this complaint against the accused for the offence punishable u/sec.138 of N.I. Act. This court took cognizance and issued summons to accused to appear before this court. Accordingly, the accused appeared before this court and enlarged on bail and plea of the accused recorded on 19.08.2021. Disposal of case on merit may take consideration time

8. Sec.143(A) of N.I Act confirms Power to direct interim compensation to the complainant- Sub Sec (1) (a) (b) 2 to 6 and Sec.143(A) reads as follows:-

(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.

(2) The interim compensation under sub-section (1) shall not exceed twenty per cent of the amount of the cheque.

(3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.

(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial years, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.

(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973 (2 of 1974).

(6) The amount of fine imposed under section 138 or the