IMPORTANT POINT
[The provisions of Section 143A of the NI Act, 1881 are directory and grant discretion to the court to award interim compensation, which must be exercised based on a prima facie evaluation of the merits of the case and the defense presented.]

JUDGMENT

N. J. Jamadar, J. - Rule. Rule made returnable forthwith and with the consent of the counsel for the parties, heard finally.

2. This petition under Article 227 of the Constitution of India and Section 482 of the Code of Criminal Procedure, 1973 takes exception to a judgment and order dated 19th August, 2023 passed by the learned Additional Sessions Judge, Greater Bombay, in Criminal Revision Application No.400 of 2023, whereby the learned Additional Sessions Judge allowed the revision setting aside an order passed by the learned Metropolitan Magistrate, 30th Court, Kurla, on 10th April, 2023 rejecting an application (Exhibit-11) for direction to pay interim compensation under Section 143A of the Negotiable Instruments Act, 1881 ("NI Act, 1881"), and direct the petitioner - accused to deposit 20% of the amount of the cheques by way of interim compensation.

3. Shorn of superfluities, the background facts necessary for the determination of this petition can be stated as under:

(a) For the sake of clarity and convenience, parties are hereinafter referred to in the capacity in which they are arrayed before the learned Magistrate in CC No.97/SC/2022.

(b) Mr. Shakeel Khan - respondent No.3 is the Proprietor of M/s. Paint Art - respondent No.1/complainant. M/s. Paint Art is engaged in the business of internal and external painting of building, plumbing and reconstruction work. M/s. Bajaj Construction is the sole proprietary concern of Manish Bajaj - accused No.2. Accused No.2 also deals in the business of building construction and real estate development.

(c) One of the buildings namely; Vandana Building, then being developed by accused was incomplete. At the instance of the accused, the complainant carried out balance civil work of the said building. Accused had agreed to pay consideration of Rs.1,70,00,000/-. Despite execution of the entire work in May, 2019, the accused committed default in payment of the cost of civil work. Eventually, on 7th September, 2021, accused No.2 affirmed an affidavit acknowledging the liability to pay the said amount of Rs.1,70,00,000/- and had drawn four cheques on City Union Bank, Khar (W), payable on 20th October, 2021 for an amount of Rs.42,50,000/- each, aggregating to Rs.1,70,00,000/-, towards discharge of the said liability.

(d) Upon presentment, those cheques were returned unencashed on 27th October, 2021. At the instance of accused No.2, the cheques were again presented on 23rd December, 2021 and they were again returned unencashed on 23rd December, 2021. A demand notice was issued on 7th January, 2023. Despite service of the demand notice, the accused committed default in payment of the amount covered by the cheques. Hence, the complaint for the offence punishable under Section 138 of the NI Act, 1881.

(e) Upon being served with the summons, the accused -petitioner appeared. The complainant filed an application for a direction to the accused to pay interim compensation (Exhibit-11). The accused resisted the application by filing a reply (Exhibit-16) contending, inter alia, that a substantial portion of the amount covered by the subject cheques was, in fact, paid to the complainant in cash and through banking channels. Copies of the vouchers evidencing the payment of the amount and extract of the bank accounts were annexed to the reply. It was contended that the complainant had misused the custody of the subject cheques and suppressed the fact that a substantial portion of the amount was already repaid. Resultantly, the presentment of the cheques, without acknowledging the part payment having already received, was illegal and, therefore, the cheques cannot be said to have been drawn in discharge of a legally enforceable debt or liability.

(f) By an order dated 10th April, 2023, the learned Metropolitan Magistrate was persuaded to reject the application opining, inter alia, that the accused appeared before the Court on 7th December, 2022 and on the very day the plea of the accused was recorded. T