Section 143-A of the N.I. Act is discretionary, not mandatory, allowing courts to grant interim compensation based on specific case evaluations.

JUDGMENT :

ANIL S. KILOR, J.

1. Heard.

2. RULE. Rule made returnable forthwith. Heard finally by consent of the learned counsel for the parties.

3. By way of present writ petition filed under Article 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, a prayer is made to quash and set aside the proceedings bearing Summary Criminal Case No. 46 of 2023 pending on the file of learned Judicial Magistrate First Class, Sindewahi, District : Chandrapur. A prayer is also made for quashing of order dated 24/11/2023 directing the petitioner to pay 20% of the cheque amount i.e. Rs.1,60,000/- to the complainant.

4. The respondent is the complainant in Summary Criminal Case No.46 of 2023 filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “the N.I. Act”). In the said proceedings an application for grant of interim compensation was filed under Section 143-A by the respondent, which came to be allowed on 24/11/2023, the same is under challenge in this writ petition.

5. The grounds raised by the petitioner are that the learned Magistrate has considered the application under Section 143-A of the N.I. Act as mandatory and further failed to consider whether the claim made by the respondent is against the ‘legally enforceable liability’. It is submitted that any cheque issued towards any illegal, immoral or against any public policy, the amount towards the same cannot be considered as legally enforceable liability. To substantiate this argument, the learned counsel for the petitioner has relied upon the judgment of the Karnataka High Court in the case of R. Parimala Bai ..vs.. Bhaskar Narasimhaiah , reported in 2018 SCC OnLine Kar 3989 and a judgment of the Delhi High Court in the case of Virendra Singh ..vs.. Laxmi Narain , reported in 2006 SCC OnLine Del 1328.

6. The respondent appeared in person and strongly opposed the petition.

7. In light of the rival submissions, I have perused the record and the impugned order.

8. This Court in Criminal Writ Petition No.48 of 2022 ( Ashwin Karokar ..vs.. Laxmikant Joshi ) vide judgment dated 07/07/2022, while observing that Section 143-A of the N.I. Act is not mandatory, has held thus :

“9.3. It is further material to note that the power to direct interim compensation under Section 143-A of the N.I. Act, can be equated with the provisions as contained in Order XXXVIII Rule 5 of the C.P.C., which confers a power upon the Court to direct the defendant to furnish security in such sum as may be specified, during the pendency of the suit, which provision is directory in nature and the use of the power is discretionary.

9.4. Section 143-A of the N.I. Act, though enacted with an intent to ensure speedy disposal of the proceeding pending under Section 138 of the N.I. Act, the said intent, insofar as Section143-A of the N.I. Act is concerned, does not make the provision mandatory, as what is conferred upon the Court by virtue of the said provision is a discretion to direct interim compensation and no right is created in the complainant under it, to demand the entitlement to compensation. Grant of interim compensation, would be at the discretion of the Court, based upon consideration of various factors, such as (a) whether the requirements of Section 138 of the N.I. Act, were fulfilled (b) whether the pleadings disclose the drawing of the presumption (c) whether the proceedings were within limitation and (d) whether prima facie a legal debt or liability was disclosed from the complaint or the notice of demand prec