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IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
MITALI THAKURIA, J.
Biju Kumar Roy Son Of Late Motiram Roy – Appellant
Versus
The State Of Assam And Anr – Respondents
Crl.Rev.P.485 of 2022
Decided on : 17-05-2024
N.I. Act - Application under Section 397 read with Section 401 of CrPC - Section 143 A of N.I. Act - [Section 397 read with Section 401 of CrPC] - [Section 143A of N.I. Act] - The court discussed the provisions of Section 143A of the Negotiable Instruments Act, 1881, and its applicability in the case. It highlighted the discretionary nature of the provision, the requirement for the court to consider relevant factors before granting interim compensation, and the need for brief reasons to be recorded when deciding on the prayer made under Section 143A.
Fact of the Case:
The petitioner lent money to the respondent, who issued a cheque that was later dishonored. The petitioner sought 20% of the cheque amount as interim compensation under Section 143A of the N.I. Act, but the court rejected the petition, citing lack of grounds for the compensation and delay caused by both parties and non-functioning of the court during the pandemic.
Finding of the Court:
The court found that the delay in the case was not solely due to the respondent's default and that the petitioner did not provide sufficient grounds for the 20% interim compensation. It held that the provision under Section 143A of the N.I. Act is discretionary and not mandatory, and the court must consider relevant factors and record brief reasons when deciding on the prayer made under Section 143A.
Issues: The issues revolved around the petitioner's request for 20% of the cheque amount as interim compensation under Section 143A of the N.I. Act, the delay in the case, and the discretionary nature of the provision under Section 143A.
Ratio Decidendi: The court emphasized the discretionary nature of the provision under Section 143A of the N.I. Act, the requirement for the court to consider relevant factors and record brief reasons when deciding on the prayer made under Section 143A, and the need for the petitioner to provide sufficient grounds for the interim compensation.
Final Decision: The court dismissed the petitioner's prayer for directing the respondent to award 20% of the cheque amount as interim compensation under Section 143A of the N.I. Act, while directing the lower court to proceed with the case and dispose of it expeditiously.
JUDGMENT :
Heard Mr. P. P. Borthakur, learned counsel for the petitioner. Also heard Mr. K. Baishya, learned Additional Public Prosecutor for the State respondent as well as Mr. D. J. Haloi, learned counsel for the respondent No. 2.
2. This is an application under Section 397 readwith Section 401 of the Code of Criminal Procedure, 1973, praying for setting aside the order dated 12.07.2022 passed by the learned Sub Divisional Judicial Magistrate, Bajali at Pathsala in C. R. (N.I.) Case No.1/2021, whereby, the said Court rejected the prayer for payment of 20% of cheque amount to the complainant/present petitioner under Section 143 A of the Negotiable Instrument Act, 1883.
3. The brief facts of the case is that; the petitioner in the month of January’ 2017 shifted to a rented house of Shri Monoranjan Kalita of Baghmora Bazar under Patacharkuchi Police Station, Bajali, where he met the respondent No.2 who used to stay in the same building as a tenant. In the month of January’ 2018, the accused/respondent No.2 requested the complainant/petitioner to give loan of Rs.6,00,000/-(Rupees Six Lakhs) only as he was in urgent need of money. After consulting with his wife, the petitioner decided to help the accused/respondent No.2 and he arranged Rs.1,50,000/-(Rupees one lakh fifty thousand) only from his own and paid to the respondent No.2. Thereafter, he also requested his brother-in-law, Sri Diganta Barman, resident of village Samoitapara to help the accused/respondent No.2 with Rs.4,50,000/-(Rupees Four lakhs fifty thousand) only. Accordingly, the petitioner’s brother-in-law also arranged a sum of Rs.3,00,000/-(Rupees Three lakhs) only and Rs.1,50,000/-(Rupees one lakh fifty thousand) only on 03.02.2018 and 08.02.2018 respectively and gave to the respondent No.2 in the residence of the complainant. In both the occasions, while, the accused/respondent No.2 had accepted the aforesaid amounts, the complainant was present along with his wife Smti. Saraju Das.
4. Again in the month of October, 2018, the accused/respondent No.2 approached the complainant to asked for another loan amounting to Rs.3,00,000/-(Rupees three lakhs) only as he was facing serious financial hardship. The respondent No.2 assured the petitioner that he will return the total amount of Rs.9,00,000/-(Rupees Nine lakhs) only by March 2019. Thereafter, the wife of the petitioner took personal loan from the State Bank of India, Simla Bazar Branch and paid a sum of Rs.1,20,000/-(Rupees one lakh twenty thousand) only and the petitioner also arranged another sum of Rs.1,80,000/-(Rupees one lakh eighty thousand) only on his own and paid Rs.3,00,000/-(Rupees three lakhs) only to the accused/respondent No.2. But, till March, 2019 the respondent did not return the money and then, the petitioner asked to the respondent No.2 to return the aforesaid amounts. Then, the accused/respondent No.2 requested the petitioner to accommodate further time. Thereafter, on 30.08.2019, the accused/respondent No.2 vacated the tenanted premises and started residing at a different rented house in the same locality. After several effort made by the petitioner, the respondent No.2 issued a cheque amounting to Rs.9,00,000/-(Rupees Nine lakhs) only on 09.11.2020 vide cheque No.413170 to the petitioner.
5. But, on presentation of the cheque before the State Bank of India, Patacharkuchi Branch, the said cheque returned back with a postal remark “insufficient fund/Drawer Confirmation not received”. After receipt of the information from the bank in regards to dishonor of cheque on 11.11.2020, the petitioner tried to inform the respondent No.2, but, he did not respond to the phone calls and thus, after having no other alternative, he issued notice to the respondent No.2 under Section 138 of N.I. Act through his Advocate on 18.11.2020. The legal notice was sent through registered A/D card, but, when the said A/D card was not returned back to the sender, the petitioner obtained the delivery status of the said legal not
The main legal point established in the judgment is the discretionary nature of the provision under Section 143A of the N.I. Act, the requirement for the court to consider relevant factors and record....
Interim compensation under Section 143-A of the NI Act is discretionary, requiring consideration of both parties' merits and the opportunity for a defense, which was not provided in this case.
[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 mer....
The court affirmed that under Section 143A of the NI Act, the power to award interim compensation is discretionary, requiring evaluation of the merits of the case and the accused's defence.
Word ‘may’ appearing in Section 143A of Negotiable Instruments Act, 1881 is not discretionary but directory in nature.
The trial Court must provide proper reasons when exercising discretion and awarding compensation under Section 143A of the N.I. Act.
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