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ARUN MONGA
Gariya Ba Shyam Enterprises – Appellant
Versus
Mahaveer Trading Company – Respondent
ORDER :
1. Petitioner is before this Court aggrieved against an order dated 23.07.2023 passed by the learned Additional Chief Judicial Magistrate, Gangapur, District Bhilwara in N.I. Case No. 353/2021, whereby the application under Section 143A of the Negotiable Instruments Act, 1881 (‘N.I. Act’) filed by the complainant-respondent was allowed. The petitioner has been directed to pay 20% of the cheque amount as compensation to the complainant.
2. At the out set, having perused the case-file, I am of the view the impugned order passed by the learned ACJM is very cryptic to say the least. It simply states that arguments of both the parties were heard, the case file was examined and, therefore, the application filed by the complainant under section 143A of the N.I. Act is accepted and it is ordered that accused proprietor Narayan shall pay 20% of the amount mentioned in the cheque as interim compensation.
3. The order has thus been passed by the ACJM mechanically, without apparently any application of mind and/or otherwise recording the reasons as to why the petitioner-accused is directed to pay interim compensation.
4. In this regard reference may be had to Hon’ble Apex Court judgment re
Interim compensation under Section 143-A of the Negotiable Instruments Act must be justified with reasons, and the accused's plea must be recorded before such compensation is awarded.
The discretion to grant interim compensation under Section 143-A of the NI Act must be supported by reasons and should be based on well-recognized principles.
Whenever a discretionary power is to be exercised by Court, same has to be exercised on well-recognized principles supported by reasons.
The main legal point established in the judgment is that the provision of Section 143(A) of the Negotiable Instruments Act is directory in nature and not mandatory, and the trial court's order direct....
Power under Section 143A NI Act to direct interim compensation is discretionary, requiring prima facie evaluation of case and defence, with brief reasons recorded; mechanical orders lacking applicati....
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