The exercise of discretion under Section 143-A of the N.I. Act requires the court to evaluate merits, record reasons, and provide opportunity to the accused, making non-compliance grounds for setting aside the order.

Rakesh Kainthla, J.

1. The present petition has been filed against the order dated 01.11.2023, passed by learned Additional Chief Judicial Magistrate Nadaun, District Hamirpur, Himachal Pradesh vide which the petitioner (accused before the learned Trial Court) was directed to deposit 20% of the cheque amount under Section 143 -A of the Negotiable Instruments Act (for short N.I. Act) within 60 days from the date of the order. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience).

2. Briefly stated, the facts giving rise to the present petition are that the complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of N.I. Act. The learned Trial Court put notice of accusation to the accused on 01.11.2023. The accused filed an application seeking permission to cross-examine the complainant and his witnesses, which was allowed. The matter was listed for the complainant’s witnesses. It was further directed that the accused would deposit 20% of the cheque amount under Section 143 -A of the N.I. Act within 60 days from the date of the order.

3. Being aggrieved from the order, the accused preferred the present petition asserting that the learned Trial Court had passed the order without any application filed on behalf of the complainant. The order was a non-speaking order and could not have been passed without considering the relevant facts and giving reasons. Therefore, it was prayed that the present petition be allowed and the order passed by the learned Trial Court be set aside.

4. I have heard Mr. Sanjeev Kumar Suri, learned counsel for the petitioner/accused and Mr. Satish Kumar Bhatia, learned counsel

5. Mr. Sanjeev Kumar Suri, learned counsel for the petitioner/accused submitted that the learned Trial Court erred in passing the order directing the accused to pay the amount of interim compensation. No application was filed on behalf of the complainant/respondent seeking the compensation. No opportunity was provided to the petitioner/accused to place the relevant circumstances before the Court. The Court passed an order directing the petitioner/accused to deposit 20% of the cheque amount without giving detailed reasons. Therefore, he prayed that the present petition be allowed and the order passed by the learned Trial Court be set aside. He relied upon the judgment of this Court passed in Jaung Bahadur Bedi vs M/s Sanjeev Kumar passed in CrMMO No. 29 of 2024, decided on 26.06.2024 in support of his submission.

6. Mr. Satish Kumar Bhatia, learned counsel for the respondent supported the order and submitted that no interference is required with it.

7. I have given considerable thought to the submissions made at the bar and have gone through the records carefully.

8. The Hon’ble Supreme Court considered the parameters for granting the compensation under Section 143 -A of N.I. Act in Rakesh Ranjan Shrivastava v. State of Jharkhand , (2024) 4 SCC 419 : 2024 SCC OnLine SC 309 , and held that the Court has to prima facie evaluate the merits of the case and thereafter to apply its mind to the quantum of interim compensation. It was observed: -

“Factors to be considered while exercising discretion

22. When the court deals with an application under Section 143 -A of the NI Act, the court will have to prima facie evaluate the merits of the case made out by the complainant and the merits of the defence pleaded by the accused in the reply to the application under sub-section (1) of Section 143 -A. The presumption under Section 139 of the NI Act, by it