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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
SANDEEP SHARMA
Ramesh – Appellant
Versus
Ram Kumar – Respondent
Being aggrieved and dissatisfied with orders dated 04.06.2024 passed by Judicial Magistrate First Class, Jubbal, District Shimla, Himachal Pradesh (Camp at Rohru) and 18.06.2025 passed by Judicial Magistrate First Class, Court No.II, Rohru, District Shimla, Himachal Pradesh (Annexures P-1 and P-2), whereby petitioner- accused (in short “accused”) came to be directed to pay interim compensation equivalent to 20% of the cheque amount within 60 days from the date of order, in terms of Section 143-A of Negotiable Instruments Act (in short “NI Act”) as inserted by Act 20 of 2018, accused has approached this Court in the instant proceedings filed under Section 528 of Bharatiya Nagrik Suraksha Sanhita, praying therein to quash and set aside the aforesaid orders.
2. Precisely, the facts of the case as emerge from the pleadings as well as other material adduced on record by the respective parties are that respondent/complainant (in short “complainant”) filed a complaint under Section 138 of the NI Act in the competent Court of law, alleging therein that accused issued post- dated cheque No.876733 amounting to Rs.12,00,000/- dated 04.03.2022 drawn from SBI branch
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.
Interim compensation under Section 143A of the NI Act can be granted before trial; the presumption of validity remains even if not all amounts are covered by the cheque.
Section 143A of the Negotiable Instruments Act is directory, allowing judicial discretion in awarding interim compensation, requiring consideration of case merits and relevant factors.
Word ‘may’ appearing in Section 143A of Negotiable Instruments Act, 1881 is not discretionary but directory in nature.
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.
(1) Provision of sub-section (1) of Section 143A of Negotiable Instruments Act, 1881, which provides for grant of interim compensation, is directory and not mandatory.(2) Non-payment of interim comp....
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.
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