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.

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 Pujarli No.4, Shimla in favour of the complainant towards discharge of his lawful liability. However, the same was dishonoured on account of insufficient funds in the bank account of the accused. Since despite having received legal notice, accused failed to make the payment good within stipulated time, complainant preferred the aforesaid complaint in the competent Court of law, which is pending adjudication. During proceedings of the case, accused filed an application under Section 145-2 of NI Act, praying therein to cross-examine the complainant. Learned Court below, after having heard learned counsel for the parties, proceeded to pass order dated 04.06.2024, whereby Court concerned, while allowing the application under Section 145-2 of the NI Act, thereby permitting the accused to cross-examine the complainant, also invoked the provisions of Section 143-A of NI Act, as inserted by Act 20 of 2018 and directed the accused to pay interim compensation equivalent to 20% of the cheque amount within 60 days from the date of the order. Though in terms of afore order, interim compensation awarded by the learned Court below was to be paid on or before 04.08.2024, but since accused failed to comply with the aforesaid direction, Court proceeded to pass order dated 18.06.2025, thereby directing the accused to pay interim compensation as per order dated 04.06.2025, failing which same shall be recovered in terms of provisions contained under Section 421 of Cr.P.C. Accused is aggrieved of second part of order dated 04.06.2024, whereby he has been directed to pay interim compensation equivalent to 20% of the cheque amount.

3. In nutshell, the grouse of the accused, as has been highlighted in the petition and further canvassed by Mr. P.S. Chandel, learned counsel representing the petitioner, is that impugned order dated 04.06.2024, whereby the accused has been directed to pay interim compensation equivalent to 20% of the cheque amount, is in complete violation of the principles of natural justice, inasmuch as no opportunity of being heard was afforded to the accused prior to passing of the aforesaid order. Mr. Chandel further submitted that by now it is well settled that while dealing with an application under Section 143-A of the NI Act, the Court is required to prima facie evaluate the merits of the case made out by the complainant and the merits of the de