IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Rajesh Bhardwaj, J.
Mohd. Sultan & another - Petitioners - Appellant
Versus
Mohd. Salim - Respondent - Respondent
CRM-M-48105 of 2022
Decided On : 10-02-2023
Section 143-A - Negotiable Instruments Act - [143-A] - The court discussed the provisions of Section 143-A of the Negotiable Instruments Act, which provides for the power to direct interim compensation to the complainant in cases of dishonour of cheques. The court emphasized that the provisions are prospective in nature and provide discretion to the Trial Court for granting interim compensation to the complainant, not exceeding 20% of the cheque amount, in order to meet the objects and reasons behind the amendment. The court found that the Trial Court had not exceeded the upper limit of 20% in the present case and dismissed the petition.
Fact of the Case:
The petitioner was ordered to pay interim compensation to the complainant under Section 143-A of the Negotiable Instruments Act in a complaint case related to the dishonour of a cheque. The petitioner sought quashing of the order, contending that it was against the statutory provisions and the law settled. The complainant alleged that the accused borrowed a sum of Rs.10 lakh and issued a post-dated cheque, which was dishonored upon presentation.
Finding of the Court:
The court found that the Trial Court had not exceeded the upper limit of 20% in granting interim compensation to the complainant, and the provisions of Section 143-A of the Negotiable Instruments Act provide discretion to the Trial Court for granting interim compensation to meet the objects and reasons behind the amendment.
Issues: The issues involved in the case included the interpretation of Section 143-A of the Negotiable Instruments Act, the discretion of the Trial Court in granting interim compensation, and the circumstances of the dishonour of the cheque.
Ratio Decidendi: The court's decision was based on the interpretation of Section 143-A of the Negotiable Instruments Act, which provides discretion to the Trial Court for granting interim compensation to the complainant, not exceeding 20% of the cheque amount, in order to meet the objects and reasons behind the amendment.
Final Decision: The petition was dismissed by the court.
RAJESH BHARDWAJ. J. –
1. The present petition has been filed under Section 482 Cr.P.C praying for quashing of order dated 8.9.2022, passed by learned JMIC, Malerkotla, whereby petitioner was ordered payment of interim compensation to the tune of 20% of the total amount mentioned in the alleged disputed cheque to respondent/complainant under Section 143-A of Negotiable Instruments Act in complaint case no. NACT/609/2021 titled as “Mohd. Salim Vs. Mohd. Sultan”.
2. As per facts of the case, complainant/respondent filed a complaint under section 138 of Negotiable Instruments Act, wherein it was contended that the accused/petitioners borrowed a sum of Rs.10 lakh from the complainant and in consideration of the said amount he issued a post dated cheque no.318836 dated 6.6.2021 in favour of the complainant drawn on State Bank of India, ADB Branch, Moti Bazar, Malerkotla. It was assured to the complainant by the petitioner that the cheque would be honoured on being presented in the bank, however, when the respondent-complainant presented the same before the Axis Bank Branch Malerkotla for its realisation, the same was dishonored vide Bank Memo dated 20.8.2021 with the remarks “Refer to Drawer/Not Arranged for” as there was no amount. A legal notice was issued by the respondent-complainant to the petitioner for making the payment within a period of 15 days but no action was taken by the petitioner nor any payment was made, hence, the complainant filed a complaint under section 138 of Negotiable Instruments Act for the prosecution of the petitioner. Learned Trial Court after hearing the arguments and finding a prima facie case, issued notice to the petitioner. As per provisions of Section 143-A of Negotiable Instruments Act petitioner was directed to pay 20% of the cheque amount as interim compensation to the complainant within a period of 60 days vide impugned order dated 8.9.2022. Aggrieved by the same petitioner has approached this court praying for quashing of the impugned order.
3. Learned counsel for the petitioner has vehemently contended that the impugned order is totally against the statutory provisions and the law settled. She submits that the petitioner has not availed the facility of loan from the respondent as has been wrongly mentioned in the complaint. She submits that the petitioner's nephew filed a suit for recovery against the respondent-complainant and various police complaints against the respondent for committing the fraud and cheating and hence the complaint filed by the complainant is a counter blast to the suit for recovery and police complaints filed by the family members of the petitioner. She submits that the Trial Court has fallen in error in interpreting the provision of Section 143-A of the Negotiable Instruments Act. She further submits that the statutory provision under Section 143-A of Negotiable Instruments Act makes it clear that the court while trying an offence under Section 138 of Negotiable Instruments Act “may” order the drawer of the cheque to pay interim compensation to the complainant and thus it is a discretion vested in the Trial court for directing the interim compensation and not a mandatory provision to be granted in every case. It is submitted that the court is to see that nobody plays with the law of land and those who are misusing the process of law by harassing the innocent persons like the petitioner without any reasonable cause must be discouraged. She has relied upon the judicial precedent of this court in a bunch of petitions i.e. CRM-M-32880-2022 (Shankar Dayal Sharma Vs. Rahul Choudhary) and other connected petitions decided on 1.9.2022 by this court.
4. Counsel further submits that the petitioner has not been given any opportunity before passing the impugned order and thus learned Trial Court has passed the impugned order in a cavalier manner without affording any opportunity to the petitioner. It is submitted that the impugned order in view of the law settled, deserves to be quash
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....
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 prospective operation of Section 143-A of the Negotiable Instruments Act and its aim to provide relief to payees of dishonoured cheques, discouraging frivolous litigations.
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....
Discretionary orders under Section 143 A (1) of the Negotiable Instruments Act must be supported by reasons, as orders without reasons are illegal and subject to being set aside.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.