Sri Narayanaswamy, petitioner No.1 who is the proprietor of

petitioner No.2-M/s. Thuahara Agencies collectively referred to as the

petitioner in this order is before this Court calling in question an

order dated 12-01-2022, passed on I.A.No.4 in C.C.No.6431 of 2021,

by the XII Additional Small Causes Judge and Additional Chief

3

Metropolitan Magistrate at Bengaluru, allowing the application filed

under Section 143A of the Negotiable Instruments Act, 1881 (8the Act9

for short).

2. Heard Sri Raghu Prasad B.S., learned counsel for the

petitioner and Sri Kedaresh R.S., learned counsel for the respondent.

3. The petitioner and the respondent were in a transaction in

pursuance of which it is claimed that the petitioner issued a cheque

for Rs.25,00,000/-, which when presented for its realization was

returned with an endorsement of 8stop payment9. Notices were issued

to the petitioner prior to initiation of proceedings under the provisions

of the Act. On 02-07-2021, the Court takes cognizance of the offence

punishable

under

the

Act

and

issues

process.

The

respondent/complainant filed an application under Section 143A of

the Act on 13-10-2021, seeking to deposit 20% of cheque amount as

obtaining under the said provision of law. The petitioner files his

objections to the said application. The Court by the order impugned

allows the application filed by the respondent/complainant under

Section 143A of the Act and directs 20% of the amount of

instrument/cheque to be deposited before the Court. The reason

4

rendered by the Court is that, once the accused does not plead guilty

Section 143A of the Act mandates that 20% deposit should be made

immediately.

4. The learned Magistrate ignores the discretion that is available

as Section 143A(1) is directory, inasmuch as the word used is 8may9

and not 8shall9 to make the deposit. Therefore, the discretion will have

to be exercised considering all the factors including the fact of the

accused not pleading guilty and becoming liable to deposit 20% of the

instrument amount. This very issue fell for consideration before this

Court in Criminal Petition No.100261 of 2022 (SMT. VIJAYA v.

SHEKHARAPPA) decided on 17-02-2022, wherein this Court has

held as follows:

<7. The Act was amended by the Amendment Act of

2018. It is by way of this amendment Section 143A came to

be inserted. The entire text of the amendment concerning

Section 143A reads as follows:

<1. Short title and commencement.4 (1)

This Act may be called the Negotiable Instruments

(Amendment) Act, 2018.

(2) It shall come into force on such date² as the

Central Government may, by notification in the

Official Gazette, appoint.

2. Insertion of new Section 143-A.4 In the

Negotiable Instruments Act, 1881 (26 of 1881)

5

(hereinafter referred to as the principal Act), after

Section 143, the following section shall be inserted,

namely:4

<143A.

Power

to

direct

interim

compensation.4

(1)

Notwithstanding

anything

contained in the Code of Criminal Procedure, 1973 (2

of 1974), the Court trying an offence under Section

138 may order the drawer of the cheque to pay

interim compensation to the complainant4

(a) in a summary trial or a summons case,

where he pleads not guilty to the accusation made in

the complaint; and

(b) in any other case, upon framing of charge.

(2) The interim compensation under sub-

section (1) shall not exceed twenty per cent. of the

amount of the cheque.

(3) The interim compensation shall be paid

within sixty days from the date of the order under

sub-section (1), or within such further period not

exceeding thirty days as may be directed by the

Court on sufficient cause being shown by the drawer

of the cheque.

(4) If the drawer of the cheque is acquitted, the

Court shall direct the complainant to repay to the

drawer the amount of interim compensation, with

interest at the bank rate as published by the Reserve

Bank of India, prevalent at the beginning of the

relevant financial year, within sixty days from the

date of the order, or within