The Magistrate must provide reasons for fixing the interim compensation under Section 143A of the NI Act.

ORDER

This application under Section 482 of Cr.P.C. has been filed against order dated 24.01.2024 passed by Sessions Judge, Chhindwara in CRR No.58/2023 arising out of order dated 20.02.2023 passed by Judicial Magistrate First Class, Chhindwara in SCNIA No.181/2021 by which applicant has been directed to deposit 20% of the cheque amount as per the mandate of Section 143-A of Negotiable Instruments Act.

2. It is submitted by counsel for applicant that High Court of Kerala at Ernakulam by order dated 17.11.2023 passed in the case of Faizal Abdul Samad vs. A. N Sasidharan and another in CRL.MC No.8132/2023 has held that it is mandatory on the part of the Magistrate to assign reasons for directing to deposit 20% of the cheque amount because under Section 143-A of Negotiable Instruments Act it is merely a maximum ceiling and the Magistrate has a discretion to direct for deposit of lesser amount.

3. Considered the submissions made by counsel for applicant.

4. The High Court of Kerala in the case of Faizal Abdul Samad (supra) has held as under: “9. Thus in Jisha’s case, this Court also observed that even though, the word ‘may’ is used in Section 143A(1) of NI Act, it will have the impact of ‘shall’ since prosecution launched under Section 142 cannot be identified as scrupulous or unscrupulous ones at the preliminary stage when the complaint is filed. It was also observed that the interim compensation contemplated under Section 143A of the Negotiable Instruments Act is something meant to be imposed on all accused irrespective of the amount involved in the 3 MCRC No.9797/2024 prosecution filed under Section 142 of the NI Act. I am in perfect agreement with the above dictum laid down by this Court. But while fixing the interim compensation, which may be upto 20% of the cheque amount as per Section 143A(2) of the NI Act., it is the duty of the learned Magistrate to give reason for fixing 20% of the cheque amount or some amount lesser than 20% of the cheque amount. Therefore, I am of the considered opinion that the Magistrate shall give reason while fixing interim compensation under Section 143A of the NI Act. The Karnataka High Court considered this point in detail. It will be better to extract the relevant paragraph of the judgment dated 06.07.2021 in Criminal Petition No.201213 of 2020 of the High Court of Karnataka, Kalaburagi Bench [Jahangir S/o. Lalsab Nadaf v. Sri.Farooq Ahmed Abdul Razak].

“9. Section 143A(1) is not a mandatory provisions and it says that Court may order the drawer of the cheque to pay the interim compensation as per conditions stipulated there under. So it is evident that the power under Section 143A is vested with the learned Magistrate to be exercised judiciously after recording the plea and it is not mandatory but the learned magistrate is required to exercise his judicious discretion under Section 143A of the Act. But in the present case, the impugned order disclose that the learned Magistrate has not even applied his mind and in a mechanical way as per the mandatory provisions of Section 143A he has directed the accused to deposit 20% of the cheque amount. The provisions of Section 143A are not mandatory but the discretion was given to the magistrate to be exercised judiciously. In the instant case though application was filed prior to the accusation it should be heard only after the accusation but after giving proper opportunity. Admittedly the accused/petitioner herein has submitted his objections to the said 4 MCRC No.9797/2024 applicants and the learned Magistrate has not passed any speaking order and in a mechanical way he directed the accused/petitioner herein to deposit 20% of the cheque amount. The entire approach of the learned magistrate is against the settled principles of natural justice and he did not even passed a summary speaking order giving reasons for passing such an order……”

10. The High Court