In the realm of cheque bounce cases under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), interim compensation has emerged as a crucial tool. Introduced via the Negotiable Instruments (Amendment) Act, 2018, Section 143A empowers courts to direct the accused to pay interim compensation to the complainant during trial. This provision aims to provide swift relief to payees while maintaining faith in banking transactions. But is it mandatory? How much can be awarded? Recent judgments clarify these aspects, emphasizing judicial discretion.
This post breaks down interim compensation under the NI Act, drawing from key court rulings. Note: This is general information based on precedents; consult a lawyer for case-specific advice, as outcomes vary.
Section 143A allows magistrates to order interim compensation not exceeding 20% of the cheque amount in cheque dishonour complaints. It applies after the accused pleads not guilty or upon framing charges. The final compensation under Section 357 CrPC is reduced by any amount paid as interim relief. Bajaj Constructions Through Its Sole Proprietor Mr. Manish Bajaj VS State of Maharashtra - 2024 Supreme(Bom) 449
Key features:
- Purpose: Prevents undue hardship to complainants and discourages frivolous defenses. Bajaj Constructions Through Its Sole Proprietor Mr. Manish Bajaj VS State of Maharashtra - 2024 Supreme(Bom) 449
- Timing: Post-plea of not guilty or charge framing. Fxp Fincon Pvt. Ltd. (opc) VS Peter Fernandes - 2021 Supreme(Bom) 616
- Recovery: Treated as a fine; refundable if acquitted, with interest. Indranil Mukherjee VS State Of West Bengal - 2022 Supreme(Cal) 809
Courts stress it's directory, not mandatory, requiring reasoned orders. Mechanical grants are quashed. Bajaj Constructions Through Its Sole Proprietor Mr. Manish Bajaj VS State of Maharashtra - 2024 Supreme(Bom) 449
Courts consistently hold Section 143A as discretionary. Factors include case merits, transaction nature, accused's finances, and prima facie evidence. Bajaj Constructions Through Its Sole Proprietor Mr. Manish Bajaj VS State of Maharashtra - 2024 Supreme(Bom) 449 Mr. Waman Kolte vs M/s. Krushna Enterprises - 2025 Supreme(Online)(Bom) 6390
Quote: The provisions of Section 143A of the NI Act, 1881 are directory and grant discretion to the court to award interim compensation, which must be exercised based on... Bajaj Constructions Through Its Sole Proprietor Mr. Manish Bajaj VS State of Maharashtra - 2024 Supreme(Bom) 449
Section 143A applies prospectively from September 1, 2018. Complaints filed earlier cannot invoke it. SAFIYA vs ABDUL SATHAR.K.M - 2019 Supreme(Online)(KER) 48314 R Piyarelall Iron & Steel Pvt Ltd VS State Of West Bengal - 2020 Supreme(Cal) 67
In G.J. Raja v. Tejraj Surana (cited in rulings), the Supreme Court confirmed no retrospective effect, protecting ongoing cases. R Piyarelall Iron & Steel Pvt Ltd VS State Of West Bengal - 2020 Supreme(Cal) 67
Limited to 20%, but courts must reason deviations from lower amounts. Factors:
- Prima facie case strength.
- Accused's financial capacity. M/s. Care Surgicals vs The State of Telangana - 2025 Supreme(Online)(Tel) 15362
- Transaction legitimacy.
Examples:
- 10-20% common; 18% upheld with evidence. M/S A R SALES CORPORATION vs PARVEZ AHMAD SHAH - 2024 Supreme(JK) 334
- 20% quashed if mechanical. Guru Nanak Pesticides & Fertilizers (M/s) VS FMC India Pvt. Ltd. - 2023 Supreme(P&H) 1766 Faizal Abdul Samad S/o A. I. Abdul Samad VS A. N. Sasidharan S/o Late Narayanan - 2023 Supreme(Ker) 838
Sub-rule (2): Compensation adjustable against final award. Guru Nanak Pesticides & Fertilizers (M/s) VS FMC India Pvt. Ltd. - 2023 Supreme(P&H) 1766
Petitions under Section 482 CrPC succeed if:
- No reasons provided (non-speaking order). Faizal Abdul Samad S/o A. I. Abdul Samad VS A. N. Sasidharan S/o Late Narayanan - 2023 Supreme(Ker) 838
- Issued prematurely (before plea/charges). Fxp Fincon Pvt. Ltd. (opc) VS Peter Fernandes - 2021 Supreme(Bom) 616
- Ignores finances or merits. Bajaj Constructions Through Its Sole Proprietor Mr. Manish Bajaj VS State of Maharashtra - 2024 Supreme(Bom) 449
Relief for Deceased Accused: Final Section 138 compensation recoverable from estate, but interim under 143A is not if death precedes trial end. Indranil Mukherjee VS State Of West Bengal - 2022 Supreme(Cal) 809
Compounding Link: Even post-conviction, cases compound under Section 147 NI Act, adjusting interim payments. Rajinder Kumar VS Pushpa Devi - 2022 Supreme(HP) 800 Rajinder Kumar VS Pushpa Devi
Courts urge expeditious trials, balancing relief. R Piyarelall Iron & Steel Pvt Ltd VS State Of West Bengal - 2020 Supreme(Cal) 67
| Aspect | Details |
|--------|---------|
| Max Quantum | 20% cheque amount Guru Nanak Pesticides & Fertilizers (M/s) VS FMC India Pvt. Ltd. - 2023 Supreme(P&H) 1766 |
| Stage | Post not guilty plea/charges Fxp Fincon Pvt. Ltd. (opc) VS Peter Fernandes - 2021 Supreme(Bom) 616 |
| Nature | Directory Mr. Waman Kolte vs M/s. Krushna Enterprises - 2025 Supreme(Online)(Bom) 6390 |
| Refund | On acquittal, with interest Indranil Mukherjee VS State Of West Bengal - 2022 Supreme(Cal) 809 |
Interim compensation under Section 143A NI Act streamlines cheque bounce justice, offering prompt relief while safeguarding accused rights through discretion. Rulings like those quashing mechanical orders Gagan Gandhi VS Raj Kumar Sharma - 2023 Supreme(P&H) 1975 ensure fairness. As caselaw evolves, stay updated—financial stakes are high.
Disclaimer: This article provides general insights from judgments (e.g., Bajaj Constructions Through Its Sole Proprietor Mr. Manish Bajaj VS State of Maharashtra - 2024 Supreme(Bom) 449, M/S A R SALES CORPORATION vs PARVEZ AHMAD SHAH - 2024 Supreme(JK) 334). Laws and facts vary; it is not legal advice. Seek professional counsel for your situation. Courts decide based on specifics.
when adjournment on payment of costs is granted. ... Regarding the apprehension that the payment of fee to the Commissioner will add to the burden of the litigant, we feel that generally ... The provision for costs and higher costs has been made because of practice having been developed to award only a nominal cost even ... Track 2 may consist of money suits and suits based solely on negotiable instruments. ... These three sections deal with three different aspects of award of cost and....
ARTICLES 19(1)(f) AND 31(2) ARE NOT MUTUALLY EXCLUSIVE - COMPENSATION MAY BE EQUIVALENT OF MONEY ... ... ;-held, in judging such compensation money value on the date of expropriation must be considered. ... Entry 45 "Banking"; Entry 46 "Bills of exchange, cheques, promissory notes and other like 589 instruments", Entry 47 "Insurance"; ... notes, coupons, drafts, bills of lading, railway receipts, warrants, debentures, certificates scrips and other inst....
accepted judgeship of High Court on April on faith of law Ministers assurance Government was bound by that assurance on doctrine of promissory ... Subject to the major premise or non-negotiable promise of non-interference with judicial personnel by methods traumatic or temptational ... him only in respect of the expenditure on two establishments, but the other injuries would, by their very nature, be incapable of compensation ... under an interim order made by the Court, but he had filed the petition pro bono publico to ....
Special leave was not granted in regard to the award of interest subsequent to the date of the arbitrators award – Question, therefore ... interest under certain circumstances was undeniable – Award not being a speaking award, it was not permissible to speculate on the ... reasons for the award of interest and the Court was not entitled to go behind the award and disallow the interest – It is difficult ... The arbitrator made an interim award on Augu....
temporary post has no right to post. ... (a) Service Law – Conditions of service – FTC Judges – Appointed to temporary posts – Under FTC scheme sponsored by Government of ... India – Financing stopped from 31st March, 2011 – Appointment on purely temporary and ad hoc basis – Services terminable without ... These courts will be staffed either by the regular judiciary on payment of additional compensation, or by retired officers. ... All interim orders passed in any of the above petition....
of the Negotiable Instruments Act, 1881, which allows for the award of interim compensation to the complainant in cases of cheque ... , leading to the restoration of the original order denying interim compensation. ... INTERIM COMPENSATION - NEGOTIABLE INSTRUMENTS ACT, 1881 - Section 143A - The court discussed Section 143A ... Section 143A of the NI Act, 1881 came to be inserted by the Negotiable Instruments (Amendment) Act 20 of 20....
Interim Compensation - Criminal Revision - Negotiable Instruments Act - Section 143A - Court upheld the trial court's order for ... interim compensation under the Negotiable Instruments Act, emphasizing the provision's intent to provide swift relief to claimants ... Fact of the Case: The petitioner challenges a trial court order directing interim compensation of 20% of the cheque ... Since the petitioner himself is ready to deposit the interim compensation....
order - The trial court's order directing payment of 20% of the cheque amount as interim compensation was set aside due to lack ... (A) Negotiable Instruments Act, 1881 - Sections 138, 142, and 143-A - Quashing of complaint for non-speaking interim compensation ... (Paras 2, 7, 8) ... ... (B) Legal principles surrounding interim compensation ... of interim compensation under a href="./.. ... Now, to come upon 09.12.2021 for cross....
This judgment concerns modification of an earlier order regarding interim compensation under the Negotiable Instruments Act. ... The appellants sought relaxation of a condition requiring a 20% deposit of compensation, arguing financial hardship, resulting in ... Learned counsel for the petitioners has submitted that the petitioners are aggrieved by the interim compensation granted by the appellate ... On hearing the matter, the appellate court was pleased to suspend the sentence of imprisonment and #HL_....
Negotiable Instruments Act - Interim Compensation - Section 143A - 143A(1), 143A(1)(a) Fact of the Case: The petitioner ... sought quashing of an order directing him to deposit 20% of the cheque amount towards interim compensation to the complainant under ... Issues: The issue was whether the petitioner should be directed to pay interim compensation under Section 143(A) of Negotiable ... Laxmi Kant Govind Joshi, decided on 7.7.2022, held that the provision of Section 143(A) #HL_START....
the use of negotiable instruments in financial transactions. ... It is also observed by the learned Magistrate that in order to further the credibility of the negotiable instruments, a breather in the shape of interim compensation in favour of the complainant has been provided for. ... Coming to the impugned order, a perusal thereof reveals that the learned Magistrate has, after narrating the rival contentions raised by the parties, observed that the object of Section 138 of the NI Act....
Learned counsel for the petitioner referring pronouncement of the Supreme Court in Meters and Instruments Private Limited and another versus Kanchan Mehta (2018) 1 SCC 560 has contended that in a case of Negotiable Instrument Act, even in absence of consent of complainant, the ... has been observed that judgment in Meters and Instruments (supra) conferring power on the trial Court to discharge an accused under Section 138 of Negotiable Instruments Act is not a good law. ... Petitioner against amount of compensation of Rs....
Learned counsel for the petitioner referring pronouncement of the Supreme Court in Meters and Instruments Private Limited and another versus Kanchan Mehta (2018) 1 SCC 560 has contended that in a case of Negotiable Instrument Act, even in absence of consent of complainant, the ... has been observed that judgment in Meters and Instruments (supra) conferring power on the trial Court to discharge an accused under Section 138 of Negotiable Instruments Act is not a good law. ... Petitioner against amount of compensation of Rs....
The Negotiable Instruments (Amendment) Act, 2018 ("Amendment Act") became effective from the 1st of September 2018 after the Negotiable Instruments (Amendment) Bill, 2017 was given the Presidential assent on the 2nd of August 2018. ... Section 148 was introduced by way of the Negotiable Instruments (Amendment) Act, 2018 with the primary object of addressing undue delays in the disposal of appeals arising out of convictions under Section 138. ... of the Negotiable Inst....
-XVI, Ranchi in Complaint Case No.5742/2022, whereby, the petitioner has been convicted under Section 138 of the Negotiable Instrument Act and he has been sentenced to undergo S.I. for 6 months and also to fine of Rs.3,00,000/- as compensation to the complainant/opposite party no.2 under Section 357( ... Manoj Goel (2022) 11 SCC 7052, Meters And Instruments Private Limited And Anr. v. Kanchan Mehta (2018) 1 SCC 5603) 7. In Raj Reddy Kallem v. ... It is to be remembered that dishonour of cheques is a regulatory offence which was made an of....
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