HC Chhattisgarh (30.06.2021) in Rajesh Soni Vs. Mukesh Verma (CRMP No. 562 of 2021) held that;
The order under Section 143A of the Act, 1881 can be passed only in summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint, in any the case upon framing of charge.
therefore, from perusal of aims and object of amended Section 143A of the Act, 1881, it is quite clear that the word 'may' may be treated as 'shall' and it is not discretionary but of directory in nature.
Hon'ble Supreme Court in G.J. Raja Vs. Tejraj Surana, held that;
In the ultimate analysis, we hold Section 143A to be prospective in operation and that the provisions of said Section 143A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book.
Excerpts of the order;
The petitioner has filed present petition under Section 482 of Cr.P.C. challenging the order dated 24.12.2019 passed by Judicial Magistrate First Class, Raipur (C.G.) in Complaint Case No. 1777/2019 wherein learned trial court has allowed the application filed by the complainant under Section 143A of the Negotiable Instrument Act, 1881 (for short “the Act, 1881”) and has directed the petitioner to pay 20% of the cheque amount, as well as order dated 06.03.2021 passed by 11th Additional Sessions Judge Raipur, District- Raipur (C.G.) by which the criminal revision filed by the petitioner has been rejected.
# 2. The brief facts, as projected by the petitioner, are that complainant/ respondent has filed complaint against the petitioner under Section 138 of the Act, 1881 on 09.01.2019 before Judicial Magistrate First Class, Raipur, District- Raipur (C.G.) mainly contending that the petitioner had given a cheque dated 26.11.2018 amounting to Rs. 6,50,000/- to the complainant. The complainant has deposited the cheque on 28.11.2018 in the account maintained by him in Central Bank of India, Branch- Chhattisgarh College, Raipur. The said cheque was dishonoured and returned due to insufficient fund on 14.12.2018, therefore, the offence under Section 138 of the Act, 1881 has been committed by the petitioner.
# 3. The complainant has sent a legal notice to the petitioner on 17.12.2018 as petitioner has not paid the amount of cheque, therefore, the complainant has filed a Complaint Case No. 1777/2019 before Judicial Magistrate First Class, Raipur, The learned Judicial Magistrate First Class taking cognizance on the complaint, issued summon to the petitioner. On 04.05.2019, the complainant has filed an application under Section 143A of the Act, 1881 contending that the charges have already been framed wherein he has denied the charges levelled against him. Further contention of the complainant is that as per the provisions of Section 143A of the Act, 1881, if charges have been framed against the accused, the interim
compensation can be ordered by the Court to the extent of 20% of the cheque amount, therefore, he prayed for grant of 20% of the amount as interim compensation.
# 4. The learned Judicial Magistrate First Class vide its order dated 24.12.2019 considering the amended provisions of Section 143A of the Act, 1881, directed the accused to pay 20% of the cheque amount as compensation, failing which proceeding under sub-section (v) of Section 143A will be initiated against petitioner, thereafter fixed the case for hearing on 20.01.2020.
# 5. Being aggrieved by the aforesaid order, the petitioner preferred Criminal Revision No. 102/2020 before the Sessions Judge, Raipur which was transferred to the Court of 11th Additional Sessions Judge, Raipur, District- Raipur. The learned 11th Additional Sessions Judge vide its order dated 06.03.2021 dismissed the revision by recording a finding that there is no illegality and irregularity in the impugned order passed by the learned Judicial Magistrate First Class, Raipur and same is inconformity with the amended provisions of Section 143A of the Act, 1881. Both these orders have been challenged by the petitioner in the present petition.
# 7. Learned counsel for the petitioner would rely upon the judgment of Madras High Court in L.G.R. Enterprises & another Vs. P. Anbazhagan, and drew attention of this Court towards para 18 of the judgment, which reads as under:-
“18. A careful reading of the order passed by the Court below shows that the Court below has focussed more on the issue of the prospective / retrospective operation of the amendment. The Court has not given any reason as to why it is directing the accused persons to pay an interim compensation of 20% to the complainant. As held by this Court, the discretionary power that is vested with the trial Court in ordering for interim compensation must be supported by reasons and unfortunately in this case, it is not supported by reasons. The attempt made by the learned counsel for the respondent to read certain reasons into the order, cannot be done by this Court, since this Court is testing the application of mind of the Court below while passing the impugned order by exercising its discretion and this Court cannot attempt to supplement it with the reasons argued by the learned counsel for the respondent.”
# 8. Learned counsel for the petitioner would further submit that since the legislature has used the word 'may', as such, it is discretionary and learned trial court should have not granted 20% of cheque amount as interim compensation, therefore, orders passed by both the courts below, are not just and proper, which are liable to be quashed by this Court.
# 10. From perusal of the Act, 1881 as well as amended Section 143A of the Act, 1881, it is clear that the Act, 1881 has played a substantial role in the Indian commercial landscape and has given rightful sanction against defaulters of the due process of trade who engage in disingenuous activities that causes unlawful losses to rightful recipients through cheque dishonour. Thereafter, the legislature has amended Act, 1881, which came into force on 01.09.2018 with the aim to secure the interest of the complainant along with increasing the efficacy and expediency of proceedings under Section 138 of the Act, 1881. Section 143A of the Act, 1881 stipulates that under certain stages of proceedings under Section 138 of the Act, 1881, the Court may order for the drawer to make payment upto 20% of the cheque amount during the pendency of the matter. The order under Section 143A of the Act, 1881 can be passed only in summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint, in any the case upon framing of charge.
# 11. From perusal of Section 143A of the Act, 1881, it is quite evident that the act has been amended by granting interim measures ensuring that interest of complainant is upheld in the interim period before the charges are proven against the drawer. The intent behind this provision is to provide aid to the complainant during the pendency of proceedings under Section 138 of the Act, where he is already suffering double edged sword of loss of receivables by dishonor of the cheque and the subsequent legal costs in pursuing claim and offence. These amendments would reduce pendency in courts because of the deterrent effect on the masses along ensuring certainty of process that was very much lacking in the past, especially enforced at key stages of the proceedings under the Act. The changes brought forth by way of the 2018 amendment to the Negotiable Instruments Act, 1881 are substantial in nature and focus heavily on upholding the interests of the complainants in such proceedings.
# 12. From perusal of the amended provision of Section 143A of the Act, 1881, it is clear that the word 'may' used is beneficial for the complainant because the complainant has already suffered for mass deed committed by the accused by not paying the amount, therefore, it is in the interest of the complainant as well the accused if the 20% of the cheque amount is to be paid by the accused, he may be able to utilize the same for his own purpose, whereas the accused will be in safer side as the amount is already deposited in pursuance of the order passed under Section 143A of the Act, 1881. When the final judgment passed against him, he has to pay allowances on lower side. Section 143A of the Act, 1881 has been drafted in such a manner that it secures the interest of the complainant as well as the accused, therefore, from perusal of aims and object of amended Section 143A of the Act, 1881, it is quite clear that the word 'may' may be treated as 'shall' and it is not discretionary but of directory in nature.
# 15. The Hon'ble Supreme Court in G.J. Raja Vs. Tejraj Surana, has examined the amended Section 143A of the Act, 1881 and held that it is prospective effect and not retrospective effect. The relevant para of the judgment is reproduced below:-
23. In the ultimate analysis, we hold Section 143A to be prospective in operation and that the provisions of said Section 143A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book. Consequently, the orders passed by the Trial Court as well as the High Court are required to be set aside. The money deposited by the Appellant, pursuant to the interim direction passed by this Court, shall be returned to the Appellant along with interest accrued thereon within two weeks from the date of this order.”
# 16. Therefore, the word “may” be treated as “shall” and is not discretionary, but of directory in nature, therefore, the learned Judicial Magistrate First Class has rightly passed the interim
compensation in favour of the complainant.
# 18. The judgment cited by learned counsel for the petitioner also indicates that the Judicial Magistrate First Class has to pass a reasoned order for determining quantum of compensation, which is payable to the victim looking to the facts and circumstances each case, but does not suggest any iota that grant of compensation as per Section 143A of the Act, 1881 is of discretionary in nature.
# 19. From perusal of provisions of the Act, 1881 considering the aims behind object of the Act, 1881 and the law laid down by the Supreme Court, I am of the considered view that the
amendment in Section 143A of the Act, 1881 is mandatory in nature, therefore, the learned Judicial Magistrate First Class has rightly passed the order of interim compensation in favour
of the respondent and has not committed any irregularity or illegality in passing such order. The learned 11th Additional Sessions Judge has also not committed any irregularity or illegality in rejecting the revision filed by the petitioner, which warrants any interference by this Court.
# 20. In view of the above, this petition being devoid of merits, is liable to be and is hereby dismissed. No order as to costs.
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