TMI Blog2024 (4) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... ue amount. Such an interpretation will be unjust and contrary to the well-settled concept of fairness and justice. If such an interpretation is made, the provision may expose itself to the vice of manifest arbitrariness - there are no manner of doubt that the word may used in Section 143A, cannot be construed or interpreted as shall . Therefore, the power under sub-section (1) of Section 143A is discretionary. Section 143A can be invoked before the conviction of the accused, and therefore, the word may used therein can never be construed as shall . The tests applicable for the exercise of jurisdiction under sub-section (1) of Section 148 can never apply to the exercise of jurisdiction under subsection (1) of Section 143A of the N.I. Act. Factors to be considered while exercising powers under sub-section (1) of Section 143A of the N.I. Act - HELD THAT:- When the court deals with an application under Section 143A of the N.I. Act, the Court will have to prima facie evaluate the merits of the case made out by the complainant and the merits of the defence pleaded by the accused in the reply to the application under sub-section (1) of Section 143A. The presumption under Section 139 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 138 of the N.I. Act. The complaint was filed in the Court of the Chief Judicial Magistrate at Bokaro. The case in the complaint is that the appellant and the respondent formed various companies on different terms and conditions regarding profit sharing. On 23rd September 2011, an appointment letter was issued by the appellant in his capacity as the Managing Director of the company M/s Thermotech Synergy Pvt. Ltd. and on behalf of a proprietary concern, M/s Tech Synergy, by which the post of Executive Director was offered by the appellant to the respondent on consolidated salary of Rs. 1,00,000/- per month. 3. On 1st June 2012, the appellant formed a partnership with one Rahul Kumar Basu, in which the respondent was shown as an indirect partner. According to the respondent's case, M/s Tech Synergy was merged with another company - M/s Megatech Synergy Pvt. Ltd. It is alleged by the respondent that in August 2012, there was an agreement to pay him 50 per cent of the profit. One more partnership firm came into existence on 3rd June 2013, wherein the appellant, respondent, and Rahul Kumar were shown as partners. It is the case of the respondent that the appellant agreed to giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 143A. Only after prima facie consideration of the merits of the complainant's case and defence of the accused, the Court must conclude whether a case is made out for the grant of interim compensation. After the Court comes to the conclusion that a case for grant of interim compensation has been made out, the Court has to apply its mind to the quantum of interim compensation. In every case, the Court cannot grant 20 per cent of the cheque amount as interim compensation. 6. The learned counsel appearing for the respondent submitted that considering the very object of Section 138 of the N.I. Act, sub-section (1) of Section 143A will have to be held as mandatory. He submitted that there is a presumption under Section 139 of the N.I. Act that unless a contrary is proved, the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or liability. He submitted that the question of rebutting the said presumption would arise only after the evidence is adduced. Therefore, the defence of the accused at the stage of considering an application under subsection (1) of Section 143A is irrelevant. In every case, an order of payment of interim compensat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o realise the value of the cheque. It was further observed that such delays compromise the sanctity of the cheque transactions. Therefore, it was proposed to amend the N.I. Act to address the issue of undue delay in the final resolution of the cheque dishonour cases. It was also stated that the proposed amendments would strengthen the credibility of cheques and help trade and commerce. 8. We may note here that by the same Act No.20 of 2018, Section 148 was brought on the statute book, which provides that in an appeal preferred by the drawer against conviction under Section 138, the Appellate Court may order the appellant to deposit such a sum which shall be a minimum 20 per cent of the fine or compensation awarded by the Trial Court. The proviso to sub-section (1) of Section 148 clarifies that the amount payable under sub-section (1) of Section 148 is in addition to interim compensation paid by the appellant/accused under Section 143A. There are no separate objects and reasons set out for the addition of Section 148. MANDATORY OR DIRECTORY 9. There is no doubt that the word may ordinarily does not mean must . Ordinarily, may will not be construed as shall . But this is not an infle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covery. Section 421 of the Cr.PC deals with the recovery of the fine imposed by a criminal court while passing the sentence. Thus, recourse can be taken to Section 421 of the Cr.PC. for recovery of interim compensation, which reads thus: 421. Warrant for levy of fine. (1) When an offender has been sentenced to pay a fine, the Court passing the sentence may take action for the recovery of the fine in either or both of the following ways, that is to say, it may (a) issue a warrant for the levy of the amount by attachment and sale of any movable property belonging to the offender; (b) issue a warrant to the Collector of the district, authorising him to realise the amount as arrears of land revenue from the movable or immovable property, or both, of the defaulter: Provided that, if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no Court shall issue such warrant unless, for special reasons to be recorded in writing, it considers it necessary so to do, or unless it has made an order for the payment of expenses or compensation out of the fine under Section 357. (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amount from the complainant. If the complainant has no assets, the recovery will be impossible. 13. At this stage, we may note sub-section (1) of Section 148. Section 148 reads thus:- 148. Power of Appellate Court to order payment pending appeal against conviction. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent of the fine or compensation awarded by the trial Court: Provided that the amount payable under this sub-section shall be in addition to any interim compensation paid by the appellant under section 143A. (2) The amount referred to in subsection (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant. (3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal: Provided that if the appellant is acquitted, the Court sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word may used therein will have to be generally construed as rule or shall . It was further observed that when the Appellate Court decides not to direct the deposit by the accused, it must record the reasons. After considering the said decision in the case of Surinder Singh Deswal (2019) 11 SCC 341, this Court, in the case of Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Limited Ors. (2023) 10 SCC 446, in paragraph 6, held thus: 6. What is held by this Court is that a purposive interpretation should be made of Section 148 NI Act. Hence, normally, the appellate court will be justified in imposing the condition of deposit as provided in Section 148. However, in a case where the appellate court is satisfied that the condition of deposit of 20% will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded. (Emphasis added) 15.1. As held earlier, Section 143A can be invoked before the conviction of the accused, and therefore, the word may used therein can never be construed as shall . The tests applicable for the exercise of jurisdiction under sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osited by the appellant will continue to remain deposited with the Trial Court. 18. Hence, impugned orders are set aside, and the application made by the complainant in Complaint Petition No. 1103/2018 under Section 143A (1) of the N.I. Act is restored to the file of Judicial Magistrate First Class, Bokaro. The learned Judge will hear and decide the application for the grant of interim compensation afresh in the light of what is held in this judgment. The amount deposited by the appellant of Rs. 10,00,000/- shall be invested in a fixed deposit till the disposal of the said application. At the time of disposing of the application, the Trial Court will pass an appropriate order regarding refund and/or withdrawal and/or investment of the said amount. 19. Subject to what is held earlier, the main conclusions can be summarised as follows: a. The exercise of power under sub-section (1) of Section 143A is discretionary. The provision is directory and not mandatory. The word may used in the provision cannot be construed as shall. b. While deciding the prayer made under Section 143A, the Court must record brief reasons indicating consideration of all relevant factors. c. The broad parameter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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