2022 (2) TMI 245 - HC - Indian Laws

Dishonor of Cheque - demand of interim compensation not exceeding 20% of cheque amount - whether the provisions of Section 148 of the Negotiable Instruments Act can be given the retrospective effect? - HELD THAT - Section 143A of the Negotiable Instruments Act grants the authority only to the trial court to pass such an order directing interim compensation to the complainant when the drawer of the cheque pleads not guilty to the accusation made in the complaint and in any other case upon framing of charge. The authority so granted to the trial court is of directing the payment of interim compensation not exceeding 20% of the amount of cheque. Section 143A of the Negotiable Instruments Act lays down the consequences in case of acquittal. The trial is still in progress; the result of the trial has yet not declared. The applicant was before the Revision Court only praying for the bail and the Revision Court was pleased to grant the bail to the applicant taking into consideration the facts and circumstances of the case. The trial court was required to consider only the facts and circumstances of the case which concerns the applicant wherein non-bailable warrant was issued, wherein that case, as per the submissions of the learned advocate for the applicant, no such order of paying 20% of the cheque amount was directed. Further that could not be consideration for the Revision Court when the law does not lays down any such mandate for granting the bail. It is only for the trial court concerned under the provisions of Section 143A of the Negotiable Instruments Act who become entitle as per the mandate to pass any such order - Sub-sec.(5) of Section 143A lays down in case the drawer of the cheque fails to pay interim compensation payable under this section it would be recovered as if it were a fine under Section 421 of the Cr.P.C., and as laid down under Sub-sec.(6) of Section 143A the amount of fine imposed under Section 138 or the amount of compensation awarded under Section 357 of the Cr.P.C. shall be reduced by the amount paid or recovered as interim compensation under the said section. Taking into consideration the said provisions of Section 143A of the Negotiable Instruments Act, the order of Revision Court directing the applicant to pay 20% of the cheque amount is against the provisions of law; hence the same deserves to be quashed and set aside - Application allowed.

Summary

Issues:
Challenge to condition imposed by the 2nd Additional District & Sessions Judge regarding payment of 20% of the cheque amount in a criminal case under Section 138 of the Negotiable Instruments Act, 1881.

Analysis:
1. The applicant challenged the condition imposed by the 2nd Additional District & Sessions Judge, Ahmedabad (Rural), to pay 20% of the cheque amount in a criminal case under Section 138 of the Negotiable Instruments Act, 1881. The applicant argued that the condition was inconsistent with the rules of bail and the provisions of the Act. The applicant highlighted that the proceedings were initiated before the amendments in 2018, making the condition harsh and legally incorrect.

2. The applicant contended that only the trial court has the authority to order interim compensation under Section 143A of the Negotiable Instruments Act. The applicant emphasized that the Revision Court's directive for the payment of 20% of the cheque amount was not in line with the law and should be deemed invalid. The applicant stressed that the trial was ongoing, and no order had been issued under Section 143A, making the condition imposed by the Revision Court premature and legally flawed.

3. The High Court agreed with the applicant's arguments and cited a previous case where the retrospective effect of Section 148 of the Negotiable Instruments Act was discussed. The Court reiterated that Section 143A grants the trial court exclusive authority to order interim compensation, not exceeding 20% of the cheque amount, under specific circumstances, which were not met in the present case. The Court highlighted that the Revision Court's decision was based on irrelevant grounds and contrary to the provisions of the Act.

4. The Court noted that the Revision Court's order was influenced by the complainant's submission regarding a previous matter where the applicant allegedly failed to comply with a similar condition. However, the Court emphasized that such considerations were irrelevant for granting bail and that only the trial court, as per the Act, had the power to impose such conditions related to interim compensation.

5. Referring to the provisions of Section 143A, the Court emphasized the consequences of non-payment of interim compensation and the subsequent recovery procedures. The Court concluded that the Revision Court's directive for the applicant to pay 20% of the cheque amount was legally untenable and ordered the condition to be quashed and set aside.

6. In the final ruling, the High Court quashed the condition imposed by the 2nd Additional District & Sessions Judge, Ahmedabad (Rural), directing the applicant to pay 20% of the cheque amount. The Court made the rule absolute to that extent and permitted direct service regarding the judgment.