2023 (2) TMI 823 - HC - Indian Laws

Dishonour of Cheque - direction to pay interim compensation under Section 143-A of Negotiable Instruments Act - petitioner has not been given any opportunity before passing the impugned order - principles of natural justice - HELD THAT - The Hon'ble Supreme Court in SURINDER SINGH DESWAL @ COL. S.S. DESWAL AND OTHERS VERSUS VIRENDER GANDHI 2019 (5) TMI 1626 - SUPREME COURT has settled the proposition of law that the provisions of Section 143-A of Negotiable Instruments Act are prospective in nature. So far as Section 148 of Negotiable Instruments Act, the same are retrospective in nature. There is no dispute that the complaint in question has been filed after the amendment which came into effect w.e.f. 1.9.2018. Accordingly, the provisions of Section 143-A of Negotiable Instruments Act are very much applicable in the present case. A perusal of the impugned order would show that the learned Trial Court after filing of complaint issued notice to the accused petitioner and heard both the sides. The contents of notice were also read over to the accused-petitioner in simple Punjabi language to which he pleaded not guilty and claimed trial. The provisions of Section 143-A of Negotiable Instruments Act provide discretion to the Trial Court for granting interim compensation to the complainant in order to meet the objects and reasons behind the amendment. The Trial Court is to exercise its discretion keeping in view the facts and circumstances of every case. From the reading of the case in hand, the Trial Court found the case appropriate wherein cheque of Rs.10 lakh was issued by the accused petitioner to the complainant, however, the same was dishonored on its presentation. The Act provides the discretion to the court for granting interim compensation not exceeding 20% of the cheque amount. In the present case, learned Trial Court has not exceeded the upper limit of 20%. In all its humility there is no dispute regarding the judgements relied upon by learned counsel for the petitioners, however, the same are distinguishable on the facts of the present case. Petition dismissed.

Issues:
1. Quashing of order for payment of interim compensation under Section 143-A of Negotiable Instruments Act.
2. Interpretation of Section 143-A provisions.
3. Discretion of Trial Court in granting interim compensation.
4. Applicability of Section 143-A post-amendment.
5. Settlement of legal proposition in Surinder Singh Deswal case.
6. Dismissal of petition based on facts and legal analysis.

Issue 1: Quashing of order for payment of interim compensation under Section 143-A of Negotiable Instruments Act
The petition was filed seeking to quash the order passed by the Trial Court for payment of interim compensation to the complainant under Section 143-A of the Negotiable Instruments Act. The petitioner argued that the order was against statutory provisions and misinterpreted the facts of the case. The complainant alleged that the petitioner borrowed a sum and issued a post-dated cheque, which was dishonored upon presentation. The Trial Court directed the petitioner to pay 20% of the cheque amount as interim compensation, leading to the petition for quashing the order.

Issue 2: Interpretation of Section 143-A provisions
Section 143-A of the Negotiable Instruments Act empowers the Court trying an offence under Section 138 to order the drawer of the cheque to pay interim compensation to the complainant. The Trial Court exercised its discretion as provided under the Act to grant interim compensation not exceeding 20% of the cheque amount. The Court is required to consider the facts and circumstances of each case while deciding on interim compensation, in line with the objectives of the amendment aimed at speedy resolution of cheque dishonour cases.

Issue 3: Discretion of Trial Court in granting interim compensation
The Trial Court, after hearing both parties and considering the facts presented, exercised its discretion to grant interim compensation to the complainant. The Court found the case suitable for such compensation as the cheque issued was dishonored, meeting the criteria under Section 143-A. The Trial Court's decision was based on the provisions of the Act and the specific circumstances of the case, ensuring that the complainant was not unduly prejudiced.

Issue 4: Applicability of Section 143-A post-amendment
The amendment to the Negotiable Instruments Act introduced Section 143-A to address delays in cheque dishonour cases and provide relief to payees. The provisions of Section 143-A, being prospective in nature, were applicable to cases filed after the effective date of the amendment. In this case, filed post-amendment, the Trial Court correctly applied the provisions of Section 143-A in granting interim compensation to the complainant.

Issue 5: Settlement of legal proposition in Surinder Singh Deswal case
The legal proposition established in the Surinder Singh Deswal case clarified the prospective nature of Section 143-A and the retrospective nature of Section 148 of the Negotiable Instruments Act. The Court's decision in this case aligned with the settled legal position, ensuring the correct application of the relevant provisions of the Act in determining the interim compensation.

Issue 6: Dismissal of petition based on facts and legal analysis
After thorough consideration of the arguments presented by both parties and a detailed review of the case record, the Court found no merit in the petition seeking to quash the Trial Court's order for interim compensation. The dismissal was based on the correct interpretation of the law, the Trial Court's discretion in granting compensation, and the specific circumstances of the case, leading to the rejection of the petition.

In conclusion, the High Court upheld the Trial Court's order for payment of interim compensation under Section 143-A of the Negotiable Instruments Act, emphasizing the importance of considering the statutory provisions, legal precedents, and factual context in such cases.

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