2023 (10) TMI 1 - HC - Indian Laws

Dishonour of Cheque - section 143(A) Negotiable Instrument Act - HELD THAT - From perusal of Section 143(A), it is evident that Court trying an offence under section 138 of the Negotiable Instruments Act may order the drawer of the cheque to pay interim compensation to the complainant (a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and (b) in any other case, upon framing of charge. (2) The interim compensation under sub-section (1) shall not exceed 20% of the amount of the cheque. (3) The interim compensation shall be paid within 60 days from the date of the order under sub-section (1), or within such further period not exceeding 30 days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque. From perusal of order dated 31.05.2023, the Court has assigned reasons for granting interim compensation to opposite party no.2 as application under section 138 Negotiable Instrument Act is pending since last two years and further observed that on account of dismissal of the complaint, complainant shall return the amount with 7% interest to applicant/accused - there are no illegality in the order dated 31.05.2023 passed by the prescribed authority. Present application dismissed.

Summary

Issues involved:
The judgment involves the quashing of an order passed under section 138 of the Negotiable Instrument Act, specifically focusing on the grant of interim compensation and the discretion of the trial court in such matters.

Interim Compensation and Discretion of Trial Court:
The applicant filed a 482 Cr.P.C. application seeking to quash the order for depositing 20% of the cheque amount as interim compensation within two months, as directed by the trial court under section 143(A) of the Negotiable Instrument Act. The applicant relied on a judgment from the High Court of Madras to argue that the trial court has discretion in ordering interim compensation and must provide reasons for such a decision. The applicant contested the lack of reasons provided by the trial court for directing the payment of interim compensation.

Contentions and Observations:
The learned counsel for the applicant argued against the order, while the learned A.G.A. opposed the contention. The Court, upon perusal of Section 143(A) and the order dated 31.05.2023, found that the trial court had assigned reasons for granting interim compensation to the opposite party. The Court noted that the application under section 138 of the Negotiable Instrument Act had been pending for two years and concluded that there was no illegality in the order. The Court upheld the decision, stating that no interference was warranted and dismissed the 482 application with the above observation.