2020 (12) TMI 430 - HC - Indian Laws

Dishonor of Cheque - effect of insertion of Section 143A of the N.I. Act - Whether the insertion of Section 143A of the N.I. Act is having a prospective effect or can also be given retrospective effect? HELD THAT - It is well settled proposition of law that always the substantive law which affects the rights of the parties will have prospective effect unless it has been given a retrospective effect expressly in the statute itself. Though the learned counsel for the respondent- complainant has relied upon the decision in the case of Surinder Singh Deswal @ Colonel S.S.Deswal Others Vs. Virender Gandhi 2019 (5) TMI 1626 - SUPREME COURT , the question before the Hon'ble Apex Court was with reference to Section 148 of the N.I. Act which has been amended and inserted w.e.f. 1.9.2018 and Section 148 of the N.I. Act is applicable to appeals against the order of conviction for the offence punishable under Section 138 of the N.I. Act even where the complaints under Section 138 of the N.I. Act were filed prior to amendment of the N.I. Act. In that light, the Hon'ble Apex Court has given effect by holding that the appellant has to deposit a sum which is not less than 20% of the fine or compensation amount - But in the said decision Section 143A of the N.I. Act has not been interpreted. In the case of G.J.Raja Vs. Tejraj Surana 2019 (8) TMI 91 - SUPREME COURT , the issue came up before the Court directly with regard to interpretation of Section 143A of the N.I. Act and the Hon'ble Apex Court has held that Section 143A of the N.I. Act is having prospective effect in nature and confined to the cases where the offences were committed after the introduction of Section 143A of the N.I. Act - When the Hon'ble Apex Court has interpreted and laid down the ratio holding that Section 143A of the N.I. Act is to be prospective in operation and is made applicable only in the cases where the offence under Section 138 of the Act was committed after insertion of Section 143A in the statute. The trial Court as well as revisional Court without going into the said aspect have passed the impugned orders - Petition allowed.

Summary

Issues:
Interpretation of Section 143A of the Negotiable Instruments Act, 1881 - Whether the insertion of Section 143A of the N.I. Act has a prospective or retrospective effect?

Analysis:
The judgment involves two Criminal Petitions filed under Section 482 of the Cr.P.C. to set aside orders passed by the Additional City Civil and Sessions Judge, Bengaluru, confirming the orders of the CMM Court in Criminal Revision Petition Nos. 776/2018 and 775/2018. The accused-petitioners challenged the direction to deposit 20% of the cheque amount as interim compensation under Section 143A of the N.I. Act after a complaint under Section 138 was filed. The petitioners argued that the amendment to Section 143A came into force after the alleged transactions, making it inapplicable retrospectively. They relied on the principle that legislation is presumed not to have retrospective operation unless a contrary intention appears, citing the case of G.J.Raja Vs. Tejraj Surana.

On the other hand, the respondent-complainant contended that the insertion in Section 143A should be given effect from the original enactment date, asserting that the amendment applies to the present case filed shortly before the amendment. The respondent cited divergent High Court views and referred to the case of Surinder Singh Deswal @ Colonel S.S.Deswal & Others Vs. Virender Gandhi to support the argument that the trial court rightly applied the amendment.

The key issue before the Court was whether the insertion of Section 143A of the N.I. Act has a prospective or retrospective effect. The Court analyzed precedents, including the case of G.J.Raja Vs. Tejraj Surana, where the Hon'ble Apex Court held that Section 143A has prospective application, limited to cases where offences were committed after its introduction. The Court emphasized that substantive laws affecting rights have prospective effect unless expressly stated otherwise in the statute. The Court noted that the trial and revisional courts erred in not considering this aspect, leading to the setting aside of the impugned orders.

In conclusion, the Court allowed both petitions, setting aside the orders of the Additional City Civil and Sessions Judge, Bengaluru, confirming the CMM Court's orders. The judgment clarified that Section 143A of the N.I. Act has a prospective effect and applies only to offences committed after its introduction, in line with established legal principles and precedents.