Interim Compensation in Cheque Dishonor Cases: Discretion and Due Process, Scope of the word "May"

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..... ng the interpretation and application of Section 143A of the Negotiable Instruments Act, 1881 (NI Act). The case revolved around the question of whether the provision for granting interim compensation u/s 143A(1) is mandatory or directory in nature. The Court also provided guidance on the factors to be considered while exercising the discretionary power under this section. Arguments Presented The .....

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..... s adduced, rendering the accused's defense irrelevant at the stage of considering an application u/s 143A(1). Discussions and Findings of the Court The Supreme Court delved into the object of Section 143A , which was introduced to address the issue of undue delay in the final resolution of cheque dishonor cases and strengthen the credibility of cheque transactions. The Court observed that Sect .....

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..... e factors to be considered while exercising discretion u/s 143A(1): The court must prima facie evaluate the merits of the complainant's case and the accused's defense pleaded in the reply to the application. The presumption u/s 139 alone is not a ground to direct interim compensation payment. A direction to pay interim compensation can be issued only if the complainant makes out a prima fa .....

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..... ,00,000/- without considering the issue of a prima facie case and other relevant factors. The High Court had also failed to apply its mind. Consequently, the Supreme Court set aside the impugned orders and restored the application made by the complainant u/s 143A(1) to the file of the Judicial Magistrate First Class, Bokaro. The trial court was directed to consider the application for granting int .....

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..... ncluding the nature of the transaction, the relationship between the parties, and the paying capacity of the accused. The Court provided guidance on the factors to be considered and the requirement to record brief reasons while deciding an application u/s 143A(1). This judgment aims to strike a balance between protecting the interests of the complainant and ensuring fairness and justice for the ac .....

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