Amended provision under Section 143A of the Negotiable Instruments Act,1881 is mandatory in nature: Chhattisgarh High Court

Page AFRHIGH COURT OF CHHATTISGARH BILASPURCRMP No. 5621Order Reserved on : 22.06.2021Order Delivered on : 30 .06 .2021Rajesh Soni S o Shri P.R. Soni Aged About 44 Years R o OppositeHarsh Tower Devpuri Tehsil & District RaipurPetitionerVersus Mukesh Verma S o Late Shri J.P. Verma Aged About 57 Years R oOpposite Suraj Kirana Store Nandi Chowk Tikrapara Tehsil &District RaipurRespondent For Petitioner: Mr. D.K. Gwalare Advocate.Hon ble Shri Justice Narendra Kumar VyasCAV Order1.The petitioner has filed present petition under Section 482 ofCr.P.C. challenging the order dated 24.12.2019 passed byJudicial Magistrate First Class Raipurin ComplaintCase No. 1777 2019 wherein learned trial court has allowedthe application filed by the complainant under Section 143A ofthe Negotiable Instrument Act 1881bywhich the criminal revision filed by the petitioner has beenrejected. 2.The brief facts as projected by the petitioner are thatcomplainant respondent has filed complaint against thepetitioner under Section 138 of the Act 1881 on 09.01.2019before Judicial Magistrate First Class Raipur District Raipur(C.G.) mainly contending that the petitioner had given a Page cheque dated 26.11.2018 amounting to Rs. 6 50 000 to thecomplainant. The complainant has deposited the cheque on28.11.2018 in the account maintained by him in Central Bankof India Branch Chhattisgarh College Raipur. The saidcheque was dishonoured and returned due to insufficient fundon 14.12.2018 therefore the offence under Section 138 of theAct 1881 has been committed by the petitioner. 3.The complainant has sent a legal notice to the petitioner on17.12.2018 as petitioner has not paid the amount of cheque therefore the complainant has filed a Complaint Case No.1777 2019 before Judicial Magistrate First Class Raipur Thelearned Judicial Magistrate First Class taking cognizance onthe complaint issued summon to the petitioner. On04.05.2019 the complainant has filed an application underSection 143A of the Act 1881 contending that the chargeshave already been framed wherein he has denied the chargeslevelled against him. Further contention of the complainant isthat as per the provisions of Section 143A of the Act 1881 ifcharges have been framed against the accused the interimcompensation can be ordered by the Court to the extent of20% of the cheque amount therefore he prayed for grant of20% of the amount as interim compensation.4.The learned Judicial Magistrate First Class vide its order dated24.12.2019 considering the amended provisions of Section143A of the Act 1881 directed the accused to pay 20% of thecheque amount as compensation failing which proceedingunder sub sectionof Section 143A will be initiated againstpetitioner thereafter fixed the case for hearing on 20.01.2020.5.Being aggrieved by the aforesaid order the petitionerpreferred Criminal Revision No. 102 2020 before the SessionsJudge Raipur which was transferred to the Court of 11thAdditional Sessions Judge Raipur District Raipur. Thelearned 11th Additional Sessions Judge vide its order dated06.03.2021 dismissed the revision by recording a finding thatthere is no illegality and irregularity in the impugned order Page passed by the learned Judicial Magistrate First Class Raipurand same is inconformity with the amended provisions ofSection 143A of the Act 1881. Both these orders have beenchallenged by the petitioner in the present petition. 6.Learned counsel for the petitioner would submit that as peramended provision of Section 143A of the Act 1881 grant ofinterim compensation is not mandatory and it is discretionary therefore it is not necessary in every case to grant 20% ofcheque amount as interim compensation. He has drawnattention of this Court towards amended provision of Section143A of the Act 1881 which is extracted below: “143A Power to direct interimcompensation Notwithstanding anythingcontained in the Code of Criminal Procedure 1973the Court trying an offenceunder Section 138 may order the drawer of thecheque to pay interim compensation to thecomplainantin a summary trial or summon case where the drawer pleads not guilty to theaccusation made in the complaint and(b) in any other case upon framingcharges.(2)The interim compensation under sub sectionshall not exceed twenty per cent of theamount of the cheque.(3)The interim compensation shall be padwithin sixty days from the date of the order undersub sectionor within such further period notexceeding thirty days as may be directed by theCourt on sufficient cause being shown by thedrawer of the cheque.(4) If the drawer of the cheque is acquitted theCourt shall direct the complainant to repay to thedrawer the amount of interim compensation withinterest at the bank rate as published by theReserve Bank of India prevalent at the beginningof the relevant financial years within sixty daysfrom the date of the order or within such furtherperiod not exceeding thirty days as may bedirected by the Court on sufficient cause beingshown by the complainant.(5)The interim compensation payable underthis section may be recovered as if it were a find Page under section 421 of the Code of CriminalProcedure 197312 SCC 372 Page the use of the word `shall or may depends onconferment of power. Depending upon thecontext may does not always mean may. May is a must for enabling compliance of provision butthere are cases in which for various reasons assoon as a person who is within the statute isentrusted with the power it becomesduty toexercise11 SCC 341 Page “8.Now so far as the submission on behalf ofthe Appellants that even considering thelanguage used in Section 148 of the N.I. Act asamended the appellate Court "may" order theAppellant to deposit such sum which shall be aminimum of 20% of the fine or compensationawarded by the trial Court and the word used isnot "shall" and therefore the discretion is vestedwith the first appellate court to direct theAppellant Accused to deposit such sum and theappellate court has construed it as mandatory which according to the learned Senior Advocatefor the Appellants would be contrary to theprovisions of Section 148 of the N.I. Act asamended is concerned considering the amendedSection 148 of the N.I. Act as a whole to be readwith the Statement of Objects and Reasons ofthe amending Section 148 of the N.I. Act thoughit is true that in amended Section 148 of the N.I.Act the word used is "may" it is generally to beconstrued as a "rule" or "shall" and not to directto deposit by the appellate court is an exceptionfor which special reasons are to be assigned.Therefore amended Section 148 of the N.I. Actconfers power upon the Appellate Court to passan order pending appeal to direct the Appellant Accused to deposit the sum which shall not beless than 20% of the fine or compensation eitheron an application filed by the original complainantor even on the application filed by the Appellant Accused Under Section 389 of the Code ofCriminal Procedure to suspend the sentence.The aforesaid is required to be construedconsidering the fact that as per the amendedSection 148 of the N.I. Act a minimum of 20% ofthe fine or compensation awarded by the trialcourt is directed to be deposited and that suchamount is to be deposited within a period of 60days from the date of the order or within suchfurther period not exceeding 30 days as may bedirected by the appellate court for sufficientcause shown by the Appellant. Therefore ifamended Section 148 of the N.I. Act ispurposively interpreted in such a manner it wouldserve the Objects and Reasons of not onlyamendment in Section 148 of the N.I. Act butalso Section 138 of the N.I. Act. NegotiableInstruments Act has been amended from time totime so as to provide inter alia speedy disposalof cases relating to the offence of thedishonoured of cheques. So as to see that due todelay tactics by the unscrupulous drawers of the Page 1dishonoured cheques due to easy filing of theappeals and obtaining stay in the proceedings an injustice was caused to the payee of adishonoured cheque who has to spendconsiderable time and resources in the courtproceedings to realise the value of the chequeand having observed that such delay hascompromised the sanctity of the chequetransactions the Parliament has thought it fit toamend Section 148 of the N.I. Act. Therefore such a purposive interpretation would be infurtherance of the Objects and Reasons of theamendment in Section 148 of the N.I. Act andalso Section 138 of the N.I. Act.”15.The Hon ble Supreme Court in G.J. Raja Vs. Tejraj Surana4 has examined the amended Section 143A of the Act 1881and held that it is prospective effect and not retrospectiveeffect. The relevant para of the judgment is reproducedbelow: “19. It must be stated that prior to the insertion ofSection 143 A in the Act there was no provisionon the statute book whereunder even before thepronouncement of the guilt of an accused oreven before his conviction for the offence inquestion he could be made to pay or depositinterim compensation. The imposition andconsequential recovery of fine or compensationeither through the modality of Section 421 of theCode or Section 357 of the code could also ariseonly after the person was found guilty of anoffence. That was the status of law which wassought to be changed by the introduction ofSection 143A in the Act. It now imposes a liabilitythat even before the pronouncement of his guiltor order of conviction the accused may with theaid of State machinery for recovery of the moneyas arrears of land revenue be forced to payinterim compensation. The person would therefore be subjected to a new disability orobligation. The situation is thus completelydifferent from the one which arose forconsideration in ESI Corpn. v. Dwarka NathBhargwa 7 SCC 131. 23.In the ultimate analysis we hold Section143A to be prospective in operation and that theprovisions of said Section 143A can be applied orinvoked only in cases where the offence under4(2019) 19 SCC 469 Page 1Section 138 of the Act was committed after theintroduction of said Section 143A in the statutebook. Consequently the orders passed by theTrial Court as well as the High Court are requiredto be set aside. The money deposited by theAppellant pursuant to the interim directionpassed by this Court shall be returned to theAppellant along with interest accrued thereonwithin two weeks from the date of this order.”16.Therefore the word “may” be treated as “shall” and is notdiscretionary but of directory in nature therefore the learnedJudicial Magistrate First Class has rightly passed the interimcompensation in favour of the complainant.17.In L.G.R. Enterprisesthe Hon ble Madras HighCourt held as under: “8.Therefore whenever the trial Courtexercises its jurisdiction under Section 143A(1) ofthe Act it shall record reasons as to why it directsthe accused personto paythe interim compensation to the complainant. Thereasons may be varied. For instance the accusedperson would have absconded for a longtime andthereby would have protracted the proceedings orthe accused person would have intentionallyevaded service for a long time and only afterrepeated attempts appears before the Court orthe enforceable debt or liability in a case is borneout by overwhelming materials which the accusedperson could not on the face of it deny or wherethe accused person accepts the debt or liabilitypartly or where the accused person does notcross examine the witnesses and keeps ondragging with the proceedings by filing onepetition after another or the accused personabsonds and by virtue of a non bailable warranthe is secured and brought before the Court after along time or he files a recall non bailable warrantpetition after a long time and the Court whileconsidering his petition for recalling the non bailable warrant can invoke Section 143A(1) of theAct. This list is not exhaustive and it is moreillustrative as to the various circumstances underwhich the trial Court will be justified in exercisingits jurisdiction under Section 143A(1) of the Act bydirecting the accused person to pay the interimcompensation of 20% to the complainant. Page 19.The other reason why the order of the trialCourt under Section 143A(1) of the Act shouldcontain reasons is because it will always besubjected to challenge before this Court. ThisCourt while considering the petition will only lookfor the reasons given by the Court below whilepassing the order under Section 143A(1) of theAct. An order that is subjected to appeal orrevision should always be supported by reasons.A discretionary order without reasons is on theface of it illegal and it will be setaside on thatground alone.” 18.The judgment cited by learned counsel for the petitioner alsoindicates that the Judicial Magistrate First Class has to pass areasoned order for determining quantum of compensation which is payable to the victim looking to the facts andcircumstances each case but does not suggest any iota thatgrant of compensation as per Section 143A of the Act 1881 isof discretionary in nature. 19.From perusal of provisions of the Act 1881 considering theaims behind object of the Act 1881 and the law laid down bythe Supreme Court I am of the considered view that theamendment in Section 143A of the Act 1881 is mandatory innature therefore the learned Judicial Magistrate First Classhas rightly passed the order of interim compensation in favourof the respondent and has not committed any irregularity orillegality in passing such order. The learned 11th AdditionalSessions Judge has also not committed any irregularity orillegality in rejecting the revision filed by the petitioner whichwarrants any interference by this Court. 20.In view of the above this petition being devoid of merits isliable to be and is hereby dismissed. No order as to costs. Sd (Narendra Kumar Vyas)JudgeArun 

Summary: Section 143A of the negotiable instruments act directs the offender to pay an interim compensation of 20% of the total value of the cheque. Such a compensation is mandatory and is not discretionary since the aim and objection behind the act is to provide relief. This was decreed by the court in Hon’ble Shri Justice Narendra Kumar Vyas in Rajesh Soni vs. Mukesh Verma [CRMP No. 562 of 2021] on the 30th of June 2021. The brief facts of the case are, the petitioner gave a cheque amounting Rs. 6,50,000/- on 26.11.2018 in favour of the defendant. When the defendant deposited such a cheque in the bank, the cheque was dishonoured due to insufficient fund. On 17.12.2018, the petitioner sent a legal notice with respect to the cheque bounce but no response was received. A complaint under Section 143A of the Act was filed against the petitioner contending that the charges have already been framed wherein he has denied the charges levelled against him. The judicial magistrate issued an order on 24.12.2019, directing the petitioner to pay 20% interim compensation asper the provisions of Section 143A. Aggrieved by this, the petitioner filed a criminal revision petition. This petition was dismissed by the additional sessions judge. This is challenged by the petitioner in the present case before the Hon’ble High Court. The counsel for the petitioner contended that the order by the judicial magistrate and the additional sessions judge was perverse since the provisions of section 143A use the word ‘may’. Such a use of the word implies that the interim compensation of 20% is discretionary by the findings of the court and is not a blanket rule. After listening to the contentions of both the parties, the court held that Section 143A of the act was amended with the aim to secure the interest of the complainant along with increasing the efficacy and expediency of proceedings under Section 138 of the Act, 1881. To support this, the court relied on Bachahan Devi &amp; another Vs. Nagar Nigam, Gorakhpur &amp; another, (2008) 12 SCC 372, wherein the word ‘may’ was interpreted as, “If it appears to be the settled intention of the legislature to convey the sense of compulsion, as where an obligation is created, the use of the word “may” will not prevent the court from giving it the effect of Compulsion or obligation. Where the statute was passed purely in public interest and that rights of private citizens have been considerably modified and curtailed in the interests of the general development of an area or in the interests or removal of slums and unsanitary areas. Though the power is conferred upon the statutory body by the use of the word “may” that power must be construed as a statutory duty. Conversely, the use of the term ‘shall’ may indicate the use in optional or permissive sense. Although in general sense ‘may’ is enabling or discretional and “shall is obligatory, the connotation is not inelastic and inviolate.” Where to interpret the word “may” as directory would render the very object of the Act as nugatory, the word “may must mean ‘shall’.”