Section 143A applies to pending cheque dishonour cases, but interim compensation orders must record reasons for exercising discretion.

Section 143A of the Negotiable Instruments Act, 1881 applies to pending Section 138 cheque dishonour proceedings because it is a beneficial amendment intended to reduce delay and strengthen cheque credibility. The trial court's power to direct interim compensation is discretionary, however, and an order under Section 143A must record reasons showing why that discretion is exercised in the particular case. A non-speaking order is arbitrary and cannot stand. The Madras HC accordingly set aside the interim compensation order and directed expeditious completion of the trial.

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Issues: (i) Whether Section 143A of the Negotiable Instruments Act, 1881 applies to pending proceedings under Section 138; (ii) Whether an order directing payment of interim compensation under Section 143A must contain reasons.

Issue (i): Whether Section 143A of the Negotiable Instruments Act, 1881 applies to pending proceedings under Section 138.

Analysis: The provision was introduced as a beneficial amendment to address delay in cheque dishonour prosecutions and to strengthen the credibility of cheque transactions. A purposive construction was adopted, following the reasoning applied by the Supreme Court in relation to the allied amendment in Section 148. On that approach, the amendment was treated as applicable even to proceedings already pending when it came into force.

Conclusion: Section 143A applies to pending proceedings.

Issue (ii): Whether an order directing payment of interim compensation under Section 143A must contain reasons.

Analysis: The word used in Section 143A(1) is "may", which confers discretion on the trial court and does not mandate interim compensation in every case. Because the power is discretionary and the order is open to challenge, the court must record reasons showing why the discretion is being exercised in a particular case. An order lacking reasons is arbitrary and cannot be sustained.

Conclusion: A reasoned order is mandatory when interim compensation is directed under Section 143A.

Final Conclusion: The interim compensation order was set aside, and the petitions were allowed, with directions for expeditious completion of the trial proceedings.

Ratio Decidendi: A beneficial amendment conferring a discretionary power to direct interim compensation in cheque dishonour cases applies to pending proceedings, but the discretion must be exercised on case-specific reasons recorded in the order.

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