Prospective application of cheque dishonour compensation provisions in pending matters, with limits on coercive recovery and liberty restrictions

Sections 143A and 148 of the Negotiable Instruments Act were treated as prospective in operation, meaning they could be applied only to orders passed after their commencement, including in pending complaints and appeals. Section 143A permits interim compensation at trial, while section 148 permits deposit in appeal after conviction, so both provisions may support monetary directions in pending proceedings. However, recovery must follow lawful modes, and non-payment cannot automatically lead to imprisonment, cancellation of bail, or cancellation of suspension of sentence. Appellate conditions must remain reasonable and cannot defeat the statutory right of appeal or protection of liberty.

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Issues: (i) whether sections 143A and 148 of the Negotiable Instruments Act, 1881 could be applied to pending complaints and appeals after their commencement; (ii) whether a condition directing deposit of compensation and providing for cancellation of bail or suspension of sentence on non-payment was legally sustainable.

Analysis: The provisions were held to operate prospectively from the date of their commencement in the sense that they could be invoked only for orders passed after that date, including in pending matters. Their language, object, and scheme showed a legislative intent to strengthen cheque credibility and provide interim or pendente lite monetary relief, while still preserving repayment protection on acquittal. The distinction between section 143A, which concerns interim compensation at trial, and section 148, which concerns deposit in appeal after conviction, showed that both provisions permit monetary directions in pending proceedings. At the same time, the Court held that recovery under these provisions must follow the modes recognized by law, and that non-payment cannot automatically justify imprisonment, cancellation of bail, or cancellation of suspension of sentence. The appellate court may impose reasonable conditions, but they cannot be so harsh as to destroy the statutory right of appeal or the protection of liberty.

Conclusion: The provisions were held applicable to pending proceedings for orders passed after commencement, but the impugned condition of cancellation of bail or suspension of sentence on non-payment was set aside, and the deposit direction was modified to 20% with extended time.

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