Prospective operation of interim compensation under Section 143A: no retrospective application to earlier cheque offences.

Section 143A of the Negotiable Instruments Act, 1881, which authorises interim compensation, affects substantive rights and therefore operates prospectively unless the legislature clearly provides otherwise. The Karnataka HC distinguished Section 148, noting that it concerns appeals against conviction and not the application of Section 143A to earlier offences. It held that Section 143A cannot be applied to complaints based on transactions committed before its insertion, and orders directing interim compensation in such pending matters were unsustainable.

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Issues: Whether Section 143A of the Negotiable Instruments Act, 1881 has prospective operation or can be applied retrospectively to offences committed before its introduction.

Analysis: The Court held that substantive provisions affecting the rights of parties are ordinarily prospective unless the statute expressly provides otherwise. It distinguished the reliance placed on Section 148 of the Negotiable Instruments Act, 1881, observing that the question there related to appeals against conviction and not to Section 143A. The Court followed the binding interpretation that Section 143A, which authorises interim compensation, applies only to offences committed after its introduction and not to pending complaints based on earlier transactions.

Conclusion: Section 143A of the Negotiable Instruments Act, 1881 is prospective in operation and cannot be applied to offences committed before its insertion. The impugned orders directing interim compensation were therefore unsustainable.

Ratio Decidendi: A statutory provision imposing interim compensation and affecting substantive rights will operate prospectively unless the legislature clearly indicates retrospective application.

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