Interim compensation in cheque dishonour cases is discretionary, and defence documents must be considered before deciding the application.

Section 143A of the Negotiable Instruments Act is directory, not mandatory, because its text uses "may", caps interim compensation at 20% of the cheque amount, and requires a reasoned exercise of discretion rather than automatic relief. In deciding interim compensation, the trial court must also consider the accused's relevant documentary material and apply the Section 294 CrPC procedure for admission or denial of documents. A mechanical rejection of defence material is impermissible at this stage, though the exercise need not become a full trial. The interim compensation order was set aside and the matter remanded for fresh consideration.

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Issues: (i) whether Section 143A of the Negotiable Instruments Act, 1881 is mandatory or directory in nature; (ii) whether the trial court, while considering an application for interim compensation under Section 143A, can ignore the accused's documentary material and the procedure under Section 294 of the Code of Criminal Procedure, 1973.

Issue (i): whether Section 143A of the Negotiable Instruments Act, 1881 is mandatory or directory in nature.

Analysis: The statutory language uses the word "may" and the scheme of the provision shows that interim compensation is contemplated during trial, subject to the ceiling of 20% of the cheque amount. The provision is materially different from Section 148 of the Act, which operates at the appellate stage after conviction. The legislative object is to provide interim relief, but the text does not make the grant automatic in every case. The Court also noted that the absence of a separate default sentence and the need for a reasoned exercise of power indicate that the Magistrate retains discretion.

Conclusion: Section 143A is directory and not mandatory.

Issue (ii): whether the trial court, while considering an application for interim compensation under Section 143A, can ignore the accused's documentary material and the procedure under Section 294 of the Code of Criminal Procedure, 1973.

Analysis: The accused had produced documents said to bear on the existence and extent of liability, and the Court held that such materials could not be brushed aside mechanically at the stage of deciding interim compensation. The procedure for admission or denial of documents under Section 294 of the Code of Criminal Procedure, 1973 applies to cheque dishonour proceedings, and a reasoned order under Section 143A must reflect consideration of the relevant defence material without converting the exercise into a full trial.

Conclusion: The trial court must consider the relevant documentary material and follow the procedure under Section 294 of the Code of Criminal Procedure, 1973 before deciding the application.

Final Conclusion: The impugned order directing interim compensation was set aside and the matter was remanded for fresh decision on the Section 143A application in accordance with law and after due consideration of the parties' submissions and documents.

Ratio Decidendi: The power under Section 143A of the Negotiable Instruments Act, 1881 is discretionary, not automatic, and a reasoned determination on interim compensation must be made after considering admissible defence material under the criminal procedure framework.

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