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of <h1>Court's Discretion on Interim Compensation under Section 143-A of Negotiable Instruments Act</h1> <h3>Mr. Ashwin Ashokrao Karokar, Versus Mr. Laxmikant Govind Joshi</h3> Mr. Ashwin Ashokrao Karokar, Versus Mr. Laxmikant Govind Joshi - TMI Issues Involved:1. Whether the provisions of Section 143-A of the Negotiable Instruments Act, 1881, which empower the Court to direct payment of interim compensation are mandatory or directory.2. If the provisions are directory, whether the Court has to record reasons for determining the quantum of interim compensation to be awarded as contemplated by Section 143-A (2) of the Negotiable Instruments Act, 1881.Analysis:Issue 1: Nature of Section 143-A (Mandatory or Directory)The petitions raised the question of whether Section 143-A of the Negotiable Instruments Act (N.I. Act), 1881, which allows the Court to direct payment of interim compensation, is mandatory or directory. The Court examined various precedents and interpretations of the terms 'may' and 'shall' within legal provisions. The Court noted that the word 'may' in Section 143-A(1) of the N.I. Act indicates discretion rather than an obligation. The Court also considered the legislative intent behind the amendment, which aimed to expedite the resolution of cheque dishonour cases and discourage frivolous litigation. The Court concluded that Section 143-A is discretionary, not mandatory, as it confers power upon the Court to direct interim compensation based on the facts and circumstances of each case.Issue 2: Requirement to Record Reasons for Quantum of Interim CompensationIf Section 143-A is held to be directory, the Court must record reasons for determining the quantum of interim compensation. The Court emphasized that the exercise of discretion must be reasoned, indicating the application of mind to the facts available. The Court held that the reasons must be spelled out in the order to ensure transparency and accountability in judicial decision-making. Therefore, the Court must record reasons for determining the quantum of interim compensation, which can be up to 20% of the cheque amount, based on the specific facts of each case.Conclusion:1. The provisions of Section 143-A of the N.I. Act are directory and not mandatory.2. The Court must record reasons for determining the quantum of interim compensation if it decides to award it, which can be up to 20% of the cheque amount.The impugned orders were quashed and set aside, and the matters were remanded back to the learned Special Court to decide the applications under Section 143-A of the N.I. Act afresh, in light of the above conclusions. Rule was made absolute in these terms.
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