Court Upholds Order for Interim Compensation under Negotiable Instrument Act

The court affirmed the Metropolitan Magistrate's order directing the petitioner to pay Rs. 4,00,000/- as interim compensation under Section 143A of the Negotiable Instrument Act. The court found the order lawful, dismissing the revisional application and vacating any interim orders. The petitioner's claim of lack of opportunity of hearing was rejected, noting the presence of counsel who declined to submit due to an adjournment request denial. The court emphasized the legal conditions for interim compensation and highlighted that failure to deposit such compensation should not lead to additional penalties.

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Issues Involved:
1. Legitimacy of the interim compensation order under Section 143A of the Negotiable Instrument Act.
2. Alleged misuse of blank signed cheques by the opposite party.
3. Whether the petitioner was afforded a reasonable opportunity of hearing.

Summary:

Legitimacy of the Interim Compensation Order:
The petitioner challenged the impugned order dated 30.09.2019 by the Metropolitan Magistrate, 4th Court, Kolkata, directing the petitioner to pay interim compensation of Rs. 4,00,000/- under Section 143A of the Negotiable Instrument Act. The court noted that Section 143A allows for interim compensation not exceeding 20% of the cheque amount, payable within 60 days, and recoverable as a fine under Section 421 of the Code of Criminal Procedure, 1973.

Alleged Misuse of Blank Signed Cheques:
The petitioner argued that the opposite party had taken 16 blank signed cheques as security and misused one of them by filling in an amount of Rs. 4,00,000/- and presenting it for encashment. The petitioner contended that this act was an abuse of the process of law under Section 138 of the N.I. Act.

Opportunity of Hearing:
The petitioner claimed that the Learned Magistrate did not afford a reasonable opportunity of hearing before passing the order. However, it was observed that the petitioner's counsel was present but declined to submit anything as his request for an adjournment was not granted.

Legal Precedents and Conclusion:
The court referred to the Supreme Court's judgment in G.J. Raja vs. Tejraj Surana, which outlines the conditions and recovery methods for interim compensation under Section 143A. The court also cited Noor Mohammad vs. Khurram Pasha, emphasizing that failure to deposit interim compensation should not result in additional disabilities like denial of the right to cross-examine witnesses.

Final Judgment:
The court found the order under revision to be in accordance with the law, causing no prejudice to the petitioner. Consequently, the revisional application CRR 557 of 2020 was dismissed, and the order dated 30.09.2019 was affirmed. No order as to costs was made, and all connected applications were disposed of. The interim order, if any, was vacated, and a copy of the judgment was directed to be sent to the Trial Court for compliance.

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