2023 (11) TMI 746 - HC - Indian Laws

Court Rules Section 143-A Prospective, Overturns Interim Compensation Order for Pre-Amendment Offense.

The court quashed the trial court's order dated 24.12.2018, which directed the accused to deposit interim compensation under Section 143-A(2) of the ... Deposit of interim compensation under Section 143-A(2) of the Negotiable Instruments Act, 1881 - HELD THAT:- Perused the Section 143-A of the Negotiable Instruments (Amendment) Act, 2018 (20 of 2018). As per said Amendment Act, trial Court is vested with power to direct accused person to deposit interim compensation not exceeding 20% of the amount of the cheque. Section 143-A (3) provides that interim compensation shall be paid within sixty days from the date of order under Sub-section (1) and Court may also extend the said period if sufficient cause is being shown by the drawer of the cheque. Section 143(4) lays down that if drawer of cheque is acquitted, Court shall direct the complainant to repay to the drawer the amount of interim compensation with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial years, within sixty days from the date of the order. Since, application of Section 143-A of the Negotiable Instruments (Amendment) Act, 2018 (20 of 2018) was held to be prospective in nature and in present case complaint case was filed on 25.08.2018 and amendment was brought into force on 01.09.2018, therefore, trial Court has committed an error in directing payment of interim compensation under Section 143-A of the Negotiable Instruments (Amendment) Act, 2018 (20 of 2018). Petition allowed. Issues involved: Challenge to order directing deposit of interim compensation under Section 143-A(2) of the Negotiable Instruments Act, 1881 based on the prospective application of the Amendment Act of 2018.Summary:Issue 1: Prospective application of Amendment Act of 2018The petitioner challenged the trial court's order directing the accused to deposit interim compensation under Section 143-A(2) of the Negotiable Instruments Act, 1881, dated 24.12.2018. The petitioner argued that the amendment brought into force on 01.09.2018 would not apply to their case as the complaint was filed on 25.08.2018. The petitioner contended that the trial court erred in allowing the application for deposit of interim compensation, as the Amendment Act of 2018 operates prospectively. The court examined Section 143-A of the Negotiable Instruments (Amendment) Act, 2018, which vests the trial court with the power to direct the accused to deposit interim compensation not exceeding 20% of the cheque amount. It further elaborated on the provisions regarding the payment and recovery of interim compensation. The petitioner relied on a judgment by the Apex Court to support the argument that Section 143-A is prospective in operation and can only be applied to cases where the offence was committed after the introduction of the said section in the statute book. As the complaint in this case was filed before the amendment came into force, the court held that the trial court erred in directing the payment of interim compensation under Section 143-A of the Amendment Act of 2018.Decision:The court quashed the order dated 24.12.2018 and allowed the petition in favor of the petitioner.