Prospective operation of Section 143-A bars interim compensation for pre-2018 cheque dishonour proceedings.

Section 143-A of the Negotiable Instruments Act applies prospectively and cannot be used to order interim compensation for a cheque dishonour that occurred before its commencement on 01.09.2018. Where the cheque was dishonoured in June 2017 and the cause of action had already arisen before the provision came into force, a direction to deposit interim compensation is contrary to law and must be set aside. The remaining part of the order was left undisturbed.

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Issues: Whether Section 143-A of the Negotiable Instruments Act could be applied retrospectively to direct payment of interim compensation in a case where the cheque dishonour and cause of action arose before the provision came into force.

Analysis: The order directing interim compensation was challenged on the ground that the complaint related to a 2017 transaction, whereas Section 143-A came into effect only from 01.09.2018. The applicable legal position was treated as settled by the Supreme Court, namely that the provision operates prospectively and can be invoked only in cases where the offence under Section 138 is committed after its introduction. Since the cheque was dishonoured in June 2017 and the cause of action had arisen before commencement of the provision, the direction to deposit interim compensation was held to be contrary to law.

Conclusion: The direction to deposit interim compensation was invalid and was set aside to that extent, while the remaining part of the order was left undisturbed.

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