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Issues: (i) Whether the power to direct interim compensation under Section 143A of the Negotiable Instruments Act, 1881 is mandatory or discretionary; (ii) Whether interim compensation under Section 143A can be directed against persons arraigned as accused under Section 141 of the Negotiable Instruments Act, 1881 though they are not the drawer of the cheque.
Issue (i): Whether the power to direct interim compensation under Section 143A of the Negotiable Instruments Act, 1881 is mandatory or discretionary.
Analysis: The provision uses the expression "may" and, as clarified by the Supreme Court, the power under Section 143A is directory and not mandatory. The Court deciding an application under the provision must prima facie evaluate the complainant's case, the defence set up by the accused, the nature of the transaction, the financial condition of the accused, and other relevant circumstances. The presumption under Section 139 of the Negotiable Instruments Act, 1881 is rebuttable and cannot by itself justify an automatic direction for payment of interim compensation. Brief reasons reflecting consideration of relevant factors are required.
Conclusion: The provision is discretionary and not mandatory.
Issue (ii): Whether interim compensation under Section 143A can be directed against persons arraigned as accused under Section 141 of the Negotiable Instruments Act, 1881 though they are not the drawer of the cheque.
Analysis: Section 143A authorises a direction only against the drawer of the cheque. Section 141 creates a deeming liability for offences by companies, but it does not convert directors or authorised signatories into the drawer for the purpose of interim compensation. The deeming fiction under Section 141 cannot be imported into Section 143A in the absence of express legislative language. A direction under Section 143A therefore cannot be sustained against persons who are proceeded against only by virtue of Section 141.
Conclusion: Interim compensation cannot be directed against non-drawer accused merely because they are liable to prosecution under Section 141.
Final Conclusion: The interim compensation orders were set aside because they were passed on an incorrect view of law and without due consideration of the relevant factors governing Section 143A.
Ratio Decidendi: The power under Section 143A of the Negotiable Instruments Act, 1881 is discretionary and can be exercised only against the drawer of the cheque on a reasoned prima facie assessment of the relevant factors; the deeming liability under Section 141 cannot be read into that provision.