TaxTMI 
TaxTMI 
Interim Compensation in Cheque Dishonor Cases: Discretion and Due Process, Scope of the word "May"
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....ing the interpretation and application of Section 143A of the Negotiable Instruments Act, 1881 (NI Act). The case revolved around the question of whether the provision for granting interim compensation u/s 143A(1) is mandatory or directory in nature. The Court also provided guidance on the factors to be considered while exercising the discretionary power under this section. Arguments Presented T....
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.... the evidence is adduced, rendering the accused's defense irrelevant at the stage of considering an application u/s 143A(1). Discussions and Findings of the Court The Supreme Court delved into the object of Section 143A, which was introduced to address the issue of undue delay in the final resolution of cheque dishonor cases and strengthen the credibility of cheque transactions. The Court ob....
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.... Exercising Discretion The Supreme Court provided guidance on the factors to be considered while exercising discretion u/s 143A(1): * The court must prima facie evaluate the merits of the complainant's case and the accused's defense pleaded in the reply to the application. The presumption u/s 139 alone is not a ground to direct interim compensation payment. * A direction to pay interi....
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.... found that the trial court had mechanically passed an order for the deposit of Rs. 10,00,000/- without considering the issue of a prima facie case and other relevant factors. The High Court had also failed to apply its mind. Consequently, the Supreme Court set aside the impugned orders and restored the application made by the complainant u/s 143A(1) to the file of the Judicial Magistrate First Cl....