2022 (5) TMI 464 - HC - Indian Laws

Dishonor of Cheque - Withdrawal of present petition to the extent of quashing of criminal complaint - Section 143(A) of Negotiable Instruments Act is only directory in nature or not - HELD THAT - Admittedly no opportunity was given to the petitioner to file his reply before passing of the impugned order despite the fact that he had not pleaded guilty to the notice of accusation served upon him under Section 138 of Negotiable Instruments Act - From the perusal of impugned order it appears that the Trial Court granted interim compensation under Section 143(A) of Negotiable Instruments Act just in a mechanical manner and there is no application of mind as to why the said compensation has to be awarded. The Trial Court misread Section 143(A) of Negotiable Instruments Act and treated the said provision of law as mandatory in nature whereas the legal position is otherwise. The matter is remanded back to learned Trial Court to dispose of the matter regarding grant of interim compensation to the complainant/respondent under Section 143A in accordance with law within one month of the receipt of certified copy of this order - Petition allowed by way of remand.

Summary

Issues:
1. Quashing of criminal complaint bearing NACT-140/2020
2. Challenge to order dated 24.09.2021, Annexure P-4, regarding deposit of interim compensation

Analysis:
Issue 1: Quashing of criminal complaint bearing NACT-140/2020
The petitioner sought to withdraw the petition to quash the criminal complaint bearing NACT-140/2020 and requested liberty to raise the same before the Trial Court. The petitioner challenged an order dated 24.09.2021, Annexure P-4, passed by the Trial Court, directing the deposit of Rs.1,20,000 as interim compensation under Section 143(A) of the Negotiable Instruments Act. The respondent had filed a criminal complaint against the petitioner under Section 138 of the Act, and the Trial Court directed the petitioner to deposit 20% of the cheque amount as interim compensation to the complainant.

Issue 2: Challenge to order dated 24.09.2021, Annexure P-4, regarding deposit of interim compensation
The Trial Court, after finding a prima facie case against the accused, directed the deposit of interim compensation based on Section 143(A) of the Negotiable Instruments Act. The petitioner contended that the order was passed mechanically without proper application of mind. The counsel argued that recent judgments from Delhi High Court and Karnataka High Court held that Section 143(A) is directory, not mandatory. The Court noted that the Trial Court's order lacked proper reasoning and misinterpreted the law as mandatory. Consequently, the Court set aside the impugned order and remanded the matter back to the Trial Court for further consideration within one month of the order's receipt.