TMI Blog2022 (3) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... e Cr.P.C. the Court trying an offence under Section 138 may order drawer to pay interim compensation to the complainant. If an order is passed for payment of interim compensation, it shall be paid within 60 days from the date of the order. The Legislature has cautiously worded sub-section (1) of Section 143A not to make it mandatory in all cases where clauses (a) and (b) of sub-section (1) would empower the learned Magistrate before whom proceedings are pending consideration to award interim compensation. It is the discretion conferred, as the word used is may . If the order is passed, then the payment is mandatory - it is not that 20% has to be the interim compensation in every case. Here again the discretion is required to be exercised by the learned Magistrate as the interim compensation can vary from 1% to 20% but shall not exceed 20%. he language of Section 143A being couched with such discretion, the discretion if not exercised in a manner known to law, becomes an arbitrary action. In the case at hand, there is not even a semblance of application of mind on the part of the learned Magistrate as the learned Magistrate misconstrues the provision that in the event the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eelavant, the learned counsel appearing for the petitioner and Shri B.V.Somapur, the learned counsel appearing for the respondent no.1 and Shri R.K.Kulkarni, the learned counsel appearing for the respondent no.2. 3. Brief facts leading to the filing of the present petition, as borne out from the pleadings, are as follows: a) The respondent and the petitioner claim to know each other for close to 20 years. It is the claim of the respondent/ complainant that owing to family necessities and for business purposes, the petitioner/accused appears to have approached the complainant on 12.12.2020 for availing a loan of rupees two crores in cash which was acceded. The same was termed by the complainant as a hand loan and the assurance according to the complainant was that the accused would return the money within one month on or before 11.1.2021. In discharge of her liability the accused appears to have issued a cheque dated 11.01.2021 for rupees two crores drawn on Syndicate Bank. At the time of issuing the cheque, it is the case of the complainant that the accused had assured that she has sufficient funds in the account and the cheque would be honoured. The cheque was presented but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of 20% of the claim amount. 5. On the other hand, the learned counsel appearing for the respondents would contend that presumption is operating against the petitioner in terms of provisions of the Act. Since the petitioner has issued the cheque, the liability is admitted and, therefore, the order directing 20% is in tune with law and would seek dismissal of the criminal petition. 6. I have given my anxious consideration to the submissions made by the respective learned counsel appearing on both sides and perused the material on record. 7. The afore-narrated facts are not in dispute. The issue is not with regard to validity of the cheque or otherwise. The only issue that falls for my consideration is whether the Criminal Court hearing C.C.No.67 of 2021 could have passed the order directing payment of 20% without recording any reason for grant of such interim compensation. 8. The Act was amended by the Amendment Act of 2018. It is by way of this amendment Section 143A came to be inserted. The relevant text of the amendment concerning Section 143A of the Act reads as follows: 1. Short title and commencement.- (1) This Act may be called the Negotiable Instrume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be permitted to be withdrawn in terms of the said amendment. It is invoking the afore-quoted provision of law an application was filed by the complainant seeking interim compensation of 20% of the amount involved. The petitioner files her objections in detail and the Court considering the application passes an order, relevant portion of which reads as follows:- 7. Point No.1: The complainant before the court is drawee and accused is drawer of cheque in question, upon which the present case has been filed by the complainant against the accused for nonpayment of amount covered under cheque which was dishonoured for the reason of insufficient funds in the account of accused to honour the cheque. xxx.xxx.xxx.xxx. Therefore, on going through entire amended provision of Negotiable Instruments Amendment Act, 2018 makes it clear that, if the drawer not pleaded the guilt, then he shall pay the interim compensation at the rate of 20% of the cheque amount, hence the amended provision clearly applicable to the case on hand, because, the accused did not plead the guilt, hence before going for trial she has to pay the 20% of the cheque amount as interim compensation to the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r side of the coin of discretion available to the learned Magistrate is that the amount should not exceed 20%. Therefore, it is not that 20% has to be the interim compensation in every case. Here again the discretion is required to be exercised by the learned Magistrate as the interim compensation can vary from 1% to 20% but shall not exceed 20%. he language of Section 143A being couched with such discretion, the discretion if not exercised in a manner known to law, becomes an arbitrary action. 13. Application of mind in exercise of discretion is discernible only in an order that contains reasons, and reasons can be found only if they are recorded in writing, and if reasons are recorded in writing, it is only then the order will be within the counters of law. 14. The consequence of non-payment of interim compensation so awarded is penal, as proceedings can be initiated by the complainant under Sections 357 and 421 of the Cr.P.C. which are recoverable as fine paid under Section 421 of the Cr.P.C. The impugned action now alleged is that in terms of the order passed by the competent Court, the proceedings for attachment of the property are initiated by the complainant and the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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