TMI Blog2022 (7) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... N.I. Act were filed prior to Amendment Act 20 of 2018 i.e. prior to 1/9/2018. It is thus apparent that there are inherent differences between the provisions of Section148 and Section 143-A of the N.I. Act, due to which what has been held in respect of the word may , as occurring in Section 148 of the N.I. Act in Surinder Singh Deswal, may not be true in respect of the word may , as occurring in Section 143-A(1) of the N.I. Act, specifically so when both these provisions operate in different arenas. From a plain reading of Section 143-A of the N.I. Act, it is clear that it is a provision enacted as an interim measure, during the pendency of the trial, when the guilt of the accused is still to be determined. The word may , thus used in Section 143-A (1) of the N.I. Act, has to be construed in light of the fact that the direction to award compensation, is at the trial stage and as an interim measure. The fact that even in cases under Section 138 of the N.I. Act, the presumption under Section 139 of the N.I. Act, is not absolute, but is rebuttable, also has to be borne in mind. That apart, in a particular case, given the requirement of Section 138 of the N.I. Act, it may so ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Court to the facts available before it in the application of the law to such facts. It can thus be concluded that the provisions of Section 143-A of the N.I. Act are directory and not mandatory - The Court has to record reasons for determining the quantum of interim compensation, if it comes to the conclusion based upon the fact position availing, that it is a case which deserves award of interim compensation, which can be anywhere upto 20% of the cheque amount. The matters are remanded back to the learned Special Court to decide the applications under Section 143-A of the N.I. Act afresh - Petition allowed by way of remand. - CRIMINAL WRIT PETITION NO . 48/2022 WITH CRIMINAL WRIT PETITION NO . 71/2022 - - - Dated:- 7-7-2022 - AVINASH G. GHAROTE, J. Mr. Madhur A. Deo, Advocate for petitioner Mr. Bhushan Mohta, Advocate for respondent J U D G M E N T 1. Heard Mr. Madhur Deo, learned Counsel for the petitioner and Mr. Bhushan Mohta, learned Counsel for the respondent. Rule. Rule made returnable forthwith. Heard finally with the consent of the learned Counsel for the rival parties. 2. The petitions raise two interesting questions : (i) Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facie reading of the complaint may come to a conclusion that the presumption stood rebutted and in such cases, the question of directing interim compensation would not arise at all. He therefore submits, that in a given case, it would be permissible for the Court to even reject the application under Section 143-A of the N.I. Act for interim compensation. 4.1. Reliance for the above proposition is placed on L.G.R. Enterprises Vs. P. Anbazhagan, AIR Online 2019 Mad 801 (para 6 and 8), which holds that the word may , as occurring in Section 143-A(1) of the N.I. Act is discretionary. Reliance is also placed on Ajay Vinodchandra Shah Vs. State of Maharashtra and another, 2019 (4) Mh.L.J. 705, in which it is held that Section 143-A(1) of the N.I. Act leaves it to the discretion of the Court to pass an order of interim compensation upto the ceiling limit of 20% of the cheque amount. 4.2. Further reliance is placed upon K. Ranjithkumar Vs. K. Mathivanan, AIR Online 2021 Mad 2542 , which reiterates the position in L.G.R. Enterprises (supra). Reliance is also placed upon JSB Cargo and Freight Forwarder Pvt. Ltd. and Others Vs. State and Another, 2021 SCC Online Del 5425, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment to the provisions to the N. I. Act was effected on 2nd August 2018, by way of a Notification published in the official gazette and it came into effect on 1st September, 2018. Inviting my attention to the statement of object and reasons, he submits that the purpose for enacting the Section 143-A and 148 of the N.I. Act, was to obviate, the delay as occasioned in the decision of the matters of Section 138 of the N.I. Act. He submits that use of the word may , does not mean that the provision is discretionary by relying upon Bachahan Devi and another Vs. Nagar Nigam, Gorakhpur and another, 2008 (12) SCC 372 (paras 31 to 33) ;Dilip K. Basu Vs. State of West Bengal and Ors, 2015 (8) SCC 744 (para 9); Surinder Singh Deswal @ Col. S. S. Deswal and others Vs. Virender Gandhi and another, 2019 (11) SCC 341. 5.1. Further reliance is placed upon, (i) Rajesh Soni s/o Shri P. R. Soni Vs. Mukesh Verma s/o Late Shri J. P. Verma, CRMP No.562 of 2021, decided on 30/06/2021 by the learned Single Judge of Chhattisgarh High Court, holding that Section 143-A(1) is mandatory in nature (para 19) and Modi Cements Vs. Kuchil Kumar Nandi, 1988 (3) SCC 249 , which dilates upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of charge. 4. Something in the title of person or persons for whose benefit the power is to be exercised. The complainant of Section 138 proceeding. 5.4. Surinder Singh Deswal (supra), according to the learned Counsel Mr. Bhushan Mohta, while interpreting the provisions of Section 148 of the N.I. Act, therefore, has held that the word may as occurring therein has to be read as shall considering that the said provision made it a duty of the Court to direct deposit of such sum which shall be minimum of 25% of the fine or compensation awarded by the Trial Court in an appeal filed by the drawer against conviction under Section 138 of the N.I. Act and not to so direct would be an exception for which reasons will have to be recorded. 5.5. Learned Counsel Mr. Mohta, also submits that JSB Cargo and Freight Forwarder Pvt. Ltd. (supra) upon which reliance is placed by Mr. Deo, learned Counsel for the petitioner, according to Mr. Mohata, does not consider Frederic Guilder Julius; Bachan Devi and D.K. Basu (supra) and therefore, cannot be considered to be laying down the correct position. 5.6. He further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r contended that the impugned order does not disclose any application of mind but has been passed merely considering that it was the duty of the Court to do so and therefore cannot be sustained. 6.4. Reliance is also placed upon Smt. Vijaya w/o Shiddalingayya Hiremath (Vijaya d/o Shadaksharappa) Vs. Shekharappa s/o Shivappa Madinur, Criminal Petition No.100261/2022, decided on 17/2/2022, by a learned Single Judge of the Karnataka High Court, holding Section 143-A of the N.I. Act to be directory. 7. The principles of interpretation as are spelt out from the various judicial precedents relied upon by the learned Counsels are as follows : (i). In S.S. Bola and others (supra) it was held that the objects and reasons of a statute are to be looked into as an extrinsic aid to find out legislative intent, only when the meaning of the statute by its ordinary language is obscure or ambiguous. (ii). Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. (supra) holds that Judicial interpretation of given words in one statute cannot extend to same words in another statute and the Court should listen attentively towards what the legislature does not say. (iii). In Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141 of the Constitution. (xv). Synthetics and Chemicals Ltd. (supra) dilates upon what could be considered as a binding precedent. 7.1. In so far as the interpretation of the word may , is concerned, the following judgments dilate upon the same : (i). Frederic Guilder Julius (supra) is on the expression it shall be lawful (pg. 222) and though it is held that the expression being according to their natural meaning permissive or enabling words only, however, if the words are coupled with a duty which requires the person in whom the power is reposed in case there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, the same, shall become obligatory and mandatory. (ii). Jogendra Singh (supra), dilates on the issue as to when may can be construed as shall and holds that there is no doubt that the word ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in Section 143-A(1) of the N.I. Act is held to empower the Court with a discretion to direct interim compensation and holds that it is not necessary that in all cases the Trial Court must necessarily direct the interim compensation to be paid and such direction should be given only on a case to case basis based upon the facts of each case. (ii). In Ajay Vinodchandra Shah (supra), it has been held that Section 143-A(1) of the N.I. Act leaves it to the discretion of the Court to pass an order of interim compensation upto the ceiling limit of 20% of the cheque amount and a difference is found between the provisions of Section 143-A(1) and 148 of the N.I. Act (para 19). (iii). K. Ranjithkumar (supra) reiterates the position in L.G.R. Enterprises (supra). (iv). JSB Cargo and Freight Forwarder Pvt. Ltd (supra), wherein a learned Single Judge after considering Surinder Singh Deswal (supra); L.G.R. Enterprises (supra) and Ajay Vinodchandra Shah (supra), holds that the provisions of Section 143-A(1) of the N.I. Act, were directory and not mandatory (para 62). (v). Mr. D.L. Sadashiva Reddy (supra) which holds that the power under Section 143-A(1) of the N.I. Act is di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court trying an offence under Section 138 may order the drawer of the cheque to pay interim compensation to the complainant, in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and in any other case, upon framing of charge. The interim compensation so payable shall be such sum not exceeding twenty per cent of the amount of the cheque; and (ii) to insert a new section 148 in the said Act so as to provide that in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent of the fine or compensation awarded by the trial court. 4. The Bill seeks to achieve the above objectives. The basic purpose for enacting Section 143-A of the N.I. Act thus appears to be to address the delay in decision of cheque dishonour cases and to discourage frivolous and unnecessary litigation. 8.2. To consider the nature, scope and ambit of Section 143-A of the N.I. Act, it is necessary to consider its language, for which the same is reproduced as under : 143-A. Power to direct interim compensation.- (1) Notwithstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the provision, consequences likely to ensue or inconvenience likely to result if the provision is read one way or the other and many more considerations relevant to the issue. It has also been held that where several statutes confer power on authorities and officers to be exercised by them at their discretion, though the power is in permissive language, such as, it may be lawful , it may be permissible , it may be open to do , etc. in certain circumstances, however, if such power is coupled with duty which must be exercised, the same therefor must be held to be mandatory. It has been held that the ultimate rule in construing auxiliary verbs like may and shall is to discover the legislative intent; and the use of the words may and shall is not decisive of its discretion or mandate. The use of the words may and shall may help the Courts in ascertaining the legislative intent without giving to either a controlling or a determinating effect. The Courts have further to consider the subject-matter, the purpose of the provisions, the object intended to be secured by the statute which is of prime importance, as also the actual words employed, and where the legislature u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e use of expressions like may or as nearly as may be by the legislature, at least prima facie indicates directory nature. State of U.P. vs. B.R. Upadhya, AIR 1961 SC 751; (ii) The circumstance that the statute itself provides consequences of breach or noncompliance, normally suggests a mandatory nature; Maqbool Ahmad v. Onkar Pratap Narain Singh, AIR 1935 PC 85, p. 88, Manilal Shah v. Sardar Mahmad, AIR 1954 SC 349; (iii) A provision couched in negative form, generally suggests mandatory nature; Affirmative words, simplicitor, generally suggest directory nature; M. Pentiah v. Muddla, AIR 1961 SC 1107; Dharamdeo Rai v. Ramnagina Rai, (1972) 1 SCC 460; (iv) A procedural rule, should ordinarily, not be construed as mandatory, If a provision relates to performance of any public duty and the invalidation of any act done in disregard of that provision causes serious prejudice to those for whose benefit it is enacted and at the same time, who have no control over the performance of the duty, such provision should be treated as directory; Dattatraya Moreshwar (supra); (v) If a statute confers a concession or privilege and prescribes a mode of acquiring it, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to deposit such sum which shall be a minimum of 20% of the fine or compensation awarded by the trial court and the word used is not shall and therefore the discretion is vested with the first appellate court to direct the appellant-accused to deposit such sum and the appellate court has construed it as mandatory, which according to the learned Senior Advocate for the appellants would be contrary to the provisions of Section 148 of the NI Act as amended is concerned, considering the amended Section 148 of the NI Act as a whole to be read with the Statement of Objects and Reasons of the amending Section 148 of the NI Act, though it is true that in the amended Section 148 of the NI Act, the word used is may , it is generally to be construed as a rule or shall and not to direct to deposit by the appellate court is an exception for which special reasons are to be assigned. Therefore amended Section 148 of the NI Act confers power upon the appellate court to pass an order pending appeal to direct the appellant-accused to deposit the sum which shall not be less than 20% of the fine or compensation either on an application filed by the original complainant or even on the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w relating to right of action and right of appeal even though remedial is substantive in nature. (iii) Every litigant has a vested right in substantive law but no such right exists in procedural law. (iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished. (v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication. held that fourth and fifth principles were apposite to the situation, and found as under : 17. The provisions contained in Section 143-A have t wo dimensions. First, the Section creates a liability in that an accused can be ordered to pay over up to 20% of the cheque amount to the complainant. Such an order can be passed while the complaint is not yet adjudicated upon and the guilt of the accused has not yet been determined. Secondly, it makes available the machinery for recovery, as if the interim compensation were arrears of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stage that is even before the pronouncement of guilt or order of conviction, Section 148 of the Act applies at the appellate stage where the accused is already found guilty of the offence under Section 138 of the Act. It may be stated that there is no provision in Section 148 of the Act which is similar to subsection (5) of Section 143-A of the Act. However, as a matter of fact, no such provision akin to sub-section (5) of Section 143-A was required as Sections 421 and 357 of the Code, which apply post-conviction, are adequate to take care of such requirements. In that sense said Section 148 depends upon the existing machinery and principles already in existence and does not create any fresh disability of the nature similar to that created by Section 143-A of the Act. Therefore, the decision of this Court in Surinder Singh Deswal [ Surinder Singh Deswal v. Virender Gandhi, (2019) 11 SCC 341 : (2019) 3 SCC (Cri) 461 : (2019) 3 SCC (Civ) 765 : (2019) 8 Scale 445] stands on a different footing. 9. Thus, in view of what has been held in G. J. Raja (supra) the following points of distinction between the provisions of Section 148 and Section 143-A of the N.I. Act, can be culled ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a Tahsildar unless the arrears of revenue which were due, were paid along with the penalty or interest and the cost of arrest and of the notice of demand as also the cost of his subsistence during detention. 6. Does not create any fresh disability as in view of Section 357 and 421 of Cr.P.C. Section 148 depends upon the existing machinery already in existence. Creates a fresh disability. The difference was also noticed in Ajay Vinodchandra Shah (supra). 9.1. Taking into consideration the legal position as flowing from the judicial precedents, as stated above, it would thus be apparent that there are inherent differences between the provisions of Section148 and Section 143-A of the N.I. Act, due to which what has been held in respect of the word may , as occurring in Section 148 of the N.I. Act in Surinder Singh Deswal (supra), may not be true in respect of the word may , as occurring in Section 143-A(1) of the N.I. Act, specifically so when both these provisions operate in different arenas. The applicability of Section 148 of the N.I. Act is at the appellate stage, where right to the compensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intainable. To direct the grant of interim compensation, in such cases, merely because of the existence of a cheque, by holding that doing so is mandatory, would not be justifiable. 9.3. It is further material to note that the power to direct interim compensation under Section 143-A of the N.I. Act, can be equated with the provisions as contained in Order XXXVIII Rule 5 of the C.P.C., which confers a power upon the Court to direct the defendant to furnish security in such sum as may be specified, during the pendency of the suit, which provision is directory in nature and the use of the power is discretionary. 9.4. Section 143-A of the N.I. Act, though enacted with an intent to ensure speedy disposal of the proceeding pending under Section 138 of the N.I. Act, the said intent, insofar as Section143-A of the N.I. Act is concerned, does not make the provision mandatory, as what is conferred upon the Court by virtue of the said provision is a discretion to direct interim compensation and no right is created in the complainant under it, to demand the entitlement to compensation. Grant of interim compensation, would be at the discretion of the Court, based upon consideration of var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions, which operate in two totally different situations and at two different stages as discussed earlier and therefore what has been held in Hyder Consulting (UK) Ltd. (supra) would clearly not be applicable. 9.8. The word interim , by its very nature denotes something which is not final, impermanent; temporary; meanwhile; meantime; and would thus govern a situation, which considering the facts prevailing and given the existence of the relevant factors, and the power to award interim compensation, would require the exercise of the discretion by the Court to ensure grant of some relief, if the circumstances so warrant, considering which, again it will have to be held that the power under Section 143-A of the N.I. Act, is discretionary. 9.9. It is further material to note that the legislature was aware of the provisions of Sections 138 to 147 of the N.I. Act, the purpose for which they were enacted, the delays which were being caused in the disposal of the proceedings, which is evident from the aims and object of the amending Act 20 of 2018, it was thus open for the legislature to have used an express language that in all cases under Section 138 of the N.I. Act, which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are also proceedings in the Court of first instance, and thus the direction to deposit 20% of the cheque amount ought to be held as directory, as at that stage, there is as yet determination of the liability of the person issuing the cheque. 9.11. Even if Section 143-A (3) of the N.I. Act provides for a time limit of 60 days to pay the interim compensation extendable by 30 days, fixing a time limit for payment of interim compensation would not render Section 143-A of the N.I. Act mandatory for in case the Special Court, chooses to exercise its discretion to award interim compensation, it cannot be said that the interim compensation would be payable at any time, at the choice of the accused, for which reason time restraints have been incorporated, otherwise the provision would have been ineffective. 9.12. Though Section 143-A (4) of the N.I. Act provides for repayment of the amount of interim compensation, upon acquittal of the accused, the said provision is in the nature of restitution, as once the complaint is dismissed by the acquittal of the accused or otherwise, for any other reason, the complainant becomes dis-entitled to the interim compensation awarded and thus there h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose for which it was enacted i.e. to avoid delays. 10. In my considered opinion, in view of the discussion above, it has to be held that Section 143-A of the N.I. Act, is discretionary and not mandatory and the view taken in L.G.R. Enterprises (supra) holding that the word may , as occurring in Section 143-A(1) of the N.I. Act empowers the Court with a discretion to direct interim compensation and it is not necessary that in all cases the trial Court must necessarily direct the interim compensation to be paid and such direction should be given only on a case to case basis based upon the facts of each case, which is followed in K. Ranjithkumar (supra); in Ajay Vinodchandra Shah (supra) to the extent holding that Section 143-A(1) of the N.I. Act leaves it to the discretion of the Court to pass an order of interim compensation upto the ceiling limit of 20% of the cheque amount and a difference is found between the provisions of Section 143-A(1) and 148 of the N.I. Act, though Ajay Vinodchandra Shah (supra), it has been declared not to be a good law, in Surinder Singh Deswal (supra) only insofar as consequences of non-compliance of condition of suspension of sentence is concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to fathom what weighed with the Court passing the order/judgment to hold one way or another, and thus make the exercise of discretion, to be struck down for nonapplication of mind and thus any order exercising or refusing to exercise discretion to award interim compensation will have to spell out the reasons for exercise of such exercise. 12. Thus, my answers to the above two questions are as under : (i) Whether the provisions of Section 143-A of the Negotiable Instruments Act, 1881, which empower the Court to direct payment of interim compensation are mandatory or directory and The provisions of Section 143-A of the N.I. Act are directory and not mandatory. (ii) In case it is held that the same is directory, whether the Court has to record reasons for determining the quantum of interim compensation to be awarded as contemplated by Section 143-A (2) of the Negotiable Instruments Act, 1881 ? The Court has to record reasons for determining the quantum of interim compensation, if it comes to the conclusion based upon the fact position availing, that it is a case which deserves award of interim compensati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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