Case Note & Summary
The petitioner, Guljama Shah Jahir Shah, filed a Criminal Writ Petition before the Bombay High Court, Nagpur Bench, challenging an order dated 20.12.2022 passed by the learned Judicial Magistrate, First Class, Khamgaon in Summary Criminal Case No.694/2022. The impugned order allowed an application filed by the respondent/original complainant under Section 143A of the Negotiable Instruments Act, 1881 (NI Act), awarding interim compensation of 20% of the cheque amount of Rs. 15,45,500/-, directing the petitioner/accused to deposit Rs. 3,09,100/- within sixty days. The petitioner contended that the trial court did not assign any reasons for awarding the maximum 20% compensation, relying on the coordinate Bench decision in Ashwin Ashokrao Karokar vs. Laxmikant Govind Joshi, 2023 (1) Mh.L.J.147, which held that reasons must be assigned. The petitioner also argued that the NI Act does not provide for restitution of interim compensation if the accused is acquitted, making the provision directory rather than mandatory. The High Court, after hearing both sides, found that the trial court's order was cryptic and lacked any reasoning. The Court set aside the impugned order and remanded the matter back to the trial court for fresh consideration, directing that the application under Section 143A be decided afresh after hearing both parties and assigning proper reasons. The petition was disposed of accordingly.
Headnote
A) Negotiable Instruments Act - Interim Compensation - Section 143A - Reasons to be assigned - The trial court while granting interim compensation under Section 143A of the Negotiable Instruments Act, 1881 must assign reasons for awarding compensation up to 20% of the cheque amount. In the absence of reasons, the order is unsustainable and liable to be set aside. (Paras 2-6)
B) Negotiable Instruments Act - Interim Compensation - Restitution upon acquittal - Section 143A - The Act does not provide any remedy to the accused for restitution of interim compensation if the accused is acquitted. The legislature may revisit the provisions for this purpose. (Para 4)
Issue of Consideration
Whether the order granting interim compensation under Section 143A of the Negotiable Instruments Act, 1881 is sustainable when the trial court fails to assign reasons for awarding the maximum 20% of the cheque amount.
Final Decision
The impugned order dated 20.12.2022 is set aside. The matter is remanded back to the trial court for fresh consideration of the application under Section 143A of the NI Act, after hearing both parties and assigning proper reasons. The petition is disposed of.
Law Points
- Section 143A of Negotiable Instruments Act
- 1881
- interim compensation
- reasons to be assigned
- mandatory vs directory
- restitution upon acquittal
Case Details
2023 LawText (BOM) (09) 159
Criminal Writ Petition No. 83/2023
Mr. R.D. Dhande for petitioner, Mr. Bhavin Suchak for respondent
Shri Sadguru Kaka Stone Crusher through its Proprietor:Nagendra Bhikaji Rohankar
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Nature of Litigation
Criminal writ petition challenging order granting interim compensation under Section 143A of the Negotiable Instruments Act, 1881.
Remedy Sought
Petitioner/accused sought quashing of order dated 20.12.2022 directing deposit of Rs. 3,09,100/- as interim compensation.
Filing Reason
Trial court allowed application under Section 143A NI Act without assigning reasons for awarding 20% of cheque amount.
Previous Decisions
Order dated 20.12.2022 passed by Judicial Magistrate, First Class, Khamgaon in Summary Criminal Case No.694/2022.
Issues
Whether the trial court's order granting interim compensation under Section 143A NI Act is sustainable without assigning reasons for awarding the maximum 20% of the cheque amount.
Submissions/Arguments
Petitioner argued that the trial court must assign reasons for awarding interim compensation up to 20% as held in Ashwin Ashokrao Karokar vs. Laxmikant Govind Joshi.
Petitioner also argued that the NI Act does not provide for restitution of interim compensation if accused is acquitted, making the provision directory.
Ratio Decidendi
While granting interim compensation under Section 143A of the Negotiable Instruments Act, 1881, the trial court must assign reasons for awarding compensation up to 20% of the cheque amount. An order without reasons is unsustainable.
Judgment Excerpts
By means of this Petition, the petitioner is challenging the order dated 20.12.2022 (Exh.19) passed by learned Judicial Magistrate, First Class, Khamgaon in Summary Criminal Case No.694/2022 thereby allowing the application filed by the respondent/original complainant under Section 143A of the Negotiable Instruments Act,1881 awarding interim compensation to the tune of 20 per cent of the cheque amount of Rs. 15,45,500/- and thus directing the petitioner/accused to deposit an amount of Rs.3,09,100/- within a period of sixty days.
Inviting my attention to the judgment passed by the coordinate Bench of this Court, in the case of Ashwin Ashokrao Karokar vs. Laxmikant Govind Joshi, reported in 2023 (1)Mh.L.J.147, Mr. R. D. Dhande, the learned counsel for the accused submits that while deciding the Application u/s 143A of the N.I.Act, the Court has to assign reasons for awarding interim compensation which can be anywhere up to 20% of the cheque amount.
Procedural History
The petitioner filed Criminal Writ Petition No. 83/2023 before the Bombay High Court, Nagpur Bench, challenging the order dated 20.12.2022 passed by the Judicial Magistrate, First Class, Khamgaon in Summary Criminal Case No.694/2022, which allowed the respondent's application under Section 143A NI Act and directed the petitioner to deposit interim compensation. The High Court heard the matter and disposed it on 21.09.2023.
Acts & Sections
- Negotiable Instruments Act, 1881: 143A
