Case Note & Summary
The petitioner, V. Krishnamurthy, proprietor of Raghvenk Industries, filed a criminal petition under Section 482 of the Code of Criminal Procedure, 1973 before the High Court of Karnataka at Bengaluru. The petitioner challenged an order dated 12-10-2021 passed by the XXVIII Additional Chief Metropolitan Magistrate, Bangalore in C.C.No.15681/2020, which directed payment of 10% interim compensation under Section 143A of the Negotiable Instruments Act, 1881 in a complaint filed by the respondent, Diary Classic Ice Creams Pvt. Ltd., for an offence punishable under Section 138 of the Act. The petitioner was a retailer and the respondent was a producer of ice cream. They had entered into an agreement in the year 2018. The petitioner was not the drawer of the cheque in question; the cheque was issued by a different entity. The learned Magistrate, while taking cognizance, directed the petitioner to pay 10% interim compensation under Section 143A. The petitioner contended that Section 143A applies only to the drawer of the cheque and not to any other accused. The respondent argued that the provision applies to all accused. The court analyzed the language of Section 143A, which uses the expression 'drawer of the cheque' and not 'accused'. The court held that the provision is intended to compensate the payee from the drawer who issued the cheque. Therefore, interim compensation under Section 143A can only be directed against the drawer of the cheque and not against any other accused who is not the drawer. The court set aside the impugned order to the extent it directed the petitioner to pay interim compensation.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 143A - Interim Compensation - Section 143A of the Negotiable Instruments Act, 1881 empowers the court to direct the drawer of the cheque to pay interim compensation to the complainant - The provision uses the expression 'drawer of the cheque' and not 'accused' - Held that interim compensation under Section 143A can only be directed against the drawer of the cheque and not against any other accused who is not the drawer (Paras 4-6).
Issue of Consideration
Whether interim compensation under Section 143A of the Negotiable Instruments Act, 1881 can be directed against an accused who is not the drawer of the cheque?
Final Decision
The petition is allowed. The impugned order dated 12-10-2021 passed by the XXVIII Additional Chief Metropolitan Magistrate, Bangalore in C.C.No.15681/2020 is set aside insofar as it directs the petitioner to pay interim compensation under Section 143A of the Negotiable Instruments Act, 1881.
Law Points
- Section 143A of Negotiable Instruments Act
- 1881 applies only to the drawer of the cheque
- not to any other accused
- Interim compensation under Section 143A cannot be directed against a person who is not the drawer of the cheque
- The provision is intended to compensate the payee from the drawer who issued the cheque
