Dishonour of cheque – Interim compensation

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Important point – Dishonour of cheque – Interim compensation – Whether would be applicable on those cases filed before the amendment came into force – Held – No – Amendment in Section 143A has prospective effect and can be invoked only in cases where the offences are committed after introduction of the said amendment.

Negotiable Instrument Act, 1881 Section 138, 143A & 148 – Dishonour of cheque – Complaint – Direction for interim compensation – Amendment in the Negotiable Instrument Act, 1881 – Whether the amendment in Section 143A is retrospective or prospective – Held – Section 143A to be prospective in operation and that the provisions of said Section 143A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143A in the statute book – The decision in Surinder Singh Deswal stands on a different footing. (Para 24)

Negotiable Instrument Act, 1881 Section 138 – Dishonour of cheque – Complainant filed a complaint on 04.11.2016, alleging that two cheques issued by the accused has been dishonoured for want of sufficient funds – After amendment in Section 143A w.e.f. 01.09.2018, the Trial Court directed the accused to pay 20% of the cheque amount as interim compensation to the complainant – The High Court found no illegality in the order – Appeal – Held – The provisions contained in Section 143A have two dimensions – First, the Section creates a liability in that an accused can be ordered to pay over upto 20% of the cheque amount to the complainant – Secondly, it makes available the machinery for recovery, as if the interim compensation were arrears of land revenue – Thus, it not only creates a new disability or an obligation but also exposes the accused to coercive methods of recovery of such interim compensation through the machinery of the State as if the interim compensation represented arrears of land revenue – The applicability of Section 143A of the Act must, therefore, be held to be prospective in nature and confined to cases where offences were committed after the introduction of Section 143A, in order to force an accused to pay such interim compensation – Impugned order set aside – Appeal allowed. (Para 18, 22, 24)

 

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