Interim Order 2

Order Details: Interim Maintenance Order
Pdf Text: 1 C.C.NO. 169/SS/2019
ORDER BELOW EXH. 18
Present application is filed U/s. 143 -A of Negotiable Instruments
Act (hereinafter referred as “N. I. Act.) by the complainant to issue
direction to accused to pay 20% of cheque amount as interim
compensation.
2. It is the submission of complainant that, the complaint is
filed U/s. 138 of N.I.Act. Further as per Section 143-A of N. I. Act, this
court can direct the accused to pay interim compensation up to 20 % of
the cheques amount. The amount of dishonoured cheque is of Rs.
13,30,265/-. On account of non-payment of cheque amount, the present
complaint is filed. Therefore, complainant lastly prayed for grant of 20
% interim compensation amount of the cheque amount.
3. Inspite of opportunity is given, accused did not file his say and
hence application proceeded without say of accused.
4. Heard. Perused the application.
5. The present private complaint is filed U/s. 138 of N.I.Act. In
response to the summons, the accused appeared in the complaint and
the plea of the accused came to be recorded on 10/01/2025. The
complainant has already filed his evidence affidavit below Exh. 20 and
matter is posted for cross-examination. The present application is filed
U/s. 143 -A of N.I. Act and Section 143-A is reproduced below:-
“ (1) Notwithstanding anything contained in the code of
Criminal Procedure, 1973 (2 of 1974), the court trying an
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offence under Section 138 may order the drawer of the
cheque to pay interim compensation to the complainant-
a) in a summary trial or a summons case,
where he pleads not guilty to the accusation
made in the complaint; and
b) in any other case, upon framing of charge.
(2) The interim compensation under sub-section (1) shall
not exceed 20 % of the amount of the cheque.
(3) The interim compensation shall be paid within
sixty days from the date of the order under sub-
section (1) or within such further period not
exceeding thirty days as may be directed by the
Court on sufficient cause being shown by the
drawer of the cheque.
(4) if the drawer of the cheque is acquitted, the
Court shall direct the complainant to repay to the
drawer the amount of interim compensation, with
interest at the bank rate as published by the
Reserve Bank of India, prevalent at the beginning
of the relevant financial year, within 60 days from
the date of the order, or within such further period
not exceeding thirty days as may be directed by the
court on sufficient cause being shown by the
complainant.
(5) The interim compensation payable under this
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section may be recovered as if it were as fine under
section 421 of the Code of Criminal Procedure,
1973 (2 of 1974).
(6) The amount of fine imposed under section 138
or the amount of compensation awarded under
section 357 of the Code of Criminal Procedure,
1973 (2 of 1974), shall be reduced by the
amount paid or recovered as interim
compensation under this section.
6. I have perused the decision of Hon’ble Supreme Court of India in
Rakesh Ranjan Shrivastava V/s. State of Zarkhand and Anr., Criminal
Appeal No. 741 of 2024, decided on 15/03/2024. It has held that,
“power under sub section (1) of Section 143-A is discretionary and not
mandatory. Sub section (1 )of Section 143-A provides for passing for a
drastic order for payment of interim compensation against the accused
in a complaint U/s. 138, even before any adjudication is made on the
guilt of the accused. The power can be exercised at the threshold even
before the evidence is recorded. If the word ‘may’ is interpreted as
‘shall’, it will have drastic consequences as in every complaint U/s. 138”.
It is further held that, “subject to what is held earlier, the main
conclusions can be summarised as follows:-
a. The exercise of power under sub-section (1) of Section 143-A is
discretionary. The provision is directory and not mandatory. The word
“may” used in the provision cannot be construed as “shall.”
b. While deciding the prayer made under Section 143A, the Court
must record brief reasons indicating consideration of all relevant
factors.
c. The broad parameters for exercising the discretion under
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Section 143-A are as follows:-
i. The Court will have to prima facie evaluate the merits of the case
made out by the complainant and the merits of the defence pleaded by
the accused in the reply to the application. The financial distress of the
accused can also be a consideration.
ii. A direction to pay interim compensation can be issued, only if the
complainant makes out a prima facie case.
iii. If the defence of the accused is found to be prima facie plausible, the
Court may exercise discretion in refusing to grant interim
compensation.
iv. If the Court concludes that a case is made out to grant interim
compensation, it will also have to apply its mind to the quantum of
interim compensation to be granted. While doing so, the Court will have
to consider several factors such as the nature of the transaction, the
relationship, if any, between the accused and the complainant, etc.
v. There could be several other relevant factors in the peculiar facts of a
given case, which cannot be exhaustively stated. The parameters stated
above are not exhaustive.
7. Perusal of above provision as well as above cited decision, it
makes clear that, the Section 143-A N. I. Act is a directory and not
mandatory. Further, while deciding application U/s. 143-A of the
N.I.Act, the guidelines issued by Hon’ble Supreme Court of India in the
case of Rakesh Shrivastava (cited supra) is required to be considered.
8. In the case in hand, it is the case of complainant that, accused No.
2 to 4 are the partners of M/s. Al Jay Exports. The accused have
authorized to complainant for handling, clearing and forwarding of Air
shipments and booking Airways bills of the accused. Accused had
executed all the concerned documents and also undertaken to clear the
outstanding bills as and when it was required as the complainant has
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paid charges from his own funds on behalf of accused to the concerned
Airline authorities. The complainant had forwarded the shipments of
the accused time to time on credit basis for the period 01/04/2017 to
01/12/2018. The complainant has raised bills. The accused have issued
present cheque for the due amount but said cheque was dishonoured
with reason “Payment stopped by drawer”.
9. The complainant has issued demand notice to the accused but
accused did not pay the cheque amount nor replied to the demand
notice. Further, the accused did not reply to the present application
also. The complainant has filed ledger account to prima-facie show the
due amount. In the case in hand, the accused did not reply to the
demand notice nor filed his say to the present application and therefore,
it prima-facie seems that the accused did not deny the issuance of
cheque nor deny their signature on the cheque. Further, it prima-facie
seems that the complainant has shown the due amount.
10. In the case in hand, the drawer of the cheque is a
partnership firm i.e. accused No. 1 and accused no. 2 to 4 are its
partners. Therefore, the question arise whether the partner of the firm
is liable to pay the interim compensation as per Section 143-A of N. I.
Act. I have perused the decision of Hon’ble Bombay High Court in the
case of Lyka Labs Ltd. & Anr. V/s. State of Maharashtra and Anr, 2023,
DGLS (BOM) 699. It has held that, “the signatory of cheque authorized
by company is not drawer in terms of Section 143-A of N.I. Act and
cannot be directed to pay interim compensation U/s. 143-A of N. I.
Act.”. I have also perused the decision of Hon’ble Supreme Court of
India in Gurudatta Sugar Factory V/s. Pritviraj Sayajirao Deshmukh.
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Petition(s) for Special Leave to Appeal (Crl.) No. (s) 8849-8850/2023.
It has held that,
“33. The appellants’ reliance on the judgment in Aneeta
Hada (Supra),11 is misplaced and out of context. While this case
underscored the necessity of involving the company as an
accused to maintain a prosecution under Section 141, it does not
support the extension of liability to authorized signatories under
Section 143A. The judgment nowhere lays down that directors or
authorised signatories would come under the ambit of ‘drawer’
for the purposes of Section 143A. The appellants' interpretation
conflates the roles of authorized signatories and drawers, which
are distinct under the NI Act. Appellants have relied upon a
single paragraph, which does not form part of the ratio therein,
to substantiate their argument. But in this relied upon paragraph,
the Court only made an observation that the authorised signatory
becomes a drawer for the company, for the limited purpose of
extending the criminal liability as per Section 141.
34. The respondents correctly argued that an authorized signatory
is not a drawer of the cheque, as established in N. Harihara
Krishnan (Supra). 12 This judgment clarified that a signatory is
merely authorized to sign on behalf of the company and does not
become the drawer. The respondents' interpretation aligns with the
principle that penal statutes should be interpreted strictly,
particularly in determining vicarious liability. The judgment in K.K.
Ahuja (Supra),13 further supports this approach, emphasizing that
penal provisions must be read strictly to determine liability.
35. In conclusion, the High Court’s decision to interpret 'drawer'
strictly as the issuer of the cheque, excluding authorized
signatories, is well-founded. 12 (2018) 13 SCC 663 13 (2009) 10
SCC 48 SLP(Crl.) Nos. 8849-8850 of 2023 Page 22 of 22 This
interpretation aligns with the legislative intent, established legal
precedents, and principles of statutory interpretation. The primary
liability for an offence under Section 138 lies with the company,
and the company’s management is vicariously liable only under
specific conditions provided in Section 141. The appellants'
submissions are thus rejected, and the High Court’s judgment is
upheld. This decision maintains the clarity and consistency of the
law regarding cheque dishonour cases, ensuring that liability is
appropriately assigned to the responsible parties under the NI Act.
Therefore, the question of law put before this Court is answered in
the negative.”
Perusal of the cited decision, it seems that, the direction cannot
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be issued to the directors or authorized signatory of company to pay
interim compensation. In the case in hand also, I have perused the
cheque filed on record and it seems that, the accused No. 1 is the
drawer of the said cheque and therefore, only accused No. 1 can be
directed to pay interim compensation. In such circumstances, I am of
the view that complainant is entitled for interim compensation to the
extent of 20 % of cheques amount as prayed. In the result, I Pass
following order :-
ORDER
1. Application is partly allowed.
2. Accused No. 1 is hereby directed to pay interim
compensation to the extent of 20% of the cheque amount
to the complainant within period of 60 days from the date
of this order.
3. If accused No. 1 has not complied this order, Complainant
is at liberty to recover said amount from the accused No. 1
as per Section 421 of Cr.P.C
Date : 13/08/2026
Sd/-
( Y. P. Pujari)
Judicial Magistrate (First Class)
48th Court, Andheri, Mumbai.
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