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IN THE HIGH COURT OF ORISSA AT CUTTACK CRLMC No.1171 of 2021 An application under Section 482 of the Code of Criminal Procedure. Sukanti Senapati ..…. Petitioner -------------- -versus- Babita Senapati …… Opposite Party ----------------------------------------------------------------------------- : Mr. Pradeep Kumar Sahoo, Advocate For Petitioner For Opp. Party : Mr. B.S. Tripathy, Advocate ----------------------------------------------------------------------------- CORAM: HON’BLE MISS JUSTICE SAVITRI RATHO JUDGMENT 24.06.2025 Savitri Ratho, J. This CRLMC has been filed challenging the order dated 25.03.2021 passed by the learned Sub Divisional Judicial Magistrate (Sadar), Cuttack ( in short “SDJM / Magistrate”), in 1.C.C. No. 257 of 2020 directing the accused - petitioner (hereinafter “the petitioner”) to pay the interim compensation amounting to Rs.1,54,500/- (10% of the cheque amount of Rs.15,45,000/-) on or before 21.05.2021 in exercise of power under Section 143-A of Negotiable Instruments Act (in short “the N.I. CRLMC No. 1171 of 2021 Page 1 of 13 Act”) to the complainant – opposite party (hereinafter “the opp.party”). CASE OF THE COMPLAINANT 2. The complainant’s case in brief is that the petitioner being the owner of a patch of land in village Bharatipur under Puri Tahasil, which she had purchased from the original title holders. Due to want of money, she sold a portion of the said land, i.e., Ac.0.04 dec. 420 sq.kadi to the opp.party by executing a registered sale deed dt.29.11.2016 for a total consideration amount of Rs.4,84,000/- and handed over possession of the land to her. After transfer of the aforesaid property, the State Govt. filed Second Appeal No.19/2017 before this Court against the
Legal Reasoning
confirming judgment in respect of that land. While the said second appeal was pending, the opp.party approached the petitioner, who is a pardanashin lady and took three blank signed cheques from her in the year 2017 with the impression to refund the same after her title is confirmed by this Hon'ble Court in the aforesaid second appeal. Thereafter, vide order dt.05.12.2018, the said second appeal filed by the State was dismissed and the right, title, interest and possession of the vendors of the petitioner as well as the opp.party was confirmed and the order passed in the second appeal CRLMC No. 1171 of 2021 Page 2 of 13 became final. But the opp.party did not return the blank signed cheques to the petitioner. While matter stood thus, in the year 2020, the local administration started a project for construction of village road and a bridge and proposed to construct it on the land of the petitioner including the land purchased by the opp.party. In such factual background, the opp.party through her husband pressurized the petitioner and in August, 2020, she obtained the signature of the petitioner on blank stamp paper purchased by her and with a mala fide intention converted the signed paper to an agreement between the parties. The opp.party also by misutilizing the previously obtained old signed blank bank cheques in the year, 2017 and with the help of the subsequent stamp paper, put a total amount of Rs.15,45,000/- in three cheques and deposited the said cheques in the bank in order to make out a case u/s.138 of the N.I. Act against the petitioner. The old cheques of different dates were deposited by the opp.party in the bank at Cuttack on one date and all the cheques returned without clearance as the said bank account of the petitioner became dormant for want of transactions for a long time. After issuing notice to the petitioner through her counsel, the opp.party filed a case before the learned S.D.J.M. CRLMC No. 1171 of 2021 Page 3 of 13 (Sadar), Cuttack i.e. 1.C.C. No.257 of 2020 under Section 138 of the N.I. Act claiming Rs.15,45,000/-. PETITION UNDER SECTION – 143 A OF THE N.I. ACT 3. The petitioner had entered appearance in the case through her counsel filed a petition u/s.205 Cr.P.C. for dispensing with her personal appearance. The opp.party filed her objection to the petition filed u/s.205 Cr.P.C. and in the form of a petition purported to be under section 143-A of N.I. Act. The petitioner filed her preliminary objection as well as additional objection and contested the prayer made by the opp.party for grant of interim compensation u/s.143 A of the NI Act taking into consideration the facts and circumstance of this case and also produced the copy of the registered sale deed in favour of the opp.party and also cited the law laid down in the matter, but the learned S.D.J.M. reserved the petition for orders. ORDER OF THE LEARNED SDJM COURT 4. The learned SDJM vide order dt.25.03.2021 allowed the petition filed u/s.143-A of the Act and directed the petitioner to pay an amount of Rs.1,54,500/- to the opp.party as interim compensation which is 10% of the cheque amount. CRLMC No. 1171 of 2021 Page 4 of 13 SUBMISSIONS 5.
Legal Reasoning
I have heard Mr. Pradeep Kumar Sahoo, learned counsel for the petitioner and Mr. B.S. Tripathy, learned counsel appearing on behalf of the opposite party-complainant. 6. Relying on the decision of the Supreme Court in the case of Rakesh Ranjan Shrivastava vrs. State of Jharkhand and Another: (2024) 4 SCC 419, Mr. Pradeep Kumar Sahoo, learned counsel for the petitioner submitted that the impugned order is liable for interference as:- i) the learned trial court has directed for payment of compensation interpreting the word ‘may’ in Section 143-A of the NI Act to be as ‘shall’ which as per the decision of the Supreme Court is directory and not mandatory; and ii) the application under Section 143-A of the N.I. Act has been decided without considering the merits of the case. 7. Mr. B.S. Tripathy, learned counsel appearing on behalf of the opposite party-complainant relied on the decision of the Hon’ble Supreme Court in the case of G.J. Raja vrs. Tejraj Surana: (2019) 19 SCC 469, and submitted that as per the provisions of Section 143-A in the N.I. Act , the accused could be made to pay or deposit interim compensation even before his CRLMC No. 1171 of 2021 Page 5 of 13 conviction and that even before pronouncement of his guilt , the interim compensation can be recovered with the aid of State machinery as arrears of land revenue. 8. Both counsel have submitted that as the case is pending since 2020, whatever the decision of this Court on payment of interim compensation, a direction may be issued to the learned SDJM (Sadar), Cuttack for disposing of 1.C.C. No. 257 of 2020 within a stipulated time. STATUTORY PROVISIONS 9. The provisions necessary for deciding this application are Section- 138 and 143-A of the N.I. Act, which are extracted below:- “Section 138- Dishonour of cheque for insufficiency, etc., of funds in the account:- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with CRLMC No. 1171 of 2021 Page 6 of 13 imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.” “Section 143-A-Power to direct interim compensation:- “(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Court trying an 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 CRLMC No. 1171 of 2021 Page 7 of 13 exceed twenty per cent 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 sixty 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 section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973. (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, shall be reduced by the amount paid or recovered as interim compensation under this section.” JUDICIAL PRONOUNCEMENTS 10. In the case of Rakesh Ranjan Shrivastava (supra), the Supreme Court has held as follows: “15. For recovery of the interim compensation, the immovable or movable property of the accused can be sold by CRLMC No. 1171 of 2021 Page 8 of 13 the Collector. Thus, non-payment of interim compensation fixed under Section 143-A has drastic consequences. To recover the same, the accused may be deprived of his immovable and movable property. If acquitted, he may get back the money along with the interest as provided in sub- section (4) of Section 143-A from the complainant. But, if his movable or immovable property has been sold for recovery of interim compensation, even if he is acquitted, he will not get back his property.” “18. In the case of Section 143-A, the power can be exercised even before the accused is held guilty. Sub-section (1) of Section 143-A provides for passing a drastic order for payment of interim compensation against the accused in a complaint under Section 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 under Section 138, the accused will have to pay interim compensation up to 20% of the cheque amount. Such an interpretation will be unjust and contrary to the well-settled concept of fairness and justice. If such an interpretation is made, the provision may expose itself to the vice of manifest arbitrariness. The provision can be held to be violative of Article 14 of the Constitution. In a sense, sub-section (1) of Section 143-A provides for penalising an accused even before his guilt is established. 19. Considering the drastic consequences of exercising the power under Section 143-A and that also before the finding of the guilt is recorded in the trial, the word "may" used in the CRLMC No. 1171 of 2021 Page 9 of 13 provision cannot be construed as "shall". The provision will have to be held as directory and not mandatory. Hence, we have no manner of doubt that the word "may" used in Section 143-A, cannot be construed or interpreted as "shall". Therefore, the power under sub-section (1) of Section 143-A is discretionary.” In the case of G.J. Raja (supra), the Hon’ble Supreme Court has held as follows: “19. It must be stated that prior to the insertion of Section 143A in the Act there was no provision on the statute book whereunder even before the pronouncement of the guilt of an accused, or even before his conviction for the offence in question, he could be made to pay or deposit interim compensation. The imposition and consequential recovery of fine or compensation either through the modality of Section 421 of the Code or Section 357 of the code could also arise only after the person was found guilty of an offence. That was the status of law which was sought to be changed by the introduction of Section 143A in the Act. It now imposes a liability that even before the pronouncement of his guilt or order of conviction, the accused may, with the aid of State machinery for recovery of the money as arrears of land revenue, be forced to pay interim compensation. The person would, therefore, be subjected to a new disability or obligation. The situation is thus completely different from the one which arose for consideration in Employees' State Insurance Corporation case.” CRLMC No. 1171 of 2021 Page 10 of 13 ANALYSIS 11. After recording the provisions of Section – 143-A of the NI Act and the submissions of the learned counsel, the learned SDJM has allowed the application holding as follows: - “It has not been provided in the Act that the Court is to see whether there exists any legally enforceable debt or liability for the accused towards the complainant at the time of dealing with the petition u/s. 143(A) rather the existence of legal liability is to be seen after taking evidence from both the sides. In the present case trial has not yet commenced and the disposal of the case may take some time. In order to provide interim relief to the complainant I think it proper to grant interim compensation to her. Moreover, it has been provided that the accused shall be repaid the entire interim compensation along with bank interest on the eve of acquittal and therefore, I am of the opinion that the accused shall not be prejudiced if he is directed to pay the interim compensation amount”. 12. From this it is apparent that the learned SDJM has not considered the merit of the case as the same was not required by the NI Act. On the ground that disposal of the case may take a long time and as the amount shall be repaid to the accused in the event (typed as “eve” in the impugned order) of acquittal, no prejudice would be caused to her, allowed the application. CRLMC No. 1171 of 2021 Page 11 of 13 13. It has been held by the Supreme Court that the word “may” used in the provision is directory and not mandatory and it cannot be interpreted as “shall”. The Supreme Court has held that if such an order for payment of compensation is passed before the accused is found to be guilty, it would be contrary to the well-settled concept of fairness and justice and it is likely to have drastic consequences as the accused may have to sell his immovable and movable property to comply with the order and on the event of his acquittal and return of the amount, may not get back his property. 14. The legal principle that an accused is presumed to be innocent until proven guilty, is well known. If direction for payment of interim compensation under Section 143-A of the NI Act is held to be mandatory, apart from being contrary to the above legal principle, it may encourage unscrupulous persons to initiate frivolous litigation in order to obtain an order of interim compensation for their unjust enrichment. By the time the accused, who may not be liable, is repaid the money after his acquittal, he may have been ruined. So an order for payment for interim compensation should not be passed for the mere asking and should be passed only under exceptional circumstances. CRLMC No. 1171 of 2021 Page 12 of 13 CONCLUSION 15. In view of the aforesaid discussion, the impugned order dated 25.03.2021 passed in 1.CC. No.257 of 2020 by the learned SDJM (S) Cuttack is set aside. 16. As the complaint case is of the year 2020, I do not consider it necessary to direct the learned SDJM to reconsider the matter, but consider that it would in the interest of justice to request the learned trial court to dispose of the case expeditiously. 17. The learned Court in seisin over the matter, is requested to make an endeavour to dispose of the complaint case expeditiously, preferably by the end of November 2025, if there is no legal impediment. 18. The CRLMC is accordingly allowed. The I.A. No.921 of
Decision
2021 is disposed of. Orissa High Court, Cuttack. The 24th June, 2025/Puspa, P.A. (Savitri Ratho) Judge Signature Not Verified Digitally Signed Signed by: PUSPANJALI MOHAPATRA Designation: Personal Assistant Reason: Authentication Location: Orissa High Court Date: 30-Jun-2025 19:19:38 CRLMC No. 1171 of 2021 Page 13 of 13