The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK CRLREV No.894 of 2025 Priyanka Agarwal …. Petitioner Mr. R.N. Parija, Advocate -Versus- State of Odisha & another …. Opposite Parties Ms. B. Dash, ASC CORAM: MR. JUSTICE R.K. PATTANAIK ORDER 19.11.2025 Order No. 01. 1. 2.
Legal Reasoning
Heard Mr. Parija, learned counsel for the petitioner. No notice is issued to the opposite parties as the matter
Decision
is disposed of at the stage of admission. 3. Instant revision is filed by the petitioner challenging the impugned order dated 12th August, 2025 passed in connection with I.C.C. Case No.09 of 2024 by the learned J.M.F.C., Rajgangpur, whereby, an application as per Annexure-3 received from opposite party No.2 under Section 143-A of the N.I. Act was entertained and disposed of allowing interim compensation in terms thereof on the grounds inter alia that such decision is not legally tenable and hence, is liable to be interfered with and set at naught. 4. Opposite party No.2 filed the complaint, a copy of which, is at Annexure-2 against the petitioner alleging the latter Page 1 of 7 to have committed an offence under Section 138 of N.I. Act and therein, considering the application dated 24th April, 2025 at Annexure-3, the learned Court below passed the interim order dated 12th August, 2025 i.e. Annexure-1 and directed the former to pay interim compensation. 5. Mr. Parija, learned counsel for the petitioner submits that the jurisdiction under Section 143-A of N.I. Act has not been properly exercised by the learned Court below while directing the interim compensation payable by the petitioner. It is submitted that such an exercise of power is not in consonance with the decision of the Apex Court in Rakesh Ranjan Shrivastava Vrs. The State of Jharkhand & another 2024 INSC 205 in Criminal Appeal No.741 of 2024 decided on 15th March, 2024, wherein, the factors to be considered, while exercising discretion under Section 143-A of N.I. Act have been outlined. The further submission is that the learned Court below could not have directed the payment of interim compensation without examining the case in its proper perspective with reference to Section 143-A of N.I. Act and the provisions made thereunder and hence, the impugned order dated 12th August, 2025 at Annexure-1 is liable to be set aside. 6. For better appreciation, the relevant provisions of Section 143-A of N.I. Act is extracted herein below: “143A. 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— Page 2 of 7 (a) in a summary trial or a summons case, where he pleads not guilty the complaint; and the accusation made in to (b) in any other case, upon framing of charge. (2) The interim compensation under sub-section (1) shall not 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 subsection (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 (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.” 7. On a reading of the above provision, it is made to understand that a Court has discretionary powers to direct interim compensation in terms of sub-section(1) of Section 143-A of N.I. Act, which shall not exceed 20% of the amount of cheque and it could be an amount less than the limit fixed. Such a discretionary power is to be exercised keeping in view the factors as has been highlighted upon by the Apex Court in Rakesh Ranjan Shrivastava (supra). On a further reading of Page 3 of 7 the said provision, the Court finds that the interim compensation shall be paid within the stipulated period as prescribed therein 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. As per sub-section (4) of Section 143-A of N.I. Act, in case, the drawer of the cheque is acquitted, the Court has power to direct the complainant to repay to the drawer the amount of interim compensation with interest at the bank rate. The provision also reveals that the interim compensation payable under this section may be recovered as per Section 421 Cr.P.C. On a proper reading of all the provisions of Section 143-A of N.I. Act, it is made to understand that the interim compensation may be directed by a Court and may also be recovered from the complainant but before that, by exercising jurisdiction in terms of the conditions mentioned therein. 8. While dealing with the provisions of Section 143-A of N.I. Act, the Apex Court in Rakesh Ranjan Shrivastava (supra) held and observed in the following words: “14. In the case of Section 143A, the power can be exercised even before the accused is held guilty. Sub- section (1) of Section 143A 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 per cent 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 Page 4 of 7 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, subsection (1) of Section 143A provides for penalizing an accused even before his guilt is established. Considering the drastic consequences of exercising the power under Section 143A and that also before the finding of the guilt is recorded in the trial, the word “may” used in the provision cannot be construed as “shall”. The provision will have to be held as a directory and not mandatory. Hence, we have no manner of doubt that the word “may” used in Section 143A, cannot be construed or interpreted as “shall”. Therefore, the power under sub-section (1) of Section 143A is discretionary. 15. Even sub-section (1) of Section 148 uses the word “may”. In the case of Surinder Singh Deswal v. Virender Gandhi, this Court, after considering the provisions of Section 148, held that the word “may” used therein will have to be generally construed as “rule” or “shall”. It was further observed that when the Appellate Court decides not to direct the deposit by the accused, it must record the reasons. After considering the said decision in the case of Surinder Singh Deswal, this Court, in the case of Jamboo Bhandari v. Madhya Pradesh State Industrial Development Corporation Limited & Ors., in paragraph 6, held thus: “6. What is held by this Court is that a purposive interpretation should be made of Section 148 NI Act. Hence, normally, the appellate court will be justified in imposing the condition of deposit as provided in Section 148. However, in a case where the appellate court is satisfied that the condition of deposit of 20% will be unjust or imposing such a condition will amount to deprivation of the right of appeal of the appellant, exception can be made for the reasons specifically recorded.” 15.1. As held earlier, Section 143A can be invoked before the conviction of the accused, and therefore, the word “may” used therein can never be construed as the exercise of “shall”. The jurisdiction under sub-section (1) of Section 148 can never apply to the exercise of jurisdiction under subsection (1) of Section 143A of the N.I. Act.” tests applicable for Page 5 of 7 9. It has been held and concluded in the above decision that a Court shall have to consider various factors, such as, the nature of the transaction, relationship between the accused and the complainant and the paying capacity of the accused and if the reply of the accused is found to be prima facie a plausible defence, it may exercise discretion in refusing to grant interim compensation. At the end, it has also been observed therein that the factors which have been delineated are not exhaustive and there could be several other factors in a given case, such as, pendency of a civil suit etc. So, therefore, while dealing with any such request received from the complainant under Section 143 of N.I. Act, all such aspects also are to be kept in view and the Court is also to record briefly indicating consideration of all the relevant factors. 10. On a reading of the impugned order dated 12th August, 2025 at Annexure-1, the Court finds that even though the relevant provisions have been reproduced but considering the fact that the cheque was issued and on the premise that there is existence of lawful debt to be discharged by the petitioner, direction to pay the interim compensation was followed. The Court does not find anywhere about the discussions with regard to the relevant factors which persuaded it to allow interim compensation in favour of opposite party No.2. The Court finds that the transaction was in cash in connection with which the alleged cheque was issued by the petitioner and at last, stood dishonored, after being presented in the Bank. Having regard to the provisions in place and the decision of the Apex Court in Page 6 of 7 Rakesh Ranjan Shrivastava (supra), the conclusion of the Court is that all such relevant aspects have not been examined by the learned Court below while directing the interim compensation in terms of Section 143-A of N.I. Act. A discretion by a Court has to be judicious and keeping in view all such factors while considering the request for interim compensation, an exercise, which has not been resorted to by the learned Court below and therefore, it needs a revisit and a fresh decision on Annexure-1. 11. Hence, it is ordered. 12. In the result, the revision petition strands allowed. As a necessary corollary, the impugned order at Annexure-1 dated 12th August, 2025 passed in connection with I.C.C. Case No.09 of 2024 is hereby set aside with a direction to the learned J.M.F.C., Rajgangpur to freshly consider the application dated 24th April, 2025 i.e. Annexure-3, which is restored to file and after hearing of the parties, to pass orders as per and in accordance with law in terms of Section 143-A of N.I. Act keeping in view the law decided by the Apex Court in Rakesh Ranjan Shrivastava (supra). 13. Issue urgent certified copy as per rules. (R.K. Pattanaik) Judge Alok Signature Not Verified Digitally Signed Signed by: ALOK RANJAN SETHY Reason: Authentication Location: ORISSA HIGH COURT Date: 21-Nov-2025 12:44:02 Page 7 of 7