Rakesh Ranjan Shrivastava v. The State of Jharkhan Anr.) decided on

1. Heard Sri Yash Pratap Singh, learned counsel for the applicant and Sri S.P. Singh, learned State Law Officer for the State.

2. This Court on 04.04.2025 while entertaining the application, issued notice to opposite party no.2. There is an office report dated 01.05.2025 that notice has been served upon opposite party no.2 through its heirs. However, till the dictation, none has put in appearance on behalf of the opposite party no.2.

3. Case of the application is the a complaint stood lodged by the applicant herein against the opposite party no.2 under Section 138 N.I. Act with an allegation that with respect to discharge of a liability, the opposite party no.2 had drawn a cheque dated 18.08.2023 bearing No.000012 of Rs.13,25,000/- which on presentation in the bank came to be dishonoured. Communication whereof was made on 19.08.2023 and a statutory demand notice was issued on 24.08.2023, however, payments were not made so the complaint was lodged on 03.10.2023. Thereafter, court below by virtue of the order 26.10.2023 summoned the opposite party no.2.

4. An application came to be preferred by the applicant under Section 143-A of the N.I. Act for grant of interim compensation to the tune of 20% of the total amount on 16.10.2024. The said application was contested by the opposite party no.2 and came to be rejected on 18.11.2024. Questioning the order dated 18.11.2024, present application has been filed.

5. Learned counsel for the applicant has submitted that the reasons on the basis whereof, application under Section 143-A of the N.I. Act has been rejected is not in accordance with law for the simple reason that Section 143-A of the N.I. Act grants power to the court to direct interim compensation in the proceedings under Section 138 N.I. Act where in a summary trial or a summon case, the accused pleads not guilty to the accusation made in the complaint. According to learned counsel for the applicant interim compensation is to be accorded just in order to give a solence to the complainant and the same should not exceed 20%.

6. Submission is that the mode and manner according to which interim compensation under Section 143-A N.I. Act is to be accorded stands crystalized in the decision of the Apex Court in Criminal Appeal No.741 of 2024 (Rakesh Ranjan Shrivastava vs. The State of Jharkhan & Anr.) decided on 15.03.2024. He submits that the said criteria has been adhered to. However, interim compensation has been refused plainly and simply on the ground that the accused was participated in the trial and was present.

7. Submission is that the said criteria is novel and does not find place in any of the provisions of the acts. He submits that the order dated 18.11.2024 be set aside and matter be remitted back to the court below to pass a fresh order.

8. Learned State Law Officer could not dispute the said factual position and the reasoning so assigned while contending that the said reasoning is not as per law laid down in the case of Rakesh Ranjan Shrivastava (supra). He submits that the order in question be set aside and matter be remitted back to the court below to pass a fresh order.

9. I have heard learned counsel for the rival parties and perused the record.

10. Apparently, a complaint stood lodged regarding dishonouring of a cheque, accused-opposite party no.2 pleaded not guilty and the applicant took recourse to the provisions of Section 143-A N.I. Act, however, the same came to be rejected on the ground that the accused-opposite party no.2 was participating in the proceedings, thus, there was no occasion to grant the said benefit in the opinion of the Court. The said criteria so adopted is not correct as various factor as enumerated in the case of Rakesh Ranjan Shrivastava are to be dealt with. Wherein, it was held as under: ".....19. 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 143A 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 Section 143A 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."

11. Since the aforesaid exercise is completely lacking, thus, this Court has no option but to set aside the order dated 18.11.2024 passed in Complaint Case No.68446 of 2023 (Arvind Yadav Vs. Kailash Nath Yadav), under Section 143-A N.I. Act, 1881, Police Station Rampur Manjha, District Ghazipur to pass a fresh order, strictly in accordance with law, with most expedition. Order Date :- 3.7.2025 S.A.

1. Heard Sri Yash Pratap Singh, learned counsel for the applicant and Sri S.P. Singh, learned State Law Officer for the State.

2. This Court on 04.04.2025 while entertaining the application, issued notice to opposite party no.2. There is an office report dated 01.05.2025 that notice has been served upon opposite party no.2 through its heirs. However, till the dictation, none has put in appearance on behalf of the opposite party no.2.

3. Case of the application is the a complaint stood lodged by the applicant herein against the opposite party no.2 under Section 138 N.I. Act with an allegation that with respect to discharge of a liability, the opposite party no.2 had drawn a cheque dated 18.08.2023 bearing No.000012 of Rs.13,25,000/- which on presentation in the bank came to be dishonoured. Communication whereof was made on 19.08.2023 and a statutory demand notice was issued on 24.08.2023, however, payments were not made so the complaint was lodged on 03.10.2023. Thereafter, court below by virtue of the order 26.10.2023 summoned the opposite party no.2.

4. An application came to be preferred by the applicant under Section 143-A of the N.I. Act for grant of interim compensation to the tune of 20% of the total amount on 16.10.2024. The said application was contested by the opposite party no.2 and came to be rejected on 18.11.2024. Questioning the order dated 18.11.2024, present application has been filed.

5. Learned counsel for the applicant has submitted that the reasons on the basis whereof, application under Section 143-A of the N.I. Act has been rejected is not in accordance with law for the simple reason that Section 143-A of the N.I. Act grants power to the court to direct interim compensation in the proceedings under Section 138 N.I. Act where in a summary trial or a summon case, the accused pleads not guilty to the accusation made in the complaint. According to learned counsel for the applicant interim compensation is to be accorded just in order to give a solence to the complainant and the same should not exceed 20%.

6. Submission is that the mode and manner according to which interim compensation under Section 143-A N.I. Act is to be accorded stands crystalized in the decision of the Apex Court in Criminal Appeal No.741 of 2024 (Rakesh Ranjan Shrivastava vs. The State of Jharkhan & Anr.) decided on 15.03.2024. He submits that the said criteria has been adhered to. However, interim compensation has been refused plainly and simply on the ground that the accused was participated in the trial and was present.

7. Submission is that the said criteria is novel and does not find place in any of the provisions of the acts. He submits that the order dated 18.11.2024 be set aside and matter be remitted back to the court below to pass a fresh order.

8. Learned State Law Officer could not dispute the said factual position and the reasoning so assigned while contending that the said reasoning is not as per law laid down in the case of Rakesh Ranjan Shrivastava (supra). He submits that the order in question be set aside and matter be remitted back to the court below to pass a fresh order.

9. I have heard learned counsel for the rival parties and perused the record.

10. Apparently, a complaint stood lodged regarding dishonouring of a cheque, accused-opposite party no.2 pleaded not guilty and the applicant took recourse to the provisions of Section 143-A N.I. Act, however, the same came to be rejected on the ground that the accused-opposite party no.2 was participating in the proceedings, thus, there was no occasion to grant the said benefit in the opinion of the Court. The said criteria so adopted is not correct as various factor as enumerated in the case of Rakesh Ranjan Shrivastava are to be dealt with. Wherein, it was held as under: ".....19. 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 143A 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 Section 143A 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."

11. Since the aforesaid exercise is completely lacking, thus, this Court has no option but to set aside the order dated 18.11.2024 passed in Complaint Case No.68446 of 2023 (Arvind Yadav Vs. Kailash Nath Yadav), under Section 143-A N.I. Act, 1881, Police Station Rampur Manjha, District Ghazipur to pass a fresh order, strictly in accordance with law, with most expedition. Order Date :- 3.7.2025 S.A.