High Court

Learned counsel for the applicant submits that the applicant has been summoned under Section 138 of the N.I. Act on 05.10.2021. He further submits that an application purported to be under Section 143A of the N.I. Act stood preferred by the opposite party no. 2 for grant of interim compensation which came to be allowed on 16.03.2024 Complaint Case no. 1087 of 2020 by the court of Civil Judge (Junior Division)/ Judicial Magistrate, Hasanpur, Amroha while according interim compensation to the tune of Rs. 40,000/-. Learned counsel for the applicant submits that he confines his relief insofar as the present application is concerned to the order dated 16.03.2024 and according 20% compensation.

5. Submission is that on mere asking, the interim compensation to the tune of 20% has been accorded without considering the principles so laid by the judgment of the Apex Court in the case of Rakesh Ranjan Srivastava v. State of Jharkand and another; [2024] 3 S.C.R. 438. He submits that there are certain criteria which were adhered to which have not been considered.

6. Learned AGA submits that so far as the summoning order is concerned, there is no fault, however, since the learned counsel for the applicant is not pressing his relief at this stage to the summoning order thus he is not raising any argument in this regard but according to him, the order dated 16.03.2024 according interim compensation to the tune of 20% is not as per the mandate of the Hon'ble Apex Court in the case of Rakesh Ranjan Srivastava (supra).

7. I have heard learned counsel for the parties and gone through the records carefully.

8. The Court finds that the order dated 16.03.2024 came to be passed by the court below granting interim compensation to the tune of 20%. Taking note of the said order, the Court further finds that there has been no consideration of the broad principles as enumerated in the case of Rakesh Ranjan Srivastava (supra). In Rakesh Ranjan Srivastava (supra) Hon'ble Supreme Court in paragraph no. 19 as observed 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."

9. The order impugned does not even consider the case on prima facie basis of either of complainant or of the accused. Further there is no satisfaction as to whether the complainant is entitled to 20% compensation and even otherwise though there is no consideration of the fact as to what would be the quantum of the compensation while considering relation to the relationship of the parties, the nature of transaction and the financial distress of the accused.

10. Since the aforesaid aspects are completely lacking thus the order dated 16.03.2024 passed in Complaint Case no. 1087 of 2020 by the court of Civil Judge (Junior Division)/ Judicial Magistrate, Hasanpur, Amroha is set aside.

11. The matter stands remitted back to pass fresh order strictly in accordance with law.

12. For facilitating early disposal, the party shall furnish the certified copy of the order before the court below by 09.05.2025 and the court below shall proceed to decide the said proceeding with most expedition.

13. Needless to point out that the Court has not adjudicated upon the merits of the case.

14. Accordingly, the application stands disposed of. Order Date :- 2.5.2025 A. Prajapati

Learned counsel for the applicant submits that the applicant has been summoned under Section 138 of the N.I. Act on 05.10.2021. He further submits that an application purported to be under Section 143A of the N.I. Act stood preferred by the opposite party no. 2 for grant of interim compensation which came to be allowed on 16.03.2024 Complaint Case no. 1087 of 2020 by the court of Civil Judge (Junior Division)/ Judicial Magistrate, Hasanpur, Amroha while according interim compensation to the tune of Rs. 40,000/-. Learned counsel for the applicant submits that he confines his relief insofar as the present application is concerned to the order dated 16.03.2024 and according 20% compensation.

5. Submission is that on mere asking, the interim compensation to the tune of 20% has been accorded without considering the principles so laid by the judgment of the Apex Court in the case of Rakesh Ranjan Srivastava v. State of Jharkand and another; [2024] 3 S.C.R. 438. He submits that there are certain criteria which were adhered to which have not been considered.

6. Learned AGA submits that so far as the summoning order is concerned, there is no fault, however, since the learned counsel for the applicant is not pressing his relief at this stage to the summoning order thus he is not raising any argument in this regard but according to him, the order dated 16.03.2024 according interim compensation to the tune of 20% is not as per the mandate of the Hon'ble Apex Court in the case of Rakesh Ranjan Srivastava (supra).

7. I have heard learned counsel for the parties and gone through the records carefully.

8. The Court finds that the order dated 16.03.2024 came to be passed by the court below granting interim compensation to the tune of 20%. Taking note of the said order, the Court further finds that there has been no consideration of the broad principles as enumerated in the case of Rakesh Ranjan Srivastava (supra). In Rakesh Ranjan Srivastava (supra) Hon'ble Supreme Court in paragraph no. 19 as observed 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."

9. The order impugned does not even consider the case on prima facie basis of either of complainant or of the accused. Further there is no satisfaction as to whether the complainant is entitled to 20% compensation and even otherwise though there is no consideration of the fact as to what would be the quantum of the compensation while considering relation to the relationship of the parties, the nature of transaction and the financial distress of the accused.

10. Since the aforesaid aspects are completely lacking thus the order dated 16.03.2024 passed in Complaint Case no. 1087 of 2020 by the court of Civil Judge (Junior Division)/ Judicial Magistrate, Hasanpur, Amroha is set aside.

11. The matter stands remitted back to pass fresh order strictly in accordance with law.

12. For facilitating early disposal, the party shall furnish the certified copy of the order before the court below by 09.05.2025 and the court below shall proceed to decide the said proceeding with most expedition.

13. Needless to point out that the Court has not adjudicated upon the merits of the case.

14. Accordingly, the application stands disposed of. Order Date :- 2.5.2025 A. Prajapati