High Court

6. Learned counsel for the applicants has submitted that the order dated 16.04.2025 passed by the court below according interim compensation to the tune of 20% cannot be sustained for the simple reason that it is not as per the mandate of the Hon'ble Apex Court in Rakesh Ranjan Shrivastava vs. State of Jharkhand, 2024 (4) SCC 8409. Submission is that certain criteria and modalities have been earmarked by the Hon'ble Apex Court, according to which the application under Section 143-A of N.I. Act is to be decided. He submits that the said exercise is completely lacking. Prayer is for setting aside the order and remitting the matter back to the court below to pass a fresh order.

7. Learned State Law Officer on the other hand submits that the order, which is being subject matter of challenge is not as per the mandate of the Hon'ble Apex Court in Rakesh Ranjan Shrivastava (supra). The order is set aside and the matter is remitted back to the court below.

8. I have heard the submissions so raised across the Bar and perused the records carefully.

9. Apparently, with the allegation of dishonouring of the cheque of an amount of Rs.25,00,000/- bearing number "066338" dated

06.11.2018 on 13.01.2018 followed by a statutory demand notice dated 11.01.2019, the complaint stood preferred, wherein the applicant was summoned on 28.10.2021 and on an application preferred by the O.P. No.2/complainant under Section 143-A of the N.I. Act for the grant of interim compensation the Court had accorded the same on 16.04.2025. A perusal of the order dated

16.04.2025 passed by the court below would reveal that on mere asking the 20% interim compensation has been accorded. The guidelines so enunciated by the Hon'ble Apex Court in Rakesh Ranjan Srivastava (supra) has not been followed. In Rakesh Ranjan Srivastava (supra), the following was observed:- "27. 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."

10. Here, the Court finds applying the said principles of law in the present facts of the case, it will be more than evident that neither the prima facie case of the complainant nor of the accused applicant has been considered, there is no consideration to the quantum of interim compensation to be awarded. The financial distress of the accused applicant has also not been considered. Thus the order dated 16.04.2025 cannot be sustained. The application is being decided on the following terms: - (a) The order dated 16.04.2025 passed by Additional Court Varanasi in Complaint Case No. 449 of 2021 (Dr. Sunil Shah Vs. Rohit Kumar Pandey U/S 138 of N.I. Act, is set aside. (b) Matter stands remitted back to the court below to pass a fresh order strictly in accordance with law. (c) The applicant shall submit a certified copy of the order before the court below by 06.06.2025. (d) The court below shall decide the said application strictly in accordance with law without granting the unnecessary adjournment with most expedition.

11. With the above observations, the application stands disposed of. Order Date :- 26.5.2025 N.S.Rathour (Vikas Budhwar, J)

6. Learned counsel for the applicants has submitted that the order dated 16.04.2025 passed by the court below according interim compensation to the tune of 20% cannot be sustained for the simple reason that it is not as per the mandate of the Hon'ble Apex Court in Rakesh Ranjan Shrivastava vs. State of Jharkhand, 2024 (4) SCC 8409. Submission is that certain criteria and modalities have been earmarked by the Hon'ble Apex Court, according to which the application under Section 143-A of N.I. Act is to be decided. He submits that the said exercise is completely lacking. Prayer is for setting aside the order and remitting the matter back to the court below to pass a fresh order.

7. Learned State Law Officer on the other hand submits that the order, which is being subject matter of challenge is not as per the mandate of the Hon'ble Apex Court in Rakesh Ranjan Shrivastava (supra). The order is set aside and the matter is remitted back to the court below.

8. I have heard the submissions so raised across the Bar and perused the records carefully.

9. Apparently, with the allegation of dishonouring of the cheque of an amount of Rs.25,00,000/- bearing number "066338" dated

06.11.2018 on 13.01.2018 followed by a statutory demand notice dated 11.01.2019, the complaint stood preferred, wherein the applicant was summoned on 28.10.2021 and on an application preferred by the O.P. No.2/complainant under Section 143-A of the N.I. Act for the grant of interim compensation the Court had accorded the same on 16.04.2025. A perusal of the order dated

16.04.2025 passed by the court below would reveal that on mere asking the 20% interim compensation has been accorded. The guidelines so enunciated by the Hon'ble Apex Court in Rakesh Ranjan Srivastava (supra) has not been followed. In Rakesh Ranjan Srivastava (supra), the following was observed:- "27. 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."

10. Here, the Court finds applying the said principles of law in the present facts of the case, it will be more than evident that neither the prima facie case of the complainant nor of the accused applicant has been considered, there is no consideration to the quantum of interim compensation to be awarded. The financial distress of the accused applicant has also not been considered. Thus the order dated 16.04.2025 cannot be sustained. The application is being decided on the following terms: - (a) The order dated 16.04.2025 passed by Additional Court Varanasi in Complaint Case No. 449 of 2021 (Dr. Sunil Shah Vs. Rohit Kumar Pandey U/S 138 of N.I. Act, is set aside. (b) Matter stands remitted back to the court below to pass a fresh order strictly in accordance with law. (c) The applicant shall submit a certified copy of the order before the court below by 06.06.2025. (d) The court below shall decide the said application strictly in accordance with law without granting the unnecessary adjournment with most expedition.

11. With the above observations, the application stands disposed of. Order Date :- 26.5.2025 N.S.Rathour (Vikas Budhwar, J)