Chandra Prakash v. Jaibeer Singh) U/s

5. With the consent of the parties, the application is being decided at the fresh stage.

6. The case of the applicant is that a complaint stood lodged by the opposite party no.2 on 08.06.2021 U/s 138 of N.I. Act with an allegations that with respect of discharge of liability, the applicant herein had drawn a cheque bearing no. 023501 dated 01.03.2021 of Rs. 10 lac and on presentation the same in the bank stood dishonoured by statutory demand notice dated 26.03.2021 and the complaint. Thereafter the applicant came to be summoned on 07.09.2022, during the pendency of the said proceeding, the order came to be passed on 18.10.2023 whereby the applicant was directed to deposit 20 per cent of the cheque amount within a period of 60 days. Questioning the said order, the applicant has been preferred the present application.

7. Learned counsel for the applicant has submitted that the order passed by the Additional Court, N.I. Act in complaint case no. 3858 of 2021 cannot be sustained particularly when as a matter of right on mere asking, 20 per cent interim compensation was accorded. He submits that law in this regard is well crystalized. In the case of Rakesh Ranjan Srivastava vs. State of Jharkhand 2024 INSC 205 whereby there are certain criteria which to be adhertive before granting interim compensation. Submission is that one of the criteria is prima facie consideration on the case of the complainant, accused, financial distress of the accused. In case prima-facie case tilt in favour of the complainant then the quantum of compensation. Looking into the nature of the transaction, the relationship of the parties. He submits that the said modalities have not been considered at all, according to him, the order dated 18.10.2023 be quashed and the mater be remitted back to the court below to pass a fresh order.

8. Learned AGA as well as the counsel appearing on behalf of opposite party no.2 submits that once the cheque stood drawn and it was dishonoured then the presumption U/s 139 of N.I. Act would be there. However, he could not dispute the fact that certain parameters had been laid down in the case of Rakesh Ranjan Srivastava (Supra) which are not been adhertive. They submits that the order be set aside and the matter be remitted back to the court below.

9. I have heard the submissions so made across the bar and perused the record carefully.

10. The order dated 18.10.2023 reads as under: "Called out Complainant and accused present with counsels and come from summon under Section 251 Cr.P.C. is received of the accused Jaiveer Singh who stated that I did not give any cheque to my signature to the complainant the cheque does not hear my "have" signature. My Cheque book was stolen from my office. I lodged a report of theft. I did't know on what ground the cheque is dishonored. I did not received the notice of the complainant. There is no due of the complainant on me, so question of payment does not arose and brought land from Sandeep, Manish and Shruti, 'Airon of Rs.52,30000/- and Rs.10,000,0/- was given from the A/C of my wife, Rs. 50000/- cash to Devang and Prabha and paid is Rs.50000/- cash. I had the agreement to sell and sale deed was executed in favor of those the cheque were kept by them. Two cheque are missed they took the cheques of my signature. As the accused deceived the accusation of the complainant and accused for trial. The case would be tried as a summon trial as per amount of the cheque. Accused to pay 20% of the cheque amount to the complainant upto 60 days of this orders. Summon the witness. Fix on 08.11.2023 for PE. The accused from jail on the date."

11. The Court finds that there has been complete non-adherence of the mandate of the Hon'ble Apex Court in the case of Rakesh Ranjan Srivastava (supra), whereby the Hon'ble Apex Court has clearly observed in para-19 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."

12. A perusal of the order dated 18.10.2023 would go to show that the same has not undertaken the exercise which was required as per the mandate in the case of Rakesh Ranjan Srivastava (Supra) as neither the quantum nor the financial distress and other aspect has been considered. Bering in mind, the nature of the order passed in the judgment on the said subject. The order dated 18.10.2023 passed by the Additional Court, N.I. Act, Muzaffarnagar, cannot be sustained. Accordingly, the present application is decided in the following terms: a. The order dated 18.10.2023 passed by the Additional Court, N.I. Act, Muzaffarnagar in complaint case no. 3858 of 2021 (Chandra Prakash vs. Jaibeer Singh) U/s 138 of N.I. Act, P.S. Shikera, District Muzaffarnagar is set aside. b. The matter stands remitted back to the court below to pass a fresh order in accordance with law. c. A joint statement has been made by learned counsel for the applicant as well as the counsel for opposite party no.2 that as per the instructions received from their client that they shall not take unnecessary adjournment, thus, the court below shall decide the same without granting unnecessary adjournment and in case any adjournment is granted then the same should be five days at a stretch. d. For facilitation and early disposal, a copy of this order be furnished before the court below by 22.07.2025. Order Date :- 14.7.2025 /C. MANI (Vikas Budhwar,J.) CHANDRAMANI VERMA CHANDRAMANI VERMA High Court of Judicature at Allahabad High Court of Judicature at Allahabad

5. With the consent of the parties, the application is being decided at the fresh stage.

6. The case of the applicant is that a complaint stood lodged by the opposite party no.2 on 08.06.2021 U/s 138 of N.I. Act with an allegations that with respect of discharge of liability, the applicant herein had drawn a cheque bearing no. 023501 dated 01.03.2021 of Rs. 10 lac and on presentation the same in the bank stood dishonoured by statutory demand notice dated 26.03.2021 and the complaint. Thereafter the applicant came to be summoned on 07.09.2022, during the pendency of the said proceeding, the order came to be passed on 18.10.2023 whereby the applicant was directed to deposit 20 per cent of the cheque amount within a period of 60 days. Questioning the said order, the applicant has been preferred the present application.

7. Learned counsel for the applicant has submitted that the order passed by the Additional Court, N.I. Act in complaint case no. 3858 of 2021 cannot be sustained particularly when as a matter of right on mere asking, 20 per cent interim compensation was accorded. He submits that law in this regard is well crystalized. In the case of Rakesh Ranjan Srivastava vs. State of Jharkhand 2024 INSC 205 whereby there are certain criteria which to be adhertive before granting interim compensation. Submission is that one of the criteria is prima facie consideration on the case of the complainant, accused, financial distress of the accused. In case prima-facie case tilt in favour of the complainant then the quantum of compensation. Looking into the nature of the transaction, the relationship of the parties. He submits that the said modalities have not been considered at all, according to him, the order dated 18.10.2023 be quashed and the mater be remitted back to the court below to pass a fresh order.

8. Learned AGA as well as the counsel appearing on behalf of opposite party no.2 submits that once the cheque stood drawn and it was dishonoured then the presumption U/s 139 of N.I. Act would be there. However, he could not dispute the fact that certain parameters had been laid down in the case of Rakesh Ranjan Srivastava (Supra) which are not been adhertive. They submits that the order be set aside and the matter be remitted back to the court below.

9. I have heard the submissions so made across the bar and perused the record carefully.

10. The order dated 18.10.2023 reads as under: "Called out Complainant and accused present with counsels and come from summon under Section 251 Cr.P.C. is received of the accused Jaiveer Singh who stated that I did not give any cheque to my signature to the complainant the cheque does not hear my "have" signature. My Cheque book was stolen from my office. I lodged a report of theft. I did't know on what ground the cheque is dishonored. I did not received the notice of the complainant. There is no due of the complainant on me, so question of payment does not arose and brought land from Sandeep, Manish and Shruti, 'Airon of Rs.52,30000/- and Rs.10,000,0/- was given from the A/C of my wife, Rs. 50000/- cash to Devang and Prabha and paid is Rs.50000/- cash. I had the agreement to sell and sale deed was executed in favor of those the cheque were kept by them. Two cheque are missed they took the cheques of my signature. As the accused deceived the accusation of the complainant and accused for trial. The case would be tried as a summon trial as per amount of the cheque. Accused to pay 20% of the cheque amount to the complainant upto 60 days of this orders. Summon the witness. Fix on 08.11.2023 for PE. The accused from jail on the date."

11. The Court finds that there has been complete non-adherence of the mandate of the Hon'ble Apex Court in the case of Rakesh Ranjan Srivastava (supra), whereby the Hon'ble Apex Court has clearly observed in para-19 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."

12. A perusal of the order dated 18.10.2023 would go to show that the same has not undertaken the exercise which was required as per the mandate in the case of Rakesh Ranjan Srivastava (Supra) as neither the quantum nor the financial distress and other aspect has been considered. Bering in mind, the nature of the order passed in the judgment on the said subject. The order dated 18.10.2023 passed by the Additional Court, N.I. Act, Muzaffarnagar, cannot be sustained. Accordingly, the present application is decided in the following terms: a. The order dated 18.10.2023 passed by the Additional Court, N.I. Act, Muzaffarnagar in complaint case no. 3858 of 2021 (Chandra Prakash vs. Jaibeer Singh) U/s 138 of N.I. Act, P.S. Shikera, District Muzaffarnagar is set aside. b. The matter stands remitted back to the court below to pass a fresh order in accordance with law. c. A joint statement has been made by learned counsel for the applicant as well as the counsel for opposite party no.2 that as per the instructions received from their client that they shall not take unnecessary adjournment, thus, the court below shall decide the same without granting unnecessary adjournment and in case any adjournment is granted then the same should be five days at a stretch. d. For facilitation and early disposal, a copy of this order be furnished before the court below by 22.07.2025. Order Date :- 14.7.2025 /C. MANI (Vikas Budhwar,J.) CHANDRAMANI VERMA CHANDRAMANI VERMA High Court of Judicature at Allahabad High Court of Judicature at Allahabad