Kant Tractors through owner Laxmi Kant Panday v. Umesh Chandra Mishra)

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

3. This application under Section 482 Cr.PC. has been filed by the applicant to quash the impugned order dated 29.10.2018 under Section 138 Negotiable instrument Act, Police Station Atarra, District Banda passed by Special Judicial Magistrate-1st, Banda passed in Complaint Case no. 17/IX of 2018 (Kant Tractors through owner Laxmi Kant Panday vs. Umesh Chandra Mishra).

4. The case of the applicant is that on 23.01.2018, the opposite party no. 2 had preferred a complaint under Section 138 of the N.I. Act before the Court of Special Judicial Magistrate-1st, Banda with an allegation that the applicant, with respect to discharge of its liability, had drawn a cheque bearing No. 374343 dated

14.11.2017 of Rs. 8,96,000/- which on presentation in the Bank on

15.11.2017 came to be dishonoured on 23.11.2017 with the remark 'insufficient funds', information whereof was made available to the opposite party no. 2 on 29.11.2017, thereafter a statutory demand notice was issued on 15.12.2017 and in failing to make the payment even 15 days, the complaint under Section 138 of the N.I. Act came to be preferred by the opposite party no. 2 against the applicant on 23.01.2018. The Court of Special Judicial Magistrate- 1st, Banda proceeded to summon the applicant under Section 138 of the N.I. Act on 12.02.2018. Thereafter an application came to be preferred by the opposite party no. 2 that since he has denied the charges thus in view of the provisions contained under Section 143A of the N.I. Act, the opposite party no. 2 be accorded 20% interim compensation. The said application came to be objected by the applicant and it was allowed on 29.10.2018 while directing the applicant to deposit 10% of the total amount of Rs. 8,96,000/-.

5. Questioning the said order, the applicant has been filed the present application.

6. Learned counsel for the applicant has submitted that the order dated 29.10.2018 according interim compensation to the tune of 20% cannot be sustained for the simple reason that Section 143A of the N.I. Act came to be inserted in the Negotiable Instruments Act by Amendment Act No. 20 of 2018 w.e.f. 01.09.2018. However, in the present case, the cheque is stated to have been dishonoured on 23.11.2017, further the statutory demand notice came to be issued on 15.12.2017 and followed by complaint under Section 138 of the N.I. Act on 23.01.2018 and the summoning order was issued on 12.02.2018. He submits that the provisions contained under Section 143A of the N.I. Act are perspective in nature and not retrospective. Reliance has been placed upon the judgment of the Hon'ble Apex Court in G.J. Raja v. Tejraj Surana; (2019) 19 SCC 469, Surinder Singh Deswal @ Colonel S.S. Deswal and others v. Virender Gandhi; (2019) 11 SCC 341 and also Surinder Singh Deswal @ Colonel S.S. Deswal and others v. Virender Gandhi and another; (2020) 2 SCC 514.

7. Learned State Law Officer as well as counsel for the opposite party no. 2 submits that once the cheque stood drawn and the same was dishonoured then the presumption under Section 139 of the N.I. Act would always be there, however, they could not dispute the fact that Section 143A of the N.I. Act was inserted in the Negotiable Instrument Act on 01.09.2018 whereas the cheque stood dishonoured on 23.11.2017, statutory demand notice was issued on 15.12.2017, complaint under Section 138 of the N.I. Act was issued on 23.01.2018 and the summoning order came to be passed on 12.02.2018. They also could not dispute the proposition of law as culled out in the above noted decision. According to the learned counsel for the opposite party no. 2, the applicant is avoiding the participation and is not joining the proceedings so as to give it a logical end.

8. At this stage, learned counsel for the applicant submits that the applicant would participate and contest the proceedings and he has no objection, in case, direction is issued for expeditious disposal of the proceedings.

9. I have heard learned counsel for the parties and gone through the records carefully. "143 A 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 compensation1 to the complainant— (a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and (b) in any other case, upon framing of charge. (2) The interim compensation under sub-section (1) shall not exceed twenty percent of the amount of the cheque. (3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (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. (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, shall be reduced by the amount paid or recovered as interim compensation under this section."

10. Apparently, as per the own case of the parties, the cheque is stated to have been dishonoured and was drawn on 04.11.2017 by the applicant which came to be dishonoured on 23.11.2017, a statutory demand notice was issued on 15.12.2017, complaint under Section 138 of the N.I. Act was preferred on 23.01.2018 and the summoning order is dated 12.02.2018. The aforesaid dates are relevant, since the entire events is prior to the enforcement of Section 143A of the N.I. Act which is w.e.f. 01.09.2018. The issue as to whether the Section 143A of the N.I. Act is perspective or retrospective in nature came up for consideration in the judgment of the Hon'ble Apex Court in G.J. Raja (supra) wherein in paragraph no. 23, it was observed as under: "23. In the ultimate analysis, we hold Section 143-A to be prospective in operation and that the provisions of said Section 143-A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143-A in the statute boos Consequently, the orders passed by the trial court as well as the High Count are required to be set aside. The money deposited by the appellant, pursuant to the interim direction passed? by this Court, shall be returned to the appellant along with interest accrued thereon within two weeks from the date of this order."

11. The same came to be reiterated in the case of Surinder Singh Deswal @ Colonel S.S. Deswal and others (i) (supra) and Surinder Singh Deswal @ Colonel S.S. Deswal and others (ii) (supra).

12. Bearing in mind the fact that the events relating to the dishonouring of the cheque, issuance of the statutory demand notice and filing of complaint under Section 138 of the N.I. Act and issuance of summoning order, are prior to insertion of Section 143A of the N.I. Act i.e. 01.09.2018 and the said provision is perspective and not retrospective in nature, thus, the order dated

29.10.2018 passed by Special Judicial Magistrate-1st, Banda is set aside.

13. Accordingly, the application is decided in the following terms: (a). The order dated 29.10.2018 passed by Special Judicial Magistrate-1st, Banda is set aside. (b). Since the applicant as per instructions received from his client submits that the applicant shall be participating in the proceedings and would not take adjournment, thus, a direction is issued to the court below to decide the said proceedings as per the provisions contained sub-section (3) of Section 143 of the N.I. Act strictly in accordance with law.

14. Accordingly, the application stands disposed of. ASHUTOSH KUMAR PRAJAPATI ASHUTOSH KUMAR PRAJAPATI High Court of Judicature at Allahabad High Court of Judicature at Allahabad Order Date :- 23.7.2025 A. Prajapati

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

3. This application under Section 482 Cr.PC. has been filed by the applicant to quash the impugned order dated 29.10.2018 under Section 138 Negotiable instrument Act, Police Station Atarra, District Banda passed by Special Judicial Magistrate-1st, Banda passed in Complaint Case no. 17/IX of 2018 (Kant Tractors through owner Laxmi Kant Panday vs. Umesh Chandra Mishra).

4. The case of the applicant is that on 23.01.2018, the opposite party no. 2 had preferred a complaint under Section 138 of the N.I. Act before the Court of Special Judicial Magistrate-1st, Banda with an allegation that the applicant, with respect to discharge of its liability, had drawn a cheque bearing No. 374343 dated

14.11.2017 of Rs. 8,96,000/- which on presentation in the Bank on

15.11.2017 came to be dishonoured on 23.11.2017 with the remark 'insufficient funds', information whereof was made available to the opposite party no. 2 on 29.11.2017, thereafter a statutory demand notice was issued on 15.12.2017 and in failing to make the payment even 15 days, the complaint under Section 138 of the N.I. Act came to be preferred by the opposite party no. 2 against the applicant on 23.01.2018. The Court of Special Judicial Magistrate- 1st, Banda proceeded to summon the applicant under Section 138 of the N.I. Act on 12.02.2018. Thereafter an application came to be preferred by the opposite party no. 2 that since he has denied the charges thus in view of the provisions contained under Section 143A of the N.I. Act, the opposite party no. 2 be accorded 20% interim compensation. The said application came to be objected by the applicant and it was allowed on 29.10.2018 while directing the applicant to deposit 10% of the total amount of Rs. 8,96,000/-.

5. Questioning the said order, the applicant has been filed the present application.

6. Learned counsel for the applicant has submitted that the order dated 29.10.2018 according interim compensation to the tune of 20% cannot be sustained for the simple reason that Section 143A of the N.I. Act came to be inserted in the Negotiable Instruments Act by Amendment Act No. 20 of 2018 w.e.f. 01.09.2018. However, in the present case, the cheque is stated to have been dishonoured on 23.11.2017, further the statutory demand notice came to be issued on 15.12.2017 and followed by complaint under Section 138 of the N.I. Act on 23.01.2018 and the summoning order was issued on 12.02.2018. He submits that the provisions contained under Section 143A of the N.I. Act are perspective in nature and not retrospective. Reliance has been placed upon the judgment of the Hon'ble Apex Court in G.J. Raja v. Tejraj Surana; (2019) 19 SCC 469, Surinder Singh Deswal @ Colonel S.S. Deswal and others v. Virender Gandhi; (2019) 11 SCC 341 and also Surinder Singh Deswal @ Colonel S.S. Deswal and others v. Virender Gandhi and another; (2020) 2 SCC 514.

7. Learned State Law Officer as well as counsel for the opposite party no. 2 submits that once the cheque stood drawn and the same was dishonoured then the presumption under Section 139 of the N.I. Act would always be there, however, they could not dispute the fact that Section 143A of the N.I. Act was inserted in the Negotiable Instrument Act on 01.09.2018 whereas the cheque stood dishonoured on 23.11.2017, statutory demand notice was issued on 15.12.2017, complaint under Section 138 of the N.I. Act was issued on 23.01.2018 and the summoning order came to be passed on 12.02.2018. They also could not dispute the proposition of law as culled out in the above noted decision. According to the learned counsel for the opposite party no. 2, the applicant is avoiding the participation and is not joining the proceedings so as to give it a logical end.

8. At this stage, learned counsel for the applicant submits that the applicant would participate and contest the proceedings and he has no objection, in case, direction is issued for expeditious disposal of the proceedings.

9. I have heard learned counsel for the parties and gone through the records carefully. "143 A 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 compensation1 to the complainant— (a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and (b) in any other case, upon framing of charge. (2) The interim compensation under sub-section (1) shall not exceed twenty percent of the amount of the cheque. (3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (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. (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, shall be reduced by the amount paid or recovered as interim compensation under this section."

10. Apparently, as per the own case of the parties, the cheque is stated to have been dishonoured and was drawn on 04.11.2017 by the applicant which came to be dishonoured on 23.11.2017, a statutory demand notice was issued on 15.12.2017, complaint under Section 138 of the N.I. Act was preferred on 23.01.2018 and the summoning order is dated 12.02.2018. The aforesaid dates are relevant, since the entire events is prior to the enforcement of Section 143A of the N.I. Act which is w.e.f. 01.09.2018. The issue as to whether the Section 143A of the N.I. Act is perspective or retrospective in nature came up for consideration in the judgment of the Hon'ble Apex Court in G.J. Raja (supra) wherein in paragraph no. 23, it was observed as under: "23. In the ultimate analysis, we hold Section 143-A to be prospective in operation and that the provisions of said Section 143-A can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the introduction of said Section 143-A in the statute boos Consequently, the orders passed by the trial court as well as the High Count are required to be set aside. The money deposited by the appellant, pursuant to the interim direction passed? by this Court, shall be returned to the appellant along with interest accrued thereon within two weeks from the date of this order."

11. The same came to be reiterated in the case of Surinder Singh Deswal @ Colonel S.S. Deswal and others (i) (supra) and Surinder Singh Deswal @ Colonel S.S. Deswal and others (ii) (supra).

12. Bearing in mind the fact that the events relating to the dishonouring of the cheque, issuance of the statutory demand notice and filing of complaint under Section 138 of the N.I. Act and issuance of summoning order, are prior to insertion of Section 143A of the N.I. Act i.e. 01.09.2018 and the said provision is perspective and not retrospective in nature, thus, the order dated

29.10.2018 passed by Special Judicial Magistrate-1st, Banda is set aside.

13. Accordingly, the application is decided in the following terms: (a). The order dated 29.10.2018 passed by Special Judicial Magistrate-1st, Banda is set aside. (b). Since the applicant as per instructions received from his client submits that the applicant shall be participating in the proceedings and would not take adjournment, thus, a direction is issued to the court below to decide the said proceedings as per the provisions contained sub-section (3) of Section 143 of the N.I. Act strictly in accordance with law.

14. Accordingly, the application stands disposed of. ASHUTOSH KUMAR PRAJAPATI ASHUTOSH KUMAR PRAJAPATI High Court of Judicature at Allahabad High Court of Judicature at Allahabad Order Date :- 23.7.2025 A. Prajapati