High Court · 2025

1. Heard Sri Santosh Kumar Shukla, learned counsel for the applicant as well as Sri Vikas Sharma, learned State Law Officer for the State.

2. In view of the order which is being proposed to be passed, notice has not been issued to the opposite party no. 2.

3. This application u/s 528 of BNSS has been preferred to set aside the impugned order dt. 09.12.2024 passed U/S 143A 2(1) Negotiable Instruments Act (Annexure-4) as well as the entire proceedings of complaint case No. 2923/2019, U/S 138 Negotiable Instruments Act pending in this court of Judicial Magistrate, Firozabad.

4. Learned counsel for the applicant has submitted that a complaint was filed by the opposite party no. 2 on 28.08.2019 under Section 138 of the NI Act with an allegation that a cheque bearing no. 915097 of an amount of Rs. 1,00,000/- dated 10.06.2019 was drawn by the applicant in favour of the opposite party no. 2 which on presentation in the bank was dishonored on account of the fact that the account is closed and on 31.07.2019, a statutory notice was issued followed by the complaint on 28.08.2019. Learned counsel for the applicant submits that the applicant came to be summoned on 07.01.2021 by the court below. During the pendency of the said proceedings, an application purported to be under Section 143A of the NI Act came to be filed by the opposite party no. 2 on 29.04.2024 for grant of interim compensation to the tune of 20% which on contest came to be allowed by the court of Judicial Magistrate, Firozabad in Complaint Case No. 2923 of 2019 on 09.12.2024.

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

6. Learned counsel for the applicant has submitted that the order dated 09.12.2024 passed by the court below 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 v. State of Jharkand and another; [2024] 3 S.C.R. 438. He submits that there are certain broad principles and criteria enunciated according to which, the court is to decide the application u/s 143A of the NI Act, he submits that though the contention so sought to be raised by the respective parties was noticed in the order but there has been no compliance of the mandate in Rakesh Ranjan Srivastava (supra) he, thus, submits that the order in question be set aside, matter be remitted back to the court below to pass a fresh order.

7. Learned AGA, on the other hand, submits that though there happens to be recital of the stand taken by both the parties but the consideration of the parameters and the guidelines laid down in Rakesh Ranjan Srivastava (supra) has not done at all.

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

9. During the pendency of the proceedings under Section 138 of the NI Act, a provision has been inserted under Section 143A in favour of the complainant to file an appropriate application for grant of interim compensation to the tune of 20%. On the filing of the said application, the accused is granted opportunity to rebut the said allegations and then, an order is to be passed. In Rakesh Ranjan Srivastava (supra), however, the Hon'ble Apex Court has initiated certain broad parameters which inevitably is prima facie consideration of the case of the complainant and of the accused, broad parameters which read 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."

10. In the present case, the Court finds that none of the criteria and the parameters so laid down has been considered being the prima facie consideration on the merits of the matter financial distress of the accused, in case, compensation is to be granted then the quantum of punishment. Since the aforesaid aspects are clearly untouched, thus, the order dated 09.12.2024 passed in Complaint Case No. 2923 of 2019 cannot be sustained.

11. Accordingly, the order dated 09.12.2024 passed in Complaint Case No. 2923 of 2019 is set aside, the matter stands remitted back to the court below to pass a fresh order strictly in accordance with law. For facilitation, the applicant shall submit a certified copy of the order by 30.05.2025. Sri Santosh Kumar Shukla, in his usual fairness has made a statement at bar as per the instructions received from that his client will take any unnecessary adjournment in that regard. In case, any adjournment is granted then to the same should be on exceptional circumstances not beyond two days and further not more than three days at one stretch.

12. With the above observations, the application stands disposed of. Order Date :- 14.5.2025 Rajesh RAJESH KUMAR High Court of Judicature at Allahabad

1. Heard Sri Santosh Kumar Shukla, learned counsel for the applicant as well as Sri Vikas Sharma, learned State Law Officer for the State.

2. In view of the order which is being proposed to be passed, notice has not been issued to the opposite party no. 2.

3. This application u/s 528 of BNSS has been preferred to set aside the impugned order dt. 09.12.2024 passed U/S 143A 2(1) Negotiable Instruments Act (Annexure-4) as well as the entire proceedings of complaint case No. 2923/2019, U/S 138 Negotiable Instruments Act pending in this court of Judicial Magistrate, Firozabad.

4. Learned counsel for the applicant has submitted that a complaint was filed by the opposite party no. 2 on 28.08.2019 under Section 138 of the NI Act with an allegation that a cheque bearing no. 915097 of an amount of Rs. 1,00,000/- dated 10.06.2019 was drawn by the applicant in favour of the opposite party no. 2 which on presentation in the bank was dishonored on account of the fact that the account is closed and on 31.07.2019, a statutory notice was issued followed by the complaint on 28.08.2019. Learned counsel for the applicant submits that the applicant came to be summoned on 07.01.2021 by the court below. During the pendency of the said proceedings, an application purported to be under Section 143A of the NI Act came to be filed by the opposite party no. 2 on 29.04.2024 for grant of interim compensation to the tune of 20% which on contest came to be allowed by the court of Judicial Magistrate, Firozabad in Complaint Case No. 2923 of 2019 on 09.12.2024.

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

6. Learned counsel for the applicant has submitted that the order dated 09.12.2024 passed by the court below 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 v. State of Jharkand and another; [2024] 3 S.C.R. 438. He submits that there are certain broad principles and criteria enunciated according to which, the court is to decide the application u/s 143A of the NI Act, he submits that though the contention so sought to be raised by the respective parties was noticed in the order but there has been no compliance of the mandate in Rakesh Ranjan Srivastava (supra) he, thus, submits that the order in question be set aside, matter be remitted back to the court below to pass a fresh order.

7. Learned AGA, on the other hand, submits that though there happens to be recital of the stand taken by both the parties but the consideration of the parameters and the guidelines laid down in Rakesh Ranjan Srivastava (supra) has not done at all.

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

9. During the pendency of the proceedings under Section 138 of the NI Act, a provision has been inserted under Section 143A in favour of the complainant to file an appropriate application for grant of interim compensation to the tune of 20%. On the filing of the said application, the accused is granted opportunity to rebut the said allegations and then, an order is to be passed. In Rakesh Ranjan Srivastava (supra), however, the Hon'ble Apex Court has initiated certain broad parameters which inevitably is prima facie consideration of the case of the complainant and of the accused, broad parameters which read 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."

10. In the present case, the Court finds that none of the criteria and the parameters so laid down has been considered being the prima facie consideration on the merits of the matter financial distress of the accused, in case, compensation is to be granted then the quantum of punishment. Since the aforesaid aspects are clearly untouched, thus, the order dated 09.12.2024 passed in Complaint Case No. 2923 of 2019 cannot be sustained.

11. Accordingly, the order dated 09.12.2024 passed in Complaint Case No. 2923 of 2019 is set aside, the matter stands remitted back to the court below to pass a fresh order strictly in accordance with law. For facilitation, the applicant shall submit a certified copy of the order by 30.05.2025. Sri Santosh Kumar Shukla, in his usual fairness has made a statement at bar as per the instructions received from that his client will take any unnecessary adjournment in that regard. In case, any adjournment is granted then to the same should be on exceptional circumstances not beyond two days and further not more than three days at one stretch.

12. With the above observations, the application stands disposed of. Order Date :- 14.5.2025 Rajesh RAJESH KUMAR High Court of Judicature at Allahabad