Praveen Kumar Mishra v. Sangeeta) under section

4. Learned counsel for the applicant submits that a complaint was lodged by the opposite party no. 2 on 05.03.2020 against the applicant under Section 138 of the N.I. Act with an allegation with respect to discharge of liability, a cheque bearing no. 071597 of Rs.10,00,000 dated 18.01.2020 was drawn by the applicant which on presentation in the bank was dishonored on 21.01.2022 followed by a statutory demand notice on 30.01.2020 and the complaint on 05.03.2020 thereafter the applicant was summoned on 28.09.2020 under Section 138 of the N.I. Act. An application came to be preferred by the opposite no. 2/ complainant for grant of interim compensation to the tune of 20% out of the total amount of Rs.10,00,000/- which came to be allowed on 12.02.2024 by the Court of Presiding Officer, Additional Judge, Varanasi in complaint case No. 806 of 2023 (Praveen Kumar v. Sangeeta).

5. Questioning the summoning order as well as the consequential orders including the order dated 12.02.2024 allowing the application under Section 143A of the N.I. Act, preferred by the opposite party no. 2, the present application has been filed.

6. Learned counsel for the applicant has submitted that merely on asking the interim compensation has been accorded without considering 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 various criteria which have been adhered too including the discussion on the prima facie case, the case set up by the complainant, the defence of the accused, quantum of compensation, in case, the Court comes to the conclusion that compensation is to be awarded, financial distress of the accused as well as other factors relatable to the nature of transaction, relationship of the parties etc. Submission is that once the said exercise is lacking, thus, the order be set aside and the matter remitted back to pass fresh order.

7. Learned AGA on the other hand submits that the issues stands crystallized in view of the judgment in the case of Rakesh Ranjan Srivastava (supra) and according to him, the order be set aside and the matter remitted back to pass fresh order.

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

9. The order dated 12.02.2024, according to interim composition is quoted in extenso: " पपककर पर पररवकदद अधधवकक उपसससत। अभभयपकक कक ओर सस हकधजरद मकफक पसतपत। अभभयपकक कस भवदकन अधधवकक पद०डबलल०- १ कक पभतपरदकक हसतप उपसससत नहह आयस और न हद धकरक 143 भवरद ककई आपधत दकधखल भकयस। उक पकसरनकपत कस भवरद अभभयपकक कस भवदकन अधधवकक ममधखक रप सस भद आपधत हसतप उपसससत नहह आयस। क परककमय धलखत अधधभनयम कस अनतररत पसतपत पकसरनकपत कस पररवकदद नस धकरक 143 क परककमय धलखत अधधभनयम कस अनतररत इस आशय पकसरनकपत पसतपत भकयक भक पररवकदद कक अभभयपक सस अनतररम पभतकर कस रप मम चसक धनरकभश कक 20% भदलकयक जकय। अनतररम पभतकर पकसरनकपत पर पररवकदद कस अवलककन भकयक। भवदकन अधधवकक कक सपनक एवव पतकवलद कक धकरक 251 हसतककर हकनक सवदककर भकयक हह। पररवकदद कस अवलककन कस पशकतत मम इस मत कक हह पभतकर कस रप मम चसक धनरकभश कक 20% दव०प०सव० कस अनतररत उभलधखत बयकन मम अभभयपकक नस कधसत चसक पर अपनक भवदकन अधधवकक कक सपननस एवव पतकवलद कस ह भक इस सतर पर अभभयपकक सस पररवकदद कक अनतररम भदलकयक जकनक नयकय सवरत हह। आदसश पररवकदद दकरक धकरक 143 क परककमय धलखत अधधभनयम कस अनतररत पसतपत पकसरनकपत सवदककर भकयक जकतक हह। अभभयपकक कक आदसभशत भकयक जकतक हह भक पररवकदद कक अरलद भतधस तक चसक धनरकभश 10,00,000/- अदक करस। पद०डबलल०-1 कक पभतपरदकक हसतप भदनकवक 27-03-2024 रपयस कक 20% असकरतत, रपयस 2,00,000/- कक पसश हक।"

10. A perusal of the order dated 12.02.2024 allowing the application of the opposite party no. 2 for interim compensation would reveal that the yardsticks so laid down by the Hon'ble Apex Court has not been adhered to which obviously the Court has 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 respect to the application, the financial distress is also to be taken into consideration. A direction be issued to pay interim compensation is to be made only when prima facie case is made out and once the prima facie case is made out for grant of interim compensation then the quantum of compensation is to be ascertained

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. Here the grant of interim compensation has been accorded without considering the said criterias which have been enumerated therein. Since the order in question is not in accordance with the principle so enunciated by the Hon'ble Apex Court in Rakesh Ranjan Srivastava (supra), thus, this Court is not issuing the notice but setting aside the order dated 12.02.2024 passed in Complaint Case No. 806/2023.

13. Accordingly, the present application stands disposed of.

14. The order dated 12.02.2024 passed in Complaint Case No. 806/2023 is set aside.

15. The matter is remitted to back to the court below to pass fresh order with most expedition.

16. In order to facilitate expeditious disposal of the matter, the applicant is to furnish the certified copy of the order by

30.05.2025.

17. The court below post remand shall pass a fresh order strictly in accordance with law principle laid down in the case of Rakesh Ranjan Srivastava (supra).

18. The applicant is represented before this Court through his counsel, thus, the applicant shall not take any adjournment, in case, adjournment is being granted for any eventuality then the same should be on the genuine reasons and not more than seven days at a stretch. Order Date :- 27.5.2025 A. Prajapati ASHUTOSH KUMAR PRAJAPATI High Court of Judicature at Allahabad

4. Learned counsel for the applicant submits that a complaint was lodged by the opposite party no. 2 on 05.03.2020 against the applicant under Section 138 of the N.I. Act with an allegation with respect to discharge of liability, a cheque bearing no. 071597 of Rs.10,00,000 dated 18.01.2020 was drawn by the applicant which on presentation in the bank was dishonored on 21.01.2022 followed by a statutory demand notice on 30.01.2020 and the complaint on 05.03.2020 thereafter the applicant was summoned on 28.09.2020 under Section 138 of the N.I. Act. An application came to be preferred by the opposite no. 2/ complainant for grant of interim compensation to the tune of 20% out of the total amount of Rs.10,00,000/- which came to be allowed on 12.02.2024 by the Court of Presiding Officer, Additional Judge, Varanasi in complaint case No. 806 of 2023 (Praveen Kumar v. Sangeeta).

5. Questioning the summoning order as well as the consequential orders including the order dated 12.02.2024 allowing the application under Section 143A of the N.I. Act, preferred by the opposite party no. 2, the present application has been filed.

6. Learned counsel for the applicant has submitted that merely on asking the interim compensation has been accorded without considering 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 various criteria which have been adhered too including the discussion on the prima facie case, the case set up by the complainant, the defence of the accused, quantum of compensation, in case, the Court comes to the conclusion that compensation is to be awarded, financial distress of the accused as well as other factors relatable to the nature of transaction, relationship of the parties etc. Submission is that once the said exercise is lacking, thus, the order be set aside and the matter remitted back to pass fresh order.

7. Learned AGA on the other hand submits that the issues stands crystallized in view of the judgment in the case of Rakesh Ranjan Srivastava (supra) and according to him, the order be set aside and the matter remitted back to pass fresh order.

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

9. The order dated 12.02.2024, according to interim composition is quoted in extenso: " पपककर पर पररवकदद अधधवकक उपसससत। अभभयपकक कक ओर सस हकधजरद मकफक पसतपत। अभभयपकक कस भवदकन अधधवकक पद०डबलल०- १ कक पभतपरदकक हसतप उपसससत नहह आयस और न हद धकरक 143 भवरद ककई आपधत दकधखल भकयस। उक पकसरनकपत कस भवरद अभभयपकक कस भवदकन अधधवकक ममधखक रप सस भद आपधत हसतप उपसससत नहह आयस। क परककमय धलखत अधधभनयम कस अनतररत पसतपत पकसरनकपत कस पररवकदद नस धकरक 143 क परककमय धलखत अधधभनयम कस अनतररत इस आशय पकसरनकपत पसतपत भकयक भक पररवकदद कक अभभयपक सस अनतररम पभतकर कस रप मम चसक धनरकभश कक 20% भदलकयक जकय। अनतररम पभतकर पकसरनकपत पर पररवकदद कस अवलककन भकयक। भवदकन अधधवकक कक सपनक एवव पतकवलद कक धकरक 251 हसतककर हकनक सवदककर भकयक हह। पररवकदद कस अवलककन कस पशकतत मम इस मत कक हह पभतकर कस रप मम चसक धनरकभश कक 20% दव०प०सव० कस अनतररत उभलधखत बयकन मम अभभयपकक नस कधसत चसक पर अपनक भवदकन अधधवकक कक सपननस एवव पतकवलद कस ह भक इस सतर पर अभभयपकक सस पररवकदद कक अनतररम भदलकयक जकनक नयकय सवरत हह। आदसश पररवकदद दकरक धकरक 143 क परककमय धलखत अधधभनयम कस अनतररत पसतपत पकसरनकपत सवदककर भकयक जकतक हह। अभभयपकक कक आदसभशत भकयक जकतक हह भक पररवकदद कक अरलद भतधस तक चसक धनरकभश 10,00,000/- अदक करस। पद०डबलल०-1 कक पभतपरदकक हसतप भदनकवक 27-03-2024 रपयस कक 20% असकरतत, रपयस 2,00,000/- कक पसश हक।"

10. A perusal of the order dated 12.02.2024 allowing the application of the opposite party no. 2 for interim compensation would reveal that the yardsticks so laid down by the Hon'ble Apex Court has not been adhered to which obviously the Court has 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 respect to the application, the financial distress is also to be taken into consideration. A direction be issued to pay interim compensation is to be made only when prima facie case is made out and once the prima facie case is made out for grant of interim compensation then the quantum of compensation is to be ascertained

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. Here the grant of interim compensation has been accorded without considering the said criterias which have been enumerated therein. Since the order in question is not in accordance with the principle so enunciated by the Hon'ble Apex Court in Rakesh Ranjan Srivastava (supra), thus, this Court is not issuing the notice but setting aside the order dated 12.02.2024 passed in Complaint Case No. 806/2023.

13. Accordingly, the present application stands disposed of.

14. The order dated 12.02.2024 passed in Complaint Case No. 806/2023 is set aside.

15. The matter is remitted to back to the court below to pass fresh order with most expedition.

16. In order to facilitate expeditious disposal of the matter, the applicant is to furnish the certified copy of the order by

30.05.2025.

17. The court below post remand shall pass a fresh order strictly in accordance with law principle laid down in the case of Rakesh Ranjan Srivastava (supra).

18. The applicant is represented before this Court through his counsel, thus, the applicant shall not take any adjournment, in case, adjournment is being granted for any eventuality then the same should be on the genuine reasons and not more than seven days at a stretch. Order Date :- 27.5.2025 A. Prajapati ASHUTOSH KUMAR PRAJAPATI High Court of Judicature at Allahabad