High Court · 2025

(S.D.), F.T.C/Additional Chief Judicial Magistrate, Firozabad, in Complaint Case No. 9667 of 2022 U/s 143A N.I. Act, Police Station-South, District- Firozabad.

4. The case of the applicant is that the complaint was lodged by the opposite party No. 2 against applicant on 04.04.2022 under Section 138 of the N.I. Act with an allegation that with respect to discharge of a liability, a cheque bearing No. 365717 dated

08.02.2022 of an amount of Rs.10,00,000/- was drawn by the applicant in favour of the opposite party no. 2, which on presentation in the bank was dishonored on 10.02.2022 on the ground of funds insufficient, followed by a statutory notice and the complaint. The applicant was summoned under Section 138 of the N.I. Act on 20.07.2022, an application came to be preferred by the opposite party no. 2 for the grant of interim compensation under Section 143A of the N.I. Act which came to be rejected on

16.03.2024 in Complaint Case No. 9667 of 2022 against which the opposite party no. 2 preferred a Criminal Revision No. 70 of 2024 which came to be allowed on 03.01.2025 setting aside the order dated 16.03.2024 remitting the matter back to pass fresh orders, thereafter on 28.02.2025, the application purported to be under Section 143A of the N.I. Act preferred by the opposite party no. 2/ complainant came to be allowed, according 20% compensation of the total amount of Rs.10,00,000/-.

5. Questioning the order dated 28.02.2025, according interim compensation to the tune of 20% in exercise of powers under Section 143A of the Act, the present application has been preferred.

6. Learned counsel for the applicant has submitted that the order dated 28.02.2025 passed by the court below cannot be sustained for a single moment for the simple reason that it does not confirm to the mandate of the Hon'ble Apex Court in Rakesh Ranjan Srivastava v. State of Jharkand and another; [2024] 3 S.C.R.

438. He submits that there are various criteria which have to be 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. Apparently, the complaint stood lodged under Section 138 of the N.I. Act with respect to dishonouring of a cheque of an amount of Rs.10,00,000/- thereafter the applicant was summoned, an application under section 143A of the N.I. Act was preferred by the opposite party no. 2 which came to be rejected on 16.03.2024 against which a criminal revision was preferred which came to be allowed on 03.01.2025 remitting the matter back and an order has been passed on 28.02.2025, according interim compensation to the tune of 20%.

10. The order dated 28.02.2025, according to interim composition is quoted in extenso: "ददनननक -28.02.2025 पतनवलल दनगरननल नयनयनलय कक दनरन पनररत आदकश कक अननपनलन मम पनररनन पत, अनतगरत धनरन-143 ए पननन सननन गयन। पररवनदल दनरबलन ससनह कक ओर सक इस आशय कन पनररनन पत पसतनत दकयनन गयन हह दक अदभयनक दनरन कनफक समय बलत जननक कक बनद भल पररवनद कन दनसतनरण नहह करनयन जन रहन हह। एन०आई० एकट कक धनरन 143 ए कक जकडन गयन हह। पररवनदल कन पररवनद एन०आई० एकट कक धनरन-143 ए जकडनक कक उपरननत पसतनत दकयन हह। नयनयनलय मम बयनन चनजर बननयन जन चनकन हह। इससलयक नयनयदहत मम पररवनदल कक आवशयकतन कक कम मम पनररनन पत अनतगरत धनरन 143 ए एन०आई० एकट पसतनत दकयन जन रहन हह। पररवनदल कक दवपकल सक चहक मनवसलग 10 लनख कन 20 पदतशत धनरनदश पररवनदल कक ददलनयन जनयक। इस सतर पर पररवनद पत मम ददशरत धनरनदश कन 20 पदतशत भनगतनन करनयक जननक कक यनचनन कक गयल हह। दटपकल कक कक ओर सक ममसखक आपसत कक गयल हह। सननन तरन पतनवलल कन अवलककन दकयन। पतनवलल कक अवलककन सक सपष हह दक दवपकल दनरन पररवनदल कक 10 लनख रपयक कन बहक ददयन गयन रन, सजसक पररवनदल नक अपनक खनतक मम जमन दकयन तक उक बबक उसकक बबक खनतक मम अपयनरप धनरनदश हकनक कक कनरण बनउनस हक गयन। उसकक बनद भल दवपकल दनरन पररवनदल कक ककई धनरनदश नहह दल गयल हह। धनरन-143 ए एन०आई०एकट कक मनशन कक अननसनर पररवनदल कक उक चहक मम ददशरत धनरनदश मनह०-10,00,000/- भनगतनन दवपकल सक करनयन जननन नयनयकदचत पतलत हकतन हह। रपयक मम सक अनतररम भनगतनन कक रप मम 20 पदतशत आदकश दवपकल कक आदकदशत दकयन जनतन हह 10,00,000/- वनसतक सननवनई ददनननक-19.03.2025 रपयक मम सक 20 कक पकश हक।" दक पररवनदल कक चहक मम ददशरत धनरनदश मनब०- पदतशत भनगतनन दवपकल एक मनह कक अनदर करम। पतनवलल

11. A perusal of the order dated 28.02.2025 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 is that 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

12. 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."

13. Here the grant of interim compensation has been accorded also without considering the said criterias which have been enumerated therein. Since the order in question is not in consonance 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 28.02.2025 passed in Complaint Case No. 9667/2022.

14. Accordingly, the present application stands disposed of.

15. The order dated 28.02.2025 passed in Complaint Case No. 9667/2022 is set aside.

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

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

30.05.2025.

18. 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).

19. 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 ASHUTOSH KUMAR PRAJAPATI High Court of Judicature at Allahabad High Court of Judicature at Allahabad

(S.D.), F.T.C/Additional Chief Judicial Magistrate, Firozabad, in Complaint Case No. 9667 of 2022 U/s 143A N.I. Act, Police Station-South, District- Firozabad.

4. The case of the applicant is that the complaint was lodged by the opposite party No. 2 against applicant on 04.04.2022 under Section 138 of the N.I. Act with an allegation that with respect to discharge of a liability, a cheque bearing No. 365717 dated

08.02.2022 of an amount of Rs.10,00,000/- was drawn by the applicant in favour of the opposite party no. 2, which on presentation in the bank was dishonored on 10.02.2022 on the ground of funds insufficient, followed by a statutory notice and the complaint. The applicant was summoned under Section 138 of the N.I. Act on 20.07.2022, an application came to be preferred by the opposite party no. 2 for the grant of interim compensation under Section 143A of the N.I. Act which came to be rejected on

16.03.2024 in Complaint Case No. 9667 of 2022 against which the opposite party no. 2 preferred a Criminal Revision No. 70 of 2024 which came to be allowed on 03.01.2025 setting aside the order dated 16.03.2024 remitting the matter back to pass fresh orders, thereafter on 28.02.2025, the application purported to be under Section 143A of the N.I. Act preferred by the opposite party no. 2/ complainant came to be allowed, according 20% compensation of the total amount of Rs.10,00,000/-.

5. Questioning the order dated 28.02.2025, according interim compensation to the tune of 20% in exercise of powers under Section 143A of the Act, the present application has been preferred.

6. Learned counsel for the applicant has submitted that the order dated 28.02.2025 passed by the court below cannot be sustained for a single moment for the simple reason that it does not confirm to the mandate of the Hon'ble Apex Court in Rakesh Ranjan Srivastava v. State of Jharkand and another; [2024] 3 S.C.R.

438. He submits that there are various criteria which have to be 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. Apparently, the complaint stood lodged under Section 138 of the N.I. Act with respect to dishonouring of a cheque of an amount of Rs.10,00,000/- thereafter the applicant was summoned, an application under section 143A of the N.I. Act was preferred by the opposite party no. 2 which came to be rejected on 16.03.2024 against which a criminal revision was preferred which came to be allowed on 03.01.2025 remitting the matter back and an order has been passed on 28.02.2025, according interim compensation to the tune of 20%.

10. The order dated 28.02.2025, according to interim composition is quoted in extenso: "ददनननक -28.02.2025 पतनवलल दनगरननल नयनयनलय कक दनरन पनररत आदकश कक अननपनलन मम पनररनन पत, अनतगरत धनरन-143 ए पननन सननन गयन। पररवनदल दनरबलन ससनह कक ओर सक इस आशय कन पनररनन पत पसतनत दकयनन गयन हह दक अदभयनक दनरन कनफक समय बलत जननक कक बनद भल पररवनद कन दनसतनरण नहह करनयन जन रहन हह। एन०आई० एकट कक धनरन 143 ए कक जकडन गयन हह। पररवनदल कन पररवनद एन०आई० एकट कक धनरन-143 ए जकडनक कक उपरननत पसतनत दकयन हह। नयनयनलय मम बयनन चनजर बननयन जन चनकन हह। इससलयक नयनयदहत मम पररवनदल कक आवशयकतन कक कम मम पनररनन पत अनतगरत धनरन 143 ए एन०आई० एकट पसतनत दकयन जन रहन हह। पररवनदल कक दवपकल सक चहक मनवसलग 10 लनख कन 20 पदतशत धनरनदश पररवनदल कक ददलनयन जनयक। इस सतर पर पररवनद पत मम ददशरत धनरनदश कन 20 पदतशत भनगतनन करनयक जननक कक यनचनन कक गयल हह। दटपकल कक कक ओर सक ममसखक आपसत कक गयल हह। सननन तरन पतनवलल कन अवलककन दकयन। पतनवलल कक अवलककन सक सपष हह दक दवपकल दनरन पररवनदल कक 10 लनख रपयक कन बहक ददयन गयन रन, सजसक पररवनदल नक अपनक खनतक मम जमन दकयन तक उक बबक उसकक बबक खनतक मम अपयनरप धनरनदश हकनक कक कनरण बनउनस हक गयन। उसकक बनद भल दवपकल दनरन पररवनदल कक ककई धनरनदश नहह दल गयल हह। धनरन-143 ए एन०आई०एकट कक मनशन कक अननसनर पररवनदल कक उक चहक मम ददशरत धनरनदश मनह०-10,00,000/- भनगतनन दवपकल सक करनयन जननन नयनयकदचत पतलत हकतन हह। रपयक मम सक अनतररम भनगतनन कक रप मम 20 पदतशत आदकश दवपकल कक आदकदशत दकयन जनतन हह 10,00,000/- वनसतक सननवनई ददनननक-19.03.2025 रपयक मम सक 20 कक पकश हक।" दक पररवनदल कक चहक मम ददशरत धनरनदश मनब०- पदतशत भनगतनन दवपकल एक मनह कक अनदर करम। पतनवलल

11. A perusal of the order dated 28.02.2025 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 is that 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

12. 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."

13. Here the grant of interim compensation has been accorded also without considering the said criterias which have been enumerated therein. Since the order in question is not in consonance 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 28.02.2025 passed in Complaint Case No. 9667/2022.

14. Accordingly, the present application stands disposed of.

15. The order dated 28.02.2025 passed in Complaint Case No. 9667/2022 is set aside.

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

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

30.05.2025.

18. 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).

19. 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 ASHUTOSH KUMAR PRAJAPATI High Court of Judicature at Allahabad High Court of Judicature at Allahabad