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Power to direct interim compensation under Section 143A of NI Act is directory in nature

In Rajesh Soni vs Mukesh Verma, appeal was filed against the order of the Judicial Magistrate First Class, directing the Petitioner (Accused of offence under NI Act) to pay 20% of the cheque amount as compensation, failing which proceeding under sub-section (v) of Section 143A will be initiated against petitioner.

The Petitioner referring to the term 'may' in the wording of the Section 143A, objected to the order claiming that the power to direct such interim compensation was discretionary and should not be ordered for each and every matter.

The High Court however disagreed and referring to the judgment of the Supreme Court in Bachahan Devi & another Vs. Nagar Nigam, Gorakhpur and Surinder Singh Deswal alias Colonel S.S. Deswal & others Vs. Virender Gandhi, observed that it has been conclusively held by the Apex court that whether a legislature is discretionary or mandatory would depend on the object of the Act irrespective of the fact the word 'may' is as per dictionary is non-directive while 'shall' is directive.

The legislature has amended Negotiable Instrument Act, 1881, which came into force on 01.09.2018 with the aim to secure the interest of the complainant along with increasing the efficacy and expediency of proceedings under Section 138 of the Act, 1881. Section 143A of the Act, 1881 stipulates that under certain stages of proceedings under Section 138 of the Act, 1881, the Court may order for the drawer to make payment upto 20% of the cheque amount during the pendency of the matter. The order under Section 143A of the Act, 1881 can be passed only in summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint, in any the case upon framing of charge.

From perusal of Section 143A of the Act, 1881, it is quite evident that the act has been amended by granting interim measures ensuring that interest of complainant is upheld in the interim period before the charges are proven against the drawer. The intent behind this provision is to provide aid to the complainant during the pendency of proceedings under Section 138 of the Act, where he is already suffering double- edged sword of loss of receivables by dishonor of the cheque and the subsequent legal costs in pursuing claim and offence. These amendments would reduce pendency in courts because of the deterrent effect on the masses along ensuring certainty of process that was very much lacking in the past, especially enforced at key stages of the proceedings under the Act.

It is clear that the word 'may' used is beneficial for the complainant because the complainant has already suffered for mass deed committed by the accused by not paying the amount, therefore, it is in the interest of the complainant as well the accused if the 20% of the cheque amount is to be paid by the accused, he may be able to utilize the same for his own purpose, whereas the accused will be in safer side as the amount is already deposited in pursuance of the order passed under Section 143A of the Act, 1881. When the final judgment passed against him, he has to pay allowances on lower side. Section 143A of the Act, 1881 has been drafted in such a manner that it secures the interest of the complainant as well as the accused, therefore, from perusal of aims and object of amended Section 143A of the Act, 1881, it is quite clear that the word 'may' may be treated as 'shall' and it is not discretionary but of directory in nature.

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