Gujarat High Court
M/S Elvee Enterprise vs Abdulrahim Ahemad Barambiya Thro Poa ... on 17 January, 2025
NEUTRAL CITATION
R/SCR.A/17195/2024 ORDER DATED: 17/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 17195 of 2024
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M/s ELVEE ENTERPRISE & ORS.
Versus
ABDULRAHIM AHEMAD BARAMBIYA THRO POA MAQSOOD ALLARAKHA
VAHEVARIYA & ANR.
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Appearance:
MR HASIT H JOSHI(2480) for the Applicant(s) No. 1,2,3
MS CHETNA SHAH, APP for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 17/01/2025
ORAL ORDER
1. This petition is filed seeking prayer to quash and set aside the impugned order dated 15.10.2024 passed by the learned Sessions Judge in Criminal Revision Application No.78 of 2023 and allow the said Revision Application by quashing and setting aside the order dated 22.9.2023 passed by the learned Judicial Magistrate, Jamnagar below Exh.20 in Criminal Case No.15358 of 2021 and order to reject the said application Exh.20.
2. Heard learned advocates for the parties.
3. Learned advocate Mr.Joshi for the petitioners has submitted that the complainant filed a Criminal Case Page 1 of 9 Uploaded by U. SRILATHA(HC00185) on Tue Jan 21 2025 Downloaded on : Tue Jan 21 21:38:54 IST 2025 NEUTRAL CITATION R/SCR.A/17195/2024 ORDER DATED: 17/01/2025 undefined No.15359 of 2021 through his power of holder before the trial Court under Section 138 of the Negotiable Instruments Act, (NI Act for short) against the present petitioners. In the said complaint, the complainant preferred an application Exh.20 under Section 143A of the NI Act praying for interim compensation. He submitted that the said application was allowed vide order dated 22.9.2023 and ordered the present petitioners to pay 20% of the amount of the disputed cheques, within 60 days. The said order was challenged by the petitioners by filing revision application before the learned Sessions Court, however, the said revision application was also rejected vide order dated 15.10.2024 and therefore this petition is filed being aggrieved by the impugned orders.
4. Learned advocate for the petitioners submitted that both the Courts below have erred in allowing the interim compensation application and directing the petitioners to deposit 20% of the disputed cheque amounts; that both the Courts have further erred in permitting the complainant to withdraw the said amount. He submitted that if the trial concludes in acquitting the petitioners, it will be difficult to recover the said amount from the complainant and therefore the Courts below ought to have ordered to deposit the said amount in fixed deposit instead of permitting the complainant to withdraw the said amount. He, also submitted that the Page 2 of 9 Uploaded by U. SRILATHA(HC00185) on Tue Jan 21 2025 Downloaded on : Tue Jan 21 21:38:54 IST 2025 NEUTRAL CITATION R/SCR.A/17195/2024 ORDER DATED: 17/01/2025 undefined learned Courts below have only taken care of the interest of the complainant and not the interest of the petitioners- accused and has wrongly interpreted the provisions of law and also the ratio laid down in the judgment of the Hon'ble Apex Court. He, therefore, prayed to allow this petition.
5. Per contra, learned APP has submitted that the provision of law prescribes that the interim compensation may be ordered to be paid to the complainant, in case, the application is filed by the complainant, however, it should not exceed 20% of the disputed cheque amount. He, therefore, submitted that it is the discretion of the Court concerned and the learned Courts below have rightly exercised the discretion, which is not required to be interfered with by this Court. He submitted that learned Courts below have not committed any error in passing the impugned orders and therefore this petition be dismissed.
6. I have considering the submissions made at the bar, the material on record and the impugned orders.
7. The complaint is filed by the complainant against the petitioners for the dishonour of cheque. The interim compensation application was filed by the complainant in the said complaint under Section 143A of the NI Act, with a Page 3 of 9 Uploaded by U. SRILATHA(HC00185) on Tue Jan 21 2025 Downloaded on : Tue Jan 21 21:38:54 IST 2025 NEUTRAL CITATION R/SCR.A/17195/2024 ORDER DATED: 17/01/2025 undefined prayer to award interim compensation, pending trial. The said was allowed. The said order was carried in revision, which was confirmed by the learned revisional Court by rejecting the revision application. While dismissing the revision application, the learned revisional Court has considered the provisions of Section 143A of the NI Act and the judgment of the Hon'ble Apex Court in the case of Rakesh Ranjan Shrivastava V/s The State of Jharkhand & Anr. In Criminal Appeal No.741 of 2024 dated 15.3.2024, and observed in paragraph nos.21 and 22 as under:
"21. It is required to note that pending this revision, accused persons have total deposited Rs.9,00,000/- in all three revision applications. According to impugned order accused persons are required to deposit Rs.47,13,333/-. It is pertinent to note that as per ratio established by Hon'ble Apex Court in the case of Rakesh Ranjan Shrivastava Vs The State of Jharkhand & Anr., in Criminal Appeal No.741 of 2024 dated 15/03/2024, there has been discussions of the provisions of Section 143(A) of the Negotiable Instrument Act that after recording of plea, power under Section 143(A) can be exercised by the Court and in case of non-payment the Court can initiate the process of recovery as per Section 421 of the Code of Criminal Procedure and it also discussed that in case of non-payment of interim compensation by the accused, it will not take away his right to defend the Page 4 of 9 Uploaded by U. SRILATHA(HC00185) on Tue Jan 21 2025 Downloaded on : Tue Jan 21 21:38:54 IST 2025 NEUTRAL CITATION R/SCR.A/17195/2024 ORDER DATED: 17/01/2025 undefined prosecution. The interim compensation amount can be recovered from him treating it as fine. The interim compensation amount can be recovered by the Trial Court by issuing a warrant for attachment and sale of the movable property of the accused as the case may be. There is also a power vested with the Court to issue a warrant to the Collector of the District authorizing him to realize the interim compensation amount as arrears of land revenue from the movable or immovable property, or both, belonging to the accused. For recovery of the interim compensation, the immovable or movable property of the accused can be sold by the Collector. Thus, non-payment of interim compensation fixed under Section 143A has consequences and if acquitted, he may get back the money as provided in sub- section (4) of Section 143A from the complainant. Such power can be exercised even before the such accused is held guilty. It is also discussed that such power can be exercised such even before recording of evidence.
22- The Hon'ble Apex Court in the cited case law as aforesaid at Para 16 and 19 has discussed herein below;
"16. When the court deals with an application under Section 1434 of the N.I. Act, 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 under sub- section Page 5 of 9 Uploaded by U. SRILATHA(HC00185) on Tue Jan 21 2025 Downloaded on : Tue Jan 21 21:38:54 IST 2025 NEUTRAL CITATION R/SCR.A/17195/2024 ORDER DATED: 17/01/2025 undefined (1) of Section 143A. The presumption under Section 139 of the N.I. Act, by itself, is no ground to direct the payment of interim compensation. The reason is that the presumption is rebuttable. The question of applying the presumption will arise at the trial. Only if the complainant makes out a prima facie case, a direction can be issued to pay interim compensation. At this stage, the fact that the accused is in financial distress can also be a consideration. Even if the Court concludes that a case is made out for grant of interim compensation, the Court will have to apply its mind to the quantum of interim compensation to be granted. Even at this stage, the Court will have to consider various factors such as the nature of the transaction, the relationship, if any, between the accused and the complainant and the paying capacity of the accused. If the defence of the accused is found to be prima facie a plausible defence, the Court may exercise discretion in refusing to grant interim compensation. We may note that the factors required to be considered, which we have set out above, are not exhaustive.
There could be several other factors in the facts of a given case, such as the pendency of a civil suit, etc. While deciding the prayer made under Section 1434, the Court must record brief reasons indicating consideration of all the relevant factors.
19-Subject to what is held earlier, the main conclusions can be summarized as follows;
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NEUTRAL CITATION R/SCR.A/17195/2024 ORDER DATED: 17/01/2025 undefined 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 1431, 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 Page 7 of 9 Uploaded by U. SRILATHA(HC00185) on Tue Jan 21 2025 Downloaded on : Tue Jan 21 21:38:54 IST 2025 NEUTRAL CITATION R/SCR.A/17195/2024 ORDER DATED: 17/01/2025 undefined 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."
8. On perusal of Section 143A, it is clear that it is the discretion of the Court to order for interim compensation and the Courts below have not erred in any manner in exercising the discretion. Further, there is a clause in Section 143A that the interim compensation cannot exceed 20% of the disputed cheque amount, which is also taken care of by the learned trial Court.
9. As regards the submission of learned advocate for the petitioners that the learned Courts below ought not have allowed the complainant to withdraw the amount of interim compensation, this Court is of the opinion that the complaint is filed for dishonour of the cheques issued by the petitioners and a huge amount of the complainant is stuck and the object of interim compensation is to get some interim relief to the complainant. If the said amount is ordered to be put Page 8 of 9 Uploaded by U. SRILATHA(HC00185) on Tue Jan 21 2025 Downloaded on : Tue Jan 21 21:38:54 IST 2025 NEUTRAL CITATION R/SCR.A/17195/2024 ORDER DATED: 17/01/2025 undefined in a fixed deposit, then the purpose of interim compensation to be paid to the complainant will not serve and therefore also, there is no error committed by the learned Courts below in ordering the withdrawal of the said amount by the complainant.
10. Further, the learned Courts below have not committed any error in interpreting the provision of law and passing the impugned orders and also properly followed the principles laid down by the Hon'ble Apex Court in the case of Rakesh Ranjan Shrivastava (supra). The learned Courts below have discussed in detail while passing the impugned orders the provision of law and also have assigned the reasons for passing the impugned orders, which is proper.
11. In view of the above discussion, this Court finds that there is no error committed by the learned Courts below and the finding are concurrent in nature which do not require any interference by this Court. Hence, this petition is dismissed at admission stage itself.
(SANDEEP N. BHATT,J) SRILATHA Page 9 of 9 Uploaded by U. SRILATHA(HC00185) on Tue Jan 21 2025 Downloaded on : Tue Jan 21 21:38:54 IST 2025