Soumen Banik vs Unknown
2023 Latest Caselaw 6262 Cal

19.09.2023 Item no. 14 Ct.34 (Suvendu)

C.R.R. 702 of 2023

In the matter of :- Soumen Banik

... Petitioner

Ms. Afreen Begum, Mr. Mostafizur Rahaman ...for the petitioner

The present revisional application has been preferred against

the order dated 20th October, 2022 passed by the learned 4 th

Judicial Magistrate, Serampore, Hooghly in connection with CR

Case No. 143 of 2021 thereby alleging the commission of an

offence punishable under Section 138 of the Negotiable

Instruments Act, 1881.

The grievance of the petitioner is that the learned Magistrate

has allowed the application under Section 143A of the N.I. Act

thereby granted interim compensation of Rs. 1,00,000/- (20% of

the cheque amount, i.e. Rs. 5, 00, 000/-).

According to the learned advocate appearing for the petitioner,

no reason has been assigned by the learned Magistrate while

allowing such application and it has been only stated that as the

accused did not plead guilty as such the application under

Section 143 of the N.I. Act should be allowed.

In order to substantiate her contention, learned advocate

relies upon the judgment of the Hon'ble High Court of Bombay

being Ashwin Ashokrao Karokar Vs. Laxmikant Govind Joshi,

reported in 2022 SCC OnLine Bom 8577. Learned advocate draws

attention of this Court to the paragraph nos. 48, 53 and 55 of the

said judgment which are as follows.

"48 it is further material to note that the legislature was

aware of the provisions of Sections 138 to 147 of the N.I.Act,

the purpose of which they were enacted, the delays which

were being caused in the disposal of the proceedings, which is

evident from the aims and object of the amending Act 20 of

2018, it was thus open for the legislature to have used an

express language that in all cases under Section 138 of the

N.I. Act, which were pending trial, the complainant was

entitled to compensation upto 25% of the cheque amount.

However, such express words, have not been used, though it

was open for the Legislature to do so, which again indicates

that the use of the word 'may', as occurring in Section 143-

A(1) of the N.I. Act, was not mandatory but was directory and

a discretion was conferred upon the Court, to either grant or

not to grant interim compensation. The fact that a discretion

was conferred upon the Court is further evident from the use

of the expression 'shall not exceed' as occurring in Section

143-A (2) of the N.I. Act which again confers a discretion upon

the Court 'trying the offence', to direct the grant of interim

compensation anywhere between the range of 0 (zero) to 20

(twenty) % of the cheque amount, indicating that in a given

case, it would be permissible for the Court, to even decline

awarding of any interim compensation, of course, for reasons

to be recorded. Thus, when the power is wide enough to cover

both the grant and refusal to grant, the power would be

discretionary [see Dharti Dhan (P) Ltd. (supra)], as no absolute

right has been conferred upon the complainant to claim

interim compensation, but a discretion has been conferred

upon the Court to so direct, the exercise of which discretion

will depend upon the Court holding in favour of the

complainant, depending upon whether a case was made out

for the same or not, based upon the facts availing on record,

in each case.

53. The use of the expression 'shall not exceed twenty per

cent of the amount of the cheque', as occurring in Section

143-A (2) of the N.I. Act, also does not make the provision

mandatory, as the use of the word 'shall' in Section 143-A (2)

has to be viewed in the background of the word 'may' as used

in Section 143-A(1), which colors the content of the entire

provision. The expression "shall not exceed twenty per cent"

in Section 143-A (1) merely caps the limit of the discretion

which the Special Court is permitted to exercise in the matter

and nothing else. The word "shall" as used in the above

expression does not transcend beyond the limits of discretion

of the Special Court, in the matter of awarding interim

compensation, which as already discussed above could be

anywhere between 0% to 20% of the cheque amount.

55. In my considered opinion, in view of the discussion

above, it has to be held that Section 143-A of the N.I. Act, is

discretionary and not mandatory and the view taken in L.G.R.

Enterprises (supra) holding that the word "may", as occurring

in Section 143-A (1) of the N.I. Act empowers the Court with a

discretion to direct interim compensation and it is not

necessary that in all cases the trial Court must necessarily

direct the interim compensation to be paid and such direction

should be given only on a case to case basis based upon the

facts of each case, which is followed in K. Ranjithkumar

(supra); in Ajay Vinodchandra Shah (supra) to the extent

holding that Section 143-A (1) of the N.I. Act leaves it to the

discretion of the Court to pass an order of interim

compensation upto the ceiling limit of 20% of the cheque

amount and a difference is found between the provisions of

Section 143-A(1) and 148 of the N.I. Act, though Ajay

Vinodchandra Shah (supra), it has been declared not to be a

good law, in Surinder Singh Deswal (supra) only insofar as

consequences of non-compliance of condition of suspension of

sentence is concerned, as noticed in JSB Cargo and Freight

Forwarder Pvt. Ltd. (supra) and thus what is held therein

would hold good, except to the extent as indicated in Surinder

Singh Deswal (supra); JSB Cargo and Freight Forwarder Pvt.

Ltd. (supra) which holds that the provisions of Section 143-

A(1) of the N.I. Act, are directory and not mandatory; G.K.

Construction Company, Through its owner Govind Katariya Vs.

Balaji Makan Samagri Stores, Through its Proprietor Mallaram

[S.B. Criminal Misc. (Pet.) No. 189/2022] decided on

04/03/2022 by a learned Single Judge of the Rajasthan High

Court at Jodhpur and D.L. Sadashiva Reddy (supra) which

holds that the power under Section 143-A (1) of the N.I.Act is

discretionary lay down the correct position. It is also material

to note that D.L. Sadashiva Reddy (supra) was carried to the

Hon'ble Apex Court vide S.L.P. No. 10151/2021 wherein while

dismissing the same on 07/01/2022, it has been held as

under :

"Though the power under Section 143A of the Negotiable

Instruments Act is discretionary power, we, having considered

the matter on merits, find that the direction to deposit 20% of

the amount is perfectly justifi8ed. As Such, in the facts and

circumstances of the case, we do not find any ground to

interfere with the order impugned in this petition. Accordingly,

the special leave petition stands dismissed."

Learned advocate for the petitioner also relies upon a

judgment of the Hon'ble High Court of Karnataka being Vijaya Vs.

Shekhapappa & Anr., reported in 2022 SCC OnLine Kar 515,

dealing with the same issue under Section 143 of the N.I. Act.

The reference has been made to paragraph nos. 10 to 15 of the

said judgment.

The summary contention of both the aforesaid judgments is to

the effect that the reasoning has to be assigned while allowing an

application under Section 143 N.I. Act. The word "may" has been

emphasized for such reasoning to be awarded.

In this case the application was taken out at the instance of

the complainant for interim compensation. Now, this Court while

deciding such an issue need not restrict itself to the reasons

assigned or not assigned by the learned Magistrate but in the

totality of the circumstances would assess the correctness of the

order and supplant reasons so far as the order is concerned if it is

found that the conclusion of the finding arrived at by the learned

Magistrate or the learned trial court is correct.

What I find from the present case is that the cheque was

issued on 02.01.2021, more than two years eight months have

passed since the cheque was presented for encashment. A person

who is involved in commercial business venture and is out of

pocket for such a long period of time and has to recover money by

way of litigation is entitled to have a remedy in the Court of law if

the legislature in its wisdom has incorporated a provision.

The delay which has occasioned itself is a ground for the

interim compensation to be paid under the provisions of Section

143A of the N.I. Act. It was incumbent upon the learned

Magistrate to assign the said reason. The absence of assigning of

such reasons automatically do not make the order illegal.

The aforesaid reasons would be deemed to be incorporated in

the order dated 20th October, 2022 and the present accused

petitioner would be entitled to pay the interim compensation.

In the alternative under Section 421 of the Cr.P.C., the

complainant would invoke jurisdiction of the learned Magistrate

for execution proceeding in respect of the said amount.

With the aforesaid observations, CRR 702 of 2023 is disposed

of.

All parties to act on the server copy of this order

downloaded from the official website of this Hon'ble Court.

(Tirthankar Ghosh, J.)