Gujarat High Court

M/S Elvee Enterprise vs Abdulrahim Ahemad Barambiya Thro Poa ... on 17 January, 2025

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                             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

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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

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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

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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

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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

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(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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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

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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