Section 138 NI Act: Defence of accused is not material at the time of granting interim compensation to complainant [Read the Order]

A Court in Delhi has recently held that defence of the accused is not material at the time of passing order u/s 143A of NI Act for interim compensation to the complainant.

Additional Sessions Judge Ajay Gupta has passed the order in the case titled as Madhu Verma vs Manish Sharma on 28.08.2019.

The present revision petition has been filed against the order dated 28.06.2019 passed by Sh. Rakesh Kumar Singh, Ld. MM, Karkardooma Court, East District, Delhi in the complaint case no.80/19 titled as Manish Sharma vs Madhu Verma. The respondent has filed the aforesaid complaint u/s 138 of Negotiable Instrument Act (hereinafter referred as NI Act) against the revisionist. Vide order dated 28.06.2019, Ld. MM has allowed the application u/s 143A NI Act and directed the revisionist to pay to the respondent/complainant 20% of the cheque amount as interim compensation to respondent/complainant.

The Court observed "As per section 143A of NI Act, for grant of interim compensation, the first requirement is that it should be a summary/summoned trial case and further, the second requirement is that the charge should have been framed and accused should not have pleaded guilty in the matter. Thus, after the accused enters his appearance and charge is framed and he has not pleaded guilty, all the prerequisites to grant interim compensation as contemplated in section 143A of NI Act gets fulfilled and thereupon, court is fully empowered to award interim compensation to the complainant which shall not exceed 20% of the cheque amount".

It also observed "It is further clear from the perusal of the provision of 143A NI Act that only aforesaid two requirements are to be fulfilled and at the time of awarding the interim compensation, court is not required to consider the strength of defence of the accused as legislature has not contemplated the same in the provision of section 143A NI Act".

The Court then held "It is also clear from the perusal of section 143A of NI Act that the Court can proceed to award interim compensation after the necessary requirements have been fulfilled and the defence raised by the accused is not to be considered at that stage and court is not to get influenced with the defence of the accused while granting the interim compensation. The legislature has laid down the complete procedure in section 143A of NI Act itself for grant of the compensation. The interest of accused has also been very well protected, as in case, the accused is acquitted, the complainant is bound to return the interim compensation amount received by him with interest at the prevalent bank rate published by RBI for those financial years".

Read the Order here:

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