The Rajasthan High Court clarified that the provision of payment of interim compensation introduced via Section 143A of the Negotiable Instruments Act, 1881 has a prospective effect and the same is applicable upon the complaints filed under Section 138 after September 1, 2018.

The High Court was considering an appeal in a cheque bounce case challenging a Trial Court order directing the petitioner to pay 20% of the cheque amount to the complainant, as interim compensation.

The Single Bench of Justice Anoop Kumar Dhand held, “This provision cannot have its retrospective effect upon the complaints filed prior to 01.09.2018.”

Advocate Yogesh Singhal represented the Petitioner while Advocate Jitendra Singh represented the Respondent.

Factual Background

The respondent-complainant submitted three different complaints against the accused-petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 on three different occasions with the allegations that the cheques issued by the petitioner were dishonoured. At the time of the commission of the alleged offence and filing of complaints, there was no provision of payment of any interim compensation to the complainant under the Act by the accused during the pendency of trial.

The Legislature introduced a new provision for payment of interim compensation by the accused to the complainant by incorporating a new provision in the form of Section 143A and the new amended provision came into force with effect from September 1, 2018. On the basis of, and with the strength of the new provision under Section 143A of the Act of 1881, the Trial Court directed the petitioner to pay 20% of the cheque amount to the complainant, as interim compensation, by way of passing the impugned order. Aggrieved by these impugned orders, the petitioners approached the High Court challenging the same.

Issue

The main issue before the Bench was whether this new provision could be applied with retrospective or prospective effect.

Reasoning

The Bench referred to the judgment of the Apex Court in G.J. Raja vs. Tejraj Surana (2019) wherein it has been held that provisions of Section 143A of the Act of 1881 would apply with prospective effect.

The Bench thus explained, “In the light of the judgment passed by the Hon’ble Apex Court in the case of G.J. Raja (supra) it is clear that Section 143A of the Act of 1881 has its prospective effect and the same is applicable upon the complaints filed under Section 138 of the Act of 1881 after introduction/insertion of Section 143A of the Act of 1881 i.e. after 01.09.2018. This provision cannot have its retrospective effect upon the complaints filed prior to 01.09.2018.”

Thus, allowing the petitions and quashing the impugned orders passed by the Trial Court, the Bench directed, “The amount (if any) deposited by the petitioners, pursuant to any order, shall be refunded to him/her (as the case may be) with interest within a period of four weeks from the date of receipt of this order.”

Cause Title: Rashmi Khandelwal & Ors. v. Kanhiyalal & Ors. (Case No.: S.B. Criminal Miscellaneous (Petition) No. 1623/2019)

Appearance:

Petitioners: Advocate Yogesh Singhal

Respondents: Advocate Jitendra Singh

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