Negotiable Instruments Act, 1881

SUPREME COURT OF INDIA

Rakesh Ranjan Shrivastava…………Appellant

Vs.

The State of Jharkhand & Anr………….Respondents

Abhay S. Oka & Ujjal Bhuyan, JJ.

Negotiable Instruments Act, 1881

Sections 138, 139 & 143A—Dishonour of cheque—Presumption—Payment of interim compensation—Presumption under Section 139 of the Negotiable Instruments Act, by itself, is no ground to direct the payment of interim compensation—Presumption being rebuttable, the question of applying the same will arise only at the trial—Financial distress of the accused shall also be a factor that should be taken into consideration by the Trial Courts while considering an application under Section 143A of the Act.

[Para 16]

Section 143A—Power to direct interim compensation—Exercise of power under sub-section (1) of Section 143A is discretionary—Provision is directory and not mandatory—Word “may” used in the provision cannot be construed as “shall”—While deciding the prayer made under Section 143A, the Court must record brief reasons indicating consideration of all relevant factors—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 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. The parameters stated above are not exhaustive.

Decision : Appeal allowed in part