INTRODUCTION

The case filed u/s 138 of the N. I. Act has become most popular means amongst the finance companies, private traders, public limited company, private limited company, merchants etc. However, the only hitch which comes in the way of the public at large is high pendency of the cases filed u/s 138 of the N.I. Act. Because of high pendency of the cases, it takes very long time to get the result and, therefore both, Supreme Court and the Govt. of India have become very vigilant on the issue of long pendency of the cases and they are taking proper actions, from time to time, with the issue of long pendency of

the cases.

❖RECENT AMENDMENT IN THE N. I. ACT

The N. I. Act has been amended from time to time, to ensure trust of the people in the entire system. The latest amendment is provided by “The Negotiable Instruments (Amendment) Act, 2018” wherein several new amendments are brought into implementation. All these amendments are brought in with a view to avoid undue delay in adjudication of the matter and to bring efficacy and efficiency in the cases related to dishonor of the cheques. Two important amendments to the N. I. Act are: Section 143 (a) and Section 148. These Sections empower the Hon’ble Courts to make the Drawer of the cheques to pay interim compensation to the Complainant during the pendency of the complaint and also at the time of filing of the appeal against the judgment delivered in the cases of dishonor of the cheques.

❖SECTION 143 (A) – POWER OF THE COURT TO

DIRECT INTERIM COMPENSATION

Because of insertion of Section 143 (a) in the N. I. Act, now the Courts are empowered to direct the Drawer of the cheque to pay interim compensation to the Complainant on two occasions.

(a) In a summary trial or summons case, where the drawer is found not

guilty to the accusation made in the complaint, and

(b)In any other case, upon framing charges.

The main intention behind this provision is to provide great help to the Complainant during the pendency of the matter. It is important to mention that the quantum of such interim compensation can be maximum up to 20 % of the amount of the cheque. The law is also further simplified. The interim compensation shall be paid within 60 days from the date of the order under sub section (1), or within such further period not exceeding 30 days as may be directed by the court on sufficient cause being shown by the drawer of the cheque. Thus, upper time limit for payment of interim compensation is also

fixed by the Legislature.

If the accused is found guilty u/s 138 of the N. I. Act, the amount of interim compensation would be deductible from the final compensation payable to the Complainant and if the Drawer of the cheque is acquitted, the Court shall order the Complainant to return the amount of interim compensation to the Drawer with interest at the bank rate as published by the R.B.I, within the time limit of 60 days from the date of the order , or within such further period not exceeding 30 days as may be directed by the court on sufficient cause

being shown by the complainant.

❖IMPORTANT RESERCH

● WHETHER SECTION 143(A) CAN BE IMPLEMENTED RETROSPECTIVELY?

Many a times, the question arises whether the Section 143 (a) can be implemented with retrospective effect or not. The Hon’ble Supreme Court gives answer of this question in the matter of G. J. Raja v/s Tejraj Surana, reported at 2019 SCC online SC 989. It was held in this case that Section 143

(a) has two dimensions. Firstly, the Section creates a liability in as much as, Drawer of the cheque can be directed to pay up to 20 % of the cheque amount to the Complainant. Secondly, it is observed that the said Section makes available machinery for the recovery as if the interim compensation were the arrears of the land revenue. Thus, it is clear that recovery of the interim compensation can also be made through the machinery of the State as if was

arrears of the land revenue.

Further, the Supreme Court very clearly clarifies that the Section 143 (a) of N. I. Act must be held to be prospective in the nature and confined to the cases where offences were committed after the introduction of the Section 143

(a) and not before that.

❖SECTION 148

Power of the appellate court to order payment pending appeal against the

conviction.

Section 148 has been introduced in the N. I. Act for the cases where the appeal has been filed against the conviction of the Drawer. It empowers the Appellate Court to direct the appellant to deposit such amount which shall be minimum of 20 % of the fine or compensation awarded by the Trial Court. Very significantly, the same is to be treated as an addition to the payment of

interim compensation u/s 143 (a) of the N. I. Act.

This provision is again very encouraging step and would give boost to the Complainant even if the appeal is preferred. Such provision would discourage the Drawer of the cheque from benefiting from long period taken for the

adjudication of the matter.

If the appellate court acquits the Drawer of the cheque, the court shall direct the Complainant to refund the amount  to the appellant with interest.

❖WHETHER SECTION 148 IS PROSPECTIVE OR RETROSPECTIVE?

While dealing with G. J. Raja’s case, the Hon’ble Supreme Court clarified that the Section 148 is retrospective in the nature despite of the fact that both the

Sections i.e. Sections 143 (a) and 148 were introduced by the Amendment Act 20 of 2018, from 01-09-2018 & there is no provision in section 148 of the Act

which is similar to sub section (5) of the section 143 A of the Act.

However , as a matter of fact no such Provision akin to sub section (5) of section 143 A was required as section 421 & 357 of the code, which apply post-conviction, are adequate to take care of such requirements. In that sense said Section 148 depends upon the existing machinery and principles already in existence and does not create any fresh disability of the nature similar to that created by Section 143A of the Act. Therefore, the decision of this Court in Surinder Singh Deswal5 stands on a different footing.

❖ANALYSIS OF THE AMENDED LAW

The Hon’ble Apex Court while analyzing the amendment brought by Section

143 (A) and 148 of N. I. Act delivered landmark judgment in Criminal Appeal No. 1160/2019 in the matter of G. J. Raja V/s Tejpal Surana and analyzed very minutely the amendments brought in the N. I. Act. This judgment deals with all the aspects pertaining to the amendments brought in the N. I. Act. After detailed analysis, the Hon’ble Supreme Court very clearly held that provisions contained in the Section 143 (A) will have prospective effect while Section 148 will have retrospective effect. This is the sum and substance of the aforesaid judgment for the common people and it has

removed all the doubts regarding “retrospectivity of the legislation”.

❖CITATION

The Following Judgments are very Important and throw light on the

details of the Amendment brought forth in N.I Act.

1. G. J. Raja v/s Tejraj Surana, reported at 2019 SCC online SC 989.
2. Sh. Shyam Lal v/s Sh. Diwan Chand and another reported at 2019

Lawsuit (HP) 1084.

• Hitendra Vishnu Thakur v/s. State of Maharashtra reported at 1994 SCC (4) 602
• Anil kumar Goel v/s. Kishan chand kaura reported at 2007 Lawsuit (SC) 1334.

❖CONCLUSION

Both the Amendments in the N. I. Act are great efforts aimed at strengthening conviction and expediting of the cases. It will discourage unnecessary and frivolous litigation. It protects the interest of the Complainant by providing interim compensation. Such amendment is a positive step which enhances the credibility of the cheques and would encourage trade and commerce.

AUTHOR: S B KESHVANI

CO.AUTHOR: KINJAL DAVE