THE SUPREME COURT OF INDIA RULES ON ISSUE OF RETROSPECITIVITY OF SECTION 143A AND SECTION 148 OF NEGOTIABLE INSTRUMENT ACT,1881

The Supreme Court of India in the matter of G.J.Raja vs. Tejraj Surana dated 30.07.2019, while deciding the retrospective applicability of the certain Sections of Negotiable Instrument Act, 1881 (Act), has ruled that Section 143A of the Act which basically states that the court can order interim compensation to the complainant during the pendency of the case, does not have retrospective application. However it held that Section 148 of the Act, shall apply retrospectively. Section 148 allows the Appellate Court to direct the Accused to deposit a minimum of twenty per cent of the awarded amount (of the fine or compensation) decided by the trial Court.

The Bench comprising of Justice Uday Umesh Lalit and Justice Vineet Saran pronounced the Judgment in an appeal against a decision of the Madras High Court. The Bench categorically held that Section 143A is prospective in operation and the provisions can be applied or invoked only in cases where the offence under Section 138 of the Act was committed after the amendment and introduction of the said Section in the statute book.

In this Judgment the Supreme Court of India upheld the Punjab and Haryana High Court’s view, wherein Justice Rajbir Sehrawat, previously, held that Section 143A of the Act has no retrospective effect whereas Section 148 of the Act will apply to the pending appeals on date of enforcement of this provision.

Negotiable Instrument Act, Amendment 2018

The amendment to the Act in year 2018 introduced two new Sections i.e. Section 143A and Section 148. Section 143A gives power to the Trial Court to direct the accused to ‘pay’ an interim compensation which cannot be more than 20% of the ‘cheque amount’. A period of sixty days, after the Order is passed, is given to pay the interim compensation. It can be recovered in the manner of recovery of fine as provided in Section 421 of the Code of Criminal Procedure. The provision also stated that the interim compensation so received has to be returned by the complainant along with interest at bank rates as prescribed by Reserve Bank of India, if the accused is acquitted after the trial. Section 148 of the Act empowers the Appellate Court to direct the accused /Appellant to deposit minimum of 20% of fine or compensation awarded by the Trial Court.

Sourabh Kumar Mishra

Senior Legal Associate

The Indian Lawyer

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