Rakesh Ranjan Shrivastava Vs State of Jharkhand & Anr. (Supreme Court of India)
Supreme Court in Rakesh Ranjan Shrivastava vs. State of Jharkhand & Anr. addressed the issue of whether Section 143A(1) of the Negotiable Instruments Act, 1881, which allows for interim compensation in cheque dishonor cases, is mandatory or discretionary. The case arose from a complaint under Section 138 of the NI Act, where the complainant alleged that the appellant had agreed to pay Rs. 4.25 crore but failed to honor a cheque of Rs. 2.2 crore. The trial court took cognizance of the complaint, and the respondent sought interim compensation under Section 143A(1).
The key issue before the Supreme Court was whether an order of interim compensation must be passed in every case or if courts have discretion in applying the provision. The respondent argued that the provision must be interpreted as mandatory to ensure the effective enforcement of the NI Act. The appellant, however, contended that the section provides discretion to courts, allowing them to assess factors such as the nature of the transaction and the relationship between the parties before awarding compensation.
The Supreme Court analyzed the legislative intent behind Section 143A, which was introduced in 2018 to deter delays in cheque bounce cases. However, the court noted that the provision does not use language making interim compensation automatic in all cases. Relying on judicial precedents, the court held that the discretion of the trial court must be exercised judiciously, considering factors such as the financial standing of the accused, the prima facie nature of the case, and the specific circumstances of the transaction.
