Section 143A NI Act | Interim Compensation To Complainant In Cheque Bounce Case Introduced In 2018 Amendment Is Prospective: Rajasthan HC

The Jaipur bench of the Rajasthan High Court has reiterated that Section 143A, Negotiable Instruments Act, inserted after an amendment in 2018 introducing payment of interim compensation to complainant in a cheque bouncing case, has prospective application and cannot be applied to complaints filed before the amendment in a retrospective manner.Justice Anoop Kumar Dhand relied upon the Supreme Court case of G.J. Raja v Tejraj Surana in which it was held that, “prior to the insertion of Section 143A in the Act there was no provision on the statute book whereunder even before…pronouncement of the guilt of an accused, or even before his conviction for the offence in question, he could be made to pay or deposit interim compensation…The person would, therefore, be subjected to a new disability or obligation…In our view, the applicability of Section 143A of the Act must, therefore, be held to be prospective in nature and confined to cases where offences were committed after the introduction of Section 143A, in order to force an accused to pay such interim compensation.”Justice Dhand thereafter said, "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. 26. In view of the discussion made hereinabove, these petitions deserve to be and are hereby allowed". The Court was hearing a bunch of petitions in which the issue before the Court was whether the amended provision of Section 143A of the NI Act could apply to a complaint filed prior to the enactment and enforcement of that provision i.e. in a retrospective manner? It noted that in the present case all the three complaints under Section 138 were submitted by the complainant against the petitioners in 2017 i.e. prior to enactment, enforcement and insertion of the amended Section 143A. After hearing the contentions from both the sides, the Court referred to the Supreme Court case of Hitendra Vishnu Thakur and others vs. State of Maharashtra and others in which certain principles on retrospective application of provisions were culled out. It was ruled that a procedural statute generally should not be applied retrospectively where it created new rights, disabilities or obligations. In background of this precedent, the Court opined that it could not lose sight of the fact that prior to insertion of Section 143A, there was no such provision in the Act for directing the accused to pay interim compensation to the complainant. And keeping in mind the Apex Court ruling it was held that Section 143A had prospective effect and was applicable only to complaints that were filed after the amendment came in i.e. September 1, 2018Accordingly, the petitions were allowed and the court directed that if any amount was deposited by the petitioners it shall be refunded to them within 4 weeks. Case Title: Rashmi Khandelwal v Kanhiyalal and Ors. Citation: 2025 LiveLaw (Raj) 32Click Here To Read/Download Order

Section 143A NI Act | Interim Compensation To Complainant In Cheque Bounce Case Introduced In 2018 Amendment Is Prospective: Rajasthan HC

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Section 143A NI Act | Interim Compensation To Complainant In Cheque Bounce Case Introduced In 2018 Amendment Is Prospective: Rajasthan HC

Nupur Agrawal

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Nupur Agrawal

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