Sanchayita Lahkar

The High Court of Gauhati, Single Bench of Justice Pranjal Das set aside a trial court direction requiring the accused in a cheque dishonour case to pay 20% of the cheque amount as interim compensation. The dispute concerns a cheque presented by the complainant that was returned unpaid with the endorsement that the drawer’s signature differed. The accused contests having issued the cheque, disputes the signature, and asserts that the bank account shown on the instrument was not his, raising allegations of forgery that, according to him, require proof through evidence. The Court held that when such disputed issues need adjudication on evidence, granting interim compensation under Section 143-A of the Negotiable Instruments Act at that stage may not be appropriate.

The case arose from a complaint filed by the second respondent alleging commission of an offence under Section 138 of the Negotiable Instruments Act, 1881, in relation to dishonour of a cheque for ₹20,00,000. The complainant alleged that the cheque had been issued by the accused towards discharge of a financial liability connected with a land transaction and was dishonoured upon presentation on the ground that the drawer’s signature differed.

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The accused denied issuance of the cheque and disputed the authenticity of the signature, contending that he did not maintain any bank account with the concerned branch. He further asserted that the cheque was forged and relied upon the registration of a police case alleging offences under Sections 420, 468, and 471 of the Indian Penal Code. During trial, the Branch Manager of the concerned bank was examined, who deposed that the account number mentioned on the cheque belonged to a third party and not to the accused.

The complainant, on the other hand, maintained that the cheque had been issued pursuant to obligations arising out of an agreement relating to sale of land and that the dishonour attracted statutory liability. An application under Section 143A of the Negotiable Instruments Act seeking interim compensation was allowed by the trial court, directing payment of 20% of the cheque amount. The accused challenged this order in revision.

The Court examined the scope and application of Section 143A of the Negotiable Instruments Act and noted that “the exercise of power under sub-section (1) of Section 143-A is discretionary and the provision is directory and not mandatory.” It recorded that “the most important consideration is that the court has to be satisfied about a prima facie case before granting interim compensation.”

The Court stated that "The court has to be satisfied about a prima facie case before granting interim compensation. The court to make such prima facie determination has to see the merits of the case put forth by the complainant and the merits of the defence put forth by the accused. It is also stated that if the defence of the accused is prima facie found to be plausible, the court may exercise discretion in refusing interim compensation."

On facts, the Court observed that “the accused/petitioner denies that he issued the cheque; he denies that the signature belongs to him; he also denies that he even has an account in the Dispur branch of the South Indian Bank.” The Court took note of the testimony of the bank’s Branch Manager and recorded that “from his testimony, it is revealed that the account number mentioned in the cheque belongs to one Bhaswati Das and does not relate to the accused petitioner.”

The Court further noted that “the contention of the accused/petitioner that the cheque bearing No. 045164 was not issued by him nor signed by him finds some support from the testimony of PW2.” It also recorded that “alleging forgery of his signature, the complaint filed by the accused petitioner before the police station has already been registered under Sections 420/468/471 of the IPC.”

Considering the cumulative effect of the material, the Court stated that “there are disputed questions which will necessitate proper adjudication through evidence and only then it would be possible to answer whether the accused petitioner incurred criminal liability under Section 138 of the NI Act.” In such circumstances, the Court concluded that “So, in such a situation and keeping in mind the principles laid down in Rakesh Ranjan Shrivastava (supra) – I come to the considered opinion that it may not be prudent to grant interim compensation at this stage, invoking the powers under section 143-A of NI Act. This is despite the projected financial difficulties of the respondent no. 2/complainant.”

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The Court directed that “the impugned order dated 26.09.2023 passed by the learned Additional Chief Judicial Magistrate, Nalbari, directing interim compensation of 20% of the cheque amount, is hereby set aside and quashed. The criminal revision stands allowed and disposed of. As the cheque bounce proceeding pertains to the year 2021, the learned trial court is requested to make an endeavour to expeditiously complete the trial, keeping in view the docket constraints.”

Advocates Representing the Parties

For the Petitioner: Mr. S. Parashar, Advocate; Mrs. T. Sarma, Advocate

For the Respondents: Mr. Firuz Khan, Advocate; Mr. Abhijit Mena, Advocate; Mr. U. Chaudhury, Advocate; Mr. T. K. Das, Advocate

Case Title: Sri Madhu Ram Deka v. State of Assam & Anr.
Neutral Citation: 2026: GAU-AS:761
Case No.: Crl.Rev.P./396/2024
Bench: Justice Pranjal Das