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Rakesh Ranjan Shrivastava vs. The State of Jharkhand & Anr.

Not available · 2024 INSC 205Decided 15 Mar 2024
Not available

Background

The respondent, a business associate of the appellant in various companies, filed a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 (cheque dishonour) against the appellant before the Chief Judicial Magistrate at Bokaro. During these proceedings, a question arose over the trial court's power under Section 143A of the Act to order the accused to pay "interim compensation" to the complainant before the case is even decided: specifically, whether this power is compulsory ("mandatory") or a matter of judicial discretion ("directory").

Decision Breakdown

The Supreme Court held that the power to grant interim compensation under Section 143A(1) is discretionary and directory, not mandatory: the word "may" in the provision cannot be read as "shall." It laid down that a court must record brief reasons showing it considered all relevant factors before granting or refusing interim compensation, including a prima facie evaluation of the complainant's case and the accused's defence, and the accused's financial distress. Interim compensation can only be ordered if the complainant makes out a prima facie case, and if the accused's defence appears prima facie plausible, the court may decline to grant it; if compensation is granted, the court must also separately reason out the appropriate amount. The appeal was partly allowed on these terms.

Lesson Learnt

Being sued for a bounced cheque does not automatically mean a court must order you to pay interim compensation upfront. Courts must exercise reasoned discretion, weighing both sides' cases and the accused's financial situation, before making such an order.

Official source (sci.gov.in)View Judgment (PDF)

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