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NOTE ON SECTION 143A

1. The Negotiable Instruments Act has been amended by The Negotiable


Instruments (Amendment) Act, 2018 (for the sake of brevity herein
after referred to as “NI Act”) whereby section 143A has been inserted
and the amendment has been notified by the Ministry of Law & Justice
vide The Gazette of India dated 02.08.2018.
2. Under this provision, Magistrate can only direct the accused to pay
interim compensation which shall not exceed 20% of the amount of
the cheque i.e. magistrate can only directed to pay 20% compensation
and the said direction does not introduce any new offence in respect of
the matter as the offence u/s 138 of NI Act has already been
committed and it remains same as it was earlier i.e. prior to the
amendment in the NI Act. Hence, the the prosecution and penalty
remains the same as per Section 138 of NI Act.
3. Also the Negotiable Instruments Act, 1881 itself by its Negotiable
Instruments (Amendment) Act, 2018 does not make any act, omission
or conduct offence punishable with any extra imprisonment or penalty.
Prosecution’s penalty would occur only at the time of breach of the
order passed under Section 143A of Negotiable Act, 1881 and hence
Article 20(1) of the Constitution of India would not apply hereby and it
is also clear from the statement of object and reasons of the amending
Act that the amendment is of a benevolent nature introduced for the
purpose of increasing the acceptability of cheques and the criminal
liability is attracted only if the orders are not complied with. Moreover,
if the legislative intent was not to include the cases in which plea has
already been recorded, then the legislative would not have use the word
“trying” which suggests that the amendment is intended to apply in all
pending cases where the plea has been recorded. Moreover, if the
amendment will apply only prospectively i.e to say in cases which have
not been filed or in which notice u/s 251 of CrPC is yet to be framed
than the same would amount to discrimination against people who
have earlier filed their cases i.e. prior to the amendment in the NI Act.
4. Further, there is no irreparable damage that will be caused to the
accused if Magistrate grants 20% interim compensation to the
complainant as by virtue of section 143A of NI Act because the said
amount can always be recovered from the complainant as per Section
143A (4) of NI Act which states that if the accused is acquitted the
magistrate shall direct the complainant to repay the respective amount
along with the interest at the bank rate as published by RBI to the
accused for the offence under Section 138 of Negotiable Instruments
Act, 1881.