Section 143A NI Act: Power to direct interim compensation
Negotiable Instruments Act, 1881
Section 143A NI Act at a Glance
Section 143A NI Act allows a court trying a cheque dishonour offence under Section 138 NI Act to order the drawer to pay interim compensation of up to 20 per cent of the cheque amount to the complainant while the trial is pending.
Section 143A NI Act Bare Act Text
143A. Power to direct interim compensation.
(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant—
(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and
(b) in any other case, upon framing of charge.
(2) The interim compensation under sub-section (1) shall not exceed twenty per cent. of the amount of the cheque.
(3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.
(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.
(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973 (2 of 1974).
(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973 (2 of 1974), shall be reduced by the amount paid or recovered as interim compensation under this section.
Amendments to this section
- Ins. by Act 20 of 2018, s. 2 (w.e.f. 1-9-2018).
Section 143A NI Act in Simple Words
Section 143A NI Act gives the court trying a cheque dishonour offence under Section 138 NI Act the power to order the drawer of the cheque to pay interim compensation to the complainant. Under Section 143A(1) NI Act, this power applies regardless of anything in the Code of Criminal Procedure, 1973. The court may pass this order in a summary trial or a summons case when the drawer pleads not guilty to the accusation in the complaint, and in any other case, upon framing of charge. Under Section 143A(2) NI Act, the interim compensation cannot exceed 20 per cent of the cheque amount.
Under Section 143A(3) NI Act, the drawer must pay the interim compensation within 60 days from the date of the court's order. If the drawer shows sufficient cause, the court may grant a further period of up to 30 days. Under Section 143A(4) NI Act, if the drawer is acquitted, the court must direct the complainant to repay the interim compensation to the drawer with interest at the Reserve Bank of India bank rate prevalent at the beginning of the relevant financial year. The complainant must make this repayment within 60 days of the order, or within a further period of up to 30 days if the court directs on sufficient cause shown by the complainant.
Under Section 143A(5) NI Act, interim compensation payable under Section 143A NI Act may be recovered as if it were a fine under Section 421 of the Code of Criminal Procedure, 1973. Under Section 143A(6) NI Act, any fine imposed under Section 138 NI Act or compensation awarded under Section 357 of the Code of Criminal Procedure, 1973 must be reduced by the amount already paid or recovered as interim compensation under Section 143A NI Act. The Act still refers to the Code of Criminal Procedure, 1973, which the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) replaced from 1 July 2024. Act 20 of 2018 inserted Section 143A NI Act from 1 September 2018.
When Section 143A NI Act Applies
- A court is trying an offence for dishonour of a cheque under Section 138 NI Act.
- In a summary trial or a summons case, the drawer pleads not guilty to the accusation in the complaint; in any other case, the court frames the charge.
- The court may order the drawer to pay interim compensation not exceeding 20 per cent of the amount of the cheque to the complainant.
- The drawer must pay within 60 days of the order, extendable by up to 30 days by the court on sufficient cause shown by the drawer.
- Unpaid interim compensation may be recovered as if it were a fine under Section 421 of the Code of Criminal Procedure, 1973, and any amount paid or recovered is deducted from a final fine under Section 138 NI Act or compensation under Section 357 of that Code.
- Upon acquittal of the drawer, the court must direct the complainant to repay the interim compensation with interest at the Reserve Bank of India bank rate prevalent at the start of the relevant financial year within 60 days, extendable by up to 30 days on sufficient cause.
Example of Section 143A NI Act
FAQs on Section 143A NI Act
What is Section 143A NI Act?▼
Section 143A NI Act empowers a court trying a cheque dishonour offence under Section 138 NI Act to order the drawer of the cheque to pay interim compensation to the complainant. The interim compensation cannot exceed 20 per cent of the cheque amount and must be repaid with interest if the drawer is acquitted.
What is the maximum interim compensation a court can order under Section 143A NI Act?▼
20 per cent of the amount of the cheque. Under Section 143A(2) NI Act, the interim compensation ordered under Section 143A(1) NI Act cannot exceed this limit.
Is the court bound to order interim compensation in every case under Section 143A NI Act?▼
No. Section 143A(1) NI Act states that the court trying an offence under Section 138 NI Act may order the drawer to pay interim compensation, making the order discretionary.
Within how many days must the drawer pay interim compensation under Section 143A NI Act?▼
60 days from the date of the order under Section 143A(1) NI Act. Under Section 143A(3) NI Act, the court may direct a further period not exceeding 30 days if the drawer shows sufficient cause.
What happens to the interim compensation if the drawer is acquitted under Section 143A NI Act?▼
Repayment with interest is mandatory. Under Section 143A(4) NI Act, the court must direct the complainant to repay the interim compensation to the drawer with interest at the Reserve Bank of India bank rate prevalent at the beginning of the relevant financial year within 60 days of the order, extendable by up to 30 days on sufficient cause.
How is unpaid interim compensation recovered under Section 143A NI Act?▼
As if it were a fine under Section 421 of the Code of Criminal Procedure, 1973. Section 143A(5) NI Act allows recovery through that procedure, and Section 143A(6) NI Act reduces any final fine under Section 138 NI Act or compensation under Section 357 of the Code of Criminal Procedure, 1973 by the amount paid or recovered.
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Sources: Bare Act Text, Negotiable Instruments Act, 1881 (India Code) ·