In Cheque Dishonour Case, Interim Compensation Can Be Ordered To Be Paid Only After Accused Pleads Not Guilty: Supreme Court

In case of Pawan Bhasin v State of UP CRIMINAL APPEAL No. 1807 / 2023 (arising out of SLP (Crl.) No(s). 6878/2023)

The Supreme Court bench led by Justices Ravindra Bhat and Aravind Kumar held that where a cheque is dishonoured, the interim compensation can be directed to be paid only after the accused has pleaded not guilty as per section  143A(1) of the Negotiable Instruments Act, 1881. In the present case, the court noted that the magistrate had directed to pay 10% of the cheque amount before the plea of accused was entered. The court held that such orders being passed before the plea was taken into account is unsustainable in law.

Therefore the court observed that “ In the present case, the Magistrate did not issue the order after the plea of the accused was entered, but before  that i.e. after he answered the summons. The party’s counsels were present at an intermediate stage of proceedings, but before the plea of “not guilty  was entered. In these circumstances, clearly, there is an infraction of Section 143A (1).”

Section 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 he 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”. for more legal updates follow us.