The Supreme Court in the case observed and has held that where the cheque is being dishonoured, it has been directed that the interim compensation to be paid only after the accused has pleaded not guilty as per section 143A (1) of the Negotiable Instruments Act, 1881.
The court in the case observed and has noted that the magistrate directed to pay an amount of 10% of the cheque amount before the plea of accused was entered.
The court in the case observed and has held that such orders which are being passed before the plea was taken into account is unsustainable in law.
The court in the case observed and has stated that the Magistrate did not issue the order after the plea of the accused was entered before that i.e., he in the case answered the summons.
The counsel appearing for the party were presented at an intermediate stage of proceedings, but before the plea of Not guilty was entered.
The Supreme Court bench headed by Justice Ravindra Bhat and Justice Aravind Kumar in the case observed wherein the Special Leave Petition is moved by the by the petitioners against the order passed by Allahabad High Court wherein the court did not find any illegality in the impugned summoning order.
Accordingly, the court allowed the appeal and has quashed the order passed by the CJM as it was being unsustainable in the law.
In the present case, there being the financial relationship between the petitioner, in this SLP and that the complainant for which the cheques were being issued. The complaint in the case was that in order to satisfy the loan as well as the benefit, the cheque was been given which was dishonoured.
The Trial Court in the case observed wherein the order dated May 24, 2022, wherein the court directed the petitioner for depositing an amount of 10% of a dishonoured cheque under Section 143A of the Negotiable Instruments Act, 1881.
The issue raised in the case was weather the cheque dishonour case, the court granted interim compensation can be granted even before the accused pleads not guilty under section 143A (1) of NI Act, 1881?
The court in the case observed and has stated that while analysing section 143A (1) held that direction for payment of interim compensation can only be made after the accused has pleaded not guilty.
Further, the court observed and has held that the trial was at an advanced stage. The complainant in the case can seek relief as stated under section 143A since it can be claimed at any stage. Accordingly, the court quashed the order of trial court.