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Section 143A of NI Act won't have retrospective application: SC

New Delhi: The Supreme Court on Tuesday held that Section 143A of the Negotiable Instruments (NI) Act on payment of interim compensation to complainant during the pendency of the case will have no retrospective application.

Section 143A was inserted in NI Act in September 2018 to reduce the undue delay in the cheque dishonour cases.

Section 143A empowers the court to order the drawer of the cheque to pay interim compensation to the complainant upon framing of charges against the accused.

The compensation amount shall not exceed 20 per cent of the amount of the cheque.

In case where the drawer is acquitted, then the payee may be directed to refund the entire amount of interim compensation along with the prevailing interest rate, to the drawer.

A bench of Justices Uday Umesh Lalit and Vineet Saran pronounced the order and said the amended Section 143A will have prospective application since September 2018.

The court was hearing a petition filed by G.J. Raja through his counsel G. Ananda Selvam who has challenged a Madras High Court order directing him to pay interim compensation in a cheque bounce case.

A trial court on December 2018 directed Raja to pay an interim compensation of 20 per cent of the cheque amount to complainant Tejraj Surana.

He challenged the order in the Madras High Court which reduced the interim compensation from 20 per cent to 15 per cent of the cheque amount.

Surana had issued legal notice to Raja in September 2016 after two cheques issued by Raja to Surana bounced due to insufficient bank balance.

Raja said the cheques waa fradulently obtained by Surana in 2009 and he had misused those cheques by presenting them for collection in 2016.

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