Failure To Deposit Interim Compensation U/s. 143A NI Act Cannot Lead To Denial Of Right To Cross Examine Witness – SC
The Supreme Court in a cheque dishonor case has held that an accused who has filed to deposit interim compensation under Section 143A of the Negotiable Instruments Act, 1881 cannot be denied the right to cross-examine the witness.
A three-judge Bench of Justice UU Lalit, Justice S. Ravindra Bhat, and Justice Sudhanshu Dhulia in this context observed –
"The concerned provision nowhere contemplates that an accused who had failed to deposit interim compensation could be fastened with any other disability including denial of right to cross-examine the witnesses examined on behalf of the complainant."
The Court also held that any such order foreclosing the right would not be within the powers conferred upon the Court and would, as a matter of fact, go well beyond the permissible exercise of power.
In this case, the Respondent had instituted a criminal complaint against the Appellant under Section 138 of the NI Act. The Respondent had alleged that a cheque in the sum of Rs. 7 lacs was drawn by the Appellant in favour of the Respondent towards repayment of hand loan received by the Appellant from the Respondent.
It was further alleged that the said cheque was presented for encashment but was dishonoured on account of 'insufficient funds.'
Thereafter, a statutory notice was issued by the Respondent to the Appellant, however, the Appellant failed to repay the amount to the Respondent. Consequently, the Appellant was guilty of the offence under Section 138 of the NI Act.
The Trial Court had directed the Appellant to deposit 20% of the cheque amount as interim compensation in terms of Section 143(A) within 60 days. The Appellant however, did not make any deposit even after the extension of time period.
When the matter was taken-up for examination of witnesses, an application was made on behalf of the Appellant under Section 145(2) of the Act seeking permission to cross-examine the Respondent. In view of his failure to deposit the interim compensation as directed, the application preferred by the Appellant was found to be not maintainable and was dismissed by the Trial Court.
The Trial Court found the Appellant guilty of the offence under Section 138 NI Act.
The Trial Court directed the Appellant to pay fine in the sum of Rs.7,00,000/-, in default whereof to undergo simple imprisonment for six months. Out of the aforesaid sum, Rs.5,000/- was to be remitted to the State while the remaining amount of Rs.6,95,000/- was directed to be made over to the Respondent as compensation under Section 357 CrPC.
The First Appellate Court dismissed the appeal of the Appellant and affirmed the order of the Trial Court.
Aggrieved, the Appellant approached the High Court, however, the Court dismissed the Criminal Revision Petition of the Appellant and affirmed the view taken by the Courts below. It was observed that the conduct of the Appellant in not depositing the interim compensation as directed, showed that he was only interested in protracting the proceedings for one reason or the other.
Aggrieved, the Appellant approached the Apex Court.
Counsel Shailesh Madiyal appeared for the Appellant while Counsel Anand Nuli appeared for the Respondent before the Supreme Court.
The Apex Court referred to Section 143A of the NI Act which states the power to direct interim compensation.
The Court in this context observed –
"After empowering the court to pass an order directing the accused to pay interim compensation under Sub-Section 1 of Section 143A, Sub-Section 2 then mandates that such interim compensation should not exceed 20 per cent of the amount of the cheque. The period within which the interim compensation must be paid is stipulated in Sub-Section 3, while Sub-Section 4 deals with situations where the drawer of the cheque is acquitted. Said Sub-Section 4 contemplates repayment of interim compensation along with interest as stipulated. Sub-Section 5 of said Section 143A then states "the interim compensation payable under this Section can be recovered as if it were a fine". The expression interim compensation is one which is "payable under this Section" and would thus take within its sweep the interim compensation directed to be paid under Sub-Section 1 of said Section 143A."
The Bench further held the remedy for failure to pay interim compensation as directed by the court is thus provided for by the Legislature. The method and modality of recovery of interim compensation is clearly delineated by the Legislature. It is well known principle that if a statute prescribes a method or modality for exercise of power, by necessary implication, the other methods of performance are not acceptable.
"The concerned provision nowhere contemplates that an accused who had failed to deposit interim compensation could be fastened with any other disability including denial of right to cross-examine the witnesses examined on behalf of the complainant," the Bench opined.
The Court also held that since the right to cross-examine the Respondent was denied to the Appellant, the decisions rendered by the Courts below suffer from an inherent infirmity and illegality.
The Court thus allowed the appeal and set aside the decisions of all the three Courts with further direction that the criminal case shall stand restored to the file of the Trial Court.
The Court further directed the Trial Court to allow the Appellant to cross-examine the Respondent and then take the proceedings to a logical conclusion.
Accordingly, the Court allowed the appeal.
Cause Title - Noor Mohammed v. Kurram Pasha