IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF MARCH 2019 BEFORE THE HON' BLE MR.JUSTICE ARAVIND KUMAR CRIMINAL PETITION No. 8236 OF 2018 BETWEEN:
H.P.Jayappa, S/o Benakappa, Aged about 49 years, Occ: Assistant Teacher, R/a # 84, Rathnakara Nagara, 3rd Cross, Savalanga Road, Shivamogga Town: 577 201.
And also working as Assistant Teacher, H.P.S., Odeyarapura Anaveri Post, Holehonnur Hobli, Bhadravathi Taluk-577 301.
(By Sri.Gopala Krishnamurthy C., Advocate) …Petitioner AND:
Prakash.Y, S/o Late Yarappa, Aged about 34 years, R/a No.6, Sriranga Nilaya, 4th Cross, Pipeline Road, Magadi Main Road, Anjana Nagara, Bengaluru-560 091.
(By Sri.Sridhara.T., Advocate) …Respondent This Criminal Petition is filed under Section 482 of Code of Criminal Procedure praying to set aside the order dated 26.10.2018 in CC.No.9967/2018, at Annexure-A on the file of the XIII ACMM, Bangalore and consequently reject the application dated 17.09.2018 at Annexure-B filed in CC.No.9967/2018 on the file of the XIII ACMM, Bangalore u/s 143A of N.I. Act filed by the respondent by allowing this petition.
This Criminal Petition coming on for Admission this day, the Court made the following:
ORDER Heard Sri. Gopalakrishnamurthy C, learned
2. On 05.09.2017, a cheque came to be issued by petitioner - accused to respondent - complainant and on its presentation by complainant through his bank it was returned unpaid with an endorsement ‘funds insufficient’. Hence complainant issued a notice on 27.09.2017 calling upon accused to pay the amount covered under the said cheque. Since demand made in the notice was not complied by petitioner-accused, a complaint under Section 200 Cr.P.C. came to be filed on 02.11.2017 before jurisdictional Magistrate alleging that accused had committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘N.I. Act’ for short). On 21.04.2018, sworn statement of complainant came to be recorded, summons was ordered to be issued to accused.
3. When matter was set down for cross- examination of PW1, complainant filed an interlocutory application under Section 143A of N.I. Act, seeking direction to accused to deposit 20% of the cheque
dated 26.10.2018 after considering the objections filed to said application. Same is under challenge in this petition.
4. It is the contention of Sri.Gopalkrishnamurthy.C, learned counsel appearing for the petitioner that Section 143A of Negotiable Instruments Act, has been inserted by Act of 20 of 2018 with effect from 01.09.2018 which is the appointed date on which the said provision came into force and plea of the accused in the instant case had already been recorded on 18.08.2018 and as such Section 143A which is a penal provision could not have been invoked and as such, learned trial Judge could not have directed the petitioner to pay the interim compensation to the complainant.
5. Per contra, Mr. R.Shashidhara, learned counsel for the respondent would support the impugned order contending that though said provision would be prospective even in respect of pending proceeding, where the plea of the accused is recorded subsequent to amending act coming into force, Section 143A would be applicable and as such impugned order is liable to be sustained.
6. Having heard the learned advocates appearing for parties and on perusal of records it would disclose that in the instant case accused has appeared before the learned trial Judge on 04.07.2018 and his counsel filed vakalathnama. For appearance of parties, matter came to be adjourned to 28.07.2018. However, on 28.07.2018, Presiding Officer was on leave and as such matter came to be adjourned to 18.08.2018. On 18.08.2018, accused was enlarged on bail and copies of complaint and documents were furnished to learned advocate appearing for accused. The substance of accusation was also read over and explained to the accused on same day i.e., 18.08.2018 and he did not plead guilty and sought for being tried. An application under Section 145(2) of the Act also came to be filed by the accused. Hence, matter was ordered to be listed for cross-examination of PW.1 on 17.09.2018.
7. On 17.09.2018, an application under Section 143A of the Act came to be filed by the complainant seeking for a direction to the accused to deposit/pay 20% of the cheque amount and as already noticed hereinabove said application came to be allowed by the learned Trial Judge by impugned order dated 26.10.2018.
8. This Court is of the considered view that it would be apt and appropriate to extract Section 143A of the N.I.Act which came to be inserted by Act 20 of 2018. It reads:
“143A. Power to direct interim compensation (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), 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.”
9. Under section 143A, Magistrate is empowered to order interim compensation to be paid by an accused to complainant a maximum of 20% of the cheque amount during the pendency of proceedings initiated under Section 138 of the Act.
10. In the instant case the cheque in question was issued by the accused to the complainant on 05.09.2017 and it came to be returned with an endorsement “Funds Insufficient” on 05.09.2017.
11. Legal notice came to be issued by the complainant calling upon accused to pay the amount covered under the cheque on 27.09.2017 and on default on the part of the accused to pay the amount, complaint came to filed under Section 200 of Cr.P.C for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 on 02.11.2017. Accused appeared on 18.08.2018 and was enlarged on bail. Plea of accused was recorded and substance of accusation was read over on same day. However, accused did not plead guilty and sought for being tried. Application filed by the accused under Section 145(2) of N.I. Act, was allowed and permitted to cross-examine PW1 vide order dated 26.10.2018. Plea of accused was recorded on 18.08.2018 i.e., prior to Section 143A of N.I. Act, came to force. Said provision being penal and it cannot be made applicable retrospective. Said Act having come into force w.e.f. 01.09.2018 said provision would not get attracted if plea of accused has already been recorded i.e., prior to Act 20 of 2018 coming into force. In the instant case plea has been recorded on 18.08.2018 i.e., prior to Act 20 of 2018 coming into force.
12. In that view of the matter, the impugned order directing the petitioner-caused to deposit 5% of the cheque amount as interim compensation cannot be sustained. Hence, the following ORDER i) Criminal petition is allowed;
ii) Order dated 26.10.2018 allowing the application filed by the complainant under Section 143A of Negotiable Instruments Act, 1881 is hereby dismissed;
iii) However, no opinion is expressed on the merits of the case. In the event, any application being filed by petitioner-accused for refund of amount, which is already said to have been paid, learned trial Judge is at liberty to consider the said application on merits and to pass appropriate orders, necessarily after affording opportunity to respondent- complainant.
SD/- JUDGE SB