Interim Compensation Under S.143A Of NI Act Being A Directory Not Discretionary: Chhattisgarh HC Verdicts

CASE BACKGROUND

• Case in discussion is of Rajesh Soni Vs Mukesh Verma where respondent has filed a complaint in contradiction to the petitioner under Section 138 of the NI Act, 1881 that a cheque had been deposited in the Central Bank of India, but the cheque was held to be dishonored and had to be returned due to inadequate funds.
• Interim conjunction of 20% was asked to be paid which continued with a lot of heated arguments about it and about what percentage was needed.

OBSERVATIONS OF THE COURT

• The counsel submitted that under the provision of this S. 143A of the Act, 1881, the grant for the interim compensation was not mandatory instead they called it out as discretionary, which means that it was as per the disposition or option to pay that amount, stating that it was therefore not necessary to grant 20% of cheque amount to every case as interim compensation.
• He tried to bring to the Court’s notice amended provision of Section 143A of the Act, 1881 which states that the interim compensation under Sub-Section 1 shall not exceed twenty per cent of the amount of the cheque.
• As may be directed by the Court on sufficient and prima facie cause found by the Court, interim compensation shall be paid within sixty days from the date of the order within such further period not exceeding thirty days
• This provision is directory and not discretionary in view of the amendment made in Section 143 A of the NI Act, 1881.

INTERESTING UNDERSTANDINGS TO BE NOTED

• As a general rule, the word “may” is non-judgmental and operational to consult options and especially so, where it is used in collocation to the word “shall”, which ordinarily is imperative as it imposes a duty.
• The aim of the legislation, as well as the relevant circumstances, should be investigated in order to determine whether these words are being employed in a directory or required sense.
• The distinction amid compulsory submission and directory impact of language is determined by the phrasing used in the statute in question, as well as the statute's intent, purpose, and effect. The contrast between the words 'shall' and 'may' is based on the delegation of power.
• ‘May' does not always mean ‘can’ and it heavily depends on the context and therefore the word ‘may' is required for compliance with the requirement and henceforth the decision made by Hon’ble J Narendra Vyas, suits well with the portrayal of “shall” to be read instead of “will” and the Section 143 A becoming directory and not discretionary.

OTHER DEVELOPMENTS

• To add more to this, the legislature is establishing a special court for the vulnerable number of pending cases under Negotiable Instrument Act involving a considerable huge amount.
• The Government has also declared the establishment of a special course for this purpose.
• This is done to keep in mind that the compensator may be innocent and he/ she may be in need of this amount because of the legal fees and they get it returned as soon as possible for their own bills and needs.

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