Section 143A VS. Section 148 of the Negotiable Instruments Act

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In 2018, some amendments were made in the Negotiable Instruments Act, 1881 through the amendment act of 2018 thereby inserting Section 143A and Section 148 to the existing act. These provisions were inserted due to the following reasons:
1) To reduce the undue delay caused in the cheque dishonour cases,
2) For payment of interim compensation to the complainants, and
3) For ease of doing business.
After the amendment was introduced, it became a question in the legal field whether these provisions are retrospective or prospective in nature.
To understand the nature of the provisions, let us first look upon the provisions inserted through the amendment act of 2018 in detail.
Section 143A
This section gives the court the power to direct interim compensation to the complainant by the drawer:
i. In a summary trail or summons case, where the drawer pleads not guilty to the accusation made in the complaint, and
ii. In any other case made upon framing of the charges.
Under this provision-
 The amount of interim compensation that is to be given by the drawer to the complainant shall not exceed 20% of the amount of the cheque.
 The interim compensation shall be paid within 60 days from the date of the order given by the court and is subject to further extension by 30 days on sufficient reason given by the drawer of the cheque.
 If the drawer is acquitted, then the complainant may be directed by the court to repay the amount of interim compensation along with the prevailing interest rates of the RBI, to the drawer. This has to be done within 60 days or within further extended period of 30 days as may be directed by the court.
Section 148
This section gives the appellate court the power to order payment of the pending fine or compensation awarded by the trial court to the appellant.
Under this provision-
 The appellate court may order the appellant to deposit minimum 20% of the amount awarded by the trial court.
 The amount paid should be in addition the interim compensation paid by the appellant under section 143A.
 The amount shall be paid within 60 days from the date of the order given by the court and is subject to further extension by 30 days on sufficient reason given by the appellant.
 If the appellant is acquitted, then the complainant may be directed by the court to repay the amount so given to him along with the prevailing interest rates of the RBI to the appellant. This has to be done within 60 days or within further extended period of 30 days as may be directed by the court.
In the case of G.J. Raja vs. Tejraj Surana, the Supreme Court has held that Section 143A of the Negotiable Instruments Act has no retrospect application during the pendency of the case. The judgment stated that Section 143A would be only applicable to the cases filed after the 2018 amendment to the Act.
The court, in the case of Surinder Singh Deswal vs. Virender Gandhi, held that the Section 148 of the Act shall be applicable in cases which were filed prior to the 2018 amendment under Section 138 of the NI Act.
The Supreme Court, by pronouncing these two judgments, has upheld the view of the Punjab and Haryana High Court which held that the Section 143A is prospective in nature and would have no retrospective effect whereas Section 148 would be applicable retrospectively.
A vital question that came up was that when these two provisions have been introduced in the same amendment, then why is one retrospective and the other prospective in nature. The reason given by the courts behind the application of these provisions is that:
i. Section 143A applies at the trial stage even before the accused is proved guilty or is convicted whereas Section 148 applies at the appellate stage where the accused is already found guilty under Section 138 of the Act.
ii. Section 143A has created a new obligation on the accused therefore creating a liability upon him. A statute which creates new rights and liabilities should better be prospective in nature for easy operation of law and justice.
The amendment is a relief as the Payee of the cheque had to put a lot of time and energy in the court to in cheque bounce case thereby strengthening the recovery provisions.

Submitted by :

Ayushi Mishra

Student Reporter INBA