Section 143A NI Act | Interim compensation to plaintiff in check bounce case introduced in 2018 amendment is prospective: Rajasthan HC

The Jaipur bench of the Rajasthan High Court has reiterated that Section 143A, Negotiable Instruments Act, inserted after an amendment in 2018 that introduced payment of interim compensation to the plaintiff in a bounced check case, has prospective application and cannot apply to complaints filed before the amendment. retrospectively.

Justice Anoop Kumar Dhand was based on the Supreme Court case of GJ Raja vs. Tejraj Surana in which it was argued that,

“before the insertion of Section 143A in the Act there was no provision in the legal code according to which even before… the pronouncement of guilt of an accused, or even before his conviction for the offense in question, he could be compel to pay or deposit provisional compensation… The person would, therefore, be subject to a new disability or obligation… In our opinion, the applicability of Section 143A of the Act must, therefore, be considered of a nature prospective and limited to cases when the crimes are committed after the introduction of section 143A, in order to force the accused to pay said provisional compensation.”

Justice Dhand later said: “In the light of the judgment passed by the Hon’ble Supreme Court in the case of GJ Raja (supra), it is clear that Section 143A of the Act of 1881 has its prospective effect and the same applies to complaints filed under the Section 138. of the Act of 1881 after the introduction/insertion of Section 143A of the Act of 1881, i.e. after the 01.09.2018. This provision cannot have retroactive effect on complaints submitted before 09/01/2018. 26. In view of the above, these requests deserve to be and are allowed“.

The Court was hearing a slew of petitions in which the question before the Court was whether the amended provision of Section 143A of the NI Act could be applied to a complaint filed before the enactment and operation of that provision, i.e. so retrospective. He observed that in the present case all the three complaints under section 138 were filed by the petitioner against the petitioners in 2017, i.e. before the enactment, application and insertion of the amended section 143A.

After hearing the arguments of both sides, the Court referred to the Supreme Court case of Hitendra Vishnu Thakur and others v. State of Maharashtra and others in which certain principles regarding the retroactive application of provisions were eliminated. It was ruled that a general procedural law should not be applied retrospectively when it created new rights, disabilities or obligations.

In view of this precedent, the Court was of the view that it could not lose sight of the fact that before the insertion of section 143A, there was no provision in law directing the accused to pay interim compensation to the plaintiff. And keeping in view the judgment of the Supreme Court, it was held that Section 143A had prospective effect and was applicable only to complaints which were filed after the amendment came into force i.e. September 1, 2018.

Accordingly, the petitions were allowed and the court ordered that if the petitioners deposited any amount, it would be refunded to them within 4 weeks.

Case title: Rashmi Khandelwal v. Kanhiyalal and Ors.

Citation: 2025 LiveLaw (Raj) 32

Click here to read/download the order