Section 143A of NIA : Section 143A: Power To Direct Interim Compensation

Explanation using Example

Example of Section 143A of The Negotiable Instruments Act, 1881:

Imagine that Rajesh issued a cheque to Sunita for Rs. 50,000 as a payment for services rendered. However, the cheque was dishonored due to insufficient funds in Rajesh's account. Sunita files a complaint against Rajesh under Section 138 of the Negotiable Instruments Act for the dishonor of the cheque.

During the trial, Rajesh pleads not guilty. The court decides to apply Section 143A and orders Rajesh to pay interim compensation to Sunita. Considering the amount of the cheque, the interim compensation is set at 20%, which is Rs. 10,000. Rajesh is directed to pay this amount within 60 days.

If Rajesh is later acquitted, the court will order Sunita to return the Rs. 10,000 to Rajesh along with the applicable bank interest rate. If Rajesh is found guilty, the Rs. 10,000 paid as interim compensation will be deducted from the final compensation amount.