The exercise of power under Section 143A(1) of Negotiable Instruments (NI) Act, 1881 is discretionary. The provision is directory and not mandatory | Factors to be considered while exercising discretion under Section 143A of NI Act, 1881 – Rakesh Ranjan Shrivastava Vs. The State of Jharkhand and Anr. – Supreme Court
Whether the provision of Section 143A(1) of Negotiable Instruments (NI) Act, 1881, which provides for the grant of Interim Compensation, is directory or mandatory?
In this landmark judgment, Hon’ble Supreme Court held that:
(i) Section 143A(1)(b) of NI Act will apply only when the case is being tried as a warrant case. In the case of a summary or summons trial, the power under Section 143A(1) can be exercised after the plea of the accused is recorded.
(ii) The interim compensation is treated as a fine for the purposes of its recovery. Section 421 of the Cr.PC deals with the recovery of the fine imposed by a criminal court while passing the sentence.
(iii) The provision will have to be held as a directory and not mandatory. Hence, we have no manner of doubt that the word “may” used in Section 143A, cannot be construed or interpreted as “shall”. Therefore, the power under sub-section (1) of Section 143A is discretionary.
(iv) Tests applicable under Section 148(1) can never apply to Section 143A(1) of the N.I. Act.
(v) The Court also listed factors to be considered while exercising discretion.
