Business Other News 31 Jul 2019 Cheque bounce: Supre ...

Cheque bounce: Supreme Court clears doubts

FC INVESTIGATIVE BUREAU
Published Jul 31, 2019, 2:58 am IST
Updated Jul 31, 2019, 2:58 am IST
The clarification had become necessary, as there were conflicting views by different high courts.
A bench comprising justice UU Lalit, in the case of GJ Raja vs Tejraj Surana, Raja, quashed a Madras High Court order that had directed the accused to pay interim compensation of 20 per cent to the complainant.
 A bench comprising justice UU Lalit, in the case of GJ Raja vs Tejraj Surana, Raja, quashed a Madras High Court order that had directed the accused to pay interim compensation of 20 per cent to the complainant.

New Delhi: In a major relief in compensation cases in the cheque bounce cases, the Apex Court on Tuesday clarified that a new provision of interim compensation during the pendency of the case will only be applicable in the matters filed after 2018 amendment.

The clarification had become necessary, as there were conflicting views by different high courts. Clarifying that Section 143A of the Negotiable Instruments (NI) Act will be effective prospectively in future, the Supreme Court said that the compensation shall not exceed 20 per cent of the amount of the cheque.

 

Section 143A, which was inserted in the Act in September 2018 to reduce the undue delay in the cheque bounce cases, empowers the trial court to order the drawer of the cheque to pay interim compensation to the complainant upon framing of charges against the accused. The provision also states that the interim compensation so received has to be returned by the complainant along with interest in case the accused is acquitted.

A bench comprising justice UU Lalit, in the case of GJ Raja vs Tejraj Surana, Raja, quashed a Madras High Court order that had directed the accused to pay interim compensation of 20 per cent to the complainant.

 

In December 2018, a Chennai Court had directed Raja to pay 20 per cent of the cheque amount as an interim compensation as per the provisions of the Section 143A of the Amended NI Act. On the appeal, the HC upheld the retrospective order, but reduced the interim compensation from 20 to 15 per cent of the cheque amount.

Surana had issued notice to Raja in September 2016 after two cheques issued by Raja to Surana bounced due to insufficient bank balance. Raja said the cheques was fradulently obtained by Surana in 2009 and he had misused these cheques.

 

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Location: India, Delhi, New Delhi




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