Retired HC Judges Elevated From Service Can't Be Discriminated From Those Appointed From Bar Regarding Pension - Supreme Court

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S.143A NI Act | Interim Compensation In Cheque

Dishonour Cases Isn't Mandatory : Supreme Court Lays
Down Broad Parameters
Yash Mittal
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15 Mar 2024 8:14 PM
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Section 138 Negotiable Instruments Act
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The Supreme Court on Friday (March 15) observed that mere filing of the cheque
dishonor complaint under the Negotiable Instruments Act would not grant a right
to a complainant to seek interim compensation under Section 143A (1) of the N.I.
Act, as the power of the court to grant interim compensation, isn't mandatory but
discretionary and needs to be decided after prima facie evaluating the merits of
the case.
Also Read - Retired HC Judges Elevated From Service Can't Be Discriminated From Those
Appointed From Bar Regarding Pension : Supreme Court (/top-stories/retired-hc-judges-
elevated-from-service-cant-be-discriminated-from-those-appointed-from-bar-regarding-
pension-supreme-court-252435?utm_source=internal-artice&utm_medium=also-read)

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Setting aside the findings of the High Court and Trial Court, the Bench Comprising
Justices Abhay S. Oka and Ujjal Bhuyan observed that the power to grant interim
compensation to the complainant by the courts shouldn't be exercised at the
threshold. Moreover, if the word 'may' in Section 143A (1) NI Act is interpreted as
'shall', then will have a drastic consequence leading to a scenario whereby in every
complaint under Section 138, the accused will have to pay interim compensation
up to 20 percent of the cheque amount.
Also Read - Tenants Holding Watan Property On 'Tiller's Day' Would Be Entitle To Purchase
Watan Property Under Maharashtra Revenue Patels (Abolition of Offices)... (/supreme-
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property-under-maharashtra-revenue-patels-abolition-of-offices-act-supreme-court-252415?
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“Considering the drastic consequences of exercising the power under Section
143A and that also before the finding of the guilt is recorded in the trial, the word
“may” used in the provision cannot be construed as “shall”. 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.”, the Judgment authored by Justice Abhay S. Oka said.
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Section 143A of N.I. Act provides a power to the court to direct interim
compensation to the complainant. The provision was inserted through an
amendment to address the issue of undue delay in the final resolution of the
cheque dishonor cases. In the statement of objects and reasons, it was stated that
unscrupulous drawers of the cheques prolong the proceedings of a complaint
under Section 138 by filing appeals and obtaining a stay. Therefore, injustice is
caused to the payee of a dishonoured cheque, who has to spend considerable time
and resources in Court proceedings to realise the value of the cheque.
The broad parameters for exercising the discretion under Section 143A
The Court laid down the following parameters :
i. The Court will have to prima facie evaluate the merits of the case made out by
the complainant and the merits of the defence pleaded by the accused in the reply
to the application. The financial distress of the accused can also be a
consideration.
ii. A direction to pay interim compensation can be issued, only if the complainant
makes out a prima facie case.
iii. If the defence of the accused is found to be prima facie plausible, the Court
may exercise discretion in refusing to grant interim compensation.
iv. If the Court concludes that a case is madeout to grant interim compensation, it
will also have to apply its mind to the quantum of interim compensation to be
granted. While doing so, the Court will have to consider several factors such as the
nature of the transaction, the relationship, if any, between the accused and the
complainant, etc.
v. There could be several other relevant factors in the peculiar facts of a given
case, which cannot be exhaustively stated. The parameters stated above are not
exhaustive.
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dispute was that the complainant/respondent No. 2 had registered
a complaint under Section 138 N.I. Act against the Appellant/Accused after a
cheque amounting to Rs. 2,20,00,000/- was dishonored by the bank. During the
pendency of the proceedings, the complainant moved an application under Section
143A (1) of N.I. Act seeking direction against the accused to pay 20% of the
cheque amount as compensation.
The trial court allowed the application and directed the Accused to pay Rs.
10,00,000/- to the respondent no.2/complainant as interim compensation. The
decision of the trial court was upheld by the High Court.
Aggrieved by the High Court's decision, the appellant/accused preferred a criminal

appeal before the Supreme Court.
Before the Supreme Court, it was contended by the accused that both the High
Court and Trial Court erred in allowing the application of the complainant directing
him to pay interim compensation to the complainant. According to the accused,
the order directing the accused to pay interim compensation was passed
mechanically without stating any reasons thereof. The accused pleaded that the
mere filing of the complaint under the NI Act doesn't empower the court to direct
the accused to pay interim compensation to the complainant, as the word 'may'
used in Section 143A (1) shouldn't be construed as 'shall', and the decision
regarding paying compensation should be based on the facts and circumstances
of each case.
Finding force in the Appellant/accused submission, the Supreme Court held that
the word 'may' used in Section 143A (1) shouldn't be construed as 'shall', and the
payment of interim compensation to the complainant isn't mandatory but directory
in nature.
The Court also noted that if the word 'may' is construed as 'shall' then it would
have a drastic consequence whereas, in every complaint under Section 138, the
accused will have to pay interim compensation up to 20 per cent of the cheque
amount.
“If the word

Notifications iZooto'may' is interpreted as 'shall', it will have drastic consequences as
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every complaint under Section 138, the accused will have to pay interim
compensation up to 20 per cent of the cheque amount. Such an interpretation will
be unjust and contrary to the well-settled concept of fairness and justice. If such
an interpretation is made, the provision may expose itself to the vice of manifest
arbitrariness. The provision can be held to be violative of Article 14 of the
Constitution. In a sense, subsection (1) of Section 143A provides for penalising an
accused even before his guilt is established.”, the court observed.
Factors To Be Considered While Exercising Discretion i.e., Whether To Grant

Interim Compensation or Not?
The Supreme Court stated that an order directing the accused to pay interim
compensation to the complainant shouldn't be passed mechanically but the Court
will have to prima facie evaluate the merits of the case made out by the
complainant and the merits of the defence pleaded by the accused in the reply to
the application under sub-section (1) of Section 143A while deciding the
application seeking interim compensation.
“The presumption under Section 139 of the N.I. Act, by itself, is no ground to direct
the payment of interim compensation. The reason is that the presumption is
rebuttable. The question of applying the presumption will arise at the trial. Only if
the complainant makes out a prima facie case, a direction can be issued to pay
interim compensation.”, the court observed.
“the Court will have to consider various factors such as the nature of the
transaction, the relationship, if any, between the accused and the complainant, and
the paying capacity of the accused.”, the court added.
In a nutshell, the court said that while deciding the prayer made under Section
143A, the Court must record brief reasons indicating consideration of all the
relevant factors.
Conclusion
After finding
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accused to pay interim compensation to the complainant, the Supreme Court
directed the Trial Court to consider the application for the grant of interim
compensation afresh and also directed that the amount of Rs. 10,00,000/-
deposited by the appellant will continue to remain deposited with the Trial Court
Accordingly, the appeal was allowed, and the impugned order was set aside.
Counsels For Petitioner(s) Mr. Shubham Bhalla, AOR Mr. Rajnish Ranjan, Adv. Mr.
Yajur Bhalla, Adv. Ms. Anchita Nayyar, Adv. Ms. Ragini Sharma, Adv. Ms. Akansha
Gulati, Adv. Ms. Nitya Maheshwari, Adv. Ms. Gauri Bedi, Adv. Mr. Jaisurya Jain,
Adv. Mr. Rohit Pandey, Adv. Mr. Alex Noel Dass, Adv. Mr. Vijay Kumar Dwivedi, Adv.
Counsels For Respondent(s) Mr. Prateek Yadav, Adv. Mr. Mohd. Shahrukh, Adv. Mr.
Yogesh Yadav, Adv. Mr. Pati Raj Yadav, Adv. Ms. Pratima Yadav, Adv. Mr. Ranbir
Singh Yadav, AOR Mr. Vishnu Sharma, Adv. Ms. Madhusmita Bora, AOR Mr.
Dipankar Singh, Adv. Mrs. Anupama Sharma, Adv.
Case Title: RAKESH RANJAN SHRIVASTAVA VERSUS THE STATE OF

JHARKHAND & ANR
Citation : 2024 LiveLaw (SC) 235
Click Here To Read/Download The Judgment (https://www.sci.gov.in/wp-

admin/admin-ajax.php?
action=get_judgements_pdf&diary_no=78592023&type=j&order_date=2024-03-15)
Tags Justice AS Oka (https://www.livelaw.in/tags/justice-as-oka)
Justice Ujjal Bhuyan (https://www.livelaw.in/tags/justice-ujjal-bhuyan)
Section 138 NI Act (https://www.livelaw.in/tags/section-138-ni-act)
Dishonor Of
Cheque (https://www.livelaw.in/tags/dishonor-of-cheque)
Section 143A NI Act (https://www.livelaw.in/tags/section-143a-ni-act)
Interim Compensation (https://www.livelaw.in/tags/interim-compensation)
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Next Story
Retired HC Judges Elevated From Service Can't Be

Discriminated From Those Appointed From Bar
Regarding Pension : Supreme Court (/top-
stories/retired-hc-judges-elevated-from-service-cant-
be-discriminated-from-those-appointed-from-bar-
regarding-pension-supreme-court-252435)
Anmol Kaur Bawa
(/anmol-kaur-bawa-247945)
15 Mar 2024 7:02 PM
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In an important judgment, the Supreme Court on Friday (March 15) there cannot be
any discrimination between the retired High Court judges, depending on their
source of elevation (whether from the bar or the District Judiciary), while
computing their pensionary benefits.
The Court held that held that the pensionary entitlement of a retired High Court
judge, who is elevated from the District Judiciary, must be computed by adding the
service as a District Judiciary member along with the service as a High Court
judge. Such pension must be computed on the basis of the last drawn salary as a
judge of the High Court judge.

( https://www.slsnagpur.edu.in/?utm_source=livelaw&utm_medium=banner&utm_campaign=English)
A bench comprising Chief Justice of India DY Chandrachud, Justices JB
Pardiwala and Manoj Misra was deciding the case of a former judge of the Punjab
and Haryana High Court.
The case related to the interpretation of the provisions of the High Court Judges
(Salaries and Conditions of Service) Act, 1954.
Factual Background
Respondent No.1(former judge) was a member of the District Judiciary from 11

May 1989 to 31 July 2014. She was appointed as a judge of the High Court on
September 25, 2014 and retired on July 4 2016. The Union Government calculated
her pension as per her last drawn salary as a District Judge and not a High Court
judge.
(https://ambitionlawinstitute.com/)
Before the Supreme Court, the Union raised the following arguments :
(1) Respondent No.1 has not completed 12 years of pensionable service as a HC

judge and hence was not entitled to the benefit of Section 14 of the High Court
Judges (Salaries and Conditions of Service) Act.
(2). There was a break in service of the petitioner for assuming the office of the
High Court judge.
(3).The pension payable to Respondent No.1 would be computed as per Section

15 and hence based on the last drawn salary as a District Judge.
https://www.livelaw.in/top-stories/retired-hc-judges-elevated-from-service-cant-be-discriminated-from-those-appointed-from-bar-regarding-pens… 10/26

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The Court observed that the submission of the Union missed the plain
consequences of the Explanation of Section 14. The Court noted that the
Explanation uses the words "means and includes".
"In other words, Section 14 applies to a judge who has not held any pensionable
post either in the Union or the State or a person, who having held a pensionable
post, opts to receive pension under part 1 of the schedule," the Court observed.
"A judge, such as the first respondent, who has not opted to receive the benefits of
pension part 1 of the schedule, would fall outside the purview of the explanation
and hence Section 14 would have no application. The post-retiral benefits of such
a judge would be governed by Section 15. Upon electing to receive pension under
Part 3 of the First Schedule, the first respondent was entitled to have the years of
service which were rendered by her as a judge of the High Court cumulated to the
years of service rendered as a member of the District Judiciary," the Court
observed.
Union's position leads to discrimination
The Court observed that accepting the Union's position "would result in a clear
discrimination between a member of the bar who becomes a judge of the High
Court judge and a member of a district judiciary who is appointed a HC judge."
In this regard, the Court noted that a member of the bar would be entitled to the
addition of 10 years of service by virtue of Section 14A of the Act. As per Section
14A, ten years of service will be deemed to be added to the service of every retired
High Court judge who was appointed from the Bar after April 1, 2004. On addition
of the years of service, their pensionary benefits would be computed on the basis
of the last drawn salary as a judge of the High Court.
The Court
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drawn from the District Judiciary as well.
“A similar principle must be applied in computing the pension of the judge elevated
from the district judiciary to the High Court. Any other interpretation would result in
plain discrimination between the judges of the High Court based on the source
from which they are elevated. Such an interpretation would do a disservice to the
importance of the District Judiciary in contributing to the judiciary of the nation
and besides would be contrary to the overall scheme and intendment of Chapter 3
of the Statute.”
The Court held that the first Respondent was "entitled to the addition of the period
during which she served as a judge of the High Court to be added to the length of
her service as a member of the District Judiciary from 11 May 1981 to 31 July
2014."
It directed that her pension must be computed on the basis of her last drawn
salary as a judge of the High Court. The arrears of pension were directed to be
paid on or before May 31,2024 with interest at the rate of 6% per annum.
The Court also rejected the Union's argument based on her "break in service".
There was a break in service of break in service for 1 month and 24 days between
her service as District Judge and appointment as High Court judge. The Court
observed that this break was inconsequential for the simple reason the service
upon appointment as a High Courtjudge was in pursuance to a recommendation
made during her tenure as a member of the District Judiciary.
Pensionary benefits vital element of judicial independence
The Court also made certain significant remarks on the importance of pensionary
benefits :
"Pensionary
Notifications iZootobenefits to judges constitute a vital element in judicial independence.
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As a consequence of long years of Judicial Office, Judges on demitting of office,
do not necessarily have the options which are open to members which are open to
persons of other services.
The reason why the State assumes the obligation to pay pension judges is to
ensure that the protection of the benefits which are available after retirement
would ensure their ability to discharge their duty without 'fear or favour' during
their years of judgeship. The purpose of creating dignified conditions of existence
for judges during their tenure or thereafter is vital element of public interest.
Courts and the judges who man them are vital a component of the rule of law. The
independence of the judiciary is a vital doctrine recognised in the constitutional
scheme, the payment of salaries and dignified conditions serves a vital part of that
purpose."
The report is based on the oral pronouncement of judgment. To be updated when

the judgment is uploaded.
Case details : UNION OF INDIA MINISTY OF LAW JUSTICE vs. JUSTICE (RETD.)
RAJ RAHUL GARG (RAJ RANI JAIN) | SLP(C) No. 007246 - / 2019
Tags CJI Chandrachud (https://www.livelaw.in/tags/cji-chandrachud)
pension scheme (https://www.livelaw.in/tags/pension-scheme)
Retired High Court Judges (https://www.livelaw.in/tags/retired-high-court-judges)
High CourtiZooto
Notifications Judges(https://www.izooto.com/campaign/getting-started-with-web-push-notifications-izooto?
(Salaries and Conditions of Service) Act
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Retired HC Judges Elevated From Service Can't Be Discriminated From Those Appointed From Bar Regarding Pension - Supreme Court

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Retired HC Judges Elevated From Service Can't Be Discriminated From Those Appointed From Bar Regarding Pension - Supreme Court

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15/03/2024, 21:37 Retired HC Judges Elevated From Service Can't Be Discriminated From Those Appointed From Bar Regarding

egarding Pension : Su…

Home (/) / Supreme court (/supreme-court) / S.143A NI Act | Interim...

S.143A NI Act | Interim Compensation In Cheque

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Section 138 Negotiable Instruments Act

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The Court laid down the following parameters :

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Aggrieved by the High Court's decision, the appellant/accused preferred a criminal

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Factors To Be Considered While Exercising Discretion i.e., Whether To Grant

Case Title: RAKESH RANJAN SHRIVASTAVA VERSUS THE STATE OF

Citation : 2024 LiveLaw (SC) 235

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