An order to pay interim compensation under the Negotiable Instruments Act of 1881 can be enforced as a “public demand” under the Bihar & Orissa Public Demands Recovery Act of 1914, according to the Division Bench of Sanjay Karol, CJ, and S. Kumar J in Sunil Kumar v. State of Bihar, (decided on 10-5-2022).
Facts of the case
The private respondent, Arun Kumar, trader of paddy, wheat, and other commodities, is respondent No. 4.It is alleged that between August 23, 2018, and August 30, 2018, goods in the amount of Rs. 1,26,75,600/- were delivered to the petitioner, Sunil Kumar, by Patna High Court CWJC No.73 of 2022 dated October 10, 2022.In exchange, the petitioner gave Punjab National Bank, Aurangabad, the number 170288 check on 15 March 2019, but upon presentation, the check was declined.Due to Private Respondent’s failure to comply, Complaint Case No. 319 of 2019 was filed on April 16, 2019, before the Chief Judicial Magistrate, Aurangabad, under Section 138 of the Negotiable Instrument Act, 1881 (the “NI Act”).
The High Court noted that, according to sub-section (5) of Section 143A of the NI Act, interim compensation paid in accordance with this section may be recovered as a fine under Section 421 of the Criminal Procedure Code, 1881.
A warrant is issued to the Collector under Section 421 (1) (b) to collect amounts as arrears of land revenue from the defaulter’s movable and immovable properties.
Additionally, it is stated in clause 3 of Schedule I of the Recovery Act that, in accordance with Section 3 of the Act, any money realized as an arrear of land revenue by process authorized for said purpose shall be deemed a public demand.
As a result, the Lower Court was correct in directing the recovery of interim compensation as land revenue under Section 143A of the NI Act. This means that the interim compensation that was ordered was recoverable as a fine under Section 421 of the CrPC, which clearly falls under the definition of “public demand.”
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JUDGEMENT REVIEWED BY ROLI NAYAN.