Hardship To Accused No Ground To Not Release Interim Compensation In Favour Of Complainants Under NI Act: Karnataka High Court

The Karnataka High Court on 28th February, 2023 has quashed an order passed by the appellate court refusing to release interim compensation deposited by the accused convicted under Negotiable Instruments Act in favour of complainants. This was in the case of Lakshminarayana v. Lokesh L and this was presided over by a single bench of Justice K Natarajan.


These petitions are filed by the petitioners complainants under Section 482 of Cr.P.C for quashing the order of rejection of the application filed by the petitioners – complainants under Section 148(3) of the Negotiable Instruments Act. The petitioners is that the petitioners are the complainants before the learned Magistrate. They have filed a complaint under Section 138 of the NI Act r/w Section 200 Cr.P.C against the respondent and the respondent is found guilty and convicted by the learned Magistrate for the offences punishable under Section 138 of the NI Act. Being aggrieved by the judgment of conviction and sentence passed by the Trial Court, the same accused person in all the cases has filed the appeal before the First Appellate Court ie., before the Sessions Judge in Criminal appeal numbers stated above and also filed the applications under Section 389 of Cr.P.C for suspending the sentence. The First Appellate Court by allowing the application under Section 389 of Cr.P.C, suspended the sentence passed by the learned Magistrate with a condition to deposit 20% of the fine amount as interim compensation payable within 60 days from the date of its order. Learned counsel for the petitioners has contended that as per the amended Section 143(A) of the NI Act, the complainants are entitled upto 20% of the cheque amount as interim compensation. The learned counsel submits that the application rejected by the First Appellate Court is not correct. Even if the accused succeeds in the appeals that amount shall be refunded by the complainants within 30 days along with interest.


The Court allowing the petition opined that “In my considered opinion, the order passed by the First Appellate Court is not correct, as it is settled position of law under Sections 143(A) and 148(3) of NI Act, it is mandatory on the part of the Trial Court as well as the First Appellate Court to impose interim compensation payable by the accused persons while challenging the case and judgment of sentence in the appeals.”


“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.” 



Click here to view your judgement

Leave a Reply

Your email address will not be published. Required fields are marked *