Application of Sections 143A and 148, Negotiable Instruments Act, 1881- Whether prospective or retrospective?

Much debate surrounds the application of Sections 143A and 148 introduced in the NI Act by way of amendment in 2018. The debate aims to answer the question whether the application of the two provisions is retrospective or prospective? Let’s analyse.

The question of applicability, whether prospective or retrospective, arises when there is ambiguity in legislation. If by express language of the statue or by necessary intendment, it is not possible to gather intention of the legislature regarding the operation of a provision, then the aids of interpretation are called into service to determine whether the provision is meant to operate retrospectively i.e. to acts and omissions preceding the date of commencement of the provision or prospectively i.e. to acts and events happening after the date of such commencement. However, there is no doubt regarding applicability of a provision with respect to period in time if by language of the statute or by necessary implication, the intention of the legislature is clear. There are several authorities to that effect. However, for sake of brevity, I’ll quote one. The Supreme Court in Punjab Tin Supply Co. v. Central Govt., (1984) 1 SCC 206, at page 219, held the following:

“17. All laws which affect substantive rights generally operate prospectively and there is a presumption against their retrospectivity if they affect vested rights and obligations unless the legislative intent is clear and compulsive. Such retrospective effect may be given where there are express words giving retrospective effect or where the language used necessarily implies that such retrospective operation is intended. Hence the question whether a statutory provision has retrospective effect or not depends primarily on the language in which it is couched. If the language is clear and unambiguous effect will have to be given to the provision in question in accordance with its tenor. If the language is not clear then the Court has to decide whether in the light of the surrounding circumstances retrospective effect should be given to it or not.”

Coming to the provisions in question, let’s see what they state:

“143A. Power to direct interim compensation. –

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the Court trying an offence under section 138 may order the drawer of the cheque to pay interim compensation to the complainant-

(a) in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and

(b) in any other case, upon framing of charge.

(2) The interim compensation under sub-section (1) shall not exceed twenty per cent of the amount of the cheque.

(3) The interim compensation shall be paid within sixty days from the date of the order under sub-section (1), or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the drawer of the cheque.

(4) If the drawer of the cheque is acquitted, the Court shall direct the complainant to repay to the drawer the amount of interim compensation, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient case being shown by the complainant.

(5) The interim compensation payable under this section may be recovered as if it were a fine under section 421 of the Code of Criminal Procedure, 1973 (2 of 1974).

(6) The amount of fine imposed under section 138 or the amount of compensation awarded under section 357 of the Code of Criminal Procedure, 1973 (2 of 1974), shall be reduced by the amount paid or recovered as interim compensation under this section.”

148. Power of Appellate Court to order payment pending appeal against conviction.-

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), in an appeal by the drawer against conviction under section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent of the fine or compensation awarded by the trial Court:

Provided that the amount payable under this sub-section shall be in addition to any interim compensation paid by the appellant under section 143-A.

(2) The amount referred to in sub-section (1) shall be deposited within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the appellant.

(3) The Appellate Court may direct the release of the amount deposited by the appellant to the complainant at any time during the pendency of the appeal:

Provided that if the appellant is acquitted, the Court shall direct the complainant to repay to the appellant the amount so released, with interest at the bank rate as published by the Reserve Bank of India, prevalent at the beginning of the relevant financial year, within sixty days from the date of the order, or within such further period not exceeding thirty days as may be directed by the Court on sufficient cause being shown by the complainant.”

So it’s clear by a bare reading of the provision that Section 143A applies to all pending trials and Section 148 applies to all pending appeals. This is apparent by use of the words “…court trying an offence… in Section 143A and “…in an appeal by the drawer against conviction…” in Section 148. Thus, the question as to when the complaint or the appeal was filed does not arise to determine the operation of the two provisions as long as they are pending before courts on or after the date of commencement of the amendment.

The language of the provisions is also consistent with the object of the amendment. The Statement of Objects and Reasons of the amendment states that the government received representations from general public and trader community in particular that because of the delay in conclusion of a case (complaint, appeal, revision and so on…) the remedy is rendered practically infructuous. There’s no denying the truth of the said grievance.

Let’s also look at the view taken by few High Courts and the Supreme Court on the point.

Bombay High Court  has held that Sections 143A and 148 operate on all pending trials and appeals, which dictum is consonant with the language of the provisions. The issue, therein, however, pertained only to the operation of Section 148.

Karnataka High Court has held that Section 148 applies to all pending appeals on the basis of language of the provision and objects and reasons of the amendment.

Allahabad High Court (Vivek Kumar Negi v. State of UP & Anr. in Application u/s 482 no. 11055/2019) has held that Section 143A applies to all trials and it is merely procedural in nature.

Punjab & Haryana High Court  has held that Section 143A is not retrospective in operation as it creates a ” new obligation” against the accused. However, Section 148, it holds, is retrospective as it is similar to provisions already existing in Cr.P.C. regarding conditions to be imposed while suspending execution of sentence of payment of fine (Section 424 Cr.P.C.).

The Supreme Court  has held that Section 148 applies to all pending appeals. It held the amendment to be procedural. Also, the Court adverted to the language of the provision and the objects for the same.

An SLP is pending in Supreme Court for admission where notice has been issued to the State of Tamil Nadu. The matter pertains to operation of Section 143A.

This article will be further updated after decision in the said SLP.

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