Anubergine Properties Private Limited Vs M/S Ana Arc Private Limited

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NC: 2025:KHC:3918 CRL.P No. 13086 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28^TH DAY OF JANUARY, 2025

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BEFORE

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THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR CRIMINAL PETITION NO. 13086 OF 2024 (482(Cr.PC) / 528(BNSS)

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BETWEEN:

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ANUBERGINE PROPERTIES PRIVATE LIMITED, A COMPANY REGISTERED

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UNDER COMPANIES ACT, 1956 REGISTERED OFFICE AT: NO.11, G.C. ROAD,ULSOOR, BANGALORE, KARNATAKA, INDIA – 560042

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REP. BY MR. ANTHONY KUNNEL GEORGE.

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MR. ANTHONY KUNNEL GEORGE, MANAGING DIRECTOR, AUBERGINE PROPERTIES PVT. LTD., NO. 11, GC ROAD, ULSOOR, BANGALORE, KARNATAKA, INDIA - 560042

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Digitally signed by LEELAVATHI S R Location: High Court of Karnataka

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MRS. ZEEBA KUNNEL, DIRECTOR, AUBERGINE PROPERTIES PVT. LTD., NO. 11, GC ROAD, ULSOOR, BANGALORE, KARNATAKA, INDIA - 560042

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MR. ARUN SAM VARGHESE, DIRECTOR, AUBERGINE PROPERTIES PVT. LTD., NO. 11, GC ROAD, ULSOOR, BANGALORE, KARNATAKA INDIA - 560042

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MS. SEEMA KOSHY, DIRECTOR,

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NC: 2025:KHC:3918 CRL.P No. 13086 of 2024

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AUBERGINE PROPERTIES PVT. LTD., NO. 11, GC ROAD, ULSOOR, BANGALORE, KARNATAKA, INDIA - 560042

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…PETITIONERS

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(BY SRI. MALLINATH S.MAKA., ADVOCATE)

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AND:

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M/S ANA ARC PRIVATE LIMITED, REGISTERED OFFICE AT: 299, 1^ST FLOOR, AMARJYOTHI LAYOUT, DOMLUR, BANGALORE KARNATAKA, INDIA - 560071

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…RESPONDENT

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(BY SMT. NAYANA TARA B.G., ADVOCATE)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 (FILED U/S.528 BNSS) CR.P.C PRAYING TO PASS AN ORDER SETTING ASIDE THE IMPUGNED ORDER DATED 18.09.2024 PASSED BY THE XIII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU IN CRL.RP.NO.25044/2024 ATTACHED HEREWITH AS ANNEXURE A.

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THIS PETITION, COMING ON FOR ADMISSION , THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

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ORAL ORDER

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This petition by the petitioner - accused in C.C.No.52097/2023 is directed against the impugned order dated 11.03.2024 passed by the XXXIV ACMM, Bangalore, which was confirmed by the Sessions Court in Crl.R.P.No.25044/2024 dismissing the revision petition filed by the petitioner.

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Heard learned counsel for both sides and perused the material on record.

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A perusal of the material on record will indicate that the respondent – complainant instituted the aforesaid proceedings against the petitioner – accused under Section 138 of the Negotiable Instruments Act. Pursuant to the petitioner – accused appearing before the trial court, the respondent – complainant filed an application under Section 143A of the N.I. Act seeking direction to the petitioner – accused to pay interim compensation to the respondent – complainant to an extent of 20% of the cheque amount. The said application having been contested by the petitioner –accused, the Trial Court proceeded to pass the impugned order dated 11.03.2024 directing the petitioner – accused to pay or deposit 10% of the cheque amount within a period of 60 days from the date of the order and further permitting the respondent – complainant to withdraw the said amount after executing an indemnity bond in this regard and by issuing certain directions. It is pertinent to state that the said order was passed at the stage of cross-examination of PW-1 by the petitioner – accused

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and the case was posted to that stage by the Trial Court by passing

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the impugned order by holding as under:-

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“The Revision Petitioners have filed this revision petition U/s 397 of Cr.P.C seeking for setting aside order dtd. 11/03/2023 for 10% of Interim Compensation passed by Learned 34 MMTC, Mayo Hall,Bengaluru on application filed in CC.No.52097/2023.

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2. The grounds urged by the petitioner are as follows:

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The Revision Petitioners have submitted that, in addressing the two reasons employed by the Learned Magistrate for allowing the said application, it is submitted that firstly, the undisputed nature of the business relationship between the parties, the acknowledged loan amount, and the issuance and signing of the cheques by the Appellant (Accused) are not justifiable grounds for granting interim compensation. These factors establish a transactional relationship between the Respondent (Complainant) and the Appellant (Accused). However, that in itself does not warrant the grant of interim compensation without understanding and examining the context and conditions under which these cheques were issued by the Appellant (Accused). The Learned Magistrate has failed to consider that these cheques were issued only as an additional comfort during a period of Covid-19 pandemic and not as a discharge of any debt or liability. The key consideration should have been the background of the cheque issuance and not simply relying

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on mere acknowledgment of the cheques and the signatures therein.

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It is further submitted that, the Appellant (Accused), as submitted earlier, issued the three blank cheques as a comfort, in relation to the construction financial facility which is in the form of Non-Convertible Debentures. The cheques were issued due to the procedural delay in creating security for the NCDs in time. However, despite the cheques, the security for the NCDs, had been created in the form of mortgages covering a substantial area of 4,81,000 sq ft of the Appellant (Accused) assets in Bangalore. Furthermore, the NCD instruments themselves outline the mechanism for returning the invested funds, which is based on the sale of assets or through the earnings from leasing the space and through Land Redevelopment Rights (LRD).

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It is further submitted that, additionally, since the investment made by the Respondent is backed by mortgages of certain assets, in the event of a recall or need for funds, the Appellant is typically granted a reasonable timeframe, such as 90 days, to either refinance or sell the assets in order to fulfil their financial obligations and make payments. Therefore, resorting to encashment of these cheques was unnecessary action done by the Respondent with the sole intention of harassing the Appellant and to bring pressure on the Appellant. It is these important factual nuances that have been overlooked by the Learned Magistrate, while relying on the acknowledgement of the cheque and the signatures on it, as reasons to grant interim compensation and that too disproportionately.

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It is further submitted that, secondly, the fact that the accused failed to appear after receiving summons and only appeared once a warrant was issued, also does not justify granting an interim compensation. It is to be noted that, since appearing before the Learned Magistrate, the Appellant or their Counsels have been present for every hearing. Furthermore, only 2-3 opportunities were taken for filing of objections to the application and the same was also done due to the unavailability of the Appellant to provide necessary instructions to their counsels and no unnecessary adjournments were ever sought. Therefore, the Appellant has never attempted to delay or disrupt the proceedings and has been cooperative with the Respondent and the Trial Court throughout. Most notably, the Appellant, as submitted earlier, has already paid a substantial sum of the total outstanding debt. Therefore, this itself shows the goodwill of the Appellant, and their bona fide intention to cooperate with the Respondent and make all the necessary payment.

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It is further submitted that, Learned Magistrate's order lacked a detailed prima facie evaluation of the merits of the Respondent case and the defence provided by the Appellant, particularly the fact that the cheques issued were not as debt payment but as the Covid-19 crisis. Furthermore, the substantial repayments made by the accused and the complexities of the transaction between the parties were also overlooked. The impugned Order dated 11.03.2024 mandates the Appellant to pay or deposit 10% of the cheque amount as interim compensation without any explanation on how this quantum was arrived at. While the statutory

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provision allows the maximum of 20% of the cheque amount as the interim compensation, it is the discretion of the magistrate to decide the exact quantum.

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It is further submitted that, in the subject case, the Respondent has presented a cheque for Rs.12,35,05,759/-. Therefore 10% of the amount of the cheque would be Rs.1,23,50,575/-. The Learned Magistrate has ordered for such a substantial amount of money to be paid without any explanation as to why 10% was required and this lack of detailed reasoning in determining the quantum of interim compensation raises questions about whether the court fully applied its mind to the relevant facts of the case. The Learned Magistrate has failed to take notice that the Appellant had several formidable defences.

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Therefore the Revision Petitioners prays that the order dated 11.03.2024 Magistrate Judge Mayo Hall is not substantiated in law or in facts and therefore requires to be set aside.

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3. The Respondent appeared through his counsel and filed his objections contending that, the present proceeding has been filed by the Appellants under Section 374(3) of Cr.P.C against order dated 11-03-2024, passed by the Learned Magistrate, on an application under Section 143 of the N.I Act. However, the same has been treated as a Criminal Revision Petition under Section 397 of Cr.P.C. The present proceeding, either as criminal appeal or as criminal revision, is not maintainable in law or on facts. The Appellants have suppressed material facts and have

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attempted to mislead the Court. Section 374 of Cr.P.C under which the present proceeding is preferred reads as follows.

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374 Appeals from Conviction

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1……..

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2. Any person convicted on a trial held by a Sessions Judge or an Additional Sessions Judge or on a trial held by any other Court in which a sentence of Imprisonment passed against him or against any other person convicted at the same trial, may appeal to the High Court.

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3. Same as otherwise provided in subsection (2), any person;

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a) Convicted on a trial held by a Metropolitan Magistrate or Assistant Sessions Judge or Magistrate of the 1st Class or of the 2nd Class; or

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b) Sentenced under Section 325, or

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c) In respect of whom an order has been made or a sentence has been passed under Section 360 by any Magistrate, may appeal to the Court of Session.

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From a bare perusal of Section 374(3) extracted above, it is evident that the said section is applicable only to appeals from orders of conviction. In the present case, the impugned order is one passed under Section 143 of the NI Act. The impugned order is not one of conviction. In fact, the trial is still pending before the Learned Magistrate. The impugned order is not a final decree. Hence, the present appeal under Section 374(3) of Cr.P.C is not maintainable and deserves to be dismissed. Hence prays to dismiss the petition.

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4. I have heard learned P.P and Counsel appearing for revision petitioners.

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5. Perused the Records. After perusal, the points arise

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for my consideration are:

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1. Whether the revision petitioner has made out the

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orders passed by the Trial Court is perverse in correct and illegal?

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2. What Order?

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6. For the above points, my findings are:

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Point No.1: In the Negative

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Point No.2: As per final order for the following:-

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R E A S O N S

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7. Point No.1:- As held in unreported Judgment in Criminal Petition No.5944/2023, Sanjay P.S Vs. Abhishkek M, in which Hon’ble Court was pleased to held that, the revision before the Court of Sessions U/s 397 of Cr.P.C would be maintainable as an order on the application filed U/s 143A of the Act is not interlocutory order, but interim order.

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8. The petitioners No.1 to 5 have taken the contention that the learned 34th ACMM is not justified in granting the interim compensation to the respondent. They admit the transactional relationship between the respondent (complainant) and petitioners (accused). However that itself does not warrant to grant of interim compensation without understanding and examining contestants in condition under which these cheques were issued by the appellant/accused. Proper reasonings are not given for grant of compensation to the extent of 10% of the amount of the cheque. The Learned Magistrate has not given proper reasons to fix the compensation at the rate of 10% of the total amount of the

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cheque. The learned Magistrate has not appreciated the defence taken by the Revision Petitioners. The learned Magistrate has not appreciated the merits of the case made out by the complainant and the merits of the defence pleaded by the accused. The complainant has not made out the prima facie case. The learned Magistrate has not applied his mind to fix the quantum of interim compensation. Therefore the Revision Petitioners has relied on the Judgments reported in Rakesh Ranjan Shrivastava Vs. The State of Jharkhan & another, 2024 SCC Online SC 309, in which the at Para 22 the Hon’ble Court has held that,

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22. Subject to what is held earlier, the main conclusions can be summarized as follows:

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a. The exercise of power under sub-section (1) of Section 143A is discretionary. The provision is directory and not mandatory. The word “may” used in the provision cannot be construed as “shall.”

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b. While deciding the prayer made under Section 143A, the Court must record brief reasons indicating consideration of all relevant factors.

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c. The broad parameters for exercising the discretion under Section 143A are as follows:

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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.

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ii. A direction to pay interim compensation can be issued, only if the complainant makes out a prima facie case.

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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.

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iv. If the Court concludes that a case is made out 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.

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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 arenot exhaustive

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9. Secondly, V. Krishnamurthy Vs. Diary Classic ICE Creams Pvt., Ltd., 2022 SCC Online Kar. 1047, in which the Hon’ble Court was pleased to held that,

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15. On a conjoint reading of the objects and reasons, amendment made, and the purport of the provisions, what would unmistakably emerge is that the learned Magistrate is empowered to exercise his discretion in the grant of interim compensation which would in any given case range from 1% to 20%. Once the discretion by the learned Magistrate happens, the rigour of the statute sets in as the words in the statute depicts that the Court may in a given case grant such compensation and once granted consequences follow. Therefore, the learned Magistrates are required to exercise discretion by recording reasons in writing which would demonstrate application of mind, as application of inseparable. Application of mind is discernible only when the order reflects adequate reasons being given for exercise of such discretion.

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16. Application of mind and passing of a reasoned order of grant of compensation becomes necessary in the light of penal consequences that ensue an accused who failed to comply with the order granting 20% compensation as the complainant is given several remedies of recovery which result in the accused being taken into custody. Therefore, such orders which result in such penal consequences should be rendered giving cogent reasons which would demonstrate application of mind and such orders should be passed only after hearing the accused in the matter. In cases where the learned Magistrate is to exercise discretion, such discretion should become two fold.”

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10. Thirdly, Vijaya Vs. Shekhapappa and another, 2022 SCC Online Kar 515, in which the Hon’ble Court was pleased to held that,

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“11. Therefore, the Legislature has cautiously worded subsection (1) of Section 143A not to make it mandatory in all cases where clauses (a) and (b) of sub-section (1) would empower the learned Magistrate before whom proceedings are pending consideration to award interim compensation. It is the discretion conferred, as the word used is “may”. If the order is passed, then the payment is mandatory. Therefore, the learned Magistrate who is hearing the application for interim compensation should apply his mind, record his reasons in exercise of his discretion, as to why 20% of the cheque amount is to be granted, as interim compensation in any given case.

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12. The other side of the coin of discretion available to the learned Magistrate is that the amount should not exceed 20%. Therefore, it is not that 20% has to be the interim compensation in every case. Here again the discretion is required to be exercised by the learned Magistrate as the interim compensation can vary from 1% to 20% but shall not exceed 20%. The language of Section 143A being couched with such discretion, the discretion if not exercised in a manner known to law, becomes an arbitrary action.”

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The principles laid down in the above judgements are applicable to the present facts of the case.

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11. The Petitioners have admitted that they borrowed loan of Rs.40 Crores from HDFC Bank Limited under a Master Facility Agreement dt: 26/04/2017 for the construction and completion of a Commercial Building namely Whitefield Towers. The petitioners became due in a sum of Rs.23,16,33,800/-. Later HDFC Bank Ltd., assigned the outstanding amount to the Respondent. During assignment of the loan they entered into Master Amendment Agreement

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dt: 01/12/2020, at that time the Petitioners have issued three ceques in favour of the Respondent/Complainant.

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12. According to the Revision Petitioners those cheques were issued to make the respondent comfort and executed a Mortgage Deed and those cheques were not issued to discharge any liability. The Petitioners admit that they have borrowed loan. Again the Petitioners contend that they issued three cheques only to comfort the Respondent and not for discharge of any liability. This contention of the Revision Petitioner cannot be accepted. The cheques were issued for the security of the amount and therefore the Petitioners cannot expect the Respondent to inform them before presenting the cheques for collection.

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13. The Petitioners also have taken contention that the Respondent had agreed to invest 42 Crores, however only Rs.38.6 Crores was sanctioned. It can be seen that as stated by the Petitioners they have repaid Rs.15,60,33,800/towards discharge of the loan. This fact shows that the Revision Petitioners were satisfied with the loan amount of Rs.38.6 Crores and therefore without waiting for release of further amount the Petitioners have made part payment. According to the Revision Petitioners the cheques were issued during Covid 19 Pandemic only to comfort the Respondent.

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14. The Covid 19 Pandemic was ended long back. The Petitioners cannot take a stand that even after expiry of Covid 19 Pandemic that the respondent has to keep quiet. These facts prima facie show that the Petitioners borrowed loan from the Bank and failed to repay the same. The

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defence taken by the Petitioners that due to Covid 19 Pandemic they issued three cheques to comfort the Respondent, cannot be accepted at this state.

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15. The Learned Magistrate has considered the relationship between the parties, loan transaction, issuance of the cheques and signatures on the cheques. The order sheet of SC.No.52097/2023 prima facie show that as on 16/03/2023 the summons was issued to the Revision Petitioner through Court and RPAD. As on 26/06/2023 summons was served on A1, 2, 4 & 5, but they did not appear before the Court. Therefore, Case supra, “in a given case, if the accused is cooperating with the Trial without seeking unnecessary adjournments, not absenting himself, or his counsel on any date……..”

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16. On 26/06/2023 A1, 2, 4 & 5 remained absent. Not only that their counsel also not appeared before the Court. On 06/07/2023 A2 to 5 appeared before the Court and filed application U/s 70(2) of Cr.P.C and Bail Application. The Bail Application was allowed and the statement of Accused Persons U/s 313 of Cr.P.C was recorded.

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17. On the same day the learned counsel for the complainant filed application U/s 143A of N.I Act. Then the matter was posted for objections and cross-examination of PW.1 to 29/08/2023. On 29/08/2023 petitioners not filed objections. On 11/10/2023 also objections were not filed. On 09/11/2023 also objections were not filed. On 02/12/2023 objection was filed, but not cross-examined PW.1.

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18. The loan amount given to the petitioners is Rs.38.6 Crores, after that loan of Rs.15,66,33,800/- was paid. Out of remaining balance amount of Rs.23,16,33,800/only the cheque for Rs.12,35,05,759/- was presented. As held in Vijaya’s Case the learned ACMM has applied his mind. Considering the balance amount and facts on record and passed an order directing the petitioners to pay the interim compensation at the rate of 10% on cheque of Rs.12,35,05,759/- and it is not exorbitant.

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19. The learned Magistrate has recorded the reasons indicating consideration of the facts. The Trial Court has discussed about the prima fafcie case of the complainant and petitioners and therefore granted interim compensation at the rate of 10% on the cheque amount.

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20. As discussed above immediately after service of summons Accused No.1, 2, 4 & 5 have not appeared before the Court and therefore NBW was issued against them. On 06/07/2022 the interim application was filed. But the objection was filed to the petition on 02/12/2023. Though PW.1 was present on 2/12/2023 the petitioners not crossexamined PW.2. The interim compensation granted by the learned Magistrate is reasonable and not illegal. The contention of the petitioners that only to comfort the respondent, three cheques were issued cannot be accepted. Therefore, I hold that the order passed by the Trial Court is correct legal and in accordance with law, which needs no interference. Hence for the above reasons, I answer Point No.1 in the Negative.

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21. Point No.2: For the forgoing reasons assigned on point No.1, I proceed to pass the following:

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O R D E R

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The Crl. Revision Petition filed by the Revision Petitioners is hereby dismissed.

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Send the copy of this order and Trial Court Records to trial court.”

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Aggrieved by the said order passed by the Trial Court,

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the petitioner filed a revision petition in Crl.R.P.No.25044/2024, which was contested by the respondent before the Sessions Court which proceeded to dismiss the revision petition filed by the petitioner by passing the impugned order as under:-

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“The Complainant filed instant application seeking interim compensation of 20% of the Cheque amount. It is specifically contended that he has prima-facie case. Hence he prays to allow the application.

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2. Per contra, after appearance of Accused through his counsel has contested the application and filed written objections to the said application. It is contended that, the application is not maintainable. It is further contended that, when the outstanding loan amount at Rs.23,16,33,800/- at the time of negotiation was being assigned to the Complainant and the terms of master amendment agreement dtd.1.12.2020 was being finalized, the Complainant

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requested 3 blank Cheques from the Accused, accordingly, the Accused issued blank undated Cheques as an additional comfort against the NCD arose due to the emergency of Covid 19 pandemic in 2020. It is further contended that Cheques were issued only as additional comfort for repayment and were not in discharge of any debt or liability. The Accused having already created a more than sufficient collateral on the loan amount. It is further contended that out of above said due amount, the Accused has paid Rs.15,66,33,800/- to the Complainant. It is further submitted that, at no point of time, did the Complainant notify the Accused either orally or in writing that, they are going to deposit the Cheques given to them for comfort. Therefore, for these reasons, the Accused prayed for rejection of application.

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3. Heard both counsels and perused the materials on record.

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4. The Complainant filed this case against the Accused for the offence punishable u/Sec.138 of N.I.Act. The Complainant filed this instant application seeking interim compensation. It is the specific case of the Complainant that, Complainant is an asset reconstruction company registered with RBI under the SARFAESI Act. Accused No.1 is a company and Accused No.2 to 5 are directors. It is further submitted that on 26.4.2017 Accused had availed a loan from HDFC Ltd. to a Master Facility Agreement for an amount of Rs.40 crores for the purpose of construction and completion of a commercial building known as ‘Whitefield tower’. It is further submitted that an amount of

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Rs.23,16,33,800/- was due under the MFA as on 30.11.2023 and HDFC Ltd. assigned the outstanding loan amount to the Complainant by way of Assignment Agreement dtd.30.11.2020. It is further submitted that, the Accused upon the assignment of loan, request to ensure that, the Complainant enters into a Master Amendment Agreement with them assuring the Complainant that they would wholly discharge their outstanding debt. It is further submitted by the Complainant that the Accused have defaulted on their payment and towards of repayment of said due amount, issued Cheque, which was dishonoured for the reason “funds insufficient” . It is further submitted that, Accused have caused loss and inconvenience to the Complainant.

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5. On perusal of documents with respect of issuance of Cheque the Accused and also business relation is also not disputed and loan amount also not disputed. The Complainant has produced statement of account and other necessary documents in which prima facie appears that, Accused have committed alleged offence. On perusal of order sheet, after service of summons all Accused remained absent and after issuance of warrant only they appeared before court and taken much time for filing of objections. The said conduct of the Accused shows that, they causing delay in the proceedings and trial.

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6. After appearance of the Accused, plea was recorded and Accused pleaded not guilty and case posted for trial.

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7. As per Sec.143(A) of N.I.Act

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“notwithstanding anything contained in the Code of Criminal Procedure, 1973 the court trying an offence u/Sec.138 may order the drawer of the Cheque to pay interim compensation to the Complainant…...

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8. The Hon'ble High Court of Karnataka in the case of V.Krishnamurthy V/s. Dairy Classic Ice Creams Pvt. Ltd., in Cri.Ptn.No.632/2022. It is held in Para No.13 that, the Magistrate by applying his mind to the facts and circumstances of the case and taken into consideration the intend and purpose of introduction of Sec.143(A) by amendment to the N.I. Act has to pass order regarding interim compensation. In the said judgement Hon'ble High Court of Karnataka held that discretion power to the Magistrate, which in paragraph No.13 of the said decision is as under;

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First fold: Where an application is so made, the learned Magistrate has to apply his mind whether such an application is to be considered at all, as every application that is made need not result in grant of 20% interim compensation. Several factors need be gone into for considering such applications bearing in mind the reason and backdrop of the amendment. As quoted herein-above the bedrock of the amendment was to stall unscrupulous drawers of cheques drawing proceedings with frivolous applications, absenting themselves, seeking continuous adjournments causing delay and grave prejudice to the case of the complainants. In these factors, the learned Magistrate after analyzing the conduct of the accused should

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grant compensation which would vary from 1% to 20% after recording reasons.

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In a given case if the accused is cooperating with the trial without seeking any unnecessary adjournments, not absenting himself or his counsel on any date and cooperating with the conclusion of the trial in such cases, the learned Magistrate will have to apply his mind, exercise his discretion as to whether such applications should be entertained at all. Therefore, it forms two classes of litigants. One who would cooperate with the proceedings and the other who would not. In cases where there is complete cooperation from the hands of the accused in the trial, the Court may consider whether interim compensation has to be granted at all and in cases where there is no cooperation on the part of the accused, the Court may proceed to consider the application.

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Second fold: The second fold of discretion in any given case, the compensation may vary from 1% to 20%. It is nowhere depicted in the statute that the amount of interim compensation should be of a particular figure. It can vary from 1% to 20%. It is this variance that gives the learned Magistrate power to exercise discretion to grant such compensation. The mandate of the statute is that it should not exceed 20%. In the cases where learned Magistrate proceeds to grant compensation, has to bear in mind the amount involved in the instrument, as certain transactions would run to several cores and the

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accused may have formidable defence against the complainant. In such cases, the learned Magistrate should exercise discretion in a cautious manner. Here again the conduct of the accused should be noticed. Therefore, the aforesaid two fold discretion is sine qua non for an order to be passed by the learned Magistrate while considering the application under Section 143A of the Act.

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9. It is pertaining to note that, Accused has not denied issuance of Cheque neither he denied signature on the Cheque. Therefore, at this stage, the Complainant is entitled for interim compensation from the Accused. Hence, I proceed to pass the following;

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ORDER

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The application u/Sec.143(A) of N.I. Act, is Partly allowed subject to following conditions;

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1. The Accused shall pay or deposit 10% of the cheque amount on or before 60 days from the date of this order. 2. The Complainant is entitled to receive the said amount by executing indemnity bond to the tune of amount deposited to the court.

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3. In the event of failure by the Complainant to prove the case, he shall repay the said amount with prevailing rate of interest as on the date of depositing the amount by the Accused to the court.

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For cross of PW1, call on 23.4.2024”

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22 -

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NC: 2025:KHC:3918 CRL.P No. 13086 of 2024

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5. A perusal of the entire material on record including the

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impugned orders will indicate that both the courts have correctly and properly considered and appreciated the entire material on record and have come to the correct conclusion that the petitioner has to be directed to pay and deposit 10% of the cheque amount. Further, both the Courts have taken into account the rival contentions and the provisions contained in Section 143-A of the N.I.Act and have correctly exercised their discretion in directing the petitioner to deposit 10% of the cheque amount.

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Upon re-appreciation, re-evaluation and

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reconsideration of the entire material on record, I do not find any illegality or infirmity in the impugned orders nor can the same be said to be perverse or capricious or having occasioned failure of justice warranting interference by this Court in the present petition. However, I deem it just and appropriate to direct the petitioner to deposit 10% of the cheque amount on or before 28.03.2025 before

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the trial court and by directing the trial court not to disburse / release the said amount deposited by the petitioner to the respondent till conclusion of the proceedings before the trial court

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23 -

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NC: 2025:KHC:3918 CRL.P No. 13086 of 2024

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which shall conclude and dispose of the proceedings within a period of three months from 11.02.2025 .

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In the result, I pass the following:

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ORDER

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i) Petition is hereby dismissed without interfering with the impugned orders passed by the trial court and Sessions Court.

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ii) The petitioner is directed to pay/deposit 10% of the cheque amount on or before 28.03.2025; however, the Trial Court shall not disburse / release the said amount deposited by the petitioner-accused to the respondent-complainant till conclusion of the proceedings

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iii) The Trial Court before whom the matter is posted on 11.02.2025 , is directed to conclude the proceedings and dispose of the matter within a period of three months from 11.02.2025.

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(iv) All rival contentions between the parties on all aspects of

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the matter are kept open and no opinion is expressed on the same.

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Sd/(S.R.KRISHNA KUMAR) JUDGE

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MDS/SRL

Anubergine Properties Private Limited v. M/S Ana Arc Private Limited

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Anubergine Properties Private Limited v. M/S Ana Arc Private Limited

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