The Rajasthan High Court, in a landmark decision delivered by Justice Anoop Kumar Dhand, ruled that Section 143A of the Negotiable Instruments Act, 1881, which empowers courts to direct interim compensation in cheque dishonor cases, applies prospectively and cannot be applied to cases filed before its introduction on September 1, 2018. The court emphasized that applying the provision retrospectively would impose new obligations on accused individuals in violation of established legal principles.
Case Background
The case revolved around three separate complaints filed under Section 138 of the Negotiable Instruments Act for dishonored cheques issued by the petitioners in 2017. The trial court directed the accused to pay 20% of the cheque amount as interim compensation under Section 143A, a provision introduced in 2018 to provide immediate relief to complainants during the pendency of trial.
The petitioners challenged the trial court’s orders before the Rajasthan High Court, arguing that Section 143A could not be applied retrospectively to cases filed before the amendment’s enactment. The respondents, however, argued that the provision was necessary to prevent delay tactics often used by accused individuals in cheque dishonor cases.
Important Legal Issues
1. Temporal Scope of Section 143A: Whether Section 143A, introduced on September 1, 2018, applies to cases filed before its enactment.
2. Retrospective vs. Prospective Application: Whether applying Section 143A retrospectively would violate principles of fairness and established rights of the accused.
Key Observations by the Court
Justice Anoop Kumar Dhand cited the Supreme Court’s ruling in G.J. Raja vs. Tejraj Surana (2019), which clarified that amendments creating new obligations or liabilities must be applied prospectively unless explicitly stated otherwise.
The court remarked:
“Law looks forward, not backward. Imposing Section 143A retrospectively would violate the fundamental principle that individuals are entitled to arrange their affairs based on the law in force at the time.”
The judgment also distinguished between Section 143A, which applies at the trial stage before guilt is established, and Section 148, which applies at the appellate stage after conviction and was held to have retrospective application in Surinder Singh Deswal vs. Virender Gandhi (2019).
Decision of the Court
The Rajasthan High Court ruled that Section 143A is prospective in nature and does not apply to complaints filed before September 1, 2018. Consequently, the trial court orders directing the petitioners to pay interim compensation were quashed.
The court ordered that any amounts deposited by the petitioners pursuant to the trial court’s orders be refunded with interest within four weeks.
Case Details
– Case Title: Rashmi Khandelwal v. Kanhiyalal and Ors.
– Case Numbers: S.B. Criminal Miscellaneous Petition No. 1623/2019, 1672/2019, 1674/2019
– Judge: Justice Anoop Kumar Dhand
– Petitioners: Rashmi Khandelwal and Rajendra Singh Sharma
– Respondents: Kanhiyalal, Ganesh Kumar
– Counsel for Petitioners: Mr. Yogesh Singhal
– Counsel for Respondents: Mr. Jitendra Singh
