The case of Rajesh Soni v. Mukesh Verma adjudicated by the Chhattisgarh High Court on June 30, 2021, serves as a pivotal reference in interpreting the ambit of Section 143A of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the Act, 1881"). The petitioner, Rajesh Soni, challenged the orders issued by the lower courts involving the imposition of interim compensation following the dishonour of a cheque under Section 138 of the Act. The primary contention revolved around whether the provision for interim compensation under Section 143A is discretionary or mandatory.

The case underscored critical aspects of statutory interpretation, especially the significance of auxiliary verbs like "may" versus "shall" in legislative enactments. Moreover, it delved into the judiciary's responsibility to uphold legislative intent while ensuring fairness to both complainants and accused parties in financial disputes.

The petitioner, Rajesh Soni, issued a cheque of Rs. 6,50,000/- to the complainant, Mukesh Verma, which was dishonoured due to insufficient funds. Following the legal provisions, Verma filed a complaint under Section 138 of the Act, 1881. Subsequently, under Section 143A of the Act, the trial court ordered Soni to pay 20% of the cheque amount as interim compensation. Dissatisfied, Soni appealed the decision, seeking to declare the interim compensation directive as discretionary rather than mandatory.

The Chhattisgarh High Court upheld the lower courts' decisions, affirming that the interim compensation under Section 143A is not merely discretionary. The court interpreted the word "may" in the statutory provision as "shall," thereby rendering the compensation mandate rather than an option. This interpretation aligns with the legislative intent to expedite justice for cheque dishonour cases and prevent undue delays caused by defaulters.

The High Court also addressed and reconciled conflicting judicial perspectives by referencing relevant precedents, notably from the Supreme Court and the Madras High Court, to fortify its stance on the mandatory nature of interim compensation.

Precedents Cited

The judgment extensively referenced critical precedents to substantiate its interpretation of Section 143A:

• Bachhan Devi v. Nagar Nigam, Gorakhpur (2008) 12 SCC 372: The Supreme Court elucidated that the word "may" in statutory language should be interpreted based on legislative intent, considering factors like the Act's objectives and the context of the provision.
• Surinder Singh Deswal alias Colonel S.S. Deswal v. Virender Gandhi (2019) 11 SCC 341: This Supreme Court decision reinforced the mandatory interpretation of similar provisions, emphasizing the purposive approach in statutory interpretation.
• G.J. Raja v. Tejraj Surana (2019) 19 SCC 469: The Supreme Court held that Section 143A is prospective in nature, thus not applicable retrospectively, reinforcing the validity of interim compensation orders issued post-amendment.
• L.G.R. Enterprises v. P. Anbazhagan AIR 2019 Mad 801: The Madras High Court highlighted the necessity for trial courts to record detailed reasons when awarding interim compensation, emphasizing that such orders are not discretionary unless well-justified.

Legal Reasoning

The court's legal reasoning was anchored in the following key points:

• Interpretation of "May" vs. "Shall": The court undertook a purposive interpretation of "may," determining that within the context of Section 143A, it effectively functions as "shall," thereby imposing a mandatory obligation rather than granting mere discretion.
• Legislative Intent: By analyzing the objectives behind the amendment of the Act in 2018, the court ascertained that the primary aim was to protect the interests of cheque payees and expedite legal proceedings, which necessitates a mandatory approach to interim compensation.
• Balancing Interests: The judgment underscored the importance of safeguarding the rights of both complainants and accused parties. Mandatory interim compensation ensures that victims are promptly compensated, while provisions were made to safeguard the accused's interests by allowing repayment of the compensation upon acquittal.
• Judicial Economy: The mandatory nature of interim compensation serves to reduce litigation delays, preventing defaulters from stalling proceedings and ensuring timely justice.

Impact

The judgment has significant implications for the enforcement of Section 143A:

• Strengthening Legal Remedies: By declaring the interim compensation mandatory, the judgment enhances the efficacy of the Act in deterring cheque defaulters and ensuring swift compensation to victims.
• Judicial Consistency: The alignment with Supreme Court precedents fosters uniformity in the interpretation of similar statutory provisions across different jurisdictions.
• Encouraging Prompt Litigation: Victims of cheque dishonour can now expect more predictable and enforceable outcomes, reducing the burden of prolonged litigation.
• Legal Precedence: This decision will guide lower courts in applying Section 143A, ensuring that interim compensation orders are treated as mandatory unless exceptional circumstances warrant otherwise.

To facilitate a clearer understanding of the judgment, the following legal concepts are elucidated:

• Section 138 of the Negotiable Instruments Act, 1881: This provision deals with the dishonour of cheques due to insufficient funds, making the drawer liable for criminal punishment.
• Section 143A of the Negotiable Instruments Act, 1881: Introduced to allow courts to order interim compensation to cheque payees during the pendency of Section 138 proceedings, aiming to provide immediate relief to the aggrieved party.
• Interim Compensation: A temporary financial remuneration ordered by the court before the final judgment in a case, intended to mitigate the victim's immediate financial loss.
• Statutory Interpretation: The process by which courts interpret and apply legislation. It involves understanding the literal meaning, context, and legislative intent behind statutory provisions.
• Auxiliary Verbs in Statutory Language: Words like "may," "shall," and "must" that convey different levels of obligation or discretion. Their interpretation can significantly influence the application of the law.

The Chhattisgarh High Court's judgment in Rajesh Soni v. Mukesh Verma reinforces the mandatory application of interim compensation under Section 143A of the Negotiable Instruments Act, 1881. By interpreting "may" as "shall" within the context of this provision, the court ensures that victims of cheque dishonour receive timely financial relief, thereby upholding the sanctity of cheque transactions and deterring defaulters from evading responsibilities.

This decision not only aligns with the legislative intent behind the 2018 amendments but also harmonizes judicial interpretation across higher courts, promoting consistency and fairness in commercial litigation. The emphasis on purposive interpretation serves as a testament to the judiciary's role in evolving statutory frameworks to meet contemporary commercial realities and protect the interests of aggrieved parties effectively.

Moving forward, this judgment sets a benchmark for lower courts to adhere to a more structured and mandatory approach in awarding interim compensation, thereby enhancing the efficiency and credibility of the judicial process in cases involving financial instruments.