The Trial Court issued an order in the case of Noor Mohammed vs Khurram Pasha, requiring the accused to deposit 20% of the cheque's amount as interim compensation pursuant to Section 143A of the Negotiable Instruments Act within 60 days. An application made on behalf of the accused under Section 145(2) of the Act asking for authorization to cross-examine the complainant was denied since the accused did not deposit the stipulated amount even after a prolonged period. He was later found guilty in accordance with Section 138 of the NI Act. The conviction and sentence imposed on the defendants were maintained by the Appellate Court and then by the Karnataka High Court.

It was argued before the Apex Court that the sum could be recovered under Sub-Section 5 of said Section 143A as if it were a fine under Section 421 of the Code in the event that the order of interim compensation as required by said Section 143A of the Act is not complied with. However, it would not be within the Court's purview to deny an accused person their ability to cross-examine a witness; it was argued that doing so would significantly bias the accused.

Hence the court upheld the appeal, returned the complaint to the Trial Court's file, and instructed it to let the accused question the complainant in cross-examination before bringing the case to a rational conclusion and noted that “After empowering the court to pass an order directing the accused to pay interim compensation under Sub-Section 1 of Section 143A, Sub-Section 2 then mandates that such interim compensation should not exceed 20 percent of the amount of the cheque. The period within which the interim compensation must be paid is stipulated in Sub-Section 3, while Sub-Section 4 deals with situations where the drawer of the cheque is acquitted. Said Sub-Section 4 contemplates repayment of interim compensation along with interest as stipulated. Sub-Section 5 of said Section 143A then states the interim compensation payable under this Section can be recovered as if it were a fine. The expression interim compensation is one which is "payable under this Section" and would thus take within its sweep the interim compensation directed to be paid under Sub-Section 1 of said Section 143A".