Sri Madhu Ram Deka v. The State of Assam & Another, 2026
The judgment reinforces that Section 143-A NI Act confers discretion, not an automatic right.
Judgement Details
Court
Gauhati High Court
Date of Decision
30 January 2026
Judges
Justice Pranjal Das
Citation
Acts / Provisions
Facts of the Case
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The case arose out of a cheque bounce complaint under Section 138 of the NI Act.
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The cheque in question was for ₹20,00,000.
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The cheque was dishonoured with the remark “drawer’s signature differs”.
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The Trial Court directed the accused to pay 20% of the cheque amount as interim compensation under Section 143-A of the NI Act.
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The accused/petitioner challenged this order by filing a criminal revision before the High Court.
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The petitioner contended that:
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He never issued the cheque.
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The signature on the cheque was not his.
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He did not maintain the bank account in question.
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He had already lodged a complaint alleging forgery, leading to registration of an FIR under Sections 420, 468, and 471 IPC.
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The petitioner’s version was supported by the testimony of the bank branch manager.
Issues
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Whether interim compensation under Section 143-A of the NI Act can be granted when there are serious disputed questions of fact requiring adjudication through evidence?
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Whether the Trial Court is required to consider the prima facie merits of the defence before directing payment of interim compensation under Section 143-A of the NI Act?
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Whether denial of cheque issuance and allegation of forgery constitutes a plausible defence to refuse interim compensation at the initial stage?
Judgement
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The Gauhati High Court allowed the criminal revision.
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The Trial Court’s order directing payment of 20% interim compensation was set aside.
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The Court held that grant of interim compensation under Section 143-A is discretionary, not mandatory.
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The Court must be satisfied about the existence of a prima facie case.
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While forming such satisfaction, the Court must consider:
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The merits of the complainant’s case
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The plausibility of the accused’s defence
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The Court noted that:
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The accused’s denial of signature and account ownership raised serious disputed questions.
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The allegation of forgery was supported by bank evidence.
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It concluded that criminal liability under Section 138 NI Act could be determined only after full-fledged trial.
Held
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Where disputed questions of fact exist requiring adjudication through evidence, it is not prudent to grant interim compensation under Section 143-A of the NI Act.
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If the defence of the accused is prima facie plausible, the Court may refuse to grant interim compensation.
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Interim compensation cannot be mechanically granted merely because financial hardship is pleaded by the complainant.
Analysis
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The judgment reinforces that Section 143-A NI Act confers discretion, not an automatic right.
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It emphasizes the need for a balanced approach, protecting accused persons from premature financial burden.
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The Court correctly applied the principle that:
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Interim compensation is justified only where liability is prima facie apparent.
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The decision safeguards against misuse of Section 143-A in cases involving:
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Alleged forgery
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Denial of signature
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Disputed account ownership
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By relying on Rakesh Ranjan Shrivastava, the Court aligned its reasoning with established precedent.
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The ruling underscores that speedy recovery objectives of the NI Act cannot override fair trial guarantees.