Tuesday, December 21, 2021

Section 143A of Negotiable Instruments Act 'directory' not 'mandatory': Delhi High Court

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The Delhi High Court has held that Section 143A of the Negotiable Instruments Act, 1881 (NI Act) is a directory provision and not ‘mandatory’ [M/S JSB Cargo And Freight Forwarder Pvt Ltd v State and Anr].

The observation was made by Justice Anu Malhotra while setting aside an order of the trial court which had, in the exercise of powers under Section 143A(4) of the NI Act granted an interim compensation of over ₹26 lakh for the dishonour of the cheque.

Section 143A lays down the power of the court hearing a cheque bounce case, to order the drawer of the cheque to pay interim compensation to the complainant under Section 138 of the NI Act.

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