Rakesh Ranjan Srivastava v. State of Jharkhand

Jharkhand High Court2022 SCC OnLine Jha 497

Bench: J. Sanjay Kumar Dwivedi

The Jharkhand High Court held that unlike Section 148 (which uses "shall"), Section 143A NI Act expressly uses "may" — giving the court genuine discretion as to whether to order interim compensation and in what quantum (up to a maximum of 20%). The court is not obligated to order interim compensation in every case merely because an application is made. Relevant factors include: (i) the prima facie strength of the complaint; (ii) the apparent financial capacity of the accused; (iii) whether the existence of the underlying legally enforceable debt is seriously disputed; (iv) the stage at which the application is made; and (v) any undue hardship that mandatory payment would cause. The trial court's mechanical order directing 20% payment without any application of mind to these factors was set aside. The matter was remitted for fresh consideration.