Interim Compensation in Cheque Dishonour Case

Interim compensation can be paid only after pleading guilty

In a cheque dishonour case, the interim compensation can be directed to be paid only after the accused has pleaded not guilty as per section 143A (1) of the Negotiable Instruments Act, 1881 (NI Act).

In Pawan Bhasin v State of UP, the Supreme Court held that the Magistrate had directed to pay 10% of the cheque amount as interim compensation in this case, before the plea of accused was entered.

The Magistrate ordered to deposit the amount prior to sending notice to the accused petitioner, under Section 251 CrPC. But the accused answered the summons.

Ordering interim compensation before pleading guilty illegal

The SC added that Magistrate issuing orders of interim compensation before the accused pleads not guilty is unsustainable in law and an infraction of Section 143A (1) of the NI Act.

The SC was hearing a Special Leave Petition preferred by the petitioners against Allahabad HC’s order which did not find any illegality in the impugned order of the Magistrate.

The SC allowed the appeal and quashed the order passed by CJM as it was unsustainable in law.


  1. Pawan Bhasin v State of UP