Interim Compensation and Deposit in Appeal (Sections 143A and 148)

A complainant who wins a Section 138 case after years of trial, only to see the conviction stayed during an equally long appeal, may receive nothing for a decade. The 2018 amendment, in force from 1 September 2018, attacked this delay by allowing courts to order the accused to pay interim compensation during trial (Section 143A) and to deposit part of the fine or compensation when appealing a conviction (Section 148). This note explains both and the Supreme Court's guidance on how they are to be used.

1. Interim Compensation During Trial (Section 143A)

When: the trial court may order the drawer to pay interim compensation to the complainant (a) in a summary or summons trial, where he pleads not guilty; and (b) in any other case, on framing of charge (Section 143A(1)).
How much: not more than 20 per cent of the cheque amount (Section 143A(2)).
Time to pay: within 60 days of the order, extendable by up to 30 days for sufficient cause (Section 143A(3)).
If acquitted: the court directs the complainant to repay the amount with interest at the RBI bank rate prevailing at the start of the financial year, within 60 days, extendable by 30 days (Section 143A(4)).
Recovery: the amount is recoverable as if it were a fine under the criminal procedure law (Section 143A(5)).
Set-off: any fine or compensation finally awarded is reduced by the interim compensation paid or recovered (Section 143A(6)).

📖 Rakesh Ranjan Shrivastava v. State of Jharkhand (Supreme Court, 2024)

Held: The power under Section 143A(1) is discretionary, not mandatory; "may" cannot be read as "shall" before conviction. The court must make a prima facie evaluation of the complainant's case and the accused's defence; if the accused shows a plausible defence, interim compensation may be refused. If it is ordered, the quantum within 20 per cent must be fixed considering the nature of the transaction, the relationship of the parties and the accused's capacity to pay, and brief reasons must be given.

Section 143A is prospective: it applies only to offences committed after 1 September 2018, since it imposes a new liability on the accused (G.J. Raja v. Tejraj Surana, 2019).

2. Deposit Pending Appeal (Section 148)

When: in an appeal by the drawer against conviction under Section 138, the appellate court may order him to deposit a sum of at least 20 per cent of the fine or compensation awarded by the trial court (Section 148(1)).
In addition to 143A: the deposit is in addition to any interim compensation already paid under Section 143A.
Time to pay: within 60 days, extendable by up to 30 days (Section 148(2)).
Release: the appellate court may release the deposit to the complainant during the appeal; if the appellant is acquitted, the complainant must repay it with interest at the RBI bank rate (Section 148(3)).

📖 Surinder Singh Deswal v. Virender Gandhi (Supreme Court, 2019)

Held: Section 148 applies to appeals filed after the 2018 amendment, even where the complaint was filed earlier, since it concerns the appeal, not the offence. Considering its object, the word "may" is generally to be construed as a rule: the appellate court should ordinarily direct the deposit.

📖 Jamboo Bhandari v. M.P. State Industrial Development Corporation (Supreme Court, 2023)

Held: Although the deposit is ordinarily required, the appellate court retains discretion to dispense with it in exceptional cases, for reasons recorded, for example where the condition would be unjust or deprive the appellant of the right of appeal.

3. Comparing the Two Provisions

Stage: Section 143A operates during trial, before any finding of guilt; Section 148 operates after conviction, in appeal.
Nature of power: Section 143A is truly discretionary (Rakesh Ranjan Shrivastava); under Section 148 deposit is the normal rule, with exceptions (Surinder Singh Deswal; Jamboo Bhandari).
Basis: 143A is a percentage of the cheque amount; 148 is a percentage of the fine or compensation awarded.
Retrospectivity: 143A applies to offences after 1 September 2018; 148 applies to appeals filed after that date.
Refund: both provide for repayment with interest if the accused is acquitted.

⚠ Key point

Under Section 143A (in force 1 September 2018), the trial court may order the accused, on plea of not guilty or framing of charge, to pay interim compensation up to 20 per cent of the cheque amount within 60 days (extendable by 30), refundable with interest on acquittal, recoverable as a fine, and set off against the final award. The power is discretionary, exercised on a prima facie view with reasons (Rakesh Ranjan Shrivastava, 2024), and is prospective (G.J. Raja, 2019). Under Section 148, an appellate court may order a convicted drawer to deposit at least 20 per cent of the fine or compensation, which may be released to the complainant; this is ordinarily required (Surinder Singh Deswal, 2019) but may be waived in exceptional cases (Jamboo Bhandari, 2023).

4. Related Topics and Provisions

Interest and compensation (Topic 21)
Summary trial (Topic 49)
Compounding (Topic 51)