Negotiable Instruments Act 1881 Section 143a: Interim Compensation (2026)
What Section 143A of the Negotiable Instruments Act, 1881 does: during a cheque bounce trial, the court may order the person who gave the cheque to pay the complainant interim compensation of up to 20 per cent of the cheque amount. Last verified October 2026.
Explainer · Negotiable Instruments Act
Section 143A of the Negotiable Instruments Act, 1881 was added to ease a long-standing problem in cheque bounce cases: the person who was cheated often waited years for money while the trial dragged on. Section 143A lets the trial court order the person who gave the cheque, called the drawer, to pay the complainant interim compensation of up to twenty per cent of the cheque amount while the case is still going on. If the drawer is later acquitted, the money is returned with interest. This explainer sets out what Section 143A says, how the twenty per cent works, the important Supreme Court ruling that it applies only going forward, and how it differs from the appeal deposit under Section 148. Last verified October 2026.
- What it is: Section 143A lets a trial court order interim compensation during a Section 138 cheque bounce case.
- Amount: up to twenty per cent of the cheque amount, in the court's discretion.
- Refund: the amount is returned to the drawer with interest if the drawer is acquitted.
- Time: it is prospective and applies only to offences committed on or after 1 September 2018 (G.J. Raja).
01Why Section 143A was added
Cheque bounce cases are meant to be quick, but in practice many ran for years. The person who received the dishonoured cheque got nothing in the meantime, while the drawer could delay. The Negotiable Instruments (Amendment) Act, 2018 added Section 143A, with effect from 1 September 2018, to give the complainant some money up front during the trial.
The aim is to discourage delay and to give early relief where a cheque has clearly bounced, without deciding the final guilt.
The core idea in one line
During a cheque bounce trial, the court may order the drawer to pay the complainant up to twenty per cent of the cheque amount as interim compensation, refundable with interest on acquittal.
02What Section 143A says
Section 143A allows the court trying a complaint under Section 138 to direct the drawer to pay interim compensation to the complainant. The order can be made:
- in a summary or summons case, where the drawer pleads not guilty to the accusation; and
- in any other case, upon framing of charge.
The interim compensation cannot be more than twenty per cent of the cheque amount, and it is payable within sixty days of the order, which the court may extend for good reason. If the drawer is acquitted, the complainant must repay the amount with interest.
03How the 20 per cent works
Two points about the twenty per cent matter in practice. First, the figure is a ceiling, not a fixed amount. The word used in the section is "may", so the court has a discretion both on whether to order interim compensation at all and on how much, up to the twenty per cent cap. Courts are expected to give reasons rather than order the maximum as a matter of routine.
Second, the compensation is recoverable in the same way as a fine, so the enforcement machinery of the court can be used if the drawer does not pay. If the trial ends in conviction and the court awards compensation, the interim amount is adjusted against the final award.
04Prospective only: the G.J. Raja ruling
A key question was whether Section 143A applies to cases already pending when it came into force. The Supreme Court answered this in G.J. Raja v. Tejraj Surana (2019). It held that Section 143A is prospective. It applies only where the offence under Section 138 was committed after 1 September 2018, the date the section came into force.
The reason is that Section 143A creates a new obligation and exposes the drawer to coercive recovery, so it cannot be applied to conduct that happened before it existed. So for a cheque that bounced before 1 September 2018, no interim compensation can be ordered under Section 143A.
05Section 143A and Section 148
Section 143A is often confused with Section 148 on the appeal deposit. The two are different stages of the same case:
| Point | Section 143A | Section 148 |
|---|---|---|
| Stage | During the trial, before conviction | After conviction, when the drawer appeals |
| Amount | Up to twenty per cent of the cheque amount | At least twenty per cent of the fine or compensation awarded |
| Nature | Interim compensation | Deposit as a condition of the appeal |
| Application in time | Prospective (G.J. Raja) | Retrospective (Surinder Singh Deswal) |
Both sections came from the same 2018 amendment, but the courts have treated them differently on whether they apply to older cases. The underlying presumption that helps the complainant is explained in Section 139.
06Practical note
For a complainant, Section 143A is a useful early lever, but the court will want to see a clear case and will fix the amount with reasons. For a drawer, an order under Section 143A is not a finding of guilt, and the money comes back with interest on acquittal, but non-payment can be enforced like a fine, so it should not be ignored. The steps to begin such a case are set out in how to file a cheque bounce complaint under Section 138.
Because the amount is discretionary, it helps to know how courts in the relevant area have exercised that discretion in similar matters.
07Where Claw fits
Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.
Interim compensation orders turn on how courts have used their discretion under Section 143A, including the percentage fixed and the reasons given. Claw lets you search more than 30 crore judgments and orders on Section 143A and Section 138, with results in under 5 seconds, and lets you follow a live cheque bounce matter by party or advocate name across 9,102 courts, benches and forums. Reported authority runs from Supreme Court rulings of 1950 and High Court rulings of 1990 to the latest orders. Claw does not use the documents you upload to train its AI models.
Create a FREE Claw account to see how Section 143A has been applied and to track a pending cheque bounce matter, and use case search across Indian courts to find orders in similar cases.
08Sources and further reading
- India Code (NI Act, 1881 bare text): indiacode.nic.in
- Supreme Court of India (judgments): sci.gov.in
- Claw: clawlaw.in
This explainer is general information, not legal advice. The law develops through judgments, so check the current position and take advice from counsel before you act.
09Frequently asked questions
What is Section 143A of the NI Act?
It lets the court trying a cheque bounce complaint under Section 138 order the drawer to pay the complainant interim compensation of up to twenty per cent of the cheque amount while the case is pending. The amount is refundable with interest if the drawer is acquitted.
Is the twenty per cent fixed?
No. Twenty per cent is the ceiling. The section uses may, so the court has a discretion on whether to order interim compensation and how much, up to that cap, and is expected to give reasons.
Does Section 143A apply to old cheque cases?
No. In G.J. Raja v. Tejraj Surana (2019), the Supreme Court held that Section 143A is prospective. It applies only where the Section 138 offence was committed on or after 1 September 2018, when the section came into force.
What happens if the drawer does not pay?
The interim compensation is recoverable in the same manner as a fine, so the court can use its enforcement powers. It is payable within sixty days of the order, which the court may extend for good reason.
How is Section 143A different from Section 148?
Section 143A applies during the trial before any conviction and allows up to twenty per cent of the cheque amount. Section 148 applies after conviction when the drawer appeals and requires a deposit of at least twenty per cent of the fine or compensation awarded. Courts treat 143A as prospective and 148 as retrospective.
Did the new criminal codes change Section 143A?
No. The new codes replaced the old IPC, CrPC and Evidence Act. They do not renumber or change the Negotiable Instruments Act, 1881, so Section 143A is unchanged by them.