The Supreme Court, led by Justices Ravindra Bhat and Aravind Kumar, has ruled that interim compensation in cases of dishonored cheques can only be directed to be paid after the accused has pleaded not guilty, as per Section 143A(1) of the Negotiable Instruments Act, 1881. The court made this observation while hearing a Special Leave Petition against an order by the Allahabad High Court, which found no illegality in an impugned summoning order.

Background: 

The Special Leave Petition was filed by the petitioners in response to a complaint regarding a financial relationship with the complainant, which involved issuing cheques. The complaint alleged that a cheque issued to satisfy a loan was dishonored.

Court's Analysis and Decision: 

The trial court had ordered the petitioner to deposit 10% of the dishonoured cheque amount under Section 143A of the Negotiable Instruments Act, of 1881. However, the Supreme Court held that the order was unsustainable in law since it was issued before the accused entered a plea of "not guilty." The court emphasized that interim compensation can only be directed after the accused has pleaded not guilty.

Advanced Stage of Trial: 

Although the court quashed the trial court's order, it also acknowledged that the trial had reached an advanced stage. Consequently, the complainant still has the option to seek relief under Section 143A, as it can be claimed at any stage of the proceedings.

Key Takeaways:

1. Supreme Court quashes order for interim compensation in cheque dishonor case.
2. Interim compensation can only be directed after the accused pleads not guilty.
3. The trial court's order was unsustainable in law as it was issued before the accused entered a plea.
4. The trial had reached an advanced stage, allowing the complainant to seek relief under Section 143A.
5. Supreme Court's ruling emphasizes the procedural requirements under the Negotiable Instruments Act.