In short. Under section 143A NI Act, a court trying a section 138 case may order the drawer to pay interim compensation of up to 20% of the cheque amount, after he pleads not guilty in a summary or summons trial. The power is discretionary (Rakesh Ranjan Shrivastava v State of Jharkhand, 2024). It is payable within 60 days and refundable with interest on acquittal.
Before 2018, a complainant in a cheque bounce case could wait years without seeing a rupee, while the accused had every reason to drag the trial out. Parliament added section 143A in the Negotiable Instruments (Amendment) Act 2018 to change that balance. The section gives the trial court power to make the accused pay part of the cheque amount up front, with protection for the accused if he wins.
For a few years many magistrates treated the provision as if it required 20% in every case. The Supreme Court corrected that in 2024. This post explains the provision as it now works in Delhi courts, for the complainant who wants to apply and the accused who wants to oppose. For the trial as a whole, see our post on how a section 138 case runs in Delhi courts, and for the remedy in general our cheque bounce practice page.
- The law
- Section 143A, Negotiable Instruments Act 1881 (from 1 September 2018)
- Maximum
- 20% of the cheque amount
- Stage
- After a not guilty plea in a summary or summons trial
- Time to pay
- 60 days, extendable by up to 30 days
- On acquittal
- Refund with interest at the RBI bank rate
- Nature
- Discretionary, with reasons (Rakesh Ranjan Shrivastava, 2024)
What is interim compensation under section 143A?
Interim compensation is an amount the trial court can order the accused to pay the complainant during the trial of a section 138 case, before any finding of guilt. The ceiling is 20% of the cheque amount. On a cheque of ₹10 lakh, the court may order anything from nothing up to ₹2 lakh.
It is not a fine and not a finding against the accused. It is a provisional payment, made on the court's prima facie view of the case, and the section builds in both ends of the outcome. If the accused is convicted, the interim amount is deducted from the fine or compensation finally ordered. If he is acquitted, the complainant has to repay it with interest. The idea is to give a complainant with a strong case some relief during a long trial, and to remove the incentive for an accused to delay.
What section 143A actually says
The section has six sub-sections. Each one answers a practical question.
Section 143A(1): who and when
The court trying an offence under section 138 "may" order the drawer of the cheque to pay interim compensation to the complainant: in a summary trial or a summons case, where he pleads not guilty to the accusation; and in any other case, upon framing of charge.
Section 143A(2) and (3): how much and by when
The amount cannot exceed 20% of the cheque amount. It must be paid within 60 days of the order, or within a further period of up to 30 days that the court may allow if the drawer shows sufficient cause.
Section 143A(4): refund on acquittal
If the drawer is acquitted, the court directs the complainant to repay the interim compensation with interest at the bank rate published by the Reserve Bank of India at the beginning of the relevant financial year, within 60 days of the order, extendable by up to 30 days for sufficient cause.
Section 143A(5) and (6): recovery and adjustment
Unpaid interim compensation may be recovered as if it were a fine, under section 421 CrPC, now section 461 BNSS. If the accused is convicted, the fine under section 138, or compensation under section 357 CrPC (now section 395 BNSS), is reduced by the interim compensation already paid.
At what stage can the court order interim compensation?
Cheque cases are tried summarily under section 143, or as summons cases, so the trigger is the accused's plea of not guilty. In Delhi this happens at the notice stage, when the court explains the substance of the accusation under section 274 BNSS and the accused states his defence. Complainants usually file the section 143A application on or just after that date, and the court hears both sides before deciding it. An application filed before the accused has appeared and pleaded is premature.
The section applies only where the offence was committed after it came into force on 1 September 2018. The Supreme Court held in G.J. Raja v Tejraj Surana (2019) that section 143A is prospective, so it cannot be used in cases where the cheque was dishonoured and the offence completed before that date. By now few such cases remain at trial, but the point still arises in old complaints that have been stuck at the service stage.
In Sanjabij Tari v Kishore S. Borcar (2025) the Supreme Court asked trial courts to decide interim deposits under section 143A as early as possible where they consider it appropriate. So an application left pending for months, or decided only at the end of evidence, defeats the purpose of the provision. Complainants should press for an early hearing; accused persons should be ready to argue it on the date it is listed.
Is interim compensation mandatory?
No. In Rakesh Ranjan Shrivastava v State of Jharkhand (2024) the Supreme Court held that the word "may" in section 143A(1) means what it says. Reading it as "shall" would make an order of up to 20% routine in every cheque case, which the court described as unjust and arbitrary, especially since unpaid amounts can be recovered as a fine.
The court laid down how the discretion is to be used. The trial court must first take a prima facie look at the complainant's case and at the defence the accused has raised. The presumption under section 139 alone is not enough, because it can be rebutted. If no prima facie case is made out, or the defence appears plausible, the court may decline to order anything. If a case is made out, the court must then decide the amount separately, looking at the nature of the transaction, the relationship between the parties, the accused's capacity to pay and any other relevant factor, such as a pending civil suit over the same debt. The order must carry brief reasons showing that these factors were considered.
This changed practice in the trial courts. Applications are now argued rather than allowed on the papers, and an order fixing 20% without reasons is open to challenge, as the order in Rakesh Ranjan Shrivastava itself was.
How much will the court order?
Anything up to 20%. The ceiling is not the default. Where the complainant's documents are strong (a loan by bank transfer, a written acknowledgment, a defence that does not explain the cheque), courts often go to or near 20%. Where the accused has raised a defence that looks credible on documents, courts may order a smaller percentage, such as 5% or 10%, or decline altogether.
Capacity to pay is a factor in its own right. An accused who files an affidavit of his income, liabilities and assets, supported by documents, gives the court a basis to reduce the amount or allow it in instalments within the statutory period. A bald plea of hardship, unsupported by anything, rarely moves a court. The relationship between the parties also matters: a commercial supply between two businesses is treated differently from a friendly loan between relatives where the circumstances of the cheque are disputed.
Section 143A compared with section 148 and final compensation
Three different payments can arise in the life of a cheque case. People often confuse them.
| Point | Section 143A interim compensation | Section 148 deposit in appeal | Final compensation on conviction |
|---|---|---|---|
| Court | Trial court (Metropolitan or Judicial Magistrate) | Appellate court (Sessions Court) | Trial court |
| Stage | During trial, after not guilty plea | When the convicted accused appeals | In the judgment |
| Amount | Up to 20% of the cheque amount | At least 20% of the fine or compensation awarded | Up to twice the cheque amount as fine; compensation from it |
| Discretion | Discretionary, with reasons | Ordinarily ordered; may be waived in exceptional cases with reasons | Part of sentencing |
| If accused wins | Refunded with interest at RBI bank rate | Refunded with interest at RBI bank rate | No liability |
| Adjustment | Deducted from the final fine or compensation | Over and above any section 143A amount | Reduced by amounts already paid |
The section 148 deposit is dealt with in our post on appealing a cheque bounce conviction and the 20% deposit.
How a complainant applies for interim compensation
A well-prepared application is short and focused on the prima facie case. It does not need to argue the whole trial.
Wait for the plea
File the application once the accused has appeared and pleaded not guilty at the notice stage, or be ready to file it that day.
Set out the prima facie case
State the debt, the cheque, the dishonour, the notice and the failure to pay, with a reference to each document already on record. Point out what the accused has not explained, for example that he admits the signature but offers no account of why he handed over the cheque.
Address the accused's defence
Deal briefly with the defence recorded at the notice stage. If he claims security, show the due date of the liability. If he claims repayment, show the account statement.
Ask for a specific amount
Ask for a figure, up to 20%, and say why it is justified on the factors in Rakesh Ranjan Shrivastava: the nature of the transaction, the relationship, and what is known of the accused's means.
Argue it promptly
Ask the court to hear and decide the application early, relying on the 2025 Supreme Court direction to decide section 143A deposits as soon as possible where appropriate.
Follow up on payment
Diarise 60 days from the order. If the amount is not paid within that time and no extension has been granted, apply for recovery as a fine under section 461 BNSS.
How the accused can oppose a section 143A application
The accused should file a written reply, not just argue on the day. The reply should show that the defence is plausible on the record: the agreement describing the cheque as security (see our post on when a bounced security cheque is still an offence), the bank entries showing repayment, the ledger showing a smaller balance, the reply sent to the legal notice at the time. Rakesh Ranjan Shrivastava allows the court to decline interim compensation where the defence appears prima facie plausible, so the reply must make that plausibility visible on paper.
When Advocate B.K. Singh opposes a section 143A application, the first document he puts before the court is usually the accused's reply to the legal notice, if one was sent. A defence recorded within 15 days of the notice, long before any complaint, reads very differently from the same defence raised for the first time in court. If there was no reply, the next best thing is contemporaneous documents: emails, messages and bank records from the time of the transaction.
On quantum, the accused can file an affidavit of income and liabilities and argue for a lower percentage, or for time within the statutory 60 plus 30 days. The accused should not oppose the application with a general plea that he is innocent and the provision is harsh. After 2024 the question is narrower: is there a prima facie case, is the defence plausible, and what amount is fair.
What happens if interim compensation is not paid?
The section provides its own remedy: the amount can be recovered as if it were a fine, under section 461 BNSS (old section 421 CrPC). That means the court can issue a warrant for attachment and sale of the accused's movable property, or a warrant to the Collector to recover the amount as arrears of land revenue from his movable or immovable property.
It does not mean the trial stops in the complainant's favour. In Noor Mohammed v Khurram Pasha (2022) a trial court had closed the accused's right to cross-examine the complainant because he had not paid interim compensation. The Supreme Court set that aside, holding that where a statute prescribes a method of enforcement, other consequences cannot be added. Non-payment leads to recovery proceedings, not to the loss of the right to defend.
In practice, though, non-payment hurts the accused. It invites recovery steps against his property, it colours the court's view of his conduct, and it makes later requests for adjournments or exemptions harder. An accused who cannot pay the amount ordered should apply for an extension within the statutory window, or challenge the order, rather than simply ignoring it.
How the amount is paid and released to the complainant
The order will say how the money is to be paid. Some courts direct payment straight to the complainant by demand draft or bank transfer; others direct a deposit in court, with the complainant then applying for release. Either way, the accused should pay in a traceable form and file a short note with the proof on the next date, so that the payment is recorded in the order sheet. Cash handed over outside court, without a receipt, is an invitation to a later dispute about whether the order was complied with.
Where the money is deposited in court, the complainant applies for its release. Because the amount is refundable if the accused is acquitted, some courts release it only against an undertaking or a bond from the complainant to repay it with interest if so directed. Complainants should be ready to give that undertaking and to provide identity and bank details. Accused persons who are worried about recovering the amount later can ask the court to impose such a condition, explaining why, for example where the complainant lives abroad or has no known assets.
Several cheques, several complaints
Where one transaction produced several bounced cheques, the complainant often files more than one complaint, sometimes in different courts. Each complaint is a separate trial, and an application under section 143A can be made in each. That can add up quickly for the accused: three complaints on cheques of ₹5 lakh each could, in theory, mean three orders of ₹1 lakh.
Capacity to pay is the factor that answers this. An accused facing several applications should tell each court about the others, with copies of any orders already passed, and ask that the total burden be considered. Courts are expected to look at the accused's real position, and an order that ignores payments already directed in a connected case is open to challenge for non-application of mind. Complainants, for their part, should disclose connected complaints honestly; concealment tends to come out and does not help.
Getting the money back after an acquittal
If the accused is acquitted, section 143A(4) requires the court to direct the complainant to repay the interim compensation with interest at the RBI bank rate prevailing at the beginning of that financial year, within 60 days of the order, extendable by up to 30 days. The accused should ask the court to include this direction in the judgment of acquittal itself, or apply for it immediately afterwards.
If the complainant appeals against the acquittal, he may ask the appellate court to stay the refund. That is a matter for the appellate court's discretion. If the complainant does not repay and no stay is in place, the accused can return to the trial court to enforce its own order. Keep the receipts and bank entries for every payment made under the interim order; you will need them to prove the amount.
Challenging an interim compensation order
An order under section 143A is made during the trial, and many courts treat it as interlocutory, which limits revision. Challenges are therefore commonly taken to the High Court under section 528 BNSS (old section 482 CrPC), and Rakesh Ranjan Shrivastava itself reached the Supreme Court through such a route. The usual ground is that the trial court did not apply its mind: it ordered 20% without looking at the defence, without considering capacity, or without reasons.
Move quickly. The 60-day payment period keeps running while a petition is drafted, and the High Court will want to know why the accused waited. A petition that only argues the defence on the merits, as if at trial, rarely succeeds; one that shows the order was mechanical often does, usually with the matter sent back for a fresh decision. For the difference between appeal, revision and High Court petitions generally, see our post on criminal appeal or revision.
Company cheques and directors
Section 143A speaks of an order against "the drawer of the cheque". Where the cheque was drawn by a company, the company is the drawer, and directors and officers are prosecuted under section 141 because of their role in the company. Directors facing applications for interim compensation have argued that the order can only be made against the company, not against them personally, and the wording gives that argument a footing. The point should be raised in the reply where it applies, along with the usual factors.
Whether a particular director can be made an accused at all is a separate and earlier question, covered in our post on when directors are liable for a company's bounced cheque.
A made-up example: two applications, two outcomes
Here's a made-up example. Arjun lends his business acquaintance Vikas ₹8,00,000 by bank transfer, recorded in a signed acknowledgment, and receives a cheque for the same amount. The cheque is dishonoured, notice is ignored, and Arjun files a complaint at the Saket courts. At the notice stage Vikas says only that he "does not owe this money". Arjun applies under section 143A. With a bank transfer, a signed acknowledgment and no explanation for the cheque, the court finds a strong prima facie case and orders ₹1,60,000, the full 20%, payable within 60 days, recording brief reasons.
Now change the facts. Vikas had replied to the legal notice within the 15 days, enclosing bank statements showing ₹6,00,000 repaid in instalments and saying the cheque was security for the original loan. He repeats this at the notice stage and files the statements with his reply to the 143A application, together with an affidavit of his income. The court finds his defence prima facie plausible on the documents, notes that at most ₹2,00,000 may be due, and orders interim compensation of ₹40,000, or 5%, giving reasons.
If Vikas is later acquitted, Arjun must repay the interim amount with interest at the RBI bank rate within 60 days. If Vikas is convicted, the interim amount is deducted from the compensation finally ordered.
Papers for a section 143A hearing
Complainant
- Bank statement showing the loan or payment
- Written acknowledgment, agreement or invoices
- The order sheet recording the accused's defence at the notice stage
- Anything showing the accused's means: business turnover, property, vehicles
Accused
- Reply sent to the legal notice
- Bank statements showing repayments
- Agreement showing the cheque was security
- Ledger or account statement with the true balance
- Affidavit of income, assets and liabilities with supporting documents
Mistakes people make with section 143A
- Complainants filing too early. An application filed before the accused has pleaded not guilty is premature and will be kept pending or dismissed.
- Complainants asking for 20% as of right. After 2024 the application must show a prima facie case and justify the amount.
- Accused persons not filing a written reply. Oral opposition on the day leaves the court with nothing on record to show the defence is plausible.
- Accused persons ignoring the order. Non-payment brings recovery proceedings against property and hurts the accused's standing with the court.
- Delay in challenging the order. Waiting until the 60 days are nearly over before going to the High Court.
- Forgetting the refund. Acquitted accused persons sometimes do not ask for the repayment direction in the judgment and then struggle to enforce it later.
Interim compensation and settlement
An interim compensation order often changes the conversation between the parties. A complainant who has received 20% has less urgency; an accused who has paid it has already committed part of the money and may prefer to settle the rest than risk conviction. Delhi courts frequently refer cases to mediation around this stage, and any settlement can give credit for the interim amount paid.
Compounding before defence evidence carries no cost under the 2025 Supreme Court guidelines, so a settlement shortly after an interim compensation order is usually the cheapest exit for both sides. The options are covered in our post on settling a cheque bounce case at every stage.
What to do this week
If you are the complainant and the accused has pleaded not guilty, prepare a short application that ties the prima facie case to the documents on record and asks for a reasoned figure. If you are the accused and an application has been filed, collect your reply to the legal notice, your proof of repayment or of what the cheque secured, and an affidavit of your means, and file a written reply before the hearing.
If an order has already been passed, note the 60-day deadline today. If you want an advocate to look at the application or the order and tell you whether to pay, seek more time or challenge it, the team of Advocate B.K. Singh at B.K. Singh & Associates can review the papers; you can reach us through the enquiry page. Our page on criminal law practice explains the wider criminal process.
Frequently asked questions
Is 20% interim compensation compulsory in a cheque bounce case?
No. The Supreme Court held in Rakesh Ranjan Shrivastava v State of Jharkhand (2024) that section 143A is discretionary. The court must assess both sides' cases, decide whether any amount is justified and give reasons for the figure.
When can interim compensation be ordered in a cheque bounce case?
After the accused pleads not guilty in a summary or summons trial, which in Delhi happens at the notice stage. It cannot be ordered before the accused has appeared and pleaded.
How long do I have to pay interim compensation?
Sixty days from the order. The court can extend this by up to 30 more days if you show sufficient cause, so apply for an extension within the first 60 days if you need it.
What can the complainant do if the 143A amount is not paid?
The amount can be recovered as a fine under section 461 BNSS, through attachment and sale of property or recovery as land revenue. The court cannot close the accused's right to cross-examine because of non-payment, as the Supreme Court held in Noor Mohammed v Khurram Pasha (2022).
Do I get interim compensation back if I am acquitted?
Yes. The court directs the complainant to repay it with interest at the RBI bank rate within 60 days, extendable by 30 days. Ask for this direction in the acquittal judgment.
Does section 143A apply to old cheque bounce cases?
Only where the offence was committed after 1 September 2018, when section 143A came into force. The Supreme Court held in G.J. Raja v Tejraj Surana (2019) that it is prospective.
Is interim compensation adjusted against the final compensation?
Yes. If the accused is convicted, the fine or compensation finally ordered is reduced by the interim compensation already paid. Keep proof of every payment.
Can I challenge an interim compensation order?
Yes, usually by a petition to the High Court under section 528 BNSS, on the ground that the trial court did not consider the defence, capacity to pay or give reasons. File quickly, because the payment period keeps running.
What is the difference between section 143A and section 148?
Section 143A is interim compensation ordered by the trial court during trial, up to 20% of the cheque amount. Section 148 is a deposit of at least 20% of the fine or compensation ordered by the appellate court when a convicted accused appeals.
Can interim compensation be ordered against a company director?
The section speaks of the drawer of the cheque, which for a company cheque is the company. Directors have argued on that basis that the order cannot be made against them personally, and the point should be raised in the reply where it applies.
Can interim compensation be paid in instalments?
The court can tailor the order within the statutory time limit, and capacity to pay is a factor in fixing the amount. Ask for this in your reply, supported by an affidavit of your income and liabilities.
Does paying interim compensation mean I admit the debt?
No. It is a provisional payment ordered on a prima facie view and refundable with interest on acquittal. It does not prevent you from contesting the case fully.
Written and reviewed at B.K. Singh & Associates
Advocate B.K. Singh
Founder of B.K. Singh & Associates. MCA, LL.B., LL.M., with more than twenty years of practice before the Supreme Court, the Delhi High Court, district courts and tribunals across Delhi NCR. This article explains the general law as of 24 October 2026; it is not legal advice on your facts.