Interim Compensation under Section 143A in a Cheque Bounce Case (2026)

How-To Guide · Cheque Bounce

Updated for 2026 · Claw Editorial

Section 143A of the Negotiable Instruments Act lets the court order the accused in a cheque bounce case to pay the complainant interim compensation of up to 20 percent of the cheque amount, even before the case is decided. It was added in 2018 to stop drawers from dragging out a clear case while the payee waits years for money. But the Supreme Court has made clear that this power is discretionary, not automatic. This guide explains when the court can order it, how to apply for it or oppose it, when it must be paid, what happens if the accused is acquitted, and the separate 20 percent deposit on appeal under Section 148. Last verified October 2026.

01What Section 143A gives the complainant

Section 143A was inserted into the Negotiable Instruments Act by the 2018 amendment and took effect on 1 September 2018. It lets the court trying a Section 138 cheque dishonour complaint order the accused to pay the complainant interim compensation of up to 20 percent of the cheque amount while the case is still going on.

The idea is simple. In a clear cheque bounce case, the drawer could earlier delay for years and the payee got nothing until the end. Interim compensation gives the payee some money early, and it pushes the drawer to settle or defend seriously rather than simply stall. For the basics of the offence itself, see the Section 138 cheque bounce notice explained.

02When the court can order interim compensation

The power is used at two stages:

• In a summons case, when the accused does not plead guilty to the accusation.
• In a summary case, when the accused does not admit the accusation.

Two limits matter. First, Section 143A applies only to complaints filed on or after 1 September 2018. The Supreme Court in G.J. Raja v Tejraj Surana (2019) held the provision is prospective, so it cannot be used in older cases. Second, the amount is capped at 20 percent of the cheque amount. It is interim, so it is adjusted against whatever the court finally awards.

03It is discretionary, not automatic

This is the most important point, and it is often misunderstood. The word in Section 143A is "may", not "shall". In Rakesh Ranjan Shrivastava v State of Jharkhand (2024), the Supreme Court held that the power is discretionary, not mandatory. A cheque bounce complaint by itself does not give the complainant a right to interim compensation.

So if you are the complainant, do not assume you will get it. Show why your case is strong on its face. If you are the accused, you can oppose it by raising a genuine, believable defence, since a serious triable defence weighs against an order.

04How to apply for or oppose interim compensation

There is no complicated separate procedure. It is done inside the running cheque bounce case.

• If you are the complainant: file a short application before the trial court asking for interim compensation under Section 143A. Set out the cheque, the dishonour, the unpaid demand notice, and why the defence is weak or absent. Suggest a percentage up to 20.
• If you are the accused: file a reply. Show your real defence, for example that there was no legally enforceable debt, that the cheque was security, or that the notice was defective. Argue that an order now would be unjust while the defence is tried.

The court hears both sides, applies the prima facie test, and passes a reasoned order. For how the whole case moves around this stage, see the Section 138 case stages and timeline, and for filing the complaint itself, how to file a cheque bounce complaint.

05Payment, acquittal and recovery

Once the court orders interim compensation, the accused must pay it within 60 days of the order. The court can extend this by up to 30 more days for a good reason. If the accused does not pay, the amount can be recovered as if it were a fine, which is a real pressure point.

Because this is interim, the law balances it. If the accused is finally acquitted, the complainant must repay the interim compensation with interest at the rate the Reserve Bank of India fixes, within 60 days, extendable by 30 days. So the money is not a windfall; it is held subject to the final result. If the accused is convicted, the interim amount is set off against the final compensation or fine.

06The separate 20 percent deposit on appeal (Section 148)

People often confuse Section 143A with Section 148. They work at different stages. Section 143A is during the trial. Section 148 applies after a conviction, when the accused appeals.

Under Section 148, when a drawer convicted under Section 138 files an appeal, the appellate court may order the appellant to deposit a minimum of 20 percent of the fine or compensation awarded by the trial court. The Supreme Court in Surinder Singh Deswal v Virender Gandhi (2019) held that although the word is "may", a deposit should normally be ordered, and reasons are needed to not order it. This deposit is on top of, not instead of, anything paid as interim compensation during trial.

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.

Whether interim compensation is ordered often turns on how courts have read the prima facie test in cases like yours, and the amount varies from court to court. Claw lets you search 30 crore+ judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990, in under 5 seconds, so you can pull orders on Section 143A and Section 148 and see what percentage courts fixed and on what reasoning. You can also track a live cheque bounce matter across 9,102 courts, benches and forums by party name, so you catch the interim compensation hearing and the payment deadline. Claw does not use your case documents to train its AI models.

Fighting or defending interim compensation in a cheque bounce case? Create a FREE Claw account to track the matter and use case search across Indian courts to find Section 143A orders in similar cases.

08Sources and further reading

• India Code (Negotiable Instruments Act, 1881, bare text): indiacode.nic.in
• Supreme Court of India (judgments): sci.gov.in
• eCourts (case status): ecourts.gov.in
• Claw: clawlaw.in

If the dispute may settle, see how to compound a cheque bounce case. This guide is general information, not legal advice. Case law and procedure change, so confirm the current position with an advocate before you act.

09Frequently asked questions