Under Section 143A, when the drawer pleads not guilty in a summary trial or summons case under Section 138, the court may direct the drawer to pay interim compensation to the complainant not exceeding 20% of the cheque amount, within 60 days (extendable by 30 days). The amount is recoverable as a fine if unpaid, is adjusted against the final compensation, and must be repaid with interest if the drawer is acquitted.
How Section 143A works in India
After the complaint is filed and the accused appears and pleads not guilty, the complainant applies for interim compensation. The Supreme Court has held that the power is discretionary, not automatic: the court looks at the prima facie case, the defence raised and the drawer's conduct, and records brief reasons. Once ordered, the money is paid to the complainant directly, not into court. If the drawer does not pay, it is recovered like a fine, including by attachment. At the end, the interim amount is deducted from the final compensation under Section 138 and 357 CrPC, or refunded with interest if the drawer wins.
Why it matters for getting paid
Cheque cases can take years. Section 143A gives the supplier up to a fifth of the money within months and, more importantly, a court order against the drawer early. Together with the Section 148 appeal deposit, it means a drawer who fights to the end still pays as the case proceeds. Many settle rather than face both. Read the entry on Section 138 for the overall process.
How FundRaksha uses it
FundRaksha's advocates file the Section 143A application with the complaint so it can be heard at the first effective hearing, supported by the invoices, ledger and memo. The order often triggers a settlement discussion, which keeps FundRaksha's pre-court settlement rate around 60%. The success fee of 30% applies to amounts actually recovered, including interim compensation.
Worked example (hypothetical)
A Vadodara chemicals supplier files a Section 138 complaint on a ₹10,00,000 cheque. The drawer appears, pleads not guilty and claims the goods were defective, though no complaint was ever recorded. The court orders interim compensation of 20%, ₹2,00,000, within 60 days. The drawer pays it to the supplier. The case is eventually decided in the supplier's favour with compensation of ₹10,00,000 plus ₹1,50,000 for costs and delay; the ₹2,00,000 already paid is deducted, leaving ₹9,50,000 payable. Had the drawer been acquitted, the supplier would have refunded ₹2,00,000 with interest at the bank rate.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.