Interim compensation, appeals and settling a cheque case
Section 143A's 20% interim compensation, section 148's appeal deposit, and what it costs to settle at each stage.
General legal information, not legal advice. Timelines are indicative and depend on your facts. Consult an advocate or CA before acting on a notice, dispute or recovery.
Short answer
The court can make the accused pay you up to 20% of the cheque amount while the case is still running. If the accused is convicted and appeals, the appeal court can make them deposit at least 20% of the fine or compensation. The case can be settled at any stage. Settling early costs less.
Interim compensation (section 143A)
| Point | Rule |
|---|---|
| When | After the accused pleads not guilty, in a summary or summons trial |
| How much | Up to 20% of the cheque amount |
| Pay within | 60 days of the order, extendable by 30 days |
| If the accused is acquitted | You must return it, with interest at the RBI bank rate |
| If the accused is convicted | It is adjusted against the final fine or compensation |
Appeal deposit (section 148)
If a convicted drawer appeals, the appeal court may order a deposit of at least 20% of the fine or compensation awarded. This is on top of any interim compensation already paid. The court can release it to the complainant during the appeal.
Settlement (compounding, section 147)
Section 138 offences can be compounded, meaning settled, at any stage. The Supreme Court's 2025 guidelines set these costs:
| Stage when accused pays | Extra cost |
|---|---|
| Before defence evidence is recorded | No extra cost. Just pay the cheque amount |
| After defence evidence, before judgment | 5% of the cheque amount |
| In revision or appeal before the Sessions Court or High Court | 7.5% |
| Before the Supreme Court | 10% |
The costs go to the Legal Services Authority, not the complainant. Summons now carry an online payment link or QR code so the accused can pay at the first stage.
Final outcome on conviction
- Imprisonment up to 2 years, and/or
- Fine up to twice the cheque amount.
Courts usually order the fine to be paid to the complainant as compensation (BNSS section 395, earlier CrPC section 357).
Accounting for amounts received
| Receipt | Entry |
|---|---|
| Cheque amount or interim compensation | Bank Dr → Customer Cr (reduces the dues) |
| Compensation above the dues | Bank Dr → Compensation received (Other income) Cr |
| Refund of interim compensation after acquittal | Customer Dr → Bank Cr, and interest paid → Interest expense |
See Accounting and GST for a bounced cheque for the full set of entries.
Sources
- India Code — Negotiable Instruments Act, 1881
- Supreme Court — Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158 (26 Sep 2025): revised compounding costs
Last verified: 30 Sep 2026.