When trial in case of dishonour of cheque should not be heard denovo ?

If a case under section 138 of the NI Act is in fact, tried as
regular summons case it would not come within the purview of
section 326(3) of Cr.P.C. In other words, if the case in substance
was not tried in a summary way, though was triable summarily,
and was tried as a regular summons case, it need not be heard de
novo and the succeeding Magistrate can follow the procedure
contemplated under section 326(1) of the Code. However, where
a case is tried in a summary way by following the procedure 74
contemplated by the provisions of Chapter XXI of the Code and
in particular sections 263 and 264, then it would be excluded from
the purview of section 326(1) of the Code.
Section 143 has a mandatory effect though the provision
opens with a non obstante clause. This means that provisions of
section 259 of Cr.P.C. regarding a warrant trial shall have no
application in respect of an offence under Section 138 of the NI
Act.

Karnataka High Court

M/S Mesh Trans Gears Pvt. Ltd. vs Dr.R. Parvathreddy S/O. ... on 22 March, 2013

This Criminal Petition is filed under Section 482 Code of Criminal Procedure, 1973 , by the advocate for the petitioner praying that this Hon'ble Court may be pleased to, quash the proceedings initiated by the respondent under Section 138 of Negotiable Instruments Act and Section 420 of the Indian Penal Code in C.C.No.420/2007 on the file of the II Judicial Magistrate First Class, Raichur.
This petition, having been heard and reserved on 26.02.2013 Circuit Bench at Gulbarga and coming on for Pronouncement of Orders this day, the Court delivered the following:-
ORDER
Heard the learned counsel for the parties.
2. The facts of the case are as follows . The respondent
herein had initiated proceedings against the petitioner for an
offence punishable under Section 138 of the Negotiable
Instruments Act, 1881 (hereinafter referred to as the 'NI Act', for
brevity). In a private complaint filed under Section 200 of the
Code of Criminal Procedure, 1973 (hereinafter referred to as the
'Cr.P.C', for brevity), it was alleged that the petitioner's father 3
had borrowed a sum of Rs.5,00,000/- on 27-11-1996. The same
had not been returned inspite of repeated demands. It is further
alleged that the petitioner had acknowledged the debt owed by his
father to the respondent, as on 25-11-1999 and even subsequently,
but ultimately issued a cheque dated 16-2-2006, for a sum of
Rs.5,00,000/-, drawn on Shamrao Vittal Co-operative Bank
Limited, Bangalore. The respondent claims to have presented
the same for encashment on 16-6-2006 through his banker, M/s
Vijaya Bank, Raichur. The same is said to have been returned
with an endorsement to the following effect, 'Refer to drawer'.
The respondent is said to have made a demand for payment,
claiming that the cheque had been dishonoured and on the footing
that the petitioner had failed to comply with the demand, had filed
the above complaint. The Court had followed the procedure in
respect of the complaint as in any other complaint, except that it
had allowed the complainant to file an affidavit in lieu of his
sworn statement and ordered summons to the petitioner. His
presence was secured and bail was granted during the pendency of 4
the case. The plea of the petitioner that he was not guilty, was
duly recorded and the matter was set down for the complainant's
evidence. At that stage, the present petition has been filed.
3. The learned Senior Advocate Shri
S.M.Chandrashekar, appearing for the learned counsel for the
petitioner while urging the several grounds raised in the revision
petition, seeks to highlight a question of considerable importance.
It is pointed out that the present petitioner is accused of an offence
punishable under Section 138 of the NI Act. The provisions of the
said Act, Sections 138 to 147 prescribe a hybrid procedure as to
the manner in which the same shall be adjudicated, significantly in
variance with the manner in which a complaint under Section 200
is to be dealt with under the provisions of the Code of Criminal
Procedure, 1973(hereinafter referred to as the 'CrPC', for brevity).
The learned Senior Advocate would hence contend that the very
initiation of proceedings under Section 200 Cr.P.C, for an offence
punishable under Section 138 of the NI Act, is without jurisdiction 5
and on that ground alone, the proceedings before the Court below
ought to be quashed.
Elaborating on the above aspect, it is pointed out that the
NI Act was amended by the Banking, Public Financial Institutions
and Negotiable Instruments Laws (Amendment) Act, 1988,
wherein a new Chapter XVII was incorporated for penalties in
case of dishonor of cheques due to insufficiency of funds in the
account of the drawer of the cheque. These provisions were
incorporated with a view to encourage the culture of use of
cheques and enhancing the credibility of the instrument. But in
course of time, it was found that Sections 138 to 142 in Chapter
XVII of the Act were found to be deficient in dealing with the
dishonour of cheques. Hence, in the year 2002, the Legislature
thought it fit to amend the NI Act, under the Negotiable
Instruments (Amendment and Miscellaneous Provisions) Act,
2002. In the Statement of Objects and Reasons to the said
amendment Act, it was stated thus :
6
".........Not only the punishment provided in the Act has proved to be inadequate , the procedure prescribed for the courts to deal with such matters has been found to be cumbersome. The courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act.
2. A large number of cases are reported to be pending under Sections 138 to 142 of the Negotiable Instruments Act in various courts in the country. Keeping in view the large number of complaints under the said Act pending in various courts a Working Group was constituted to review Section 138 of the Negotiable Instruments Act, 1881 and make recommendations as to what changes were needed to effectively achieve the purpose of that section................."
The said Amendment Act came into force with effect from 6-2-
2003.
Attention is next drawn to Sections 4 and 5 of the Cr.P.C
which read as follows :
7
4. Trial of offences under the Indian Penal Code and other laws: (1) All offences under the Indian Penal Code (45 of 1860) shall be
investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained.
(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.
5. Saving: Nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force."
8
From a reading of the above provisions, it is contended by
Shri Chandrashekar, that an offence punishable under Section 138
of the NI Act is enquired into and tried in the manner as regulated
under the provisions of the said Act, except that the provisions of
Sections 262 to 265 of the Cr.P.C shall, as far as may be, apply
to such trials. And further, in the absence of a specific provision
to the contrary, the provisions of the Cr.P.C shall not affect the
special procedure and powers conferred under the provisions of
the NI Act .
In other words, it is contended that a complaint filed under
Section 200 Cr.P.C, for an offence punishable under Section 138
of the NI Act, attracts the rigour of the pre-trial procedure
contemplated under the provisions of the Cr.P.C, as in the present
case on hand. Where as the intent of the legislation is that where
any cheque drawn by a person in favour of another for the
discharge of any debt or other liability is returned unpaid by the
bank, either on account of insufficiency of funds in the account of
the drawer or that the amount indicated in the cheque exceeds the 9
amount arranged to be paid from that account, under an agreement
with the bank, such person is deemed to have committed an
offence punishable under Section 138 of the NI Act. This is
subject to certain conditions such as the cheque having been
presented within six months from the date on which it was drawn,
that the holder in due course of the cheque has made a demand for
the payment of the money by way of a notice to the drawer, within
15 days of the receipt of information from the bank regarding the
dishonour of the cheque and that the drawer fails to meet the
demand within 15 days from the date of receipt of such notice.
The Court of Metropolitan Magistrate or a Judicial
Magistrate of the first class, in terms of Section 142, shall not
take cognizance of a complaint unless it is made in writing, by
the payee or the holder in due course of the cheque, within one
month from the date on which the cause of action arose i.e., on
expiry of fifteen days from the date of receipt of a notice of
demand issued by the payee as aforesaid. But if the above 10
conditions are satisfied the Magistrate is bound to take cognizance
of the case and issue summons to the drawer of the cheque and
proceed as in the case of a summary trial, which again makes the
procedure for the trial of summons cases as prescribed under the
Cr.P.C applicable.
It is hence contended that the proceedings before the trial
Court having taken a course other than contemplated under the
special legislation is therefore without jurisdiction and ought to be
set at naught. Without prejudice to this contention, it is also
sought to be canvassed that the respondent admittedly claiming
that the cheque in question was issued in respect of an apparently
time barred debt, is precluded from bringing any criminal action in
respect of such a transaction on the basis of the cheque in
question.
The learned Senior Advocate has also raised other
contentions on factual aspects, to demonstrate that the proceedings
before the trial Court ought to be quashed. 11
4. The learned counsel appearing for the respondent on
the other hand would point out that apart from the petitioner
seeking to question the alleged departure from the procedure
contemplated under the provisions of the NI Act , while not
conceding that there has occurred any material irregularity being
committed by the Court below, it is pointed out that the matter
was posted for the respondent to tender evidence on his complaint,
when the petitioner herein has approached this court. The
petitioner having acquiesced in the jurisdiction of the Court below
without demur can have no further grievance in respect of the
further proceedings to ensue before the Court below, when all the
defences available to him are in tact and could be placed before
the Court below. It is contended that the several grounds raised in
the petition in relation to factual aspects are disputed and hence,
ought to be tested at the trial and cannot be the subject matter of
adjudication in this revision petition. The learned counsel hence
seeks that the petition be dismissed with costs. 12
5. Though on merits, the petition would fail for reasons
stated hereunder, the incidental question of law and procedure
that would have to be applied in dealing with a complaint alleging
an offence punishable under Section 138 of the NI Act, that is
sought to be canvassed, requires to be addressed in some detail
and this Court considers it a duty to indicate the manner in which
the lower Courts shall deal with such cases.
In this regard in order to reconcile the departure in
procedure in addressing a complaint of an offence punishable
under Section 138 of the NI Act and the procedure that would
normally be followed in respect of offences punishable under the
provisions of the IPC, it would be useful to firstly consider the
procedure contemplated under the Cr.P.C and justify the departure
from the same and the extent to which it would be possible, in
reconciling the procedure contemplated in dealing with a
complaint under the NI Act, without eroding the discretion
available to the Court of the Magistrate in choosing a particular
course of action in a given circumstance. 13
Sections 190 to 199 of the Cr.P.C describe the methods by
which various criminal Courts are entitled to take cognizance of
offences and also the limitations subject to which such cognizance
is taken.
What is taking cognizance has not been defined in the
Code. It merely means that the Court or Judge takes judicial
notice or becomes aware of the allegation of an offence. It does
not involve action of any kind. It occurs as soon as a Magistrate
applies his mind to the alleged commission of an offence for the
purpose of taking further steps towards inquiry and trial.
Sections 200 to 203 Cr.P.C ensure that false and frivolous
complaints are nipped in the bud. The object under the said
provisions is to distinguish baseless cases from genuine
grievances. For obvious reasons the special procedure, applicable
in cases where cognizance is taken on a complaint, is not needed
in cases where cognizance has been taken on a police report.
Section 200 provides that a magistrate taking cognizance of
an offence on a complaint, which may be oral or in writing, shall 14
examine upon oath the complainant and the witnesses present, if
any, and that the substance of such examination shall be reduced
to writing and shall be signed by the complainant and the
witnesses and also by the magistrate. The object of such
examination is to ascertain whether there is a prima facie case
against the person accused of the offence in the complaint. If the
Magistrate is satisfied that there are sufficient grounds for
proceeding further, he can issue process to the accused.
The Magistrate can postpone the issue of process and
conduct an enquiry himself or direct an investigation by the police
or by any other person.
If, after considering the statements on oath of the
complainant and the witnesses, if any, and the result of the enquiry
or investigation under Section 202, the Magistrate is of the
opinion that there is no sufficient ground for proceeding , he shall
dismiss the complaint and shall briefly record his reasons for such
dismissal (Sec.203).
15
If on the other hand, it is found that there are sufficient
grounds for proceeding, then the Magistrate shall issue a summons
for the attendance of the accused, if the case appears to be a
summons case. He may issue a warrant, or if he thinks fit, a
summons, if the case appears to be a warrant case, for causing the
accused to be brought or to appear before such Magistrate.
In a case exclusively triable by the Court of Session, at the
stage of Sections 203 and 204, the Magistrate is only to see
whether or not there is "sufficient ground for proceeding" against
the accused. He is not to weigh the evidence closely as if he were
the trial Court.
The Magistrate is empowered to dispense with the personal
attendance of the accused and permit him to appear by his pleader.
But may in his discretion at any stage of the proceedings, direct
the personal attendance of the accused and enforce such
attendance in the manner provided under the Cr.P.C. 16
In so far as the provisions of the NI Act are concerned,
it is to be kept in view that under the Banking, Public Financial
Institutions and Negotiable Instruments Laws (Amendment) Act,
1988, Chapter XVII - comprising of Sections 138 to 142, was
inserted in the NI Act, with effect from 1-4-1989. This was with
a view to enhance the acceptability of cheques in settlement of
liabilities by making the drawer liable for penalties in case of
dishonour of cheques. However, in course of time, it was found
that the said provisions were found deficient in dealing with cases
of such dishonour of cheques. Hence, the Negotiable Instruments
(Amendment & Miscellaneous Provisions) Act, 2002 was
passed, which came into force with effect from 6-2-2003. By this
Act, Sections 138, 141 and 142 were amended and Sections 143
to 147 were introduced .
The said provisions of law are extracted hereunder for ready
reference.
17
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 1[a term which may be extended to two years,] or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been, presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
1
Substituted by Act No.55 of 2002 (w.e.f. 6-2-2003) 18
(b) the payee or the holder in due course of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, 1[within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.- For the purposes of this section," debt or other liability" means a legally enforceable debt or other liability.
139. Presumption in favour of holder.- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.
140. Defence which may not be allowed in any prosecution under section 138.- It shall not be a defence in a prosecution for an offence under section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that section.
1
Substituted by Act No.5 of 2002 (w.e.f. 6-2-2003) 19
141. Offences by companies.- (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
1
[Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.]
1
Inserted by Act No.55 of 2002 (w.e.f. 6-2-2003) 20
(2) Notwithstanding anything contained in sub- section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.- For the purposes of this section,-
(a)" company" means any body corporate and includes a firm or other association of individuals; and
(b) " director", in relation to a firm, means a partner in the firm.
142. Cognizance of offences. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974 )-
(a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138;
21
1
[Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period.]
(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.
2
[143. Power of Court to try cases summarily.- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Chapter shall be tried by a Judicial Magistrate of the first class or by a Metropolitan Magistrate and the provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may be, apply to such trials:
Provided that in the case of any conviction in a summary trial under this section, it shall be lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding one year and an amount of fine exceeding five thousand rupees:
Provided further that when at the commencement of, or in the course of, a summary trial under this section, it appears to the Magistrate that the nature of the case is such that a sentence of imprisonment for a term exceeding one
1
Inserted by Act No.55 of 2002 (w.e.f. 6-2-2003) 2
Sections 143 to 147 inserted by Act No.55 of 2002 (w.e.f. 6-2-2003) 22
year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Magistrate shall after hearing the parties, record an order to that effect and thereafter recall any witness who may have been examined and proceed to hear or rehear the case in the manner provided by the said Code.
(2) The trial of a case under this section shall, so far as practicable, consistently with the interests of justice, be continued from day to day until its conclusion, unless the Court finds the adjournment of the trial beyond the following day to be necessary for reasons to be recorded in writing.
(3) Every trial under this section shall be conducted as expeditiously as possible and an endeavour shall be made to conclude the trial within six months from the date of filing of the complaint.
144. Mode of service of summons.- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974) and for the purposes of this Chapter, a Magistrate issuing a summons to an accused or a witness may direct a copy of summons to be served at the place where such accused or witness ordinarily resides or carries on business or personally works; for gain, by speed post or by such courier services as are approved by a Court of Session.
23
(2) Where an acknowledgment purporting to be signed by the accused or the witness or an endorsement purported to be made by any person authorised by the postal department or the courier services that the accused or the witness refused to take delivery of summons has been received, the Court issuing the summons may declare that the summons has been duly served.
145. Evidence on affidavit.- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974) the evidence of the complainant may be given by him on affidavit and may, subject to all just exceptions be read in evidence in any enquiry, trial or other proceeding under the said Code.
(2) The Court may, if it thinks fit, and shall, on the application of the prosecution or the accused, summon and examine any person giving evidence on affidavit as to the facts contained therein.
146. Bank's slip prima facie evidence of certain facts.- The Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved. 24
147. Offences to be compoundable.- Notwithstanding anything contained in the Code of Criminal Procedure, 1973, (2 of 1974), every offence punishable under this Act shall be compoundable."]
On receipt of a complaint for an offence punishable under
Section 138 of the NI Act , having due regard to the fact that it is a
special statutory offence, where the ingredients are specified with
precision, the question whether the sworn statement of the
complainant and his witnesses, if any, needs to be recorded or
whether the complaint furnishing the relevant and complete
details with the supporting documents and on the basis of an
affidavit in lieu of the sworn statement, without anything more
would be sufficient to entertain the requisite satisfaction under
Section 204 Cr.P.C, has been answered by this Court as well as
by other Courts in the affirmative in the following decisions.
In the case of Muhammed Basheer v. The State of Kerala,
(2009 Crl.LJ 246), the Court has answered the following
questions :
25
"What is the import and consequence of the amendment to Section 202 Cr.P.C by Act 25 of 2005 w.e.f. 23.06.06 by which the words "and shall in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction" were introduced? Is the stipulation couched in the above language directory or mandatory? Does that stipulation apply at all to prosecutions under Section 138 of the Negotiable Instruments Act? If the sworn statement of all necessary witnesses cited by the complainant is recorded under Section 200 Cr.P.C and the materials are sufficient to induce the requisite satisfaction in the mind of the learned Magistrate that there is sufficient ground for proceeding, should the learned Magistrate still proceed to the stage of Section 202 Cr.P.C and conduct a further enquiry? What would be the content and scope of such an extended enquiry in such circumstances? When does the enquiry under Section 200 Cr.P.C end and the enquiry under Section 202 Cr.P.C commence? Is the boundary line between the enquiry under Section 200 Cr.P.C and 202 Cr.P.C so firm, definite, stable and specific? These questions arise for consideration in these cases."
While the analysis of the relevant provisions and the
interpretation of their scope and intent, which are lucidly dealt
with in the decision, is very much necessary to be reiterated to 26
grasp the precision of the summary of the conclusions drawn by
the Court - it would be sufficient for the present purpose to
reproduce the summary of the Court's conclusions. The same is
extracted hereunder:
"31. I may summarise my conclusions as follows:
i) Alert application of mind must be made by a criminal court at the stage of Section 203/204 Cr.P.C while taking cognizance and issuing process to satisfy itself that there is "sufficient ground for proceeding" against an accused person.
ii) This must be done by the Magistrate, cognizant of the twin requirements and challenge at the threshold - of giving a bona fide complainant a fuller and more exhaustive opportunity to substantiate his genuine grievance and of showing the door to a vexatious complainant trying to abuse the criminal adjudicatory process against a person who does not deserve to endure the unnecessary trauma.
iii) Ordinarily process can be issued under Section 204 Cr.P.C. at the end of the enquiry under Section 200 - i.e. after recording the sworn statement of the complainant and his witnesses if any present if the requisite satisfaction that there is sufficient ground for proceeding can be entertained by the Magistrate on the materials available. 27
iv) If at the end of the enquiry under Section 200 Cr.P.C the Magistrate is not able to come to a conclusion as to whether there is or there is no sufficient ground to proceed the Magistrate shall proceed to conduct an enquiry under Section 202 Cr.P.C. Such enquiry may be conducted by the Magistrate himself or he may direct an investigation to be conducted by a police officer or any other person.
v) The criminal Court at that stage must be alertly conscious of the greater trauma that a person who resides outside its jurisdiction will have to endure if process were issued by the court against him.
vi) The Magistrate, in the case of person residing outside his jurisdiction, must ordinarily come to a conclusion as to whether there is sufficient ground to proceed against such accused only after conducting an enquiry under Section 202 Cr.P.C.
vii) Notwithstanding the fact that requirement of (vi) is introduced by a specific amendment substituting the permissive "may" by the command of "shall", the non compliance does not vitiate the cognizance taken and the consequent issue of process as the purpose of such an enquiry under Section 200 and 202 Cr.P.C is only to decide whether or not "there is sufficient ground for proceeding". 28
viii) Section 202 Cr.P.C as amended applies to prosecutions under Section 138 of the N.I.Act also in the light of Section 4(2) of the Code and in the absence of any specific contra provision in Section 138 of the N.I.Act.
ix) But ordinarily in a prosecution under Section 138 of the N.I.Act, if a proper complaint is filed supported by necessary documents and a proper affidavit is filed under Section 145 of the N.I. Act it may not be necessary for the Magistrate to proceed to hold the enquiry under Section 202 Cr.P.C as the requisite satisfaction can be entertained at the end of the enquiry under Section 200 Cr.P.C itself.
x) But in a case where there is possibility of dispute regarding territorial jurisdiction or dispute regarding complicity alleged with the help of Section 141 of the N.I. Act, it will be proper, necessary and advisable for the Magistrate to hold enquiry under Section 202 Cr.P.C, if requisite satisfaction is not induced by the materials placed before it under clause (ix) above.
xi) Even in such enquiry under Section 202 Cr.P.C in a prosecution under Section 138 of the N.I. Act, it is not invariably necessary to examine a complainant and his witnesses personally on oath. They can be directed to file affidavit or additional affidavit under Section 145 of the N.I. Act on the specific aspects where materials are found necessary or the Court entertains doubts. Section 145 of 29
the N.I. Act as explained in the decision in Vasudevan v State of Kerala [2005 (1) KLT 200] shall apply to the stage of enquiry under Section 202 Cr.P.C also. Courts must be specifically cognizant of the need for expedition in a prosecution under Section 138 of the N.I. Act.
xii) In a case where the requisite satisfaction under Section 204 Cr.P.C can be entertained convincingly by the materials available on record, the non compliance with Section 202 Cr.P.C does not ipso facto vitiate the cognizance taken or the process issued. Section 202 does not contemplate or mandate a ritualistic enquiry merely to satisfy the letter of the procedural / adjectival law even after the requisite satisfaction under Section 203 /204 Cr.P.C is convincingly entertained by the Court. In this sense the requirement introduced by amendment is only directory and not mandatory, though all courts are certainly expected to follow that stipulation."
In the case of Rajesh Agarwal Vs. State and Another,
(2010 )159 Comp Cases 13 (Del), the Court was addressing the
very question as to the procedure to be followed in respect of a
complaint of an offence under Section 138 of the NI Act. The
following dictum of the Court as regards the pre-summons
procedure is relevant:
30
5. In order to ensure that the cases under Section 138 of the Negotiable Instruments Act, 1881 are tried before the Court of the Metropolitan Magistrate/Judicial Magistrate in an expeditious manner, the Legislature provided for summary trial. Section 145 of the Negotiable Instruments Act, 1881, provides that evidence of complainant may be given by him by way of an affidavit and such affidavit shall be read in evidence in any inquiry, trial or other proceedings in the court. This also makes it clear that a complainant is not required to examine himself twice, i.e., one after filing the complaint and one after summoning of the accused. The affidavit and the documents filed by the complainant along with the complaint for taking cognizance of the offence are good enough to be read in evidence at both the stages, i.e., pre-summoning stage and the post summoning stage. The complainant is not required to be recalled and re-examined after summoning of the accused unless the Metropolitan Magistrate passes a specific order as to why the complainant is to be recalled. Such an order is to be passed on an application made by the accused or under section 145(2) of the Negotiable Instruments Act, 1881, suo moto by the Court. Section 145 of the Negotiable Instruments Act, 1881, reads as under:
"145. Evidence on affidavit - (1)
Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of
31
1974), the evidence of the complainant may be given by him on affidavit and may,
subject to all just exceptions be read in evidence in any enquiry, trial or other
proceedings under the said Code.
(2) The Court may, if it thinks fit, and shall, on the application of the prosecution of the accused, summon and examine any
person giving evidence on affidavit as to the facts contained therein."
6. Summary trial procedure is given under Sections 260 to 265 of the Code of Criminal Procedure. As per this procedure also when during the course of summary trial, it appears to the Magistrate that the nature of case was such that it was desirable to try it as a summon trial, he has the power to recall any witness who has been examined and proceed to re-hear the case in the manner provided in the Code.
7. The difference between summary trial and summon trial is thus obvious. In summary trial after the accused is summoned, his plea is to be recorded under Section 262 (g) of the Code of Criminal Procedure, and his examination if any can be done by the Metropolitan Magistrate and a finding can be given by the court under Section 263(h) of his examination. The same procedure is 32
to be followed by the Metropolitan Magistrates for offence of dishonour of cheque. If proviso a, b and c to Section 138 of the Negotiable Instruments Act, 1881 are shown to have been complied with, technically the commission of offence stands completed. It is for the accused to show that no offence could have been deemed to be committed by him for some specific reasons and defences. He cannot simply say "I am innocent" or "I plead not guilty".
8. The procedure being followed presently by the learned Metropolitan Magistrates under Section 138 of the Negotiable Instruments Act, 1881, is not commensurate with the summary trial provisions of the Code of Criminal Procedure, and the provisions of Negotiable Instrument Act, 1881, and that is the reason that decisions of cases under section 138 of the Negotiable Instruments Act, 1881, is taking an unnecessary long time and complaints remain pending for years. The procedure as prescribed under law is that along with complaint under Section 138 of the Negotiable Instruments Act, 1881, the complainant should file affidavit of his evidence and all necessary documents like dishonour memo, returned cheque, notice of demand and then the learned Metropolitan Magistrate should scrutinize the complaint and document and if he finds that the affidavit and the documents disclose dishonour of cheque issued by the accused, issuance of a demand notice by the complainant, nonpayment of the cheque amount by the accused despite notice, cheque return memo of the bank 33
etc., and if the court finds that the complaint was filed within the period of limitation, cognizance is to be taken and notice of appearance of the accused should be sent to the accused."
In the case of Rajesh Bhalchandra Chalke v. State of
Maharashtra (Criminal Writ Petition 2523 of 2010 & connected
cases) decided on 7-12-2010, a three judge bench of the Bombay
High Court on a reference by a learned Single Judge on the
question whether in view of the provisions of Section 145 of the
NI Act, a Metropolitan Magistrate or Judicial Magistrate, First
Class, taking up a complaint under Section 138 of the NI Act,
along with documents in support thereof and a verification made
in the affidavit in support of the complaint is still obliged to
examine on oath the complainant and his witnesses before issuing
process on the complaint ?
The Court has answered the question thus :
"29. xxxxx Sub-section (2) of Section 145 is as comprehensive as sub-section (1) thereof. While it is true that the question of the accused giving an application for 34
summoning and examining the complainant would arise after issuance of the process and after service of summons on the accused, it is open to the Magistrate before whom affidavit is tendered by the complainant in support of his complaint, to summon and examine the complainant as to the facts contained in the affidavit filed by the complainant in support of the complaint, because such affidavit is permissible in the enquiry or other proceeding when the Magistrate is yet to decide whether or not to issue the process. The Magistrate certainly has the discretion to decide whether to rely on the affidavit given by the complainant in support of the complaint and on the documents and issue process on the basis thereof or to summon and examine the complainant on oath as to the facts contained in the affidavit. This, however, does not mean that in each and every case the Magistrate is bound to call the complainant and examine him on oath before issuing process. The very purpose of introducing Section 145 on the statute book would be defeated if the Court over-looks the non-obstante clause with which Section 145 begins - "Notwithstanding anything contained in the Code of Criminal Procedure, 1973...". The Statement of Objects and Reasons appended to the Bill clearly provides that it was decided to bring out, inter alia, the following amendments in the Negotiable Instruments Act, 1881, namely, "(iv) to prescribe procedure for dispensing with preliminary evidence of the complainant". The expression "preliminary evidence" obviously refers to examination of 35
the complainant by the Magistrate before issuance of the process.
30. The learned counsel for the accused would submit that evidence would only mean examination in chief or cross-examination or re-examination as contemplated by Section 137 of the Indian Evidence Act, 1872. This argument is also misconceived. Section 3 of the Indian Evidence Act, 1872, defines "evidence" as under :-
"Evidence - "Evidence means and
includes - 1) all statements which the Court permits or equires to be made before it by witnesses, in relation to matters of fact under inquiry; such statements are called oral evidence; (2) all documents including electronic records produced for the inspection of the Court, such documents are called documentary evidence."
The words "Proved", "Disproved" and "Not proved" are defined as under :-
"Proved" - A fact is said to be
proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the
supposition that it exists.
36
"Disproved" - A fact is said to be
disproved when, after considering the
matters before it, the Court either believes that it does not exist, or considers its non- existence so probable that a prudent man ought, under the circumstances of the
particular case, to act upon the supposition that it does not exist.
"Not proved" - A fact is said not to
be proved when it is neither proved nor
disproved."
31. It is thus clear that "evidence" as defined by the Indian Evidence Act is not confined to examination in chief, cross-examination or re-examination of a witness under Section 137. Evidence means and includes all statements which the Court permits or requires to make before it in relation to matters of fact under enquiry. What would come on record by way of examination upon oath of the complainant or witnesses under Section 200 of the Code of Criminal Procedure would as much be evidence as contemplated by Section 145 of Negotiable Instruments Act, 1881 examination in chief, cross- examination and re- examination of a witness under Section 137 of the Indian Evidence Act. There is nothing in the provisions of Section 145 or any other section of NI Act to adopt the narrow meaning of the word "evidence", as is canvassed by the learned Counsel for the accused.
37
32. It is, therefore, clear that as per the provisions of Section 145 of NI Act added by Amending Act 55 of 2002 with effect from 6th February 2003, the statement which the Court would require the complainant to make before it for the purpose of enabling the Court to decide whether or not to issue process under Section 200 of CrPC is also "evidence" as contemplated by sub-section (1) of Section 145 of NI Act.
33. It is even the case of the accused that, as held by the Apex Court in Nirmaljeet Singh Hoon vs. The State of West Bengal and another, (1973) (3) SCC 753): (AIR 1972 SC 639) :-
'....... The object of such examination is to ascertain whether there is a prima facie case against the person accused of the
offence in the complaint and to prevent the issue of process on complaint which is either false or vexatious or intended only to harass such a person. Such examination is provided, therefore, to find out whether there is or not sufficient ground for
proceeding."
If, on going through the complaint, the
documents and the affidavit verifying the facts stated in the complaint, the learned Magistrate finds that a prima facie case 38
against the accused is made out and that, prima facie, the complaint is neither false nor vexatious or intended only to harass the accused person, we see no reason why the learned Magistrate cannot issue process on the complaint and must insist upon personal examination of the complainant, particularly when sections 118, 139 and 146 raise
presumptions in favour of the holder of the cheque (that the cheque was drawn for
consideration; that the holder of the cheque received the cheque, for the discharge, in whole or in part, of any debt or other
liability; that on production of bank's slip or memo having thereon the official mark
denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque) and Section 140 denies the accused the defence (that he had no reason to believe, when he issued the cheque, that the cheque may be dishonoured on the
presentment for the reasons stated in section 138) and when Sections 143 to 147 are
specifically added on the statute book to make the procedure less cumbersome and to expedite disposal of the case within six months from the date of filing the complaint'.
39
34. As per the settled principle of interpretation of statute, a statutory provision is not to be interpreted in such a manner as to yield absurd results. All that the Magistrate is required to consider while considering whether or not to issue process on a complaint under Section 138 of the NI Act is to ascertain whether the complainant has made out a prima facie case. It would be absurd if, on the basis of the affidavit of complainant submitted after issuance of process, the accused can be convicted and sentenced to imprisonment upto one year in a summary trial, but on the basis of an affidavit in support of the complain, the Magistrate cannot even say that the complainant has made out a prima facie case for issuance of process.
35. After addition of section 135 NI Act in the statute book, it is open to the Magistrate to issue process on the basis of the contents of the complaint, the documents in support thereof and the affidavit submitted by the complainant in support of the complaint. Once the complainant files an affidavit in support of the complaint before issuance of the process under Section 200 Cr.P.C., it is thereafter open to the Magistrate, if he thinks it fit, to call upon the complainant to remain present and to examine him as to the facts contained in the affidavit submitted by the complainant in support of his complaint. But then it is a matter of discretion and the Magistrate is not bound to call upon the complainant to remain present before the Court and to examine him upon oath for taking decision whether 40
or not to issue process on the complaint under Section 138 of NI Act.
CASE LAW
36. Having thus examined the matter on first principles, we proceed to refer to and rely upon the decision in M/s. Mandvi Co-op Bank Ltd. Vs. Nimesh B Thakore, 2010 ALL MR CRI 599 = (2010) 3 SCC 83 decided on 11th January 2010. The Apex Court considered the provisions of Section 145 of NI Act in a slightly different context but held in unmistakable terms as under:-
"16. It may be noted that the
provisions of sections 143, 144, 145 and 147 expressly depart from and override the
provisions of the Code of Criminal Procedure, the main body of adjective law for criminal trials. The provisions of section 146 similarly depart from the principles of the Indian Evidence Act. Section 143 makes it possible for the complaints under section 138 of the Act to be tried in the summary manner, except, of course, for the relatively small number of cases where the Magistrate feels that the nature of the case is such that a sentence of imprisonment for a term
exceeding one year may have to be passed or that it is, for any other reason,
41
undesirable to try the case summarily. It is, however, significant that the procedure of summary trials is adopted under section 143 subject to the qualification "as far as
possible", thus, leaving sufficient flexibility so as not to affect the quick flow of the trial process. ......."
"17. It is not difficult to see that
sections 142 to 147 lay down a kind of a special code for the trial of offences under Chapter XVII of the Negotiable Instruments Act and sections 143 to 147 were inserted in the Act by the Negotiable Instruments
(Amendment and Miscellaneous Provisions) Act, 2002 to do away with all the stages and processes in a regular criminal trial that normally cause inordinate delay in its
conclusion and to make the trial procedure as expeditious as possible without in any way compromising on the right of the
accused for a fair trial."
(emphasis supplied)
37. The Apex Court also referred in paragraph 18 of the said judgment to 213th Report of the Law Commission submitted to the Union Minister for Law and Justice on November 24, 2008 and noted the alarming 42
number of complaints under Section 138 of the NI Act in various Courts including in the subordinate Courts in the State of Maharashtra (5,91,818 complaints as on 1st June, 2008).
38. The Apex Court further made the following pertinent observations in paragraph 32 of the said judgment :-
"...... the High Court was in error in
drawing an analogy between the evidences of the complainant and the accused in a case of dishonoured cheque. The case of the
complainant in a complaint under section 138 of the Act would be based largely on documentary evidence. The accused, on the other hand, in a large number of cases, may not lead any evidence at all and let the prosecution stand or fall on its own
evidence. In case the defence does lead any evidence, the nature of its evidence may not be necessarily documentary; in all likelihood the defence would lead other
kinds of evidences to rebut the presumption that the issuance of the cheque was not in the discharge of any debt or liability. This is the basic difference between the nature of the complainant's evidence and the evidence 43
of the accused in a case of dishonoured
cheque. ......"
(emphasis supplied)
39. The contention of the learned counsel for the accused that the Amending Act of 2002 only intended to expedite the stage of trial after issuance of process, without expediting the stage prior to issuance of process also, cannot be accepted. The very fact that when Parliament provided for time limit of six months for concluding the trial, it did not provide that the six months period would begin from the date of issuance of process. Parliament has specifically provided that endeavor shall be made to conclude the trial within six months from the filing of the complaint. Thus, having regard to the language of all the provisions added by the Amending Act of 2002 and the reasons in the Statement of Objects and Reasons, it is clear that Parliament had noted that Courts were unable to dispose of cases under Section 138 of NI Act expeditiously and in a time bound manner on account of the cumbersome procedure prescribed under Cr.PC for the Courts to deal with such matters. It is thus clear that Parliament added Sections 143 to 147 for making the procedure simpler and gave these provisions over-riding effect over Cr.PC by enacting the the non-obstante clause. The view that appeals to us makes the procedure simpler and the view which is being canvassed on behalf of the accused would mean that 44
the cumbersome procedure would still remain cumbersome."
In K. Srinivasa vs. Kashinath ILR 2005 KAR 2890, this
Court was dealing with the question whether the Court of the
Metropolitan Magistrate could issue process against the accused
without recording the sworn statement of the complainant, in
respect of an offence alleged under Section 138 of the NI Act.
The question has been answered thus :
"6. Section - 200 of the Code of Criminal Procedure provides the procedure for dealing with the private complaint, according to which, the jurisdictional Magistrate taking cognizance of an offence on complaint shall examine upon oath the complainant and the witnesses present, if any, and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate. The proviso to this section provides certain exceptions.
7. By insertion of new Section - 145 of the Act, the statute prescribes the procedure of having the evidence of complainant in the form of affidavit, notwithstanding anything contained in the Code of Criminal Procedure 1973. The said Section - 145 is an exception to general 45
procedure prescribed in the Code of Criminal Procedure for recording the evidence and it has got overriding effect. It is settled principle of interpretation of statutes that whenever any Act is enacted, it should be construed in such a way so as to give effect to the object of the "Act" for which the enactment was introduced. Otherwise, the very purpose of introduction such legislation would be rendered useless. In the background of this principle, if Section - 145 of the "Act" is read along with the Statement of objects and reasons, it is clear that the procedure is prescribed for dispensing with recording of preliminary evidence (sworn statement) of the complainant which saves the cost as well as the valuable time of the Court. Such procedure, will not in any way affect or prejudice the right of accused as it is always open for him to file an application U/S. 145(2) to summon and examine any person giving evidence on affidavit as to the facts contained therein and rebut the averments made in the affidavit filed by the complainant and his witnesses. The word "evidence" is a broader term than the word "sworn statement. Thus it is evident that even at the stage of issuing process on the basis of the complaint filed U/S. 200 of Cr.P.C., the Court can accept the affidavit of the complainant instead of recording his sworn statement, in view of introduction of Section - 145 of the act and can proceed further, if the affidavit filed by the complainant makes out prima facie case against the accused. Even when the sworn statements of the complainant and his witnesses are recorded U/S. 200 of 46
Cr.P.C.; the said statements are not tested by the cross- examination at that stage of the proceedings. The Court has to mainly rely upon the un-cross-examined or untested sworn statement, which is generally one sided, at the time of issuing process. In view of the same, no prejudice or injustice will be caused to the accused, if the process is issued against the accused on the basis of the affidavit filed by the complainant and his witnesses without recording the sworn statements. The affidavits, though, are not included in Section -3 of Evidence Act, the same can be used as evidence, if the law specifically permits certain matters to be proved by affidavit. If the accused wants to test the correctness of material found in such affidavits, he has always an opportunity to do so by filing the application U/S. 145(2) of the "Act" for summoning the complainant or witness for cross-examination. Thus, it is clear that Section 145 of the Act is introduced with a view to dispense with recording of sworn statement of the complainant and his witnesses before issuing process.
8. The wordings found in Section - 145 of the Act are more of less similar to Section-296 of the Code of Criminal Procedure, which reads thus:
"296. Evidence of formal character on
affidavit -(1) The evidence of any person whose evidence is of a formal character may be given by affidavit and may, subject to all 47
just exceptions, be read in evidence in any inquiry, trial or other proceeding under this Code.
(2) The Court may, if it thinks fit, and shall, on the application of the prosecution or the accused, summon and examine any such
person as to the facts contained in his
affidavit."
9. As could be seen from Section-296 of Cr.P.C., if the evidence is of a formal character, the same can be obtained by way of affidavit. The Apex Court, in case of STATE OF PUNJAB -vs- NAIBUDDIN while discussing the scope and ambit of Section-296 of Cr.P.C. observed thus:
"The normal mode of giving evidence is by examining the witness in Court. But that course involves, quite often, spending of time of the witness, the trouble to reach the Court and wait till he is called by the Court, besides all the strain in answering questions and cross-questions in open Court. It also involves costs, which on many occasions are not small. The enabling provision of Section-296 is thus a departure from the usual mode of giving evidence. The object of providing such an exception is to help the Court to gain the time and cost, besides 48
relieving the witness of his troubles, when all that the said witness has to say in Court relates only to some formal points."
The offence under Section 138 of the Act is a technical offence. Thus in cases falling U/S. 138 of the Act, generally, few technical conditions have to be proved by the Complainant as contemplated U/S. 138 of the Act. The nature of sworn statement to be given by the complainant shall be only in conformity with Section 138 and not any other aspect. He has to narrate the steps taken by him in pursuance to dishonour of cheque. As such, in view of the aforesaid dictum laid down by the Apex Court and also for the purpose of achieving the object of Legislature of speedy disposal of the cases falling under Section 138 of the Act by dispensing with the recording of preliminary evidence, Section-145 of the Act is introduced.
10. The expression "affidavit" has been commonly understood to mean a sworn statement in writing made especially under oath or on affirmation before the authorized Magistrate or officer. The affidavit has been defined in sub-section-(iii) of Section-3 of General Clauses Act 1897 to include "affirmation and declaration in the case of person by law allowed to affirm or declare instead of swearing". The essential ingredients of an affidavit are that the statements or declarations are made by the deponent relevant to the subject matter and in order to add 49
sanctity to it, he swears or affirms the truth of the statements made in the presence of a person who in law is authorized either to administer oath or to accept the affirmation. There is a responsibility on the declarant for making precise and accurate statements in affidavit. The part or the role assigned to the person entitled to administer oath is no less sacrosanct. Section-3 of the Oaths Act, 1969 specifies persons on whom the power to administer oath or record affirmation is conferred. The affidavit requires a solemn affirmation or oath before the person authorized to administer the same and then at the foot of affidavit, the signature of the deponent must appear and below that the officer entitled to administer oath must put his signature in token of both, that he administered the oath and that deponent has signed in his presence. Thus it is clear that necessary safeguards are to be taken at the time of swearing to the affidavit. In view of the same, the Legislature must have thought it fit to dispense with recording of the sworn statement of the complainant by accepting the affidavit. If at all, any party wishes to examine the deponent of such affidavit, it is always open for him to do so by making application before the competent Court as enumerated in Section-145 (2) of the "Act".
12. In view of the discussion made above, this Court is of the considered view that the non-obstante clause in Section-145 of the "Act" dispenses the procedure contemplated in Section-200 of the Code of Criminal 50
Procedure in respect of examination of the complainant and his witnesses on oath. Consequently, recording of sworn statement by the Magistrate in the criminal cases falling U/S. 138 of the Negotiable Instruments Act may be dispensed with by accepting the affidavit of the complaint and his witnesses.
In view of the above, I do not find merit in the present revision petition and the same is liable to be rejected. Hence, the following order is made. The criminal revision petition is dismissed."
There is a later decision of another single judge of this court
in the case of B.R Premakumari v. Supraja Credit Co-op Society
Ltd. (ILR 2009 Kar 3477) taking a different view. But there is no
reference therein to the earlier decision in K. Srinivas, supra.
Incidentally, the divergent opinions have been referred to be
placed before a larger bench.
It is to be next noticed that in terms of Section 145 of the
NI Act, the provisions of Sections 262 to 265 of the Cr.P.C shall,
as far as may be, apply to a trial in respect of an offence
punishable under Section 138 of the NI Act. It is further provided 51
that the Magistrate may pass a sentence of imprisonment not
exceeding one year and impose an amount of fine exceeding five
thousand rupees. This is in variance with what is provided under
Section 262 (2) of the Cr.P.C.
"262. Procedure for summary trials: (1) xxxx (2) No sentence of imprisonment for a term exceeding three months shall be passed in the case of any conviction under this Chapter."
It is further provided under the second Proviso to Section 145 of
the NI Act, the Magistrate forms an opinion, either at the
commencement of the trial, or in the course of it, that the nature of
the case is such that may attract a punishment of imprisonment
exceeding one year, or for any other reason that it is not desirable
to try the case summarily, he is conferred the discretion to record
an order to that effect and proceed to recall any witness who has
been examined and to hear or rehear the case in accordance with
the Cr.P.C.
52
Under the provisions of the Cr.P.C, a summary trial is an
abridged form of a regular trial. Having due regard to the risks
involved in the said procedure, it was considered by the legislature
that only senior and experienced judicial officers be empowered to
try certain cases summarily. (A Chief Judicial Magistrate, or a
Metropolitan Magistrate, any Magistrate of the first class specially
empowered in this behalf by the High Court etc. - See Section
260 (1) CrPC.)
The procedure for a summary trial is the same as for a
summons case, subject to the provisions of Sections 262 to 265
CrPC.
When in a summons case the accused appears or is brought
before the magistrate, the particulars of the offence of which he is
accused shall be stated to him, and he shall be asked whether he
pleads guilty, or has any defence to make, but it shall not be
necessary to frame a formal charge [Section 251]. 53
The section only dispenses with a formal charge in a
summons case, but it does not dispense with the statement of the
particulars of the offence for which the accused is to be dealt with.
The purpose of questioning the accused under the section is to
apprise him of the charge against him. The accused should have a
clear statement made to him: (1) that he is about to be put on the
trial, and (2) as to the offence or facts constituting the offence
with the commission of which he is accused. The record must
show the particulars which were explained or stated to the accused
by the magistrate.
Further, in a case instituted upon a complaint in writing,
every summons issued would be accompanied by a copy of such
complaint. Therefore, when the accused enters appearance in
answer to such summons, he would have a fair idea of the
allegations made against him on the basis of which the summons
was issued.
54
Section 205 enables a magistrate issuing a summons for an
accused to dispense with his personal attendance and to permit
him to appear by his pleader. This power is most likely to be used
in summons cases. In cases where the personal attendance of the
accused is dispensed with, his pleader can, in his stead, plead to
the "charge", or make an answer to the statement of allegations.
When once there is a denial of the offence under Section
251, the magistrate is required to proceed to hear the prosecution
and to take the prosecution evidence under Section 254.
In a trial of a summons case it is not necessary to frame a
formal charge according to the provisions of Sections 211-213;
however, the provisions relating to joinder of charges and joint
trial of persons are applicable in respect of trials of summons
cases.
If the accused pleads guilty, the magistrate shall record the
plea as nearly as possible in the words used by the accused and
may, in his discretion convict him thereon (Section 252). It is 55
important that the terms of the section are strictly complied with
because the right of appeal of the accused depends upon the
circumstance whether he pleaded guilty or not and it is for this
reason that the legislature requires that the exact words used by
the accused in his plea of guilty should be as nearly as possible be
recorded in his own language in order to prevent any mistake or
misapprehension. If there are a number of accused persons, the
plea of each of the accused should be separately recorded and, in
his own words after the accusation was read over to each one of
them.
If the magistrate does not convict the accused under the
above Section 252 or Section 253, the magistrate shall proceed to
hear the prosecution and take all such evidences as may be
produced in support of the prosecution [Section 254(1)].
The magistrate may, if he thinks fit, on the application of
the prosecution, issue a summons to any witness directing him to
attend or produce any document or thing [Section 254(2)]. 56
In all summons cases tried before a magistrate, the
magistrate shall, as the examination of each witness proceeds,
make a memorandum of the substance of his evidence in the
language of the court.
Section 314 enables the prosecutor to submit his arguments
after the conclusions of the prosecution evidence and before any
other further step is taken in the proceedings.
In every trial, for the purpose of enabling the accused
personally to explain any circumstances appearing in evidence
against him, the court is required, after the witnesses for the
prosecution have been examined and before he is called on for his
defence, to question him generally on the case. However in a
summons case where the court has dispensed with the personal
attendance of the accused, the court has got the discretion to
dispense with the above-mentioned examination of the accused.
[Section 313(1)(b)]
57
After the personal examination of the accused, if any, under
Section 313(1)(b), the magistrate shall "hear" the accused and
take all such evidence as he produces in his defence [Section
254(1)].
The magistrate may, if he thinks fit, on the application of
the accused, issue a summon to any witness directing him to
attend or produce any document or other thing. [Section 254(2)].
When Section 254(1) requires that the magistrate shall hear
the accused, it certainly means that he should ask the accused
what he has to say in his defence against the incriminating
evidence which is brought on record against him and the accused
should be heard on every circumstance appearing in evidence
against him. The accused must be examined under this section
whether he offers to produce the defence or not after the entire
prosecution evidence was adduced. Failure to hear the accused
amounts to a fundamental error in a criminal trial and it is an error
that cannot be cured by Section 465. However, if the prosecution 58
itself is unreliable, and cannot warrant itself conviction of the
accused, the mere ritual of asking the accused formally whether
he wants to be heard and produce his defence evidence need not
be observed. Because that would not serve any useful purpose.
The same provisions as are applicable in respect of record
of evidence for the prosecution are equally applicable to the
record of defence evidence.
After the closure of the defence evidence, the defence may
submit its arguments. This has been provided by Section 314.
If the magistrate, upon taking the evidence for the
prosecution and for the defence, and such further evidence, if any,
as he may on his own motion, cause to be produced, finds the
accused not guilty, he shall record an order of acquittal. [Section
255(1)].
In so far as the manner in which a trial for an offence under
Section 138 of the NI Act is to be conducted is addressed in some 59
detail by the Delhi High Court in Rajesh Agarwal's case supra, as
hereunder:
"In case the accused appears before the court of the Metropolitan Magistrate, the Court should ask him as to what was his plea of defence. Normally the first date is wasted by the courts of the Metropolitan Magistrate just by taking bail bond of the accused and passing a bail order, while Sections 251 & 263(g) of Code of Criminal Procedure provide that when the accused appears before the Metropolitan Magistrate in a summary trial proceedings, the particulars of the offence, to which he is accused, shall be stated to him and he should be asked whether he pleads guilty or he has any defence to make. This is the mandate of section 143 of Negotiable Instruments Act, 1881, which provides summary trial of offence in terms of the Code of Criminal Procedure. Under Section 263(g) of the Code of Criminal Procedure, the court has to record the plea of the accused and his examination. It is thus obvious that in a trial of an offence under Section 138 Negotiable Instruments Act, 1881, the accused cannot simplicitor say "I plead not guilty" and wants to face trial. Since the offence under section 138 of the Negotiable Instruments Act, 1881, is a document based technical offence, deemed to have been committed because of dishonour of cheque issued by the accused or his company or his firm, the accused must disclose to the Court as to what is his defence 60
on the very first hearing when the accused appears before the Court. If the accused does not appear before the Court of the Metropolitan Magistrate on summoning and rather approaches High Court, the High Court has to refuse to entertain him and ask him to appear before the Court of the Metropolitan Magistrate as the High Court cannot usurp the powers of the Metropolitan Magistrate and entertain a plea of the accused why he should not be tried under Section
138. This plea as to why he should not be tried under Section 138 is to be raised by the accused before the Court of the Metropolitan Magistrate under section 251 and under section 263 (g) of the Code of Criminal Procedure. Along with his plea he can file necessary documents and also make an application, if he is so advised, under Section 145(2) of Negotiable Instruments Act, 1881 to recall the complainant to cross-examine him on his plea of defence. However, only after disclosing his plea of defence he can make an application that the case should not be tried summarily but as a summon trial case. This application must disclose the defence of the accused and the reasons why he wants the case to be tried as a summon trial. xxx
11. The trial under Section 138 of the Negotiable Instruments Act, 1881, cannot be carried out like any other summons trial under IPC offences. The documents placed on record of the Court about the dishonour of cheque are the documents from banks and unless the accused says that 61
these documents are forged, or he had not issued the cheque at all, he did not have any account in the bank, the cheque was not signed by him, the cheque book was forged by the complainant or other similar claim, the evidence of the complainant about dishonour of cheque cannot be questioned, nor the complainant can be asked to depose before the court again. If the case under Section 138 of the Negotiable Instruments Act, 1881, which is document based, is not tried in a summary manner, the sole purpose of making this offence in summary trial stands defeated. Thus in all cases under section 138 of the Negotiable Instruments Act, 1881, once evidence is given by way of affidavit, at the stage of pre-summoning, the same evidence is to be read by the court at post summoning stage and the witness need not be recalled at post summoning stage unless the court of the Metropolitan Magistrate for reasons, considers it necessary.
12. In Harish Chandra Biyani Vs. Stock Holding Corporation of India Ltd., (2007) 1 BC 417, the Bombay High Court had occasion to deal with the issue and observed as under:
"5. In view of the amended
provisions of Section 145 of the Negotiable Instruments Act, 1881, the complainant is entitled to lead evidence by way of an
affidavit. The Division Bench of this Court 62
in the case of KSL and Industries Ltd. v. Mannalal Khandelwal reported in MANU/MH/0022/2005, has held that the
evidence of the complainant in respect of his examination-in-chief can be taken on affidavit. If evidence of the complainant is taken on affidavit, it would not be necessary to again record examination-in-chief of the complainant whose affidavit of examination- in-chief is already filed. The Division Bench was specifically considering the issue, i.e. whether, in spite of mandate of Section
145(1) of the Act, the Court is obliged to examine the complainant even in respect of matters which have been stated in affidavit. The said issue has been decided in
paragraphs 38 and 39 which read as under:
'38. Sub-section (1) of Section 145
gives complete freedom to the complainant either to give his evidence by way of
affidavit or by way of oral evidence. If this is made on affidavit, the same has to be accepted and such affidavit is required to be kept on record by the Court. The second part of Sub-section (1) provides that the complainant may give his evidence on
affidavit and may, subject to all just
63
exceptions, be read in evidence in any
enquiry, trial or other proceeding. Thus, it is clear that once the evidence of the
complainant is given on affidavit, it may be read in evidence in any enquiry, trial or other proceeding, and it may be subject to all just exceptions.
39. We are clearly of the opinion
that according to the language of Section 145 of the Act, the evidence (examination- in-chief) of the complainant can be given on affidavit, and thereafter, if the accused so desires, he/she may request the Court to call the complainant for cross-examination'...
7. The learned Counsel for the
applicant has submitted that Section 145(2) of Negotiable Instruments Act consists of two parts. As per Section 145(2) the Court shall on the application of the prosecution or the accused summon and examine the
person giving evidence on affidavit as to the facts stated therein. It is submitted that this provision leaves no discretion to the trial Court and in the event that an application is made, the Court has to summon and
examine any person giving evidence on
64
affidavit as to the facts contained therein. Mr. Thakore the learned Counsel for the
applicant has further submitted that this Sub- section (2) of Section 145 was not taken into consideration by the Division Bench and the Division Bench only considered the provisions of Section 145(1). I do not find this submission to be correct. As observed earlier, this provision has been taken into consideration by the Division Bench of this Court in the case of KSL and Industries
(supra). Thus, I find no merit in this
submission. In fact paras 38 and 39 of the said decision, referred to above, make it amply clear that the Division Bench took into consideration the provisions of Sub- section (2) of Section 145 of Negotiable Instruments Act and has thereafter held that the evidence (examination in chief) of the complainant can be given on affidavit and thereafter if the accused so desires, he/she may request the Court to call the complainant for cross-examination."
The court has then concluded thus, in so far as the
procedure to be followed:
65
"17. The summary trial procedure to be followed for offences under section 138 of the Negotiable Instruments Act, 1881 would thus be as under:
"Step I: On the day complaint is
presented, if the complaint is accompanied by an affidavit of the complainant, the concerned Metropolitan Magistrate shall
scrutinize the complaint and documents and if commission of offence is made out, take cognizance and direct issuance of summons of accused, against whom case is made out. Step II: If the accused appears, the
Metropolitan Magistrate shall ask him to furnish bail bond to ensure his appearance during trial and ask him to take notice under section 251 of the Code of Criminal
Procedure, and enter his plea of defence and fix the case for defence evidence, unless an application is made by an accused under
section 145(2) of the Negotiable Instruments Act, 1881 for recalling a witness for cross examination on plea of defence.
Step III : If there is an application
under section 145(2) of the Negotiable
Instruments Act, 1881 for recalling a witness of the complainant, the court shall decide the same, otherwise, it shall proceed to take defence evidence on record and allow cross- 66
examination of defence witnesses by the
complainant.
Step IV: To hear arguments of both
sides.
Step V: To pass order/judgment."
6. While keeping in view the opinions expressed in the
decided cases and the provisions of law which are referred to and
the discussion hereinabove, it may be seen that Section 4 and
Section 5 of the Cr.P.C. would clearly require the special
procedure prescribed under the amended provisions of the NI Act
to take precedence over the procedure prescribed under the
Cr.P.C. It is only where the provisions of Chapter XVII are silent
as regards the course of action in respect of any particular
circumstance that the provisions of the Cr.P.C. would become
applicable in the Court exercising its powers in the conduct of the
trial.
In a restatement of the law and the procedure that would
have to be followed in respect of a complaint of an offence 67
punishable under Section 138 of the NI Act, the procedure that
shall be adopted would require the competent courts to keep in
view the several ingredients that require to be present in the
complaint and the necessary documents that require to accompany
the complaint, which are enumerated hereunder :
a)The dishonoured cheque leaf.
b)The concerned bank's endorsement to the effect that the cheque
has been dishonoured.
c)A copy of the notice for demand of payment ,in writing ,issued to
the drawer of the cheque , on account of the dishonour by the bank.
d)Acknowledgement of service of notice or reply, if any.
e)An affidavit of the complainant, stating and affirming the
correctness and veracity of the documents produced.
In addition to the above, the following conditions are also to
be satisfied.
a)That the cheque has been presented within a period of 6 months
from the date on which the cheque was drawn. 68
b)That the payee or the holder in due course of the cheque, has
issued the above referred notice of demand within 30 days , of the
receipt of information, of dishonour by the bank.
c) And that the drawer of the cheque has failed to make payment
after such demand, within 15 days of receipt of the above said
notice of demand.
d) That the complaint has been made within one month of the date
on which the cause of action has arisen, namely, that the drawer
has failed to meet the demand for payment , after receipt of notice
in that regard.
Therefore, the very registration of a complaint can be
avoided if the above requirements are not met. A suitable
"checklist" can be provided to the registry of each court to mark
the objections to the very registration of the case, and place the
same before the court, in the event that the complainant should fail
to comply with the above, and that the complainant is not inclined
to satisfy the requirements of lodging the very complaint. 69
On the matter being placed before the court, if the
complainant is not able to satisfy the court as to the reason for such
non-compliance, the court shall not take cognizance of the
complaint.
In the absence of any indication as to the manner in which
the competent court should deal with a complaint under Section
138 of the NI Act, involving a drawer of a cheque residing outside
its jurisdiction, it would seem that the Court must ordinarily come
to a conclusion as to whether there is sufficient ground to proceed
against him only after conducting an enquiry under Section 202 of
the Cr.P.C. This is evident from a plain reading of the amended
Section 202 of the Code. But then again having regard to the object
and intent of the provisions of the NI Act, it may not be necessary
for the Magistrate to proceed to hold an enquiry under Section 202
of the Cr.P.C., as the requisite satisfaction can be assured at the
initial stage under Section 200 itself. However, if there is a
possibility of dispute regarding the territorial jurisdiction or with
reference to compliance with the requirements under Section 141 70
of the NI Act, it would be advisable for the Magistrate to hold an
enquiry under Section 202 Cr.P.C. But even at such an enquiry it
may not be necessary to require the complainant to make a sworn
statement or his witnesses to be examined. It would suffice if the
Court should direct the complainant to clarify any doubts or verify
any other aspect by filing a proper affidavit or additional affidavit.
Therefore, this bench fully endorses the view of the Kerala
High Court that where the requisite satisfaction under Section 204
Cr.P.C. can be obtained on the basis of materials available on
record, the non-compliance with Section 202 Cr.P.C. does not ipso
facto vitiate the cognizance taken or the process issued. The view
of the Kerala High Court is to the following effect: "Section 202
does not contemplate or mandate a ritualistic enquiry merely to
satisfy the letter of the procedural/ adjectival law, even after the
requisite satisfaction under Section 203/204 Cr.P.C. is
convincingly entertained by the Court. In this sense the
requirement introduced by amendment (to Section 202 Cr.P.C.) is 71
only directory and not mandatory, though all courts are certainly
expected to follow the stipulation."
Under Section 144 of the NI Act service of summons on the
accused can be effected through Speed Post or Courier service. If
the accused refuses to receive the summons, he is deemed to have
been served. The court in its discretion can resort to coercive
measures in appropriate cases, to secure the presence of the
accused. The assistance of the police in respect of complaints
under Section 138 NI Act, is best avoided unless it is felt necessary
by the trial court. Chapter VI of the Cr.P.C., under Sections 62, 63
and 64 provides how summons are to be served by the Police.
Affixture is one of the modes prescribed. In the opinion of this
Court, in this age and time this is not a honourable manner of
service in so far as complaints under the NI Act are concerned. In
addition to service of summons by way of speed post and courier
service, issuance of summons by way of certificate of posting may
be a better alternative.
72
Though Section 143 it begins with a non-obstante clause
carving out an exception to the provisions of the Criminal
Procedure Code, sub-section (1) thereof clearly provides that the
provisions of sections 262 and 265 of the Code, as far as may be,
applied to trials for an offence under Section 138 of the Act. It
empowers the Magistrate to pass a sentence of imprisonment for a
term not exceeding one year and an amount of fine exceeding five
thousand rupees. It also provides that if it appears to the
Magistrate that the nature of the case is such that a sentence of
imprisonment for a term exceeded one year may have to be
passed, he can do so after hearing the parties and recalling any
witness who may have been examined. Under this provision so
far as practicable, the Magistrate is expected to conduct the trial
on a day-to-day basis until its conclusion and conclude the trial
within six months from the date of filing of the complaint.
In every case tried summarily, in which the accused does
not plead guilty, the Magistrate shall record the substance of the 73
evidence and a judgment containing a brief statement of the
reasons for the finding. A successor Magistrate can act on the
evidence recorded by his predecessor, either in whole or in part.
There is no need to conduct a retrial or a de novo trial, where the
case was conducted as a summons case. Therefore, if the
Magistrate, records the evidence, as is done in a regular summons
case the succeeding Magistrate can act on the evidence so
recorded by his predecessor, or partly recorded by his predecessor
and partly recorded by himself.
If a case under section 138 of the NI Act is in fact, tried as
regular summons case it would not come within the purview of
section 326(3) of Cr.P.C. In other words, if the case in substance
was not tried in a summary way, though was triable summarily,
and was tried as a regular summons case, it need not be heard de
novo and the succeeding Magistrate can follow the procedure
contemplated under section 326(1) of the Code. However, where
a case is tried in a summary way by following the procedure 74
contemplated by the provisions of Chapter XXI of the Code and
in particular sections 263 and 264, then it would be excluded from
the purview of section 326(1) of the Code.
Section 143 has a mandatory effect though the provision
opens with a non obstante clause. This means that provisions of
section 259 of Cr.P.C. regarding a warrant trial shall have no
application in respect of an offence under Section 138 of the NI
Act. There is no room for doubt that for the purposes of trial of an
offence falling under the Act, the provisions of a summary trial
under the Code would be applicable and a summary trial cannot
be converted into a trial for a warrant case. The evidence adduced
by the parties could be by way of affidavits under section 145 of
the Act. And on the application of the prosecution or the accused
the Court may summon or examine any person giving evidence as
to the facts contained thereunder.
75
When at the commencement of, or in the course of, a
summary trial, it appears to the Magistrate that the nature of the
case is such that a sentence of imprisonment for a term exceeding
one year may have to be passed or that it is, for any other reason,
undesirable to try the case summarily, the Magistrate shall after
hearing the parties, record an order to that effect and thereafter
recall any witness who may have been examined and proceed to
hear or rehear the case in the manner provided by the Code of
Criminal Procedure.
An option is left with the Magistrate to try the case in the
manner provided under Sections 262 to 265 of the Code of
Criminal Procedure or otherwise as a regular trial. The
phraseology used in the section 'as far as may be' denotes that
there is an option available to the Magistrate. There may be
circumstances wherein after recording the evidence, the
Magistrate may gather an impression that the case calls for a 76
higher punishment and in such a circumstance, the Magistrate can
elect to try the case as a summons case.
It is found that in many cases the trial courts, while
convicting the accused not only impose punishment by way of
imprisonment but also direct payment of fine extending to twice
the amount of the cheque, in order to compensate the complainant
from out of the fine amount. In the opinion of this court
imprisonment should be imposed only in appropriate cases of
habitual or repeat offenders or in such other cases which in the
opinion of the trial court deserves such a stringent measure,
fairness would require that imposition of fine, which may extend to
twice the amount of the cheque, is itself adequate punishment and
imprisonment should generally be directed only on default of
payment of the fine amount.
7. Coming to the case on hand, the presence of the petitioner
having been secured, the petitioner seeking to question the 77
procedure adopted is now redundant. In so far as the procedure to
be followed in the trial that shall ensue is dealt with hereinabove.
The defences that are available to the accused petitioner are not
taken away - hence there is no further prejudice caused to the
petitioner, accordingly the petition is dismissed.
Sd/-
JUDGE
S.S. / KS

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