Many of the directions given by the various High
Courts, in our view, are worthy of emulation by the
Criminal Courts all over the country dealing with cases
under Section 138 of the Negotiable Instruments Act, for
which the following directions are being given :-
DIRECTIONS:
(1) Metropolitan Magistrate/Judicial Magistrate
(MM/JM), on the day when the complaint under
Section 138 of the Act is presented, shall
scrutinize the complaint and, if the complaint is
accompanied by the affidavit, and the affidavit
and the documents, if any, are found to be in
order, take cognizance and direct issuance of
summons.
(2) MM/JM should adopt a pragmatic and realistic
approach while issuing summons. Summons must
be properly addressed and sent by post as well as
by e-mail address got from the complainant.
Court, in appropriate cases, may take the
assistance of the police or the nearby Court to
serve notice to the accused. For notice of
appearance, a short date be fixed. If the
summons is received back un-served, immediate
follow up action be taken.
(3) Court may indicate in the summon that if the
accused makes an application for compounding of
offences at the first hearing of the case and, if
such an application is made, Court may pass
appropriate orders at the earliest.
(4) Court should direct the accused, when he
appears to furnish a bail bond, to ensure his
appearance during trial and ask him to take notice
under Section 251Cr.P.C. to enable him to enter
his plea of defence and fix the case for defence
evidence, unless an application is made by the
accused under Section 145(2) for re-calling a
witness for cross-examination.
(5) The Court concerned must ensure that
examination-in-chief, cross-examination and reexamination
of the complainant must be
conducted within three months of assigning the
case. The Court has option of accepting affidavits
of the witnesses, instead of examining them in
Court. Witnesses to the complaint and accused
must be available for cross-examination as and
when there is direction to this effect by the Court.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) NO.18 OF 2013
Indian Bank Association and others … Petitioners
Versus
Union of India and others … Respondents
K.S. Radhakrishnan, J.
Dated;April 21, 2014.
1. This Writ Petition, under Article 32 of the Constitution
of India, has been preferred by the Indian Banks’
Association (IBA) along with Punjab National Bank and
another, seeking the following reliefs :-
a. Laying down appropriate guidelines/directions to be
followed by all Courts within the territory of India
competent to try a complaint under Section 138 of
the Negotiable Instruments Act, 1881 (the Act) to
follow and comply with the mandate of Section 143 of
the said Act read with Sections 261 to 265 of Criminal
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Procedure Code, 1973 (Cr.P.C.) for summary trial of
such complaints filed or pending before the said
Courts.
b. Issue a writ of mandamus for compliance with the
guidelines of this Hon’ble Court indicating various
steps to be followed for summary trial of complaints
under Section 138 of the said Act and report to this
Hon’ble Court.
c. Issue a writ of mandamus, directing the respondents,
to adopt necessary policy and legislative changes to
deal with cases relating to dishonor of cheqeus so
that the same are expeditiously disposed off in
accordance with the intent of the Act and the
guidelines to be laid down by this Hon’ble Court.
2. The first petitioner, which is an Association of Persons
with 174 banks/financial institutions as its members, is a
voluntary association of banks and functions as think tank
for banks in the matters of concern for the whole banking
industry. The Petitioners submit that the issue raised in
this case is of considerable national importance owing to
the reason that in the era of globalization and rapid
technological developments, financial trust and
commercial interest have to be restored.
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3. The Petitioners submit that the banking industry has
been put to a considerable disadvantage due to the delay
in disposing of the cases relating to Negotiable
Instruments Act. The Petitioner banks being custodian of
public funds find it difficult to expeditiously recover huge
amount of public fund which are blocked in cases pending
under Section 138 of the Negotiable Instruments Act,
1881. Petitioners submit that, in spite of the fact, Chapter
XIV has been introduced in the Negotiable Instruments Act
by Section 4 of the Banking, Public Financial Institutions
and Negotiable Instruments Laws (Amendment) Act, 1988,
to enhance the acceptability of cheques in settlement of
liability by making the drawer liable for penalties in case of
bouncing of cheques due to insufficiency of funds, the
desired object of the Amendment Act has not achieved.
4. Legislature has noticed that the introduction of
Sections 138 to 142 of the Act has not achieved desired
result for dealing with dishonoured cheques, hence, it
inserted new Sections 143 to 147 in the Negotiable
Instruments Act vide Negotiable Instruments (Amendment
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and Miscellaneous Provisions) Act, 2002 for speedy
disposal of cases relating to dishonour of cheques through
summary trial as well as making the offence
compoundable. But, no uniform practice is seen followed
by the various Magistrate Courts in the country, as a result
of which, the object and purpose for which the
amendments were incorporated, have not been achieved.
5. Cheque, though acknowledged as a bill of exchange
under the Negotiable Instruments Act and readily accepted
in lieu of payment of money and is negotiable, the fact
remains that the cheque as a negotiable instrument
started losing its credibility by not being honoured on
presentation. Chapter XVII was introduced, as already
indicated, so as to enhance the acceptability of cheques in
settlement of liabilities. The Statement of Objects and
Reasons appended with the Bill explaining the provisions
of the new Chapter reads as follows :-
“This clause [Clause (4) of the Bill] inserts a new
Chapter XVII in the Negotiable Instruments Act,
1881. The provisions contained in the new
Chapter provide that where any cheque drawn
by a person for the discharge of any liability is
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returned by the bank unpaid for the reason of
the insufficiency of the amount of money
standing to the credit of the account on which
the cheque was drawn or for the reason that it
exceeds the arrangements made by the drawer
of the cheque with the bankers for that account,
the drawer of such cheque shall be deemed to
have committed an offence. In that case, the
drawer, without prejudice to the other
provisions of the said Act, shall be punishable
with imprisonment for a term which may extend
to one year, or with fine which may extend to
twice the amount of the cheque, or with both.
The provisions have also been made that
to constitute the said offence:
(a) such cheque should have been presented to
the bank within a period of six months of the
date of its drawal or within the period of its
validity, whichever is earlier; and
(b) the payee or holder in due course of such
cheque should have made a demand for the
payment of the said amount of money by giving
a notice, in writing, to the drawer of the cheque
within fifteen days of the receipt of the
information by him from the bank regarding the
return of the cheque unpaid; and
(c) the drawer of such cheque should have
failed to make the payment of the said amount
of money to the payee or the holder in due
course of the cheque within fifteen days of the
receipt of the said notice.
It has also been provided that it shall be
presumed, unless the contrary is proved, that
the holder of such cheque received the cheque
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in the discharge of a liability. Defences which
may or may not be allowed in any prosecution
for such offence have also been provided to
make the provisions effective. Usual provision
relating to offences by companies has also been
included in the said new Chapter. In order to
ensure that genuine and honest bank customers
are not harassed or put to inconvenience,
sufficient safeguards have also been provided in
the proposed new Chapter. Such safeguards
are:
(a) that no court shall take cognizance of such
offence except on a complaint, in writing, made
by the payee or the holder in due course of the
cheque;
(b) that such complaint is made within one
month of the date on which the cause of action
arises; and
(c) that no court inferior to that of a
Metropolitan Magistrate or a Judicial Magistrate
or a Judicial Magistrate of the First Class shall
try any such offence.”
6. The objectives of the proceedings of Section 138 of
the Act are that the cheques should not be used by
persons as a tool of dishonesty and when cheque is issued
by a person, it must be honoured and if it is not honoured,
the person is given an opportunity to pay the cheque
amount by issuance of a notice and if he still does not pay,
he must face the criminal trial and consequences. Section
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138 of the Negotiable Instruments Act, 1881, is given
below for easy reference :-
“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 provision of this Act, be
punished with imprisonment for a term which
may extend to one year, 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;
(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, within fifteen days of the receipt of
information by him from the bank regarding the
return of the cheque as unpaid; and
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(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.”
7. This Court in Electronics Trade & Technology
Development Corporation Ltd., Secunderabad v.
Indian Technologists & Engineers (Electronics) (P)
Ltd. and Another (1996) 2 SCC 739, held as follows:
“6.…..The object of bringing Section 138 on
statute appears to be to inculcate faith in the
efficacy of banking operations and credibility in
transacting business on negotiable instruments.
Despite civil remedy, Section 138 intended to
prevent dishonesty on the part of the drawer of
negotiable instrument to draw a cheque without
sufficient funds in his account maintained by him
in a book and induce the payee or holder in due
course to act upon it. Section 138 draws
presumption that one commits the offence if he
issues the cheque dishonestly. It is seen that
once the cueque has been drawn and issued to
the payee and the payee has presented the
cheque and thereafter, if any instructions are
issued to the bank for non-payment and the
cheque is returned to the payee with such an
endorsement, it amounts to dishonour of cheque
and it comes within the meaning of Section
138….”
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8. In Goa Plast (P) Ltd. v. Chico Ursula D’Souza
(2004) 2 SCC 235, this Court, while dealing with the
objects and ingredients of Sections 138 and 139 of the
Act, observed as follows :-
“The object and the ingredients under the
provisions, in particular, Sections 138 and 139
of the Act cannot be ignored. Proper and
smooth functioning of all business transactions,
particularly, of cheques as instruments,
primarily depends upon the integrity and
honesty of the parties. In our country, in a large
number of commercial transactions, it was
noted that the cheques were issued even
merely as a device not only to stall but even to
defraud the creditors. The sanctity and
credibility of issuance of cheques in commercial
transactions was eroded to a large extent.
Undoubtedly, dishonour of a cheque by the
bank causes incalculable loss, injury and
inconvenience to the payee and the entire
credibility of the business transactions within
and outside the country suffers a serious
setback. Parliament, in order to restore the
credibility of cheques as a trustworthy
substitute for cash payment enacted the
aforesaid provisions. The remedy available in a
civil court is a long-drawn matter and an
unscrupulous drawer normally takes various
pleas to defeat the genuine claim of the payee.”
9. We have indicated, Sections 138 to 142 of the Act
were found to be deficient in dealing with the dishonoured
cheques. In the said circumstances, the legislature
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inserted new Sections 143 to 147 by the Negotiable
Instruments (Amendment and Miscellaneous Provisions)
Act, 2002, which is brought into force w.e.f. 6th February,
2003. The object and reasons for the said Amendment
Act are of some importance and are given below :-
“1. The Negotiable Instruments Act, 1881 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
dishonour 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. The existing provisions in the
Negotiable Instruments Act,1881, namely,
sections 138 to 142 in Chapter XVII have been
found deficient in dealing with dishonour of
cheques. 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
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Negotiable Instruments Act, 1881 and make
recommendations as to what changes were
needed to effectively achieve the purpose of
that section.
3. The recommendations of the Working Group
along with other representations from various
institutions and organisations were examined
by the Government in consultation with the
Reserve Bank of India and other legal experts,
and a Bill, namely, the Negotiable Instruments
(Amendment) Bill, 2001 was introduced in the
Lok Sabha on 24th July, 2001. The Bill was
referred to Standing Committee on Finance
which made certain recommendations in its
report submitted to Lok Sabha in November,
2001.
4. Keeping in view the recommendations of the
Standing Committee on Finance and other
representations, it has been decided to bring
out, inter alia, the following amendments in the
Negotiable Instruments Act,1881, namely:—
(i) to increase the punishment as prescribed
under the Act from one year to two years;
(ii) to increase the period for issue of notice by
the payee to the drawer from 15 days to 30
days;
(iii) to provide discretion to the Court to waive
the period of one month, which has been
prescribed for taking cognizance of the case
under the Act;
(iv) to prescribe procedure for dispensing with
preliminary evidence of the complainant;
(v) to prescribe procedure for servicing of
summons to the accused or witness by the
Court through speed post or empanelled private
couriers;
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(vi) to provide for summary trial of the cases
under the Act with a view to speeding up
disposal of cases;
(vii) to make the offences under the Act
compoundable;
(viii) to exempt those directors from prosecution
under section 141 of the Act who are nominated
as directors of a company by virtue of their
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;
(ix) to provide that the Magistrate trying an
offence shall have power to pass sentence of
imprisonment for a term exceeding one year
and amount of fine exceeding five thousand
rupees;
(x) to make the Information Technology Act,
2000 applicable to the Negotiable Instruments
Act,1881 in relation to electronic cheques and
truncated cheques subject to such modifications
and amendments as the Central Government, in
consultation with the Reserve Bank of India,
considers necessary for carrying out the
purposes of the Act, by notification in the
Official Gazette; and
(xi) to amend definitions of "bankers' books"
and "certified copy" given in the Bankers' Books
Evidence Act,1891.
5. The proposed amendments in the Act are
aimed at early disposal of cases relating to
dishonour of cheques, enhancing punishment
for offenders, introducing electronic image of a
truncated cheque and a cheque in the
electronic form as well as exempting an official
nominee director from prosecution under the
Negotiable Instruments Act,1881.
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6. The Bill seeks to achieve the above objects.”
10. Section 143 of the Act introduced by 2002
Amendment reads as follows :-
“143. Power of Court to try cases
summarily.-
(1) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973, 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 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,
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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.”
11. Section 145 of the Act deals with the evidence on
affidavit and reads as follows :
“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.”
12. The scope of Section 145 came up for consideration
before this Court in Mandvi Cooperative Bank Limited
v. Nimesh B. Thakore (2010) 3 SCC 83, and the same
was explained in that judgment stating that the legislature
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provided for the complainant to give his evidence on
affidavit, but did not provide the same for the accused.
The Court held that even though the legislature in their
wisdom did not deem it proper to incorporate a word
“accused” with the word “complainant” in Section 145(1),
it does not mean that the Magistrate could not allow the
complainant to give his evidence on affidavit, unless there
was just and reasonable ground to refuse such
permission.
13. This Court while examining the scope of Section 145
in Radhey Shyam Garg v. Naresh Kumar Gupta
(2009) 13 SCC 201, held as follows :-
“If an affidavit in terms of the provisions of
Section 145 of the Act is to be considered to be
an evidence, it is difficult to comprehend as to
why the court will ask the deponent of the said
affidavit to examine himself with regard to the
contents thereof once over again. He may be
cross-examined and upon completion of his
evidence, he may be re-examined. Thus, the
words “examine any person giving evidence on
affidavit as to the facts contained therein, in the
event, the deponent is summoned by the court
in terms of sub-section (2) of Section 145 of the
Act”, in our opinion, would mean for the
purpose of cross-examination. The provision
seeks to attend a salutary purpose.”
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14. Considerable time is usually spent for recording the
statement of the complainant. The question is whether
the Court can dispense with the appearance of the
complainant, instead, to take steps to accept the affidavit
of the complainant and treat the same as examination-inchief.
Section 145(1) gives complete freedom to the
complainant either to give his evidence by way of affidavit
or by way of oral evidence. The Court has to accept the
same even if it is given by way of an affidavit. Second
part of Section 145(1) provides that the complainant’s
statement on affidavit may, subject to all just exceptions,
be read in evidence in any inquiry, trial or other
proceedings. Section 145 is a rule of procedure which
lays down the manner in which the evidence of the
complainant may be recorded and once the Court issues
summons and the presence of the accused is secured, an
option be given to the accused whether, at that stage, he
would be willing to pay the amount due along with
reasonable interest and if the accused is not willing to
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pay, Court may fix up the case at an early date and
ensure day-to-day trial.
15. Section 143 empowers the Court to try cases for
dishonour of cheques summarily in accordance with the
provisions of Section 262 to 265 of the Code of Criminal
Procedure, 1973. The relevant provisions being Sections
262 to 264 are extracted hereinbelow for easy reference :
“262. Procedure for summary trials.
(1) In trials under this Chapter, the procedure
specified in this Code for the trial of summonsease
shall be followed except as hereinafter
mentioned.
(2) No sentence of imprisonment for a term
exceeding three months shall be passed in the
case of any conviction under this Chapter.
263.Record in summary trials.-
In every case tried summarily, the Magistrate
shall enter, in such form as the State
Government may direct, the following
particulars, namely:-
(a) the serial number of the case:
(b) the date of the commission of the offence;
(c) the date of the report or complaint;
(d) the name of the complainant (if any);
(e) the name, parentage and residence of the
accused;
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(f) the offence complained of and the offence (if
any) proved, and in cases coming under clause
(ii), clause (iii) or clause (iv) of sub-section (1) of
section 260, the value of the property in respect
of which the offence has been committed;
(g) the plea of the accused and his examination
(if any);
(h) the finding;
(i) the sentence or other final order
(j) the date on which proceedings terminated.
264. Judgment in cases tried summarily. –
In every case tried summarily in which the
accused does not plead guilty, the Magistrate
shall record the substance of the evidence and
a judgment containing a brief statement of the
reasons for the finding.”
16. We have indicated that under Section 145 of the Act,
the complainant can give his evidence by way of an
affidavit and such affidavit shall be read in evidence in
any inquiry, trial or other proceedings in the Court, which
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. Affidavit and
the documents filed by the complainant along with
complaint for taking cognizance of the offence are good
enough to be read in evidence at both the stages i.e. prePage
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summoning stage and the post summoning stage. In
other words, there is no necessity to recall and reexamine
the complaint after summoning of accused,
unless the 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 Act suo moto by the Court. In
summary trial, after the accused is summoned, his plea is
to be recorded under Section 263(g) Cr.P.C. and his
examination, if any, can be done by a Magistrate and a
finding can be given by the Court under Section 263(h)
Cr.P.C. and the same procedure can be followed by a
Magistrate for offence of dishonour of cheque since
offence under Section 138 of the Act is a document based
offence. We make it clear that if the proviso (a), (b) & (c)
to Section 138 of the Act are shown to have been
complied with, technically the commission of the offence
stands completed and it is for the accused to show that no
offence could have been committed by him for specific
reasons and defences.
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17. Procedure for summary case has itself been
explained by this Court in Nitinbhai Saevantilal Shah
and another v. Manubhai Manjibhai Panchal and
another (2011) 9 SCC 638, wherein this Court held as
under :
“12. Provision for summary trials is made in
Chapter XXI of the Code. Section 260 of the
Code confers power upon any Chief Judicial
Magistrate or any Metropolitan Magistrate or
any Magistrate of the First Class specially
empowered in this behalf by the High Court to
try in a summary way all or any of the offences
enumerated therein. Section 262 lays down the
procedure for summary trial and sub-section (1)
thereof inter alia prescribes that in summary
trials the procedure specified in the Code for the
trial of summons case shall be followed subject
to the condition that no sentence of
imprisonment for a term exceeding three
months is passed in case of any conviction
under the chapter.
13. The manner in which the record in
summary trials is to be maintained is provided
in Section 263 of the Code. Section 264
mentions that in every case tried summarily in
which the accused does not plead guilty, the
Magistrate shall record the substance of the
evidence and a judgment containing a brief
statement of the reasons for the finding. Thus,
the Magistrate is not expected to record full
evidence which he would have been, otherwise
required to record in a regular trial and his
judgment should also contain a brief statement
of the reasons for the finding and not elaborate
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reasons which otherwise he would have been
required to record in regular trials.”
18. Amendment Act, 2002 has to be given effect to in its
letter and spirit. Section 143 of the Act, as already
indicated, has been inserted by the said Act stipulating
that notwithstanding anything contained in the Code of
Criminal Procedure, all offences contained in Chapter XVII
of the Negotiable Instruments Act dealing with dishonour
of cheques for insufficiency of funds, etc. shall be tried by
a Judicial Magistrate and the provisions of Sections 262 to
265 Cr.P.C. prescribing procedure for summary trials, shall
apply to such trials and it shall be lawful for a Magistrate
to pass sentence of imprisonment for a term not
exceeding one year and an amount of fine exceeding
Rs.5,000/- and it is further provided that in the course of a
summary trial, if it appears to the Magistrate that the
nature of the case requires passing of the sentence of
imprisonment exceeding one year, the Magistrate, after
hearing the parties, record an order to that effect and
thereafter recall any witness and proceed to hear or
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rehear the case in the manner provided in Criminal
Procedure Code.
19. This Court in Damodar S. Prabhu v. Sayed
Babalal H. (2010) 5 SCC 663, laid down certain
guidelines while interpreting Sections 138 and 147 of the
Negotiable Instruments Act to encourage litigants in
cheque dishonour cases to opt for compounding during
early stages of litigation to ease choking of criminal justice
system for graded scheme of imposing costs on parties
who unduly delay compounding of offence, and for
controlling of filing of complaints in multiple jurisdictions
relatable to same transaction, which have also to be
borne in mind by the Magistrate while dealing with cases
under Section 138 of the Negotiable Instruments Act.
20. We notice, considering all those aspects, few High
Courts of the country have laid down certain procedures
for speedy disposal of cases under Section 138 of the
Negotiable Instruments Act. Reference, in this
connection, may be made to the judgments of the
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Bombay High Court in KSL and Industries Ltd. v.
Mannalal Khandelwal and The State of Maharashtra
through the Office of the Government Pleader
(2005) CriLJ 1201, Indo International Ltd. and another
v. State of Maharashtra and another (2005) 44 Civil
CC (Bombay) and Harischandra Biyani v. Stock
Holding Corporation of India Ltd. (2006) 4 MhLJ 381,
the judgment of the Calcutta High Court in Magma
Leasing Ltd. v. State of West Bengal and others
(2007) 3 CHN 574 and the judgment of the Delhi High
Court in Rajesh Agarwal v. State and another (2010)
ILR 6 Delhi 610.
21. Many of the directions given by the various High
Courts, in our view, are worthy of emulation by the
Criminal Courts all over the country dealing with cases
under Section 138 of the Negotiable Instruments Act, for
which the following directions are being given :-
DIRECTIONS:
(1) Metropolitan Magistrate/Judicial Magistrate
(MM/JM), on the day when the complaint under
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Section 138 of the Act is presented, shall
scrutinize the complaint and, if the complaint is
accompanied by the affidavit, and the affidavit
and the documents, if any, are found to be in
order, take cognizance and direct issuance of
summons.
(2) MM/JM should adopt a pragmatic and realistic
approach while issuing summons. Summons must
be properly addressed and sent by post as well as
by e-mail address got from the complainant.
Court, in appropriate cases, may take the
assistance of the police or the nearby Court to
serve notice to the accused. For notice of
appearance, a short date be fixed. If the
summons is received back un-served, immediate
follow up action be taken.
(3) Court may indicate in the summon that if the
accused makes an application for compounding of
offences at the first hearing of the case and, if
such an application is made, Court may pass
appropriate orders at the earliest.
(4) Court should direct the accused, when he
appears to furnish a bail bond, to ensure his
appearance during trial and ask him to take notice
under Section 251Cr.P.C. to enable him to enter
his plea of defence and fix the case for defence
evidence, unless an application is made by the
accused under Section 145(2) for re-calling a
witness for cross-examination.
(5) The Court concerned must ensure that
examination-in-chief, cross-examination and reexamination
of the complainant must be
conducted within three months of assigning the
case. The Court has option of accepting affidavits
of the witnesses, instead of examining them in
Court. Witnesses to the complaint and accused
must be available for cross-examination as and
when there is direction to this effect by the Court.
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22. We, therefore, direct all the Criminal Courts in the
country dealing with Section 138 cases to follow the
above-mentioned procedures for speedy and expeditious
disposal of cases falling under Section 138 of the
Negotiable Instruments Act.
23. Writ Petition is, accordingly, disposed of, as above.
…..………………………J.
(K.S. Radhakrishnan)
………………………….J.
(Vikramajit Sen)
New Delhi,
April 21, 2014.
Print Page
Courts, in our view, are worthy of emulation by the
Criminal Courts all over the country dealing with cases
under Section 138 of the Negotiable Instruments Act, for
which the following directions are being given :-
DIRECTIONS:
(1) Metropolitan Magistrate/Judicial Magistrate
(MM/JM), on the day when the complaint under
Section 138 of the Act is presented, shall
scrutinize the complaint and, if the complaint is
accompanied by the affidavit, and the affidavit
and the documents, if any, are found to be in
order, take cognizance and direct issuance of
summons.
(2) MM/JM should adopt a pragmatic and realistic
approach while issuing summons. Summons must
be properly addressed and sent by post as well as
by e-mail address got from the complainant.
Court, in appropriate cases, may take the
assistance of the police or the nearby Court to
serve notice to the accused. For notice of
appearance, a short date be fixed. If the
summons is received back un-served, immediate
follow up action be taken.
(3) Court may indicate in the summon that if the
accused makes an application for compounding of
offences at the first hearing of the case and, if
such an application is made, Court may pass
appropriate orders at the earliest.
(4) Court should direct the accused, when he
appears to furnish a bail bond, to ensure his
appearance during trial and ask him to take notice
under Section 251Cr.P.C. to enable him to enter
his plea of defence and fix the case for defence
evidence, unless an application is made by the
accused under Section 145(2) for re-calling a
witness for cross-examination.
(5) The Court concerned must ensure that
examination-in-chief, cross-examination and reexamination
of the complainant must be
conducted within three months of assigning the
case. The Court has option of accepting affidavits
of the witnesses, instead of examining them in
Court. Witnesses to the complaint and accused
must be available for cross-examination as and
when there is direction to this effect by the Court.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) NO.18 OF 2013
Indian Bank Association and others … Petitioners
Versus
Union of India and others … Respondents
K.S. Radhakrishnan, J.
Dated;April 21, 2014.
1. This Writ Petition, under Article 32 of the Constitution
of India, has been preferred by the Indian Banks’
Association (IBA) along with Punjab National Bank and
another, seeking the following reliefs :-
a. Laying down appropriate guidelines/directions to be
followed by all Courts within the territory of India
competent to try a complaint under Section 138 of
the Negotiable Instruments Act, 1881 (the Act) to
follow and comply with the mandate of Section 143 of
the said Act read with Sections 261 to 265 of Criminal
Page 2
2
Procedure Code, 1973 (Cr.P.C.) for summary trial of
such complaints filed or pending before the said
Courts.
b. Issue a writ of mandamus for compliance with the
guidelines of this Hon’ble Court indicating various
steps to be followed for summary trial of complaints
under Section 138 of the said Act and report to this
Hon’ble Court.
c. Issue a writ of mandamus, directing the respondents,
to adopt necessary policy and legislative changes to
deal with cases relating to dishonor of cheqeus so
that the same are expeditiously disposed off in
accordance with the intent of the Act and the
guidelines to be laid down by this Hon’ble Court.
2. The first petitioner, which is an Association of Persons
with 174 banks/financial institutions as its members, is a
voluntary association of banks and functions as think tank
for banks in the matters of concern for the whole banking
industry. The Petitioners submit that the issue raised in
this case is of considerable national importance owing to
the reason that in the era of globalization and rapid
technological developments, financial trust and
commercial interest have to be restored.
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3. The Petitioners submit that the banking industry has
been put to a considerable disadvantage due to the delay
in disposing of the cases relating to Negotiable
Instruments Act. The Petitioner banks being custodian of
public funds find it difficult to expeditiously recover huge
amount of public fund which are blocked in cases pending
under Section 138 of the Negotiable Instruments Act,
1881. Petitioners submit that, in spite of the fact, Chapter
XIV has been introduced in the Negotiable Instruments Act
by Section 4 of the Banking, Public Financial Institutions
and Negotiable Instruments Laws (Amendment) Act, 1988,
to enhance the acceptability of cheques in settlement of
liability by making the drawer liable for penalties in case of
bouncing of cheques due to insufficiency of funds, the
desired object of the Amendment Act has not achieved.
4. Legislature has noticed that the introduction of
Sections 138 to 142 of the Act has not achieved desired
result for dealing with dishonoured cheques, hence, it
inserted new Sections 143 to 147 in the Negotiable
Instruments Act vide Negotiable Instruments (Amendment
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and Miscellaneous Provisions) Act, 2002 for speedy
disposal of cases relating to dishonour of cheques through
summary trial as well as making the offence
compoundable. But, no uniform practice is seen followed
by the various Magistrate Courts in the country, as a result
of which, the object and purpose for which the
amendments were incorporated, have not been achieved.
5. Cheque, though acknowledged as a bill of exchange
under the Negotiable Instruments Act and readily accepted
in lieu of payment of money and is negotiable, the fact
remains that the cheque as a negotiable instrument
started losing its credibility by not being honoured on
presentation. Chapter XVII was introduced, as already
indicated, so as to enhance the acceptability of cheques in
settlement of liabilities. The Statement of Objects and
Reasons appended with the Bill explaining the provisions
of the new Chapter reads as follows :-
“This clause [Clause (4) of the Bill] inserts a new
Chapter XVII in the Negotiable Instruments Act,
1881. The provisions contained in the new
Chapter provide that where any cheque drawn
by a person for the discharge of any liability is
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returned by the bank unpaid for the reason of
the insufficiency of the amount of money
standing to the credit of the account on which
the cheque was drawn or for the reason that it
exceeds the arrangements made by the drawer
of the cheque with the bankers for that account,
the drawer of such cheque shall be deemed to
have committed an offence. In that case, the
drawer, without prejudice to the other
provisions of the said Act, shall be punishable
with imprisonment for a term which may extend
to one year, or with fine which may extend to
twice the amount of the cheque, or with both.
The provisions have also been made that
to constitute the said offence:
(a) such cheque should have been presented to
the bank within a period of six months of the
date of its drawal or within the period of its
validity, whichever is earlier; and
(b) the payee or holder in due course of such
cheque should have made a demand for the
payment of the said amount of money by giving
a notice, in writing, to the drawer of the cheque
within fifteen days of the receipt of the
information by him from the bank regarding the
return of the cheque unpaid; and
(c) the drawer of such cheque should have
failed to make the payment of the said amount
of money to the payee or the holder in due
course of the cheque within fifteen days of the
receipt of the said notice.
It has also been provided that it shall be
presumed, unless the contrary is proved, that
the holder of such cheque received the cheque
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in the discharge of a liability. Defences which
may or may not be allowed in any prosecution
for such offence have also been provided to
make the provisions effective. Usual provision
relating to offences by companies has also been
included in the said new Chapter. In order to
ensure that genuine and honest bank customers
are not harassed or put to inconvenience,
sufficient safeguards have also been provided in
the proposed new Chapter. Such safeguards
are:
(a) that no court shall take cognizance of such
offence except on a complaint, in writing, made
by the payee or the holder in due course of the
cheque;
(b) that such complaint is made within one
month of the date on which the cause of action
arises; and
(c) that no court inferior to that of a
Metropolitan Magistrate or a Judicial Magistrate
or a Judicial Magistrate of the First Class shall
try any such offence.”
6. The objectives of the proceedings of Section 138 of
the Act are that the cheques should not be used by
persons as a tool of dishonesty and when cheque is issued
by a person, it must be honoured and if it is not honoured,
the person is given an opportunity to pay the cheque
amount by issuance of a notice and if he still does not pay,
he must face the criminal trial and consequences. Section
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138 of the Negotiable Instruments Act, 1881, is given
below for easy reference :-
“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 provision of this Act, be
punished with imprisonment for a term which
may extend to one year, 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;
(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, within fifteen days of the receipt of
information by him from the bank regarding the
return of the cheque as unpaid; and
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(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.”
7. This Court in Electronics Trade & Technology
Development Corporation Ltd., Secunderabad v.
Indian Technologists & Engineers (Electronics) (P)
Ltd. and Another (1996) 2 SCC 739, held as follows:
“6.…..The object of bringing Section 138 on
statute appears to be to inculcate faith in the
efficacy of banking operations and credibility in
transacting business on negotiable instruments.
Despite civil remedy, Section 138 intended to
prevent dishonesty on the part of the drawer of
negotiable instrument to draw a cheque without
sufficient funds in his account maintained by him
in a book and induce the payee or holder in due
course to act upon it. Section 138 draws
presumption that one commits the offence if he
issues the cheque dishonestly. It is seen that
once the cueque has been drawn and issued to
the payee and the payee has presented the
cheque and thereafter, if any instructions are
issued to the bank for non-payment and the
cheque is returned to the payee with such an
endorsement, it amounts to dishonour of cheque
and it comes within the meaning of Section
138….”
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8. In Goa Plast (P) Ltd. v. Chico Ursula D’Souza
(2004) 2 SCC 235, this Court, while dealing with the
objects and ingredients of Sections 138 and 139 of the
Act, observed as follows :-
“The object and the ingredients under the
provisions, in particular, Sections 138 and 139
of the Act cannot be ignored. Proper and
smooth functioning of all business transactions,
particularly, of cheques as instruments,
primarily depends upon the integrity and
honesty of the parties. In our country, in a large
number of commercial transactions, it was
noted that the cheques were issued even
merely as a device not only to stall but even to
defraud the creditors. The sanctity and
credibility of issuance of cheques in commercial
transactions was eroded to a large extent.
Undoubtedly, dishonour of a cheque by the
bank causes incalculable loss, injury and
inconvenience to the payee and the entire
credibility of the business transactions within
and outside the country suffers a serious
setback. Parliament, in order to restore the
credibility of cheques as a trustworthy
substitute for cash payment enacted the
aforesaid provisions. The remedy available in a
civil court is a long-drawn matter and an
unscrupulous drawer normally takes various
pleas to defeat the genuine claim of the payee.”
9. We have indicated, Sections 138 to 142 of the Act
were found to be deficient in dealing with the dishonoured
cheques. In the said circumstances, the legislature
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inserted new Sections 143 to 147 by the Negotiable
Instruments (Amendment and Miscellaneous Provisions)
Act, 2002, which is brought into force w.e.f. 6th February,
2003. The object and reasons for the said Amendment
Act are of some importance and are given below :-
“1. The Negotiable Instruments Act, 1881 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
dishonour 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. The existing provisions in the
Negotiable Instruments Act,1881, namely,
sections 138 to 142 in Chapter XVII have been
found deficient in dealing with dishonour of
cheques. 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
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Negotiable Instruments Act, 1881 and make
recommendations as to what changes were
needed to effectively achieve the purpose of
that section.
3. The recommendations of the Working Group
along with other representations from various
institutions and organisations were examined
by the Government in consultation with the
Reserve Bank of India and other legal experts,
and a Bill, namely, the Negotiable Instruments
(Amendment) Bill, 2001 was introduced in the
Lok Sabha on 24th July, 2001. The Bill was
referred to Standing Committee on Finance
which made certain recommendations in its
report submitted to Lok Sabha in November,
2001.
4. Keeping in view the recommendations of the
Standing Committee on Finance and other
representations, it has been decided to bring
out, inter alia, the following amendments in the
Negotiable Instruments Act,1881, namely:—
(i) to increase the punishment as prescribed
under the Act from one year to two years;
(ii) to increase the period for issue of notice by
the payee to the drawer from 15 days to 30
days;
(iii) to provide discretion to the Court to waive
the period of one month, which has been
prescribed for taking cognizance of the case
under the Act;
(iv) to prescribe procedure for dispensing with
preliminary evidence of the complainant;
(v) to prescribe procedure for servicing of
summons to the accused or witness by the
Court through speed post or empanelled private
couriers;
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(vi) to provide for summary trial of the cases
under the Act with a view to speeding up
disposal of cases;
(vii) to make the offences under the Act
compoundable;
(viii) to exempt those directors from prosecution
under section 141 of the Act who are nominated
as directors of a company by virtue of their
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;
(ix) to provide that the Magistrate trying an
offence shall have power to pass sentence of
imprisonment for a term exceeding one year
and amount of fine exceeding five thousand
rupees;
(x) to make the Information Technology Act,
2000 applicable to the Negotiable Instruments
Act,1881 in relation to electronic cheques and
truncated cheques subject to such modifications
and amendments as the Central Government, in
consultation with the Reserve Bank of India,
considers necessary for carrying out the
purposes of the Act, by notification in the
Official Gazette; and
(xi) to amend definitions of "bankers' books"
and "certified copy" given in the Bankers' Books
Evidence Act,1891.
5. The proposed amendments in the Act are
aimed at early disposal of cases relating to
dishonour of cheques, enhancing punishment
for offenders, introducing electronic image of a
truncated cheque and a cheque in the
electronic form as well as exempting an official
nominee director from prosecution under the
Negotiable Instruments Act,1881.
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6. The Bill seeks to achieve the above objects.”
10. Section 143 of the Act introduced by 2002
Amendment reads as follows :-
“143. Power of Court to try cases
summarily.-
(1) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973, 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 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,
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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.”
11. Section 145 of the Act deals with the evidence on
affidavit and reads as follows :
“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.”
12. The scope of Section 145 came up for consideration
before this Court in Mandvi Cooperative Bank Limited
v. Nimesh B. Thakore (2010) 3 SCC 83, and the same
was explained in that judgment stating that the legislature
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provided for the complainant to give his evidence on
affidavit, but did not provide the same for the accused.
The Court held that even though the legislature in their
wisdom did not deem it proper to incorporate a word
“accused” with the word “complainant” in Section 145(1),
it does not mean that the Magistrate could not allow the
complainant to give his evidence on affidavit, unless there
was just and reasonable ground to refuse such
permission.
13. This Court while examining the scope of Section 145
in Radhey Shyam Garg v. Naresh Kumar Gupta
(2009) 13 SCC 201, held as follows :-
“If an affidavit in terms of the provisions of
Section 145 of the Act is to be considered to be
an evidence, it is difficult to comprehend as to
why the court will ask the deponent of the said
affidavit to examine himself with regard to the
contents thereof once over again. He may be
cross-examined and upon completion of his
evidence, he may be re-examined. Thus, the
words “examine any person giving evidence on
affidavit as to the facts contained therein, in the
event, the deponent is summoned by the court
in terms of sub-section (2) of Section 145 of the
Act”, in our opinion, would mean for the
purpose of cross-examination. The provision
seeks to attend a salutary purpose.”
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14. Considerable time is usually spent for recording the
statement of the complainant. The question is whether
the Court can dispense with the appearance of the
complainant, instead, to take steps to accept the affidavit
of the complainant and treat the same as examination-inchief.
Section 145(1) gives complete freedom to the
complainant either to give his evidence by way of affidavit
or by way of oral evidence. The Court has to accept the
same even if it is given by way of an affidavit. Second
part of Section 145(1) provides that the complainant’s
statement on affidavit may, subject to all just exceptions,
be read in evidence in any inquiry, trial or other
proceedings. Section 145 is a rule of procedure which
lays down the manner in which the evidence of the
complainant may be recorded and once the Court issues
summons and the presence of the accused is secured, an
option be given to the accused whether, at that stage, he
would be willing to pay the amount due along with
reasonable interest and if the accused is not willing to
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pay, Court may fix up the case at an early date and
ensure day-to-day trial.
15. Section 143 empowers the Court to try cases for
dishonour of cheques summarily in accordance with the
provisions of Section 262 to 265 of the Code of Criminal
Procedure, 1973. The relevant provisions being Sections
262 to 264 are extracted hereinbelow for easy reference :
“262. Procedure for summary trials.
(1) In trials under this Chapter, the procedure
specified in this Code for the trial of summonsease
shall be followed except as hereinafter
mentioned.
(2) No sentence of imprisonment for a term
exceeding three months shall be passed in the
case of any conviction under this Chapter.
263.Record in summary trials.-
In every case tried summarily, the Magistrate
shall enter, in such form as the State
Government may direct, the following
particulars, namely:-
(a) the serial number of the case:
(b) the date of the commission of the offence;
(c) the date of the report or complaint;
(d) the name of the complainant (if any);
(e) the name, parentage and residence of the
accused;
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(f) the offence complained of and the offence (if
any) proved, and in cases coming under clause
(ii), clause (iii) or clause (iv) of sub-section (1) of
section 260, the value of the property in respect
of which the offence has been committed;
(g) the plea of the accused and his examination
(if any);
(h) the finding;
(i) the sentence or other final order
(j) the date on which proceedings terminated.
264. Judgment in cases tried summarily. –
In every case tried summarily in which the
accused does not plead guilty, the Magistrate
shall record the substance of the evidence and
a judgment containing a brief statement of the
reasons for the finding.”
16. We have indicated that under Section 145 of the Act,
the complainant can give his evidence by way of an
affidavit and such affidavit shall be read in evidence in
any inquiry, trial or other proceedings in the Court, which
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. Affidavit and
the documents filed by the complainant along with
complaint for taking cognizance of the offence are good
enough to be read in evidence at both the stages i.e. prePage
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19
summoning stage and the post summoning stage. In
other words, there is no necessity to recall and reexamine
the complaint after summoning of accused,
unless the 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 Act suo moto by the Court. In
summary trial, after the accused is summoned, his plea is
to be recorded under Section 263(g) Cr.P.C. and his
examination, if any, can be done by a Magistrate and a
finding can be given by the Court under Section 263(h)
Cr.P.C. and the same procedure can be followed by a
Magistrate for offence of dishonour of cheque since
offence under Section 138 of the Act is a document based
offence. We make it clear that if the proviso (a), (b) & (c)
to Section 138 of the Act are shown to have been
complied with, technically the commission of the offence
stands completed and it is for the accused to show that no
offence could have been committed by him for specific
reasons and defences.
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17. Procedure for summary case has itself been
explained by this Court in Nitinbhai Saevantilal Shah
and another v. Manubhai Manjibhai Panchal and
another (2011) 9 SCC 638, wherein this Court held as
under :
“12. Provision for summary trials is made in
Chapter XXI of the Code. Section 260 of the
Code confers power upon any Chief Judicial
Magistrate or any Metropolitan Magistrate or
any Magistrate of the First Class specially
empowered in this behalf by the High Court to
try in a summary way all or any of the offences
enumerated therein. Section 262 lays down the
procedure for summary trial and sub-section (1)
thereof inter alia prescribes that in summary
trials the procedure specified in the Code for the
trial of summons case shall be followed subject
to the condition that no sentence of
imprisonment for a term exceeding three
months is passed in case of any conviction
under the chapter.
13. The manner in which the record in
summary trials is to be maintained is provided
in Section 263 of the Code. Section 264
mentions that in every case tried summarily in
which the accused does not plead guilty, the
Magistrate shall record the substance of the
evidence and a judgment containing a brief
statement of the reasons for the finding. Thus,
the Magistrate is not expected to record full
evidence which he would have been, otherwise
required to record in a regular trial and his
judgment should also contain a brief statement
of the reasons for the finding and not elaborate
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reasons which otherwise he would have been
required to record in regular trials.”
18. Amendment Act, 2002 has to be given effect to in its
letter and spirit. Section 143 of the Act, as already
indicated, has been inserted by the said Act stipulating
that notwithstanding anything contained in the Code of
Criminal Procedure, all offences contained in Chapter XVII
of the Negotiable Instruments Act dealing with dishonour
of cheques for insufficiency of funds, etc. shall be tried by
a Judicial Magistrate and the provisions of Sections 262 to
265 Cr.P.C. prescribing procedure for summary trials, shall
apply to such trials and it shall be lawful for a Magistrate
to pass sentence of imprisonment for a term not
exceeding one year and an amount of fine exceeding
Rs.5,000/- and it is further provided that in the course of a
summary trial, if it appears to the Magistrate that the
nature of the case requires passing of the sentence of
imprisonment exceeding one year, the Magistrate, after
hearing the parties, record an order to that effect and
thereafter recall any witness and proceed to hear or
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rehear the case in the manner provided in Criminal
Procedure Code.
19. This Court in Damodar S. Prabhu v. Sayed
Babalal H. (2010) 5 SCC 663, laid down certain
guidelines while interpreting Sections 138 and 147 of the
Negotiable Instruments Act to encourage litigants in
cheque dishonour cases to opt for compounding during
early stages of litigation to ease choking of criminal justice
system for graded scheme of imposing costs on parties
who unduly delay compounding of offence, and for
controlling of filing of complaints in multiple jurisdictions
relatable to same transaction, which have also to be
borne in mind by the Magistrate while dealing with cases
under Section 138 of the Negotiable Instruments Act.
20. We notice, considering all those aspects, few High
Courts of the country have laid down certain procedures
for speedy disposal of cases under Section 138 of the
Negotiable Instruments Act. Reference, in this
connection, may be made to the judgments of the
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Bombay High Court in KSL and Industries Ltd. v.
Mannalal Khandelwal and The State of Maharashtra
through the Office of the Government Pleader
(2005) CriLJ 1201, Indo International Ltd. and another
v. State of Maharashtra and another (2005) 44 Civil
CC (Bombay) and Harischandra Biyani v. Stock
Holding Corporation of India Ltd. (2006) 4 MhLJ 381,
the judgment of the Calcutta High Court in Magma
Leasing Ltd. v. State of West Bengal and others
(2007) 3 CHN 574 and the judgment of the Delhi High
Court in Rajesh Agarwal v. State and another (2010)
ILR 6 Delhi 610.
21. Many of the directions given by the various High
Courts, in our view, are worthy of emulation by the
Criminal Courts all over the country dealing with cases
under Section 138 of the Negotiable Instruments Act, for
which the following directions are being given :-
DIRECTIONS:
(1) Metropolitan Magistrate/Judicial Magistrate
(MM/JM), on the day when the complaint under
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Section 138 of the Act is presented, shall
scrutinize the complaint and, if the complaint is
accompanied by the affidavit, and the affidavit
and the documents, if any, are found to be in
order, take cognizance and direct issuance of
summons.
(2) MM/JM should adopt a pragmatic and realistic
approach while issuing summons. Summons must
be properly addressed and sent by post as well as
by e-mail address got from the complainant.
Court, in appropriate cases, may take the
assistance of the police or the nearby Court to
serve notice to the accused. For notice of
appearance, a short date be fixed. If the
summons is received back un-served, immediate
follow up action be taken.
(3) Court may indicate in the summon that if the
accused makes an application for compounding of
offences at the first hearing of the case and, if
such an application is made, Court may pass
appropriate orders at the earliest.
(4) Court should direct the accused, when he
appears to furnish a bail bond, to ensure his
appearance during trial and ask him to take notice
under Section 251Cr.P.C. to enable him to enter
his plea of defence and fix the case for defence
evidence, unless an application is made by the
accused under Section 145(2) for re-calling a
witness for cross-examination.
(5) The Court concerned must ensure that
examination-in-chief, cross-examination and reexamination
of the complainant must be
conducted within three months of assigning the
case. The Court has option of accepting affidavits
of the witnesses, instead of examining them in
Court. Witnesses to the complaint and accused
must be available for cross-examination as and
when there is direction to this effect by the Court.
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22. We, therefore, direct all the Criminal Courts in the
country dealing with Section 138 cases to follow the
above-mentioned procedures for speedy and expeditious
disposal of cases falling under Section 138 of the
Negotiable Instruments Act.
23. Writ Petition is, accordingly, disposed of, as above.
…..………………………J.
(K.S. Radhakrishnan)
………………………….J.
(Vikramajit Sen)
New Delhi,
April 21, 2014.
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