1

® IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 22ND

DAY OF MARCH 2013

BEFORE:

THE HON’BLE MR. JUSTICE ANAND BYRAREDDY

CRIMINAL PETITION No.8943 OF 2010

BETWEEN:

M/s. Mesh Trans Gears Private Limited,

No.884, Kamakshipalya Extension,

Magadi Road, Bangalore – 560 079,

Represented by its Managing Director,

Rajiv S.Hundekar, No.52, 1st Floor,

Vinayaka Layout,

Magadi Road,

Bangalore. …PETITIONER

(By Shri. S.M. Chandrashekar, Senior Advocate for Shri R.J.

Bhusare, Advocate)

AND:

Dr. R. Parvathreddy,

Son of R. Hampanna,

Major,

Occupation: Medical Practitioner,

resident of C/o. Kasturi Memorial Clinic,

Jamunal Medical Teen Khandil,

Ashok Road,

Raichur. …RESPONDENT

2

(By Shri. Prashant S. Kumman, Advocate for Shri. Veeresh B.

Patil, Advocate )

*****

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:-

O R D E R

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

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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

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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

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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 :

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“………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 :

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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.”

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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

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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

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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.

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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.

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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.

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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

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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).

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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.

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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.

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“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)

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(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)

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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)

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(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;

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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.

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(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.

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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 :

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“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”.

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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)]

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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.

x x x

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

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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

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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