2005 (2) TMI 885 - HC - Indian Laws

Dishonour of Cheque - Procedure to try complaint u/s 138 of the Negotiable Instruments Act, 1881 - Scope of Section 145 - evidence by way of affidavit - permission to cross examine the complainant - whether the Court can dispense with his / her appearance and instead, take affidavit of the complainant and treat the same as examination in chie f - HELD THAT - The petitioners are justified in their assertion that the newly added provisions of the Act in question would be rendered nugatory if complaints filed under Section 138 of the Act are not disposed of expeditiously. The judicial system itself cannot acquire efficacy, credibility or respectability if a complaint of this nature takes five to seven years before it is finally adjudicated by the Metropolitan Magistrate. It has become imperative for us to take all necessary steps to ensure that these complaints are disposed of expeditiously and unscrupulous people do not take undue advantage of the pendency of these complaints before the Courts. Undoubtedly, dishonoured of a cheque by the bank causes incalculable loss, injury and inconvenience to the payee, and the entire credibility of the business transaction within and outside the country suffers a serious set back. The Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment, specifically incorporated the provisions of Sections 138 to 142 of the Act. The provisions of Section 138 of the Act would be attracted only when the cheque has been issued for the discharge of any debt or other legally enforceable liability. The maker of the cheque is not liable for prosecution if the cheque is given by way of a gift, present or donation and is dishonoured. Subsection (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 subsection (1) provides that the complainant may give his evidence on affidavit and may, subject to all just 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. 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. All these petitions are accordingly disposed of. Rule is partly made absolute in Criminal Writ Petition. All intervention applications stand disposed of.

Issues Involved:
1. Expeditious adjudication of complaints u/s 138 of the Negotiable Instruments Act, 1881.
2. Obligation of the Court to examine the complainant in respect of matters stated on affidavit u/s 145(1) of the Act.

Issue 1: Expeditious Adjudication of Complaints u/s 138 of the Act

1. All these petitions emanate from the proceedings u/s 138 of the Negotiable Instruments Act, 1881 (for short, "the Act"). Therefore, we propose to decide these petitions by a common judgment.

8. PIL No. 151 of 2004 relates to cases pertaining to Section 138 of the Act. In this case, a criminal complaint was filed u/s 138 of the Act against the accused, who issued a cheque for Rs. 3,15,300 for discharge of legal liability on 14th July, 2003. The said cheque was dishonoured with the remark: "Refer to drawer". The demand notice was sent, but the accused refused to pay the outstanding amount. In these circumstances, the petitioner was compelled to file a criminal complaint u/s 138 of the Act.

9. The petitioner's complaint was verified on 20th September, 2003 and the process was issued by the Metropolitan Magistrate returnable after six months on 20th March, 2004. The petitioner has filed an application for proponing the date, which was rejected after hearing the parties. The petitioner in this petition has made serious grievance of undue delay which occurs in disposal of complaints u/s 138 of the Act by the Metropolitan Magistrates. According to the petitioner, normally, there are only one or two hearings of these cases in the entire year and consequently, there is enormous delay in disposal of these cases.

10. In another petition (Suo Motu PIL No. 157 of 2004) also, unduly long delay in disposal of these complaints has been highlighted. In the daily national newspaper Deccan Chronicle dated 16th September, 2004, it was published that 2,50,000 cheque bouncing cases, involving Rs. 7,000 crores to Rs. 8,000 crores, are pending in the 47 Magistrates' Courts in Mumbai.

19. The petitioners are justified in their assertion that the newly added provisions of the Act in question would be rendered nugatory if complaints filed u/s 138 of the Act are not disposed of expeditiously. The judicial system itself cannot acquire efficacy, credibility or respectability if a complaint of this nature takes five to seven years before it is finally adjudicated by the Metropolitan Magistrate.

20. It has become imperative for us to take all necessary steps to ensure that these complaints are disposed of expeditiously and unscrupulous people do not take undue advantage of the pendency of these complaints before the Courts.

33 (c) Complaints must be disposed of as expeditiously as possible, and in any event, within six months from the date when the presence of the accused has been secured. In case the concerned judicial officer is not able to dispose of the complaint within six months, then, the concerned judicial officer must submit a report to the concerned Sessions Judge, indicating the reasons which led to delay in disposal of the complaint. The report submitted by the concerned judicial officer shall be taken into consideration while evaluating the performance of the concerned judicial officer.

44. We direct the Chief Secretary of the State of Maharashtra to ensure that 100 additional posts of Civil Judges, Junior Division, and their supporting staff are created forthwith, and in any event, within two months from today.

Issue 2: Examination of Complainant on Affidavit u/s 145(1) of the Act

6. The learned Single Judge of this Court in the impugned order raised a question whether in spite of mandate of Section 145(1) of the Act (which has been inserted by amending Act No. 55 of 2002 with effect from 6th February, 2003), the Court is obliged to examine the complainant even in respect of matters which have been stated on affidavit, which is to be treated as examination in chief of the witness. The learned Single judge has also referred to the observations of the Supreme Court in Ameer Trading Corporation Ltd. v. Shapoorji Processing Ltd.AIR2004SC355 , and order dated 2nd September, 2004 of this Court passed in Criminal Writ Petition No. 26 of 2004 in Raminder Singh Sahani v. Japfa Oberoi Agro Ltd. & Anr.

36. We refer to another important issue of these cases, which requires to be adjudicated, viz., regarding evidence by way of affidavit. Section 145 of the Act was added by way of amendment in the year 2002 with effect from February, 2003. Section 145 of the Act reads as under:

37. The Statement of Objects and Reasons of the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002, as crystallised, is as under:

The said provisions in the Negotiable Instruments Act, 1881, viz., Sections 138 to 142 in Chapter XVII, have been found deficient in dealing with dishonoured 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. The proposed amendments in the Act are made for early disposal of cases relating to dishonoured 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 Act.

38. Subsection (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 subsection (1) provides that the complainant may give his evidence on affidavit and may, subject to all just 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.

40. Immediately after the presence of the accused is secured, an option be given to him whether, at that stage, he would be willing to pay the amount due, along with reasonable interest, and the Court may consider passing suitable order. But where the accused is not willing to pay the principal amount with interest even at that stage, the Court may fix up the case at an early date, and ensure day to day trial of the case.

41. All these petitions are accordingly disposed of. Rule is partly made absolute in Criminal Writ Petition No. 1228 of 2004. All intervention applications stand disposed of.

48. These petitions are disposed of. These petitions would be listed on 1st March, 2005 for limited purpose of ensuring the compliance of our judgment.

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