2005 (7) TMI 726 - SC - Indian Laws

Summary

Issues:
1. Revision of judgment by High Court regarding dropping of proceedings under Section 138 of the Negotiable Instruments Act.
2. Examination of defense on merits at the summoning stage.
3. Payment made by Respondents in relation to the cheques issued.
4. Error in the approach of the High Court in allowing the revision petition.

Issue 1: Revision of judgment by High Court regarding dropping of proceedings under Section 138 of the Negotiable Instruments Act
The Appellant filed complaints under Section 138 of the Negotiable Instruments Act, and the Metropolitan Magistrate issued summons to the Respondents. The Magistrate dismissed an application to drop the proceedings, stating that the determination of whether the cheques were issued for discharge of debt/liability should be made after recording evidence. The High Court, in its revisional jurisdiction, examined the defense on merits and allowed the criminal revision petition filed by the Respondents, reversing the Magistrate's decision. The Supreme Court found the High Court's approach erroneous and set aside the judgment, directing the Complaint Cases to be tried on merits in accordance with the law.

Issue 2: Examination of defense on merits at the summoning stage
The Supreme Court noted that the High Court erred in examining the defense on merits at the stage of summoning the Respondents. The Court emphasized that questions regarding payment made by the Respondents in relation to the cheques issued should be decided during the trial of the complaint cases under Section 138 of the Negotiable Instruments Act and not at the summoning stage. The Court held that it was premature for the High Court to consider the defense of the Respondents at that point.

Issue 3: Payment made by Respondents in relation to the cheques issued
The subject matter of the complaints involved four cheques totaling a significant amount. The Respondents claimed to have made a payment of a substantial sum by bank drafts after the issuance of some of the cheques. The Supreme Court highlighted that the determination of whether the payment was made and whether it covered the amounts specified in the cheques should be made during the trial proceedings under Section 138 of the Negotiable Instruments Act. The Court emphasized that such matters should not form the basis for allowing a revision petition at an earlier stage.

Issue 4: Error in the approach of the High Court in allowing the revision petition
The Supreme Court concluded that the High Court's decision to allow the revision petition by examining the defense on merits and determining the payment made by the Respondents was erroneous. By setting aside the High Court's judgment, the Supreme Court restored the Complaint Cases to be tried on merits in accordance with the law. The parties were directed to appear before the Chief Metropolitan Magistrate for further proceedings. The appeals were allowed accordingly, emphasizing the importance of following the legal procedures and conducting a trial to decide the issues raised in the complaints under the Negotiable Instruments Act.