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2018 (11) TMI 1397 - HC - Indian LawsClosure of proceedings - dishonor of cheque - whether the provisions of Section 258 Cr.P.C. for stopping all the proceedings are applicable to the proceedings initiated under Section 138 of the N. I. Act? Held that - Obviously it is only when the cheque amount with interest and cost as assessed paid by a specific date, the Court is entitled to close the proceedings in exercise of its power under Section 143 of the Act read with Section 258 Cr.P.C. and thereafter discharge the accused and not beyond that. It is not the Section but only the principles of Section 258 Cr.P.C. that have been held to be applicable to complaint cases that too only to the extent as enunciated by the Hon ble Supreme Court in Meters and Instruments case 2017 (10) TMI 218 - SUPREME COURT OF INDIA . Petition dismissed - decided against petitioner.
Issues Involved:
1. Applicability of Section 258 Cr.P.C. to proceedings under Section 138 of the Negotiable Instruments Act. 2. Interpretation and application of the Supreme Court's decision in Meters and Instruments Private Limited vs. Kanchan Mehta. 3. Binding nature of judicial precedents and ratio decidendi. Detailed Analysis: 1. Applicability of Section 258 Cr.P.C. to proceedings under Section 138 of the Negotiable Instruments Act: The primary issue in this case was whether the provisions of Section 258 of the Criminal Procedure Code (Cr.P.C.) could be applied to proceedings initiated under Section 138 of the Negotiable Instruments Act (N.I. Act). Section 258 Cr.P.C. allows a Magistrate to stop proceedings in certain cases instituted otherwise than upon complaint. The court observed that Section 258 Cr.P.C. is applicable only in cases where prosecution is launched by the State and not in cases where a complaint is filed by a private party, such as under Section 138 of the N.I. Act. Thus, Section 258 Cr.P.C. would not apply to complaints under Section 138 of the N.I. Act unless the conditions specified by the Supreme Court in Meters and Instruments Private Limited vs. Kanchan Mehta are met. 2. Interpretation and application of the Supreme Court's decision in Meters and Instruments Private Limited vs. Kanchan Mehta: The court referred to the Supreme Court's decision in Meters and Instruments Private Limited vs. Kanchan Mehta, which held that Section 258 Cr.P.C. could be applied to proceedings under Section 138 of the N.I. Act if the cheque amount along with interest and reasonable cost of litigation is paid to the satisfaction of the court. The Supreme Court emphasized that the object of the provision is primarily compensatory, and the punitive element is mainly to enforce the compensatory aspect. The court can close the proceedings and discharge the accused if the complainant is duly compensated. However, in this case, the petitioner’s application under Section 258 Cr.P.C. was not based on the payment of the cheque amount with interest and cost, but on the ground that the complaint was not maintainable due to a lack of legal enforceable liability and the existence of a pending civil suit. Therefore, the court concluded that the principles of Section 258 Cr.P.C. as interpreted by the Supreme Court in Meters and Instruments did not apply to the petitioner’s case. 3. Binding nature of judicial precedents and ratio decidendi: The court discussed the binding nature of judicial precedents and the concept of ratio decidendi, citing several Supreme Court decisions. It emphasized that the ratio of a judgment must be understood in the context of the facts of that particular case and that a judgment is only an authority for what it actually decides. The court referred to the decision in Ambica Quarry Works v. State of Gujarat, which held that the ratio of a decision must be understood in the background of the facts of that case. The court also cited the decision in Krishena Kumar v. Union of India, which explained that the ratio decidendi is the underlying principle or general reason upon which the decision is based. The court concluded that the principles laid down by the Supreme Court in Meters and Instruments Private Limited vs. Kanchan Mehta were applicable only to cases where the cheque amount with interest and cost is paid, and not beyond that. Conclusion: The court dismissed the petition, holding that there was no merit in the petitioner’s argument that Section 258 Cr.P.C. was applicable to the proceedings under Section 138 of the N.I. Act in the absence of payment of the cheque amount with interest and cost. The court reiterated that the principles of Section 258 Cr.P.C. as interpreted by the Supreme Court in Meters and Instruments Private Limited vs. Kanchan Mehta apply only when the cheque amount with interest and cost is paid, and not in other circumstances.
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