2020 (3) TMI 517 - HC - Indian Laws

Dishonor of Cheque - section 138 of NI Act - argued by petitioner that the cheque in question was a post dated cheque which was issued as a security cheque without any liability and privity of contract between the petitioner and respondent No. 2 - HELD THAT - The Negotiable Instruments Act, provides sufficient opportunity to a person who issues the cheque. Once a cheque is issued by a person, it must be honoured and if it is not honoured, the person is given an opportunity to pay the cheque amount by issuance of a notice and if he still does not pay, he is bound to face the criminal trial and consequences. It is seen in many cases that the petitioners with malafide intention and to prolong the litigation raise false and frivolous pleas and in some cases, the petitioners do have genuine defence, but instead of following due procedure of law, as provided under the NI Act and the Cr.PC, and further, by misreading of the provisions, such parties consider that the only option available to them is to approach the High Court and on this, the High Court is made to step into the shoes of the Metropolitan Magistrate and examine their defence first and exonerate them. The High Court cannot usurp the powers of the Metropolitan Magistrate and entertain a plea of accused, as to why he should not be tried under Section 138 of the NI Act. An offence under Section 138 of the NI Act is technical in nature and defences, which an accused can take, are inbuilt; for instance, the cheque was given without consideration, the accused was not a Director at that time, accused was a sleeping partner or a sleeping Director, cheque was given as a security etc. etc., the onus of proving these defences is on the accused alone, in view of Section 106 of the Indian Evidence Act, 1872. Since the mandate of the legislature is the trial of such cases in a summary manner, the evidence already given by the complainant by way of affidavit is sufficient proof of the offence and this evidence is not required to be given again in terms of section 145(1) of the NI Act and has to be read during the trial. Upon analyzing the provisions of the NI Act, it is clear that Section 138 of the Act spells out the ingredients of the offence as well as the conditions required to be fulfilled before initiating the prosecution - These ingredients and conditions are to be satisfied mainly on the basis of documentary evidence, keeping in mind the presumptions under Sections 118 and 139 of the NI Act and Section 27 of the General Clauses Act, 1897 as well as the provisions of Section 146 of the Act. The parameters of the jurisdiction of the High Court, in exercising jurisdiction under Section 482 Cr.PC, are now almost well-settled. Although it has wide amplitude, but a great deal of caution is also required in its exercise. The requirement is, the application of well known legal principles involved in each and every matter - Adverting back to the facts of the present case, this Court does not find any material on record which can be stated to be of sterling and impeccable quality warranting invocation of the jurisdiction of this Court under Section 482 Cr.PC at this stage. More so, the defence as raised by the petitioners in the petition requires evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.PC and the same can only be proved in the Court of law. There are no flaw or infirmity in the proceedings pending before the Trial Court. However, the Trial Court shall certainly consider and deal with the contentions and the defence of the petitioner in accordance with law - petition dismissed.

Summary

Issues:
Petition to quash impugned order under Negotiable Instruments Act, 1881. Interpretation of legal provisions under Cr.PC and NI Act. Jurisdiction of High Court under Section 482 Cr.PC.

Analysis:
1. The petitioner filed a petition under Section 482 of the Cr.P.C. seeking to quash an order passed by the Metropolitan Magistrate summoning the petitioner under Section 138 of the Negotiable Instruments Act, 1881. The petitioner argued that the cheque in question was a post-dated security cheque issued without liability or privity of contract. Additionally, the petitioner claimed that there was an alteration on the cheque, which the trial court failed to consider. The High Court emphasized that the accused must raise defenses before the Magistrate and not directly approach the High Court to avoid trial under Section 138 of the NI Act.

2. The judgment highlighted that an offense under Section 138 of the NI Act is technical, and defenses must be raised before the Magistrate. The accused bears the burden of proving defenses, such as the cheque being given without consideration or as security. The court emphasized that the trial should be summary, and the accused can lead defense evidence through affidavits and documents as per Sections 143 and 145 of the NI Act.

3. The High Court emphasized the importance of following the procedure outlined in the Cr.PC, where the accused must enter a plea of defense before the Magistrate. The accused can recall witnesses for cross-examination on the defense taken. The judgment clarified that the accused's defense evidence should be filed on the first day of appearance, and if no witness recall application is made, the Magistrate proceeds with taking defense evidence and allowing cross-examination.

4. The judgment analyzed the provisions of the NI Act, stating that Section 138 outlines the offense's ingredients and conditions based on documentary evidence. The court highlighted the special code for trial under Chapter XVII of the NI Act, which departs from the Cr.PC to expedite proceedings. The High Court, while exercising jurisdiction under Section 482 Cr.PC, emphasized the need for caution and adherence to legal principles, stating that allegations requiring proof in court cannot be decided under Section 482.

5. Ultimately, the High Court found no flaw in the proceedings before the Trial Court and dismissed the petition, emphasizing that the Trial Court should consider the petitioner's contentions and defense in accordance with the law. The judgment concluded by stating that the prayers were untenable in law, and no notice to the respondents was deemed necessary, dismissing the petition and disposing of the related application accordingly.