2023 (8) TMI 241 - HC - Indian Laws

Dishonour of Cheque - insufficient funds - whether the alleged amount of default, has already been paid by the petitioner prior to receiving the copy of summons in the present case? - HELD THAT - It is clear from the materials on record that the payment towards the petitioner s liability was not within the notice period - In this case, it is clear that the payment was not made within the statutory period. So the proceedings under Section 138 N.I. Act is prima facie maintainable. In the present case as seen from the order dated 18.03.2009 the Magistrate took evidence on affidavit along with documents under Section 200 Cr.P.C. and considered the case to be suitable for issuing process under Section 202 Cr.P.C. on examination of the documents and the evidence of the complainant on affidavit and being satisfied as to the sufficiency of grounds for proceeding under Section 202 Cr.P.C. - the proceeding is under Section 138 N.I. Act. The strict compliance of the provision under Section 202 Cr.P.C. in such cases has been dispensed with by the Hon ble Supreme Court. By the order under revision the learned Magistrate has issued a warrant of arrest against the petitioner. Payment of the due amount has been made. Keeping with the view of the Hon ble Supreme Court in re-expeditious trial of the cases under Section 138 N.I. Act the present revision is disposed of by directing the learned Magistrate to refer this case for mediation to the Secretary of the respective District Legal Services Authority - in the interest of justice and as payment of the cheque amount has already been made by the petitioner, the order under revision issuing warrant of arrest against the petitioner is liable to be set aside. Revision application allowed.

Summary

Issues Involved:
1. Quashing of the order dated 14.11.2018 and the entire proceeding of complaint case C/13277/2009 under Section 138 of the Negotiable Instruments Act, 1881.
2. Compliance with Section 202 of the Cr.P.C.
3. Validity of the warrant issued against the petitioner.
4. Payment of the alleged debt before the issuance of summons.

Summary:

Quashing of the Order and Proceedings:
The petitioner sought to quash the order dated 14.11.2018 and the entire proceeding of complaint case C/13277/2009 under Section 138 of the Negotiable Instruments Act, 1881. The complaint was initially filed on 18.03.2009, alleging that the petitioner issued a cheque for Rs. 53,110/-, which was dishonored due to "Insufficient funds." Despite receiving a demand notice, the petitioner allegedly did not make the payment within the stipulated period, leading to the filing of the complaint.

Compliance with Section 202 of the Cr.P.C.:
The petitioner contended that the learned Trial Court did not comply with the mandatory provision of Section 202 of the Cr.P.C. when issuing the process, as the petitioner resided outside the jurisdiction of the court. However, the court noted that the proceedings under Section 138 of the NI Act do not strictly require compliance with Section 202 Cr.P.C. as per the Supreme Court's interpretation in relevant cases, including "Re expeditious trial of cases u/s 138 N.I. Act" and "Sunil Todi vs The State of Gujarat."

Validity of the Warrant:
The petitioner argued that the warrant issued on 14.11.2018 was unjustified as the petitioner had already paid the total cheque amount through two demand drafts before receiving the summons. The court acknowledged that the payment was made before the issuance of the summons but outside the statutory notice period. Therefore, the proceedings under Section 138 NI Act were prima facie maintainable.

Payment of Alleged Debt:
The petitioner submitted evidence of payment through two demand drafts amounting to Rs. 53,110/-, which was acknowledged by the complainant. The court observed that the payment was made after the notice period but before the summons, indicating a bona fide effort to settle the debt.

Conclusion:
The court concluded that the order issuing the warrant of arrest against the petitioner should be set aside in the interest of justice, considering the payment of the cheque amount. The complaint case C/13277/2009 is to proceed in accordance with the law, with an effort to settle the dispute through mediation. The revisional application CRR 1021 of 2019 was allowed, and the impugned order dated 14.11.2018 was set aside. All connected applications were disposed of, and the interim order was vacated. The judgment was directed to be sent to the learned Trial Court for necessary compliance.