2023 (12) TMI 668 - HC - Indian Laws

Dishonour of Cheque - technically defective legal demand notice - no cause of action arises against the drawers of cheques - sufficient opportunity to a person who issues the cheque - HELD THAT - 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. Sections 143 and 145 of the NI Act were enacted by the Parliament with the aim of expediting trial in such cases. The provisions of summary trial enable the respondent to lead defence evidence by way of affidavits and documents. Thus, an accused who considers that he has a tenable defence and the case against him was not maintainable, he can enter his plea on the very first day of his appearance and file an affidavit in his defence evidence and if he is so advised, he can also file an application for recalling any of the witnesses for cross-examination on the defence taken by him. In view of the procedure prescribed under the Cr.PC, if the accused appears after service of summons, the learned Metropolitan Magistrate shall ask him to furnish bail bond to ensure his appearance during trial and ask him to take notice under Section 251 Cr.PC and enter his plea of defence and fix the case for defence evidence, unless an application is made by an accused under Section 145(2) of NI Act for recalling a witness for cross-examination on plea of defence. If there is an application u/s 145(2) of N.I. Act for recalling a witness of complainant, the court shall decide the same, otherwise, it shall proceed to take defence evidence on record and allow cross examination of defence witnesses by complainant - 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. 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. Thus, no ground for quashing of the proceedings/complaint/order of cognizance/order of summoning dated 16.03.2023 against the petitioners from the Complaint Case No. C.C. N1 ACT 6887/2022 is made out - petition dismissed.

Summary

Issues Involved:
1. Quashing of proceedings/complaint/order of Cognizance/Order of summoning dated 16.03.2023 against the petitioners.
2. Legal validity of the order of cognizance against the petitioners dated 16.03.2023.

For the first issue, the petitioners sought to quash the proceedings based on a complaint under Section 138 of the Negotiable Instruments Act, 1881. The Metropolitan Magistrate issued summons requiring the petitioners to attend court. The petitioners argued that the order of cognizance was improper due to non-compliance with statutory provisions. However, the court found that all statutory requirements had been met, including the presentation of the cheque within its validity period, subsequent dishonor, and issuance of a legal notice. The High Court emphasized that the accused must raise defenses before the Metropolitan Magistrate and that the High Court cannot usurp the Magistrate's powers. The offense under Section 138 is technical, and defenses must be proven by the accused, with evidence already given by the complainant considered proof unless the accused requests to recall witnesses for cross-examination.

Regarding the legal validity of the order of cognizance, the court noted that partners of a partnership firm can be vicariously liable for the firm's acts. The court found prima facie evidence to proceed against the accused based on compliance with statutory requirements. The High Court concluded that no grounds existed to quash the proceedings, and the Trial Court should address the petitioners' contentions and defense in accordance with the law. The prayers to quash the proceedings were deemed untenable, leading to the dismissal of the petition and pending application. The High Court did not find material warranting the invocation of its jurisdiction under Section 482 of the Cr.PC, as the defense raised required evidence that could only be proven in a court of law. The court emphasized the importance of following the prescribed procedures under the Cr.PC and the NI Act to expedite trial in such cases, allowing accused parties to enter their defense evidence and cross-examine witnesses effectively.