2017 (2) TMI 177 - HC - Indian Laws

Offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - Held that - In the present facts of the case, the offence allegedly committed by the petitioner/accused is punishable under Section 138 of the Act and in Section 33 sub-section (2), proviso (a) is an exception to impound such document since the proceedings are criminal trial, where the Court is empowered to impose sentence against the accused. In those circumstances, the Magistrate is bound to exercise his discretion to hold that the mandate of sub- sections 1 and 2 of Section 33 are required to be applied in respect of any instrument in question insufficiently stamped instrument in question and non-exercise of discretion so vested in the Magistrate would result in great hardship and prejudice to the complainant and therefore when the Magistrate exercised his discretion not to impound the document by exercising the discretionary power vested on it by virtue of Section 33 (2) proviso and Section 35 proviso (d), such orders cannot be enquired, while exercising jurisdiction under Section 138 of the Act. When the Special Magistrate and the Revisional Courts have exercised their discretion under Sections 33(2) proviso (a) and 35 proviso (d), this Court cannot interfere with such orders while exercising inherent power under Section 482 Cr.P.C. Section 482 Cr.P.C. confers inherent power on the High Court being the highest Court of the State only for limited purpose of enforcing the orders passed under the Code, to prevent abuse of process of the Court and to meet the ends of justice in view of the limited power conferred on it, unless the order passed by the trial Court and confirmed by the revisional Court is prima-facie erroneous and the court cannot interfere by exercising inherent power under Section 482 Cr.P.C. Therefore, find no illegality in the order passed by the trial Court in exercising discretion that conferred on the Courts below to set aside the same, consequently, persuaded by the law laid down by Calcutta High Court in as early as in 1950 and in the latter judgment of the Karnataka and Madhya Pradesh High Courts and interpreting the provisions under Sections 33 and 35 of the Stamp Act. It is of the view that the orders passed by the Special Magistrate confirmed by the IV Additional Metropolitan Sessions Judge at Hyderabad, by exercising jurisdiction under Section 397 Cr.P.C., are free from any illegality and legal infirmity calling for interference of this Court, while exercising power under Section 482 Cr.P.C. Hence, petition is devoid of merits and liable to be dismissed.

Summary

Issues Involved:
1. Legally enforceable debt and dishonoured cheque under Section 138 of the Negotiable Instruments Act.
2. Admissibility of unstamped and unregistered Memorandum of Understanding (MoU) under the Indian Stamp Act.
3. Discretionary power of the Magistrate to impound documents under Sections 33 and 35 of the Indian Stamp Act.
4. Application of Sections 33 and 35 of the Indian Stamp Act in criminal proceedings.

Detailed Analysis:

1. Legally Enforceable Debt and Dishonoured Cheque under Section 138 of the Negotiable Instruments Act:
The petitioner was accused under Section 138 of the Negotiable Instruments Act for issuing a cheque that was dishonoured. The complainant alleged that the cheque was issued to discharge a legally enforceable debt. The petitioner failed to pay the amount despite notice, leading to the filing of the complaint.

2. Admissibility of Unstamped and Unregistered Memorandum of Understanding (MoU) under the Indian Stamp Act:
The basis of the complainant's claim was an unstamped and unregistered MoU. The petitioner argued that the MoU was inadmissible as evidence since it was not duly stamped or registered. The Special Magistrate and the Revisional Court dismissed the petitioner's request to impound the MoU under Section 33 of the Indian Stamp Act.

3. Discretionary Power of the Magistrate to Impound Documents under Sections 33 and 35 of the Indian Stamp Act:
The petitioner contended that the Magistrate should have impounded the MoU as required by Sections 33 and 35 of the Indian Stamp Act. However, the courts held that the power to impound documents under these sections is discretionary. Section 33(2) proviso (a) and Section 35(d) provide exceptions for criminal courts, allowing them to admit unstamped documents in evidence in criminal proceedings, except in cases under Chapters IX and X of the Cr.P.C.

4. Application of Sections 33 and 35 of the Indian Stamp Act in Criminal Proceedings:
The court examined whether Sections 33 and 35 of the Indian Stamp Act apply to criminal proceedings. It was concluded that these sections do not mandate the impounding of documents in criminal cases, except for proceedings under Chapters IX and X of the Cr.P.C. The court cited precedents from the High Courts of Calcutta, Madhya Pradesh, and Karnataka, which supported the discretionary power of criminal courts in such matters.

Conclusion:
The court upheld the decisions of the Special Magistrate and the Revisional Court, stating that they had judiciously exercised their discretion not to impound the MoU. The petitioner's arguments based on civil case precedents were deemed inapplicable to the criminal proceedings under Section 138 of the Negotiable Instruments Act. The petition was dismissed, affirming that the orders were free from illegality and legal infirmity.