2023 (9) TMI 704 - HC - Indian Laws

Dishonour of Cheque - territorial jurisdiction - whether an inquiry under Section 202 of the Code of Criminal Procedure is mandatory before issuance of process in a complaint under Section 138 read with Section 141 of the Negotiable Instruments Act when the accused resides outside the territorial jurisdiction of the learned Chief Judicial Magistrate at Kolkata? - HELD THAT - This Court has already held that Section 202 of the Cr.P.C was introduced in the statute book in order to prevent lodging of false complaint only to cause harassment of innocent persons who reside outside the jurisdiction of the court of the learned Magistrate. When the learned Magistrate on scrutiny of record prima facie came to a decision that process ought to have been issued even against a person who resides outside the jurisdiction of the court of the learned Magistrate and passed an order under Section 204 of the Cr.P.C, it is obvious that the learned Magistrate also took into account the provision under Section 202 of the Cr.P.C. In SMS PHARMACEUTICALS LTD. VERSUS NEETA BHALLA 2005 (9) TMI 304 - SUPREME COURT , the Hon ble Supreme Court while construing the provision of Section 141 of the N.I Act, 1881, has noted that the position of a Managing Director or a Joint Managing Director of the company is distinct since persons occupying that position are in charge of and responsible for the conduct of the day to day business of the company. It was observed that though there is a general presumption that the Managing Director and Joint Managing Director are responsible for the act of the company, the director will not be held liable if he was not responsible for the criminal conduct of the company at the time of the commission of offence. Now to conclude, it is found from the record that the petitioner was arraigned as an accused in the aforementioned cases under Section 138 read with Section 141 of the N.I Act on the ground that he at the relevant point of time was the Managing Director of the company. Secondly, in the petition of complaint it was not stated that the petitioner resides outside the jurisdiction of the learned Magistrate. Thirdly, while issuing process the learned Magistrate adverted to the petition of complaint, evidence of the complainant affirmed under Section 145(1) of the N.I Act and the documents filed by the complainant. Thus, before issuance of process, the learned Magistrate obviously came to the conclusion that there are prima facie reasons to issue process against the petitioner and lastly, if the impugned order prima facie proves application of mind by the learned Magistrate in respect of compliance of mandatory provision under Section 202 of the Cr.P.C, the order cannot be set aside only on technical ground for absence of the magic words that inquiry under Section 202 was held and the learned Magistrate was satisfied that process should be issued against the accused. There are no merit in these bunches of criminal revision and accordingly the revisional applications are set aside.

Summary

Issues Involved:

1. Whether an inquiry under Section 202 of the Code of Criminal Procedure (Cr.P.C) is mandatory before issuing process in a complaint under Section 138 read with Section 141 of the Negotiable Instruments (N.I) Act when the accused resides outside the territorial jurisdiction of the learned Chief Judicial Magistrate at Kolkata.

Summary:

Issue 1: Mandatory Inquiry under Section 202 Cr.P.C

The common question addressed in these criminal revisions is whether an inquiry under Section 202 of the Cr.P.C is mandatory before issuing process in complaints under Section 138/141 of the N.I Act when the accused resides outside the jurisdiction of the Magistrate.

Section 202 Cr.P.C mandates that a Magistrate must conduct an inquiry or direct an investigation when the accused resides outside the area of the Magistrate's jurisdiction. This is to prevent false complaints and unnecessary harassment of individuals residing far from the court's jurisdiction. The Hon'ble Supreme Court, in cases like Vijay Dhanuka, Abhijit Pawar, and Birla Corporation, has emphasized that the inquiry under Section 202 cannot be dispensed with and is mandatory for determining sufficient grounds to proceed against the accused. The evidence of the complainant can be given by affidavit under Section 145 of the N.I Act, which the Magistrate may consider during the inquiry.

In the present cases, the petitioner argued that the learned Magistrate issued process without conducting the mandatory inquiry under Section 202 Cr.P.C, as the petitioner resides in Ahmedabad, Gujarat. The Supreme Court in Sunil Todi & Ors. vs. State of Gujarat & Anr. reiterated that Section 202 was amended to prevent false complaints against individuals residing far away as a means of harassment.

The Division Bench of the Calcutta High Court in S.S Binu vs. State of West Bengal & Anr. also held that an inquiry under Section 202 is necessary to prevent false complaints and harassment.

Conclusion:

The Court concluded that although the learned Magistrate did not explicitly state that an inquiry under Section 202 was conducted, the examination of the complaint, affidavit, and documents by the Magistrate implied substantial compliance with the requirement. The Court also noted that the address of the petitioner within the jurisdiction was mentioned in the complaint, which might have influenced the Magistrate's initial decision. Therefore, the absence of explicit mention of the inquiry under Section 202 does not invalidate the process issued by the Magistrate. The revisional applications were set aside, affirming the Magistrate's order.