2025 (4) TMI 430 - HC - Indian Laws

Dishonour of Cheque - challenge to issuance of the impugned notice - lack of prior examination of the complainant and witnesses on oath - non-application of mind - principles of natural justice - HELD THAT - In light of the decision in A.C. Narayanan v. State of Maharashtra and Another 2013 (9) TMI 948 - SUPREME COURT it becomes clear that in respect of complaints under Section 138 of the NI Act once the complainant files an affidavit in support of the complaint it is within the Magistrate s discretion to decide whether to examine the complainant or witnesses on oath. The Magistrate is not bound to do so and may rely solely on the complaint supporting documents and the affidavit to decide whether to issue process. Section 145 of the NI Act expressly permits the complainant to tender evidence by way of affidavit and enables the Court to proceed on such material unless a request is made for summoning the witness for cross-examination. Thus the NI Act carves out a procedural departure from the general requirement under Section 200 CrPC (and now Section 223 BNSS) recognising the affidavit as a valid substitute for oral examination at the pre-cognizance stage. While Section 223 of the BNSS broadly retains the procedural framework of Section 200 of the CrPC with respect to the examination of the complainant and witnesses it introduces a significant departure through the insertion of a proviso mandating that the proposed accused be afforded an opportunity of hearing before cognizance is taken. This proviso marks a substantive procedural safeguard that did not exist under the earlier regime. However with regard to offences under Section 138 of the NI Act the Supreme Court in A.C. Narayanan v. State of Maharashtra has categorically held that the Magistrate may in his discretion proceed on the basis of the complaint supporting documents and an affidavit of the complainant without necessarily examining the complainant or witnesses on oath prior to issuing process. Accordingly in the Court s view the procedure for such cases has not undergone any material change with the enactment of Section 223 of the BNSS. The requirement of examining the complainant and the witnesses upon oath at the pre-cognizance stage remains directory and not mandatory in complaints under Section 138 of the NI Act. Conclusion - The Petitioner s contention that the Magistrate erred in issuing notice under Section 223 without first examining the complainant and witnesses on oath does not merit acceptance. The challenge to the Impugned notice is therefore misconceived and without legal basis. The Court finds no merit in the present petition - Petition dismissed.

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment include:

1. Whether the issuance of the impugned notice by the Trial Court was procedurally defective under Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) due to the lack of prior examination of the complainant and witnesses on oath.

2. Whether the procedural safeguards under Section 223 of the BNSS, particularly the requirement for a pre-cognizance hearing, were correctly applied in the context of a complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).

3. The applicability of precedents and statutory provisions concerning the issuance of process in complaints under the NI Act, particularly in light of the new procedural requirements under the BNSS.

ISSUE-WISE DETAILED ANALYSIS

1. Procedural Defect in Issuance of Notice

The Petitioner argued that the Trial Court misdirected itself by issuing a notice without applying judicial mind to the complaint's contents, as required under Section 223 of the BNSS. The Petitioner contended that the notice was premature and violated the procedural safeguards of examining the complainant and witnesses on oath before issuing notice to a proposed accused.

Relevant Legal Framework and Precedents: Section 223 of the BNSS mandates that before taking cognizance of an offence, the Magistrate must examine the complainant and witnesses on oath. However, the first proviso requires that the accused be given an opportunity of being heard before cognizance is taken.

Court's Interpretation and Reasoning: The Court interpreted that the statutory requirement for a pre-cognizance hearing was a new procedural safeguard not present in the corresponding provision of the CrPC. The Court noted that the Magistrate issued the impugned notice to comply with this requirement, providing an opportunity for the accused to be heard.

Application of Law to Facts: The Court found that the issuance of the notice was in compliance with the statutory requirement under the first proviso to Section 223 (1) of the BNSS. The procedural safeguard was correctly applied, and the Magistrate's discretion in not examining the complainant and witnesses on oath was upheld.

2. Procedural Requirements for NI Act Complaints

The Petitioner argued that the complaint lacked necessary material particulars and foundational facts to sustain a prima facie case under Section 138 of the NI Act, and thus, the Trial Court should have dismissed it at the threshold.

Relevant Legal Framework and Precedents: The Court referred to the Supreme Court's decision in A.C. Narayanan v. State of Maharashtra, which clarified that for complaints under Section 138 of the NI Act, the Magistrate could rely on the complaint, supporting documents, and an affidavit without necessarily examining the complainant or witnesses on oath.

Court's Interpretation and Reasoning: The Court emphasized that the NI Act allows for evidence by affidavit, and the Magistrate has discretion to issue process based on such affidavits and documentary evidence. The procedural departure under the NI Act was recognized as valid and applicable.

Application of Law to Facts: The Court concluded that the Magistrate's reliance on affidavits and documentary evidence was appropriate and consistent with the established legal position for NI Act complaints. The procedural requirements under Section 223 of the BNSS did not alter this position.

SIGNIFICANT HOLDINGS

The Court held that:

1. The procedural safeguard of a pre-cognizance hearing under Section 223 of the BNSS was correctly applied, and the issuance of notice was not procedurally defective.

2. For complaints under Section 138 of the NI Act, the Magistrate's discretion to rely on affidavits and documentary evidence without examining the complainant and witnesses on oath is upheld, consistent with the Supreme Court's decision in A.C. Narayanan.

3. The Petitioner's reliance on decisions from the High Courts of Kerala and Karnataka was misplaced, as those cases did not pertain to offences under the NI Act and were factually distinguishable.

4. The petition challenging the impugned notice was dismissed for lack of merit.

← Previous Next →