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TMI Blog2005 (2) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... otiable Instruments Act, 1881 (for short, "the Act"). Therefore, we propose to decide these petitions by a common judgment. 2. These petitions raise following two issues, which are required to be determined: (i) Whether the complaint under Section 138 of the Act, according to the legislative mandate, requires to be adjudicated expeditiously and in any event, within six months from the date of the service of summons or warrants on the accused? (ii) Whether, in spite of mandate of Section 145(1) of the Act, the Court is obliged to examine the complainant even in respect of matters which have been stated on affidavit? 3. Now, we would deal with basic facts and issues involved in individual petitions. Criminal Writ Petition No. 1228 of 2004: 4. The petitioner Company approached this Court against the order of the learned Sessions Judge delivered in Criminal Revision Application No. 713 of 2003 on 28th November, 2003 in proceedings emanated from Section 138 of the Act. The learned Metropolitan Magistrate, Mumbai, by his order dated 1st August, 2003, arrived at the conclusion that the amendment, more particularly in Section 145 of the Act, has been introduced by the Legislature w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s common judgment. 8. PIL No. 151 of 2004 relates to cases pertaining to Section 138 of the Act. In this case, a criminal complaint was filed under Section 138 of the Act against the accused, who issued a cheque for Rs. 3,15,300/for discharge of legal liability on 14th July, 2003. The said cheque was dishonoured with the remark: "Refer to drawer". The demand notice was sent, but the accused refused to pay the outstanding amount. In these circumstances, the petitioner was compelled to file a criminal complaint under Section 138 of the Act. 9. The petitioner's complaint was verified on 20th September, 2003 and the process was issued by the Metropolitan Magistrate returnable after six months on 20th March, 2004. The petitioner has filed an application for proponing the date, which was rejected after hearing the parties. The petitioner in this petition has made serious grievance of undue delay which occurs in disposal of complaints under Section 138 of the Act by the Metropolitan Magistrates. According to the petitioner, normally, there are only one or two hearings of these cases in the entire year and consequently, there is enormous delay in disposal of these cases. 10. In anot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability." 16. Section 140 deals with defence which may not be allowed in any prosecution under Section 138. Section 138 deals with offences by companies. Sections 142 deals with cognizance of offences. Sections 138 to 142 have been incorporated in the Act as a result of strong public opinion for inculcating faith in the efficacy of banking operations and credibility in transacting business on the basis of negotiable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complaint: (i) Filing of complaint under Section 138 of the Act with Metropolitan Magistrate (MM) / Additional Metropolitan Magistrate (AMM); (ii) The Metropolitan Magistrate (incharge) verifies the complaint and marks the same to the concerned MM or AMM for further proceeding; (iii) Stage of issuance or declining to issue the process; (iv) Recording of the statement of the Complainant and other witnesses and their cross examination; (v) Fixing the date for hearing of arguments of the Counsel for the Complainant and accused; (vi) Orders for summoning of the accused; (vii) Appearance of the accused and other necessary formalities regarding release of the accused on bail be completed; (viii) Hearing of application, if moved, for recalling the summoning order and passing order; (ix) Asking the accused regarding his guilt or otherwise by a notice under Section 251 of the Criminal Procedure Code; (x) On his pleading not guilty, to again examine the complainant and witnesses, to permit their cross examination and recording the statement of accused under Section 281 of the Criminal Procedure Code and to ask him to lead his defence evidence; (xi) Pronouncing the judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the business transaction within and outside the country suffers a serious set back. The Parliament, in order to restore the credibility of cheques as a trustworthy substitute for cash payment, specifically incorporated the provisions of Sections 138 to 142 of the Act. An unscrupulous drawer normally takes various pleas to defeat the genuine transaction and claim of the payee. 29.Experience has shown that the criminal prosecution under the provisions of Sections 417 and 420, Indian Penal Code, have not proved efficacious to bring home the guilt of the drawer accused . In this background, these new provisions have been enacted. The object and intention of incorporating these provisions were to lend greater acceptability and credibility to the business transactions and to establish that the cheques are a trustworthy substitute for cash payment. The other object and inherent intention of enacting the said provisions is clear, viz., that the Legislature was extremely keen and anxious in ensuring expeditious disposal of cases pertaining to dishonoured of cheques. The said amendments were, in fact, introduced primarily to accomplish the said object. 30. The Courts have to give m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncing of cheques due to insufficiency of funds in the accounts or for the reason that it exceeds the arrangements made by the drawer, with adequate safeguards to prevent harassment of honest drawers. It is obviously to achieve the above objective that provisions have been incorporated in the Chapter creating a new offence in case where a cheque bounces when presented for payment and conferring a new criminal remedy on the affected party, namely, the payee or holder in due course of the dishonoured cheque in addition to the existing civil remedy." 34. Their Lordships of the Supreme Court in Electronic Trade and Technology Development Corporation Ltd. v. Indian Technologist and Engineers, 1996CriLJ1692, have observed that the object of bringing Section 138 of the Act on the statute appears to be to inculcate faith in the efficacy of the banking operations and credibility in transacting business on negotiable instruments. The fact that in Bombay Courts, about one lakh complaints are pending as on 31st December, 2004 clearly demonstrates that the credibility and acceptability of issuance of cheques in settlement of liability is seriously in question. To control the flood of these com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unishment provided in the Act has proved to be inadequate, the procedure prescribed for the Courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner, in view of the procedure contained in the Act. The proposed amendments in the Act are made for early disposal of cases relating to dishonoured of cheques, enhancing punishment for offenders, introducing electronic image of a truncated cheque and a cheque in the electronic form as well as exempting an official nominee director from prosecution under the Act. 38. Subsection (1) of Section 145 gives complete freedom to the complainant either to give his evidence by way of affidavit or by way of oral evidence. If this is made on affidavit, the same has to be accepted and such affidavit is required to be kept on record by the Court. The second part of subsection (1) provides that the complainant may give his evidence on affidavit and may, subject to all just exceptions, be read in evidence in any enquiry, trial or other proceeding. Thus, it is clear that once the evidence of the complainant is given on affidavit, it may be read in evidence in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration while evaluating the performance of the concerned judicial officer. (d) Every judicial officer must ensure that at least four cases in a month are disposed of by reasoned judgments. (e) The trial of these complaint cases under Section 138 of the Act be continued from day to day until its conclusion. (f) The complainant must ensure that the legislative intention is carried out in dealing with complaints under Section 138 of the Act. (g) The Registrar General is directed to monitor that directions given by the Court are scrupulously followed. A comprehensive quarterly report be submitted to this Court indicating whether directions of this Court are followed. 41. All these petitions are accordingly disposed of. Rule is partly made absolute in Criminal Writ Petition No. 1228 of 2004. All intervention applications stand disposed of. 42. These petitions would, however, be listed on 1 st March, 2005 only to ensure compliance of our judgment, as mentioned below. 43. We would like to place on record that presently, there are 727 posts of Civil Judges, Junior Division, in the State of Maharashtra. The entire process of filling these vacancies is complete, as far as this C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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