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TMI Blog2010 (12) TMI 1358X X X X Extracts X X X X X X X X Extracts X X X X ..... Act ) and its interplay with section 200 of the Code of Criminal Procedure, 1973 ( CrPC ). 2. Shortly put, the question is - whether, in view of the provisions of section 145 of NI Act (added by Act No. 55 of 2002), a Metropolitan Magistrate or Judicial Magistrate, First Class, taking up a complaint under section 138 of the NI Act, along with documents in support thereof and a verification made in the affidavit in support of the complaint, is still obliged to examine on oath the complainant and his witnesses before issuing process on the complaint? 3. The reference has been made as the learned Single Judge expressed the prima facie view that the judgment of a learned Single Judge of this Court in Amarnath Baijnath Gupta v. Mohini Organics (P.) Ltd. 2009 Crl LJ 995 and the judgment of a Division Bench of this Court in Maharaja Developers v. Udaysing 2007 Crl LJ 2207 require reconsideration inasmuch as the said Benches have held that provisions of section 145 of the NI Act would not have an overriding effect over the provisions of section 200 of CrPC, and insofar as the said judgments have held that before issuing process under section 200 CrPC, it is mandatory for the Magistrate to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed No. 1 for the period from 19-9-2008 to 18-12-2008 (for 90 days) with a view to earn interest on it at 13.75 per cent as promised, and that the said amount was paid by the complainant to accused No. 1 company by cheque dated 19-9-2008; that upon receipt of payment accused No. 2 had sent certified copy of the resolution of accused No. 1 in respect of borrowing the funds and also copy of a board resolution dated 29-5-2008 in respect of the authorized person who was competent to sign the letter of undertaking for post-dated cheques, money receipts and undertaking under section 293 of the Companies Act wherein, names of accused Nos. 2 and 3 are shown, that the accused had also sent copy of the letter in respect of the signature verification of the authorised person vide letter dated 25-4-2006 and the letter dated 3-6-2008, same having been verified by the bankers of the accused, wherein the name and specimen signatures of accused Nos. 2 and 3 were shown. Copies of the above resolutions and letters were produced along with complaint. Upon receipt of the payment of Rs. 20,00,000 from the complainant, the accused issued two post-dated cheques dated 18-12-2008, in favour of the complain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayed that the Court may issue process, summon all the accused and try and punish them for the offence punishable under section 138 of the Negotiable Instruments Act, 1881. The complainant also gave the list of its witnesses. After the complaint was filed on 16-11-2009, the complainant also gave verification under affidavit dated 18-12-2009 of its Manager : 1. I say that, I am the Manager Legal Administration and POA Holder of the Complainant, I am well conversant with the facts of this complaint. 2. I say that the Accused have issued cheques, in favour of Complainant, towards the legal and enforceable liability of the Complainant being the debt i.e., a cheque No. 939127 dated 29-8-2009 for Rs. 20,00,000 (Rs. twenty lakh only) drawn on Punjab National Bank Large Corporate Branch, Cuffe Parade, Mumbai-400 005. 3. I say that, I have deposited the said cheque in our bank Axis Bank Ltd., Thane (W) Branch for encashment, however, the same is returned dishonoured with memo dated 10-9-2009 with remarks Funds Insufficient and the same was intimated to the Complainant by their banker vide letter of intimations dated 11-9-2009. 4. The Complainant has issued legal notice on 19-9-2009 to all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the NI Act, even though the complainant has filed verification on affirmation. While referring the matter to the larger Bench, the learned Single Judge also made the observations already quoted in paragraph 4 hereinabove. Rival Submissions 8. Mr. Marwadi, learned counsel for the petitioner accused, made the following submissions : 8.1 Section 200 of CrPC mandates the learned Magistrate to examine upon oath the complainant and his witnesses present, if any, and to reduce the substance of such examination into writing, before the Magistrate can take cognizance of an offence on complaint. There is no other provision for taking cognizance of an offence except sections 200 and 202 of CrPC. Section 200 uses the words shall examine and not may examine . Hence, the procedure recording examination of the complainant on oath is mandatory and not optional. Reliance is placed on several decisions in support of the contention that examination of complainant on oath is mandatory before issuing process under section 200 of CrPC. 8.2 Section 145 of NI Act, upon which reliance is placed by the complainant, provides that the evidence of the complainant may be given by him on affidavit, but what the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Magistrate can get the complainant to produce such documents. If the complainant suppresses the documents and the Magistrate issues process on the complaint merely on the basis of his verification on affidavit and without examining the complainant on oath, thereafter the accused has no other option but to participate in the trial which will remain pending for a number of years. There is no provision enabling the accused to file an application for discharge. Once the plea of the accused is recorded under section 252 of CrPC, the procedure laid down in Chapter XX for summary trial has to be followed and the entire trial is required to be taken to its logical conclusion. Our attention is also invited to the decision of the learned Single Judge of this Court in Peacock Industries Ltd. v. Budhrani Finance Ltd. 2006 ALL MR CRI 2233, decided on 14-7-2006. Referring to the various guidelines laid down in the said decision, it is submitted that on account of non-observance of these guidelines, serious prejudice is being caused to the accused. 11. Mr. Chavan for accused in Criminal Writ Petition No. 3478 of 2010 reiterated the above submissions and further submitted that the ingredient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding anything contained in the CrPC. The complaints under section 138 of NI Act shall be tried by a Metropolitan Magistrate or by a Judicial Magistrate of the First Class as summary trial under sections 262 to 265 of CrPC. The very fact that the Legislature specifically provided in sub-section (3) of section 143 that every trial shall be conducted as expeditiously as possible and an endeavour shall be made to complete the trial within six months from the date of filing of the complaint clearly indicates the legislative intent that issuance of process was also intended to be expedited after filing of the complaint. 14. Sections 138 to 147 in Chapter XVII of the NI Act are a Code by itself and the very fact that the Legislature specifically provided for the non obstante clause in sections 143, 144 and 145 of NI Act that those provisions were Notwithstanding anything contained in the Code of Criminal Procedure, 1973 , the said provisions added on the statute book by Amending Act 55 of 2002 with effect from 6-2-2003 were obviously intended to give over-riding effect over section 200 of CrPC which is on the statute book since the date of coming into force of the Code in 1974. 15. Strong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless (a) the cheque has been presented to the bank within 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 thirty 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 rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be conducted as expeditiously as possible and an endeavour shall be made to conclude the trial within six months from the date of filing of the complaint. [Emphasis supplied] Section 144 of NI Act provides for expeditious mode of service of summons by permitting such service to be made even by speed post or courier services. Even if the endorsement by the postal department or the courier services states that the accused refused to take delivery of summons, the Court may declare that the summons has been duly served. 21. Sections 145 and 146 of NI Act read as under : 145. Evidence on affidavit. (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the evidence of the complainant may be given by him on affidavit and may, subject to all just exceptions be read in evidence in any enquiry, trial or other proceeding under the said Code. (2) The Court may, if it thinks fit, and shall, on the application of the prosecution or the accused, summon and examine any person giving evidence on affidavit as to the facts contained therein. 146. Bank s slip prima facie evidence of certain facts. The Court shall, in respect of every proceeding under this Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw Commission in its Report No. 213 sent on 24-11-2008, took note of the fact in paragraph 1.5 of the Report that over 38 lakh cheque bouncing cases were pending in various Courts in the country as on 1-6-2008. The Law Commission specifically noted as under:- . . . The number of complaints which are pending in Bombay Courts (5,91,818 cases pending in subordinate Courts of State of Maharashtra) seriously cast shadow on the credibility of our trade, commerce and business. Immediate steps have to be taken by all concerned to ensure restoration of the credibility of trade, commerce and business. The Parliament, therefore, enacted Amending Act No. 55 of 2002 adding sections 143 to 147 in NI Act. The Statement of Objects and Reasons appended to the Bill leading to the enactment of the said Amending Act is set out in the decision dated 11-1-2010 of the Apex Court in Mandvi Co-op. Bank Ltd v. Nimesh B. Thakore [2010] 3 SCC 831. The relevant portions thereof read as under : 14. . . . 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s true that the trial has not yet commenced at the stage when the Magistrate is to decide whether or not to issue process on the complainant under section 138 of NI Act, but sub-section (1) of section 145 permits the complainant to give on affidavit not merely the evidence during trial, but also evidence in any enquiry or other proceeding under CrPC. Obviously, the stage at which the Magistrate considers whether or not to issue process on complaint under section 138 of NI Act is either an enquiry or a proceeding under CrPC other than trial. Sub-section (1) of section 145, therefore, is all comprehensive and permits the complainant to submit on affidavit what he would have otherwise been required to state before the Magistrate in the course of examination upon oath under section 200 of CrPC. 28. The contention of the learned counsel for the accused is that sub-section (2) of section 145 contemplates that on the application of the accused, the Court shall summon and examine any person giving evidence on affidavit as to the facts contained therein and that, therefore, this stage can come only after issuance of process and not before issuance of process. 29. The argument is thoroughly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pection of the Court, such documents are called documentary evidence. The words Proved , Disproved and Not proved are defined as under: Proved - A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. Disproved - A fact is said to be disproved when, after considering the matters before it, the Court either believes that it does not exist, or considers its non- existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist. Not proved - A fact is said not to be proved when it is neither proved nor disproved. 31. It is thus clear that evidence as defined by the Indian Evidence Act is not confined to examination in chief, cross-examination or re-examination of a witness under section 137. Evidence means and includes all statements which the Court permits or requires to make before it in relation to matters of fact under enquiry. What would come on record by way of examination upon oath of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e presentment for the reasons stated in section 138) and when sections 143 to 147 are specifically added on the statute book to make the procedure less cumbersome and to expedite disposal of the case within six months from the date of filing the complaint. 34. As per the settled principle of interpretation of statute, a statutory provision is not to be interpreted in such a manner as to yield absurd results. All that the Magistrate is required to consider while considering whether or not to issue process on a complaint under section 138 of the NI Act is to ascertain whether the complainant has made out a prima facie case. It would be absurd if, on the basis of the affidavit of complainant submitted after issuance of process, the accused can be convicted and sentenced to imprisonment up to one year in a summary trial, but on the basis of an affidavit in support of the complaint, the Magistrate cannot even say that the complainant has made out a prima facie case for issuance of process. 35. After addition of section 145 NI Act in the statute book, it is open to the Magistrate to issue process on the basis of the contents of the complaint, the documents in support thereof and the affi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure as expeditious as possible without in any way compromising on the right of the accused for a fair trial. [Emphasis supplied] 37. The Apex Court also referred in paragraph 18 of the said judgment to 213th Report of the Law Commission submitted to the Union Minister for Law and Justice on 24-11-2008 and noted the alarming number of complaints under section 138 of the NI Act in various Courts including in the subordinate Courts in the State of Maharashtra (5,91,818 complaints as on 1-6-2008). 38. The Apex Court further made the following pertinent observations in paragraph 32 of the said judgment : . . . the High Court was in error in drawing an analogy between the evidences of the complainant and the accused in a case of dishonoured cheque. The case of the complainant in a complaint under section 138 of the Act would be based largely on documentary evidence. The accused, on the other hand, in a large number of cases, may not lead any evidence at all and let the prosecution stand or fall on its own evidence. In case the defence does lead any evidence, the nature of its evidence may not be necessarily documentary; in all likelihood the defence would lead other kinds of evidences to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), the Apex Court was not required to apply the provisions of section 145 of NI Act inserted by the Amending Act 55 of 2002. In that case, the only question the Apex Court examined was, as indicated in paragraph 13 of the judgment, who should be examined as the complainant under section 200 of CrPC where the complainant is an incorporeal body. The Court held that when the complainant is a body corporate, it is the de jure complainant and it must necessarily associate a human being as de facto complainant to represent the de jure complainant in Court proceedings. Usually, where the complainant is an incorporeal body represented by one of its employees, the employee who is a public servant is a de facto the complainant and in presenting complaint, he acts in the discharge of his official duties. Therefore, in such cases, the exemption under clause (a) of provide to section 200 of CrPC will be available. The following observations in paragraph 13 of the judgment highlight the scope of the controversy which was resolved by the Apex Court : 13. . . . When an offence is committed in regard to a transaction of the Government company, it will be illogical to say that a complaint rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not by way of an affidavit and that accepting the affidavit in the place of sworn statement is deprecated by the said Court. Since the reported decision does not make any reference to section 145 of NI Act, we would be justified in proceeding on the basis that the earlier decisions of the Karnataka High Court did not deal with a case arising after 6-2-2003 when section 145 of the NI Act came to be added. For the same reason, reliance placed on a decision of a Division Bench of the Kerala High Court in N. Harihara Iyer v. State of Kerala 2000 CRI LJ 1251, dated 10-12-1999 would not take the case of the accused any further. 46. As regards the decision of the learned Single Judge of this Court in Peacock Industries Ltd. s case (supra), learned counsel for the accused relied upon the guidelines laid down in the said decision. It is true that the judgment of the learned Single Judge was rendered after considering section 145 of the NI Act. The learned Single Judge considered two questions. Question (a) was whether sub-section (2) of section 145 of the NI Act confers an unfettered right on the complainant and the accused to apply to the Court seeking direction to give oral examination i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect given by Parliament to section 145 of the NI Act by providing the non obstante clause Notwithstanding anything contained in the Code of Criminal Procedure . 52. The Division Bench posed the following question, in paragraph 16 of the judgment : 16. In order to ascertain whether it is mandatory for the Magistrate to examine the complainant in a complaint under section 138 of the N.I. Act with affirmation as regards truthfulness of the facts mentioned in the complaint before issuance of process under section 200 of Cr.P.C. it is necessary to examine whether the provisions of sections 142 and 145 of the N.I. Act which is special enactment dispenses with the said requirement of section 200 of Cr.P.C. [Emphasis supplied] 53. It is settled legal position that ordinarily the provisions of a subsequently enacted special legislation with a non obstante clause would prevail over the provisions of a previously enacted general law. The Division Bench, however, relied upon reasoning of the Apex Court in Pankajbhai Nagjibhai Patel s case (supra) interpreting the scope of section 142 of NI Act vis-a-vis section 200 Cr.PC. With respect to the Division Bench, the following important aspects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n obstante clause in section 145 of NI Act, which is a subsequently enacted special enactment. 54. The Division Bench referred to the decisions of the Apex Court and other Courts which were dealing with cases when section 145 of the NI Act was not brought on the statute book. The Division Bench did not at all consider the celebrated Mischief Rule of interpretation, which we have applied in the foregoing discussion and which reads as under : 1st -What was the law before making of the Act, 2nd -What was the mischief and defect for which the previous law did not provide, 3rd -What remedy the Parliament had resolved and appointed to cure the disease of the commonwealth, and 4th -The true reason of the remedy. (Principles of Statutory Interpretation by Justice G.P. Singh, 11th Edition 2008). 55. For the elaborate reasons given in paragraphs 19 onwards, therefore, we over rule the decision of the Division Bench in Maharaja Developers case (supra). 56. When it was brought to notice of the Division Bench in Maharaja Developers case (supra) that the procedure of Magistrate personally examining the complainant on oath before issuing process will take considerable time, the Division Bench was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies in the prescribed form before the date of the cheque in question, the Magistrate would grant such directors exemption for personal appearance and exemption for giving bond as a matter of course for the complaint in respect of the particular cheque. Conclusions 59. In view of the above discussion, our conclusions are as under : (i) For the purpose of issuing process under section 200 of the Code of Criminal Procedure, 1973, it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint under section 138 of the Negotiable Instruments Act, 1881 and the Magistrate is not obliged to call upon the complainant to remain present before the Court, nor to examine the complainant or his witnesses upon oath for taking the decision whether or not to issue process on the complaint under section 138 of the Negotiable Instruments Act, 1881. It is only if and where the Magistrate, after considering the complaint under section 138 of the Negotiable Instruments Act, 1881 and the documents produced in support thereof and the verification in the form of affidavit of the complainant, is of the view that examination of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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