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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 ..... uments Act, 1881 ('NI 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... twenty lakh only) as Inter-Corporate Deposit to accused 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details given in the body of the complaint itself. The complainant prayed 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 le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that it is mandatory for the learned Magistrate to examine the complainant on oath, when the complaint is filed under section 138 of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly contended on behalf of the accused that there may be cases where the complainant may have suppressed material documents. It is only by examining the complainant on oath that 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. It is further submitted on behalf of the complainants that in order to expedite the decision on the complaint under section 138 of NI Act, section 143 thereof provides that notwithstanding 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 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the trial from day-to-day except for reasons to be recorded in writing. Sub-section (3) of section 143 further provides that the trial shall be conducted expeditiously and preferably within six months from the date of filing of the complaint. Sub-section (3) reads as under :-- "(3) Every trial under this section shall 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... object can be achieved by punishing the unscrupulous persons who issue cheques without really intending to discharge their liability. At the same time, section 138 provides adequate safeguard by giving an opportunity to the honest drawer for his lapse induced by inadvertent or negligence by permitting him to pay the amount within the prescribed limit. 24. The Law 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rary, the legislative intent is absolutely clear that in complaints under section 138 of NI Act, interpretation of section 200 CrPC has to be controlled by section 145 of NI Act. Sub-section (1) of section 145 specifically provides that the evidence of the complainant may be given by him on affidavit and, subject to all just exceptions, may be read in evidence in any enquiry, trial or other proceeding under the CrPC. 27. It is 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination as contemplated by section 137 of the Indian Evidence Act, 1872. This argument is also misconceived. Section 3 of the Indian Evidence Act, 1872, defiances "evidence" as under :-- "Evidence.--Evidence means and includes -- (1) all statements which the Court permits or requires to be made before it by witnesses, in relation to matters of fact under inquiry; such statements are called oral evidence; (2) all documents including electronic records produced for the inspection 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, unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st insist upon personal examination of the complainant, particularly when sections 118, 139 and 146 raise presumptions in favour of the holder of the cheque (that the cheque was drawn for consideration; that the holder of the cheque received the cheque, for the discharge, in whole or in part, of any debt or other liability; that on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, pre-sume the fact of dishonour of such cheque) and section 140 denies the accused the defence (that he had no reason to believe, when he issued the cheque, that the cheque may be dishonoured on the 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of summary trials is adopted under section 143 subject to the qualification "as far as possible", thus, leaving sufficient flexibility so as not to affect the quick flow of the trial process. . . . ." "17. It is not difficult to see that sections 142 to 147 lay down a kind of a special code for the trial of offences under Chapter XVII of the Negotiable Instruments Act and sections 143 to 147 were inserted in the Act by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 to do away with all the stages and processes in a regular criminal trial that normally cause inordinate delay in its conclusion and to make the trial procedure 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Small Industries Corpn. Ltd. v. State (NCT of Delhi) [2009] 1 SCC 407 strongly relied upon by the learned counsel for the accused and particularly paragraphs 15 and 16 of the judgment in support of the contention that section 200 of the Code mandatorily requires examination of the complainant before issuance of process. 41. Reliance placed on the aforesaid decision is misconceived for the simple reason that in the above case before the Apex Court, the Magistrate took cognizance on 4-2-2002 without examining the complainant and its witnesses under section 200 of CrPC. The Amending Act 55 of 2002, however, came into force from 6-2-2003 and, therefore, in National Small Industries Corpn. Ltd.'s case (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44. Reliance placed on the decision of the Apex Court in Associated Cement Co. Ltd. v. Keshvanand [1998] 1 SCC 687, is also misconceived as in the said decision rendered on 16-12-1997 also the Apex Court could have had no occasion to deal with section 145 of the NI Act added with effect from 6-2-2003 by Amending Act 55 of 2002. 45. The learned counsel for the accused also relied on the decision of the Karnataka High Court in Smt. B.R. Premakumari v. Supraja Credit Co-op. Society Ltd. [2010] All MR CRI Journal 151. The learned Single Judge of the Karnataka High Court appears to have followed the view of the High Court in an earlier decision that recording of sworn statements means the statement of the complainant to be recorded by the Magistrate, 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 pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulness of the contents of the complainant. It, therefore, follows that the Magistrate is obliged and duty bound to examine upon oath the complainant and his witnesses before issuance of process under section 204 of Cr.P.C. though there is a solemn affirmation at the foot of the complaint by the complainant." 50. With respect, we are unable to concur with the view of the Division Bench in Maharaja Developers' case (supra). 51. The Division Bench has not at all referred to the legislative object of the amendment particularly as set out in the Statement of Objects and Reasons. The Division Bench proceeded on the footing that section 200 CrPC continues to control the inquiry or trial of an offence punishable under section 138 of NI Act, without discussing the overriding 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. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CrPC, it was by subsequent amendment made in 2002 (with effect from 6-2-2003) that Parliament added section 145 to enlarge the powers of the Court hearing complaints under section 138 of NI Act by making the procedure less cumbersome and particularly dispensing with the stage of preliminary evidence (i.e., examination of complainant under section 200 CrPC) as expressly indicated in the Statement of Objects and Reasons for the Amending Act 55 of 2002. With respect, the legislative object clearly evident in the non obstante clause in section 145 (to dispense with the stage of preliminary evidence i.e., requirement of personal examination of the complainant in section 200 CrPC) has been frustrated by the view taken by the Division Bench that the said requirement in section 200 CrPC continued notwithstanding the non 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 interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervations of the learned Single Judge deprecating the practice of complainant filing affidavit in support of the complaint under section 138 of NI Act in a pre-conceived format. We see no reason why the affidavit in a format based upon the ingredients of the offence under section 138 of NI Act should be frowned upon, when the complaint read with the affidavit in support thereof and the documents produced with the complaint constitute sufficient material for the learned Magistrate to determine whether the complainant has made out a prima facie case. 58. As regards the submission of learned counsel for the accused about alleged harassment to accused who have resigned as directors of an accused company, we are of the view that ordinarily when such directors produce documentary evidence to show that the resignation was electronically communicated to the Registrar of 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 conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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