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TMI Blog2025 (1) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court in case of P. MOHANRAJ ORS. VERSUS M/S. SHAH BROTHERS ISPAT PVT. LTD. [ 2021 (3) TMI 94 - SUPREME COURT ] has dealt with nature of cases under Section 138 being quasi-criminal. The Hon ble Supreme Court observed Section 138 proceeding can be said to be a civil sheep in a criminal wolf s clothing - The issue involved in that case was whether the proceeding under Section 138 read with Section 141 of the Negotiable Instruments Act are covered by the moratorium provisions under Sections 14 of the Insolvency and Bankruptcy Code. That is why there was an occasion for the Hon ble Supreme Court to consider the nature of proceeding under Chapter XVII of the Negotiable Instruments Act. The ingredients of Section 138, 141, 142, 143-A, 148 were considered. If the proceeding under Section 138 of the Negotiable Instruments Act are quasi-criminal in nature, there is reason to believe that one of attribute of criminal trial about mandatory recording of statement under Section 313 of the Criminal Procedure Code is not applicable. So in given set of facts narrated hereinabove, the accused cannot make complaint about causing prejudice if evidence is adduced in his absence and he cannot make c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lainant filed an affidavit of examination-in-chief on 06.02.2018. Cross-examination was deferred. f) Finally, on 19.03.2018, no cross order was passed. g) Complainant closed the evidence and matter is adjourned for recording of 313 statement to 05.06.2018. h) Draft of 313 statement is annexed to the revision application. It contains only questions and no answers. 4. Finally, the learned Magistrate convicted all the accused for an offence punishable under Section 138 read with 141 of the Negotiable Instruments Act vide two judgments dated 05/06/2018. The sentence in every case is as follow:- a) Simple imprisonment for one year and in case of default for three months; b) fine is double amount of cheque i.e. Rupees One crore in every case. c) There is simple interest of 9% from the date of the complaint till its realization. d) The amount has to be paid to the Complainant by way of compensation. Criminal appeals 5. Both the accused woke up from slumber and two criminal appeal nos. 382 of 2018 and 383 of 2018 were filed before the Court of City Civil Greater Mumbai. One of the ground was statement of the accused was not recorded under Section 313 of the Criminal Proced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng grounds:- a) the trial Court concluded, "accused has not discharged the burden", but in these revisions, this point is not canvassed on behalf of the applicants and rightly so. b) the trial Court referred about direction no. 4 in case of Indian Bank Association and others Vs. Union of India and Others 2014 (5) SCC 590, but according to him, direction no. 4 never talks about dispensing statement under Section 313 of the Criminal Procedure Code. Finding by the Appellate Court 10. In the memo of the appeal, Applicants have made grievance about non recording the statement under Section 313 of the Criminal Procedure Code. The Appellate Court in para no. 15 has emphasized on the continuous absence of the Applicants on six occasions and even absence of their advocates. The Appellate Court further observed reason for absence is vaguely pleaded. But it is not substantiated by any such cogent evidence, at Para no. 16. 11. It is undisputed fact that after recording of the plea both the accused have not appeared before the trial Court. It is undisputed fact that the Complainant was not cross-examined. It is undisputed fact that statement of the accused under Section 313 was not recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XXI (21) It lays down procedure for summary trials. Section 143 encapsulate summary trial by the Magistrate at the beginning. This section starts with 'non-obstant clause'. But sub section (1) mentions 'the provisions of sections 262 to 265 (both inclusive) of the Code shall, as far as may be, apply to such trials'. 16. There are two provisions in the Code which are relevant for deciding the controversy involved in these revisions. Their meaning and effect need to be looked into by considering the provisions of Negotiable Instruments Act. They are :-- a. provision about recording the evidence in presence of the accused. b. provision relating to recording the statement of the accused. Principle of natural justice 17. The principle of natural justice warrants opportunity of hearing to be given to the person affected by the outcome. This principle is recognized by Criminal Procedure Code by way of various sections. There is stage of recording of plea/charge. There is stage of giving of evidence and then cross-examination and giving evidence by way of defence. There is stage of general questioning by the Judge which is optional and there is mandatory questioning of the accus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contingency covered as per Section 299 of the Code even though the evidence is recorded in the absence of accused, case is never disposed of. But such evidence can be considered after the arrest of the accused. 22. In order to deal with the contingency, cases remained pending for absence of the accused, the legislatures while enacting the Bharatiya Nagarik Suraksha Sanhita, 2023 have incorporated new provisions dealing procedure to be adopted when accused did not appear in spite of adopting several mode. 23. Nothing of that sort has happened in these matters. But then still can it be said that "the learned Magistrate was justified in proceeding further in absence of the accused and without recording their statements"? Recording statement of the accused 24. Apart from above, the legislatures have inserted chapter XXIV (24) which deals with "General provisions as to inquiries and trials". These provisions apply to every inquiry and trial conducted under the Code. One of the provision (which is relevant) is "power of the Court to examine the accused". Section 313 itself lays down the purpose, and it is "for enabling the accused personally to explain any circumstances appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ognizance, other stages of criminal trial and so on. On these subjects, the provisions of the Code of Criminal Procedure and of the N.I.Act needs to be considered simultaneously. The following are the relevant stages of criminal trial :- Taking cognizance Section 190 of the Criminal Procedure Code lays down three modes of the taking cognizance. But legislatures only recognizes one such mode for taking cognizance for an offence committed under Section 138 of the Negotiable Instruments Act. It is on the basis of the complaint. That is why the opening sentence of Section 142 (1) is "notwithstanding anything contained in Code of Criminal Procedure". Generally there are no pre-conditions in taking cognizance as per Section 190 of the Criminal Procedure Code, but as per Section 142 of the Negotiable Instruments Act, certain pre-conditions are prescribed. About limitation Section 142 of the Negotiable Instruments Act lays down period of limitation different from the period prescribed as per the Criminal Procedure Code. Section also lays down period of limitation for taking cognizance which is different from the period mentioned in the Code. Mode of the service of summons As per Cri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it mean to say that the provisions of the Criminal Procedure Code dealing with that subject are applicable?" and when the Court finds that "accused is taking disadvantage of the protection granted by Criminal Procedure Code, how the Criminal Court is required to deal with such a situation" is an issue. 32. On this background, it is material to consider the observations in the judgments. Both the sides relied upon few of the judgments delivered by the Hon'ble Supreme Court, but in none of these judgments "the issue of recording the evidence of the Complainant in the absence of the accused and dispensing with statement Section 313" has arisen. Supreme Court Judgments 33. In case of Indian Bank Association and others Vs. Union of India and Others 2014 (5) SCC 590 the Hon'ble Supreme Court has taken stock of the directions given by various High Court about speedy disposal of Section 138 prosecution and issued some directions. They start from the stage of the filing of the complaint till recording of the evidence. Three months time was fixed in completing evidence. It is true that there are no directions about conducting trial in absence of the accused and about dispensing with Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cropped up. As said above contingency "accused remaining absent and evidence is recorded and in such eventuality whether the statement can be dispensed with or not" has not cropped up in above judgments. So these judgments does not give us any guidance how to deal with present controversy. It only gives general guidance about necessity of the recording Section 313 statement. The purpose is to give an opportunity to the accused to explain the circumstances against him and in that way it is for his benefit. But if Court finds it is causing prejudice to him by insisting upon physical presence, the Court has dwelled upon a mechanism to record it in non-traditional way. That is by preparing a draft of the questions and giving answers by the accused with advent of technology. Now the presence of the accused is not to be interpreted in narrow way. That is to say physical presence but it also includes presence through electronic mode. 38. That is why the Hon'ble Supreme Court in case of the State of Maharashtra V/s. Praful B. Desai (2003) 4 SCC 601 has sanctioned recording the evidence of witness staying abroad in a trial conducted at Bombay. 39. It is true there are few of the High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a prosecution under Section 138 of the Negotiable Instruments Act the accused remained absent. Even there was no cross order. The Complainant applied for dispensing the statement under Section 313 of the Criminal Procedure Code. It was rejected. Learned Single Judge of this Court allowed that prayer. There was an emphasis on the insertion of Sections 143 to 147 in the Negotiable Instruments Act for speedy disposal of such prosecutions. Other judgments of the Hon'ble Supreme Court and High Courts were also considered. The learned Single Judge has held, 'It is not the Complainant's duty to secure the presence of the accused in such a case, to record their 313 statement. If the accused are not bothered to remain present before the Court, the Complainant, who is already a victim should not be made to suffer for no fault of his. The fate or the command/control of a criminal trial cannot left to the mercy of the accused in this manner and to such an extent, that unless the accused wishes, the trial will not move an inch ahead'. (Para no. 17) 45. In case of B. N. Ashwath Narayan Vs. Shri Shankar in Criminal Revision Petition No. 1333 of 2018 learned single Judge observed there is no pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of Shivaji Sahebrao Bobade and Anr. Vs. State of Maharashtra 1973 (2) SCC 793) the Hon'ble Supreme Court opined questioning on remaining aspect can be done even by the Appellate Court, para no. 16. Nature of prosecution 49. I have taken this view considering the nature of prosecution under Section 138 of the Negotiable Instruments Act. In many cases the Hon'ble Supreme Court has observed that "cases under Section 138 of the Negotiable Instruments Act are quasi criminal". 50. Recently, the Hon'ble Supreme Court in case of P. Mohanraj and others Vs. Shah Brothers ISPAT Private Limited (2021) 6 SCC 258 has dealt with nature of cases under Section 138 being quasi-criminal. The Hon'ble Supreme Court observed "Section 138 proceeding can be said to be a "civil sheep" in a 'criminal wolf's' clothing". 51. The issue involved in that case was whether the proceeding under Section 138 read with Section 141 of the Negotiable Instruments Act are covered by the moratorium provisions under Sections 14 of the Insolvency and Bankruptcy Code. That is why there was an occasion for the Hon'ble Supreme Court to consider the nature of proceeding under Chapter XVII of the Negotiable Instruments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in regard to cheque dishonour cases". (from para no. 16 of the said judgment). e) The observations in case of Lafarge Aggregates and Concrete (India) (P) Ltd. Vs. Sukarsh Azad (2014) 13 SCC 779 were reproduced in para no. 62 the nature of the proceedings are hybrid in nature. This is consistent view. f) The observations in case of M. Abbas Haji V/s T. N. Channakeshava (2019) 9 SCC 606 are considered in para no. 65. The principles which apply to acquittal in other criminal cases cannot apply to this case. The Hon'ble Supreme Court by taking overview on various decisions concluded in that case :- "a conspectus of these judgments would show that the gravamen of a proceeding under Section 138, though couched in language making the act complained of an offence, is really in order to get back through a summary proceeding, the amount contained in the dishonoured cheque together with interest and costs, expeditiously and cheaply". (para no. 67). Appellation 54. Before concluding that "prosecution under Section 138 of the Negotiable Instruments Act as quasi criminal nature", the Hon'ble Supreme Court has also considered the nature of the proceedings initiated as per the provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to the Complainant. Hence, the following order is passed:-
ORDER
(i) Both the revision applications are dismissed.
(ii) The order of conviction and the sentence passed by the Court of Metropolitan Magistrate in C.C. No. 4081/SS of 2016, dated 05.06.2018 and confirmed on 28.02.2023 by the Court of the Additional Sessions Judge, Mumbai in Criminal Appeal No. 382 of 2018 for the offence punishable under Section 138 of the Negotiable Instruments Act is confirmed.
(iii) The order of conviction and the sentence passed by the Court of Metropolitan Magistrate in C.C. No. 4001/SS of 2016, dated 05.06.2018 and confirmed on 28.02.2023 by the Court of the Additional Sessions Judge, Mumbai in Criminal Appeal No. 383 of 2018 for the offence punishable under Section 138 of the Negotiable Instruments Act is confirmed.
(iv) The amount of Rs. 1,20,00,000/- (Rs. One Crore Twenty Lakhs) deposited in Sessions Court alongwith interest, if any, be returned to the Complainant.
(v) Interim stay granted on execution of orders passed by both the Courts below stands vacated.
60. Both revision applications are disposed of.
61. Pending Interim Applications, if any, also stand disposed of. X X X X Extracts X X X X X X X X Extracts X X X X
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