Section 145 NI Act Allows Affidavit Evidence; Magistrates Must Record Plea and Expedite Trials Under Section 138

The SC held that under Section 145 of the Negotiable Instruments Act, the complainant may submit evidence by affidavit, which can be read at both pre- and post-summoning stages, eliminating the need for re-examination unless ordered by the Magistrate. For summary trials under Section 138, the Magistrate must record the accused's plea and may examine the accused before delivering a finding under Section 263 Cr.P.C. The Court directed all Criminal Courts to adopt a pragmatic approach for summons issuance, ensure timely examination of parties within three months, and allow affidavits in place of oral evidence to expedite disposal. The offence is deemed complete upon compliance with statutory conditions, placing the onus on the accused to prove otherwise. These procedural guidelines aim to facilitate speedy trial and effective adjudication of cheque dishonour cases nationwide. The writ petition was disposed accordingly.

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Issues Involved:
1. Guidelines for summary trial of complaints under Section 138 of the Negotiable Instruments Act, 1881.
2. Compliance with guidelines for summary trial and reporting to the Supreme Court.
3. Legislative and policy changes for expeditious disposal of cheque dishonor cases.

Detailed Analysis:

1. Guidelines for Summary Trial of Complaints under Section 138 of the Negotiable Instruments Act, 1881:

The petitioners, including the Indian Banks' Association and Punjab National Bank, sought the Supreme Court's intervention to lay down appropriate guidelines for the summary trial of complaints under Section 138 of the Negotiable Instruments Act, 1881. They emphasized the considerable disadvantage faced by the banking industry due to delays in disposing of such cases, which hinders the recovery of public funds blocked in pending cases. The petitioners highlighted the legislative intent behind the amendments to the Act, particularly the introduction of Sections 143 to 147, aimed at speedy disposal and making the offense compoundable.

The Supreme Court reiterated the objectives of Section 138, which is to ensure that cheques are honored and to provide a criminal remedy for dishonor due to insufficiency of funds. The Court cited previous judgments underscoring the importance of maintaining the credibility of cheques in commercial transactions and the need for a robust mechanism to deal with dishonored cheques.

2. Compliance with Guidelines for Summary Trial and Reporting to the Supreme Court:

The Court underscored the legislative intent behind Section 143, which allows for the summary trial of cases under Section 138, and the procedural provisions under Sections 262 to 265 of the Criminal Procedure Code (Cr.P.C.). The Court noted that Section 145 permits the complainant to give evidence by affidavit, which should be read in evidence at both pre-summoning and post-summoning stages, thus avoiding the need for the complainant to be examined twice.

The Court provided detailed directions for the Metropolitan Magistrate/Judicial Magistrate (MM/JM) to follow for the summary trial of Section 138 cases. These include scrutinizing the complaint and accompanying affidavit, issuing summons pragmatically, ensuring proper service of summons, facilitating early compounding of offenses, and conducting examination-in-chief, cross-examination, and re-examination of the complainant within three months.

3. Legislative and Policy Changes for Expeditious Disposal of Cheque Dishonor Cases:

The petitioners also sought a writ of mandamus directing the respondents to adopt necessary policy and legislative changes to expedite the disposal of cheque dishonor cases. The Court acknowledged the legislative amendments made by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002, which aimed to address the deficiencies in Sections 138 to 142 and introduced Sections 143 to 147 for faster case disposal.

The Court emphasized the need for uniform practices across various Magistrate Courts to achieve the legislative intent. It referred to the guidelines laid down by various High Courts and directed all Criminal Courts in the country to follow similar procedures for the speedy and expeditious disposal of Section 138 cases.

Conclusion:

The Supreme Court provided comprehensive guidelines for the summary trial of complaints under Section 138 of the Negotiable Instruments Act, 1881, to ensure the expeditious disposal of cheque dishonor cases. The directions included procedural steps for scrutinizing complaints, issuing summons, facilitating compounding of offenses, and conducting trials within specified timeframes. The Court's directions aim to restore financial trust and commercial interest by addressing delays in the judicial process related to dishonored cheques. The writ petition was disposed of with these directives to be followed by all Criminal Courts dealing with Section 138 cases.

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