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Issues: (i) Whether cognizance for an offence under Section 138 of the Negotiable Instruments Act could be taken on the basis of an FIR and police investigation instead of a complaint by the payee or holder in due course; (ii) Whether the order taking cognizance under Sections 406 and 420 of the Indian Penal Code was sustainable.
Issue (i): Whether cognizance for an offence under Section 138 of the Negotiable Instruments Act could be taken on the basis of an FIR and police investigation instead of a complaint by the payee or holder in due course.
Analysis: Section 138 is a special provision dealing with cheque dishonour, and Section 142 begins with a non obstante clause overriding the Code of Criminal Procedure. The statutory scheme permits cognizance of an offence under Section 138 only upon a written complaint by the payee or holder in due course, and the prescribed mode cannot be substituted by lodging of an FIR. The principle that where a statute prescribes a particular manner of doing an act, it must be done in that manner alone was applied.
Conclusion: Cognizance under Section 138 of the Negotiable Instruments Act through FIR was invalid and was set aside in favour of the petitioner.
Issue (ii): Whether the order taking cognizance under Sections 406 and 420 of the Indian Penal Code was sustainable.
Analysis: The allegations disclosed a dispute relating to payment, proposed sale of property, and dishonour of cheques, but the Court held that the ingredients of the penal offences under Sections 406 and 420 required examination of evidence and surrounding circumstances at trial. On a prima facie view, no error was found in the Magistrate's decision to take cognizance under the Indian Penal Code.
Conclusion: Cognizance under Sections 406 and 420 of the Indian Penal Code was upheld and the challenge failed against the petitioner.
Final Conclusion: The proceeding was interfered with only to the extent of the cheque dishonour offence, while the prosecution under the Indian Penal Code was permitted to continue.
Ratio Decidendi: Where a special statute prescribes an exclusive mode for initiation of proceedings and attaches a non obstante clause, cognizance cannot be taken through a different procedure, but cognizance for distinct IPC offences may still stand if their ingredients are prima facie disclosed.
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