2021 (12) TMI 329 - HC - Indian Laws

Petitions for Closure of Proceedings under Section 138 NI Act Granted with Exemption

The petitions sought closure of proceedings under Section 138 of the Negotiable Instruments Act, as the dishonored cheque amount was repaid. The ... Dishonor of Cheque - rebuttal of presumption - burden of proof is on the accused or not - preponderance of probabilities - Section 139 of NI Act - HELD THAT:- Hon’ble Apex Court in M/s. Meters and Instruments [2017 (10) TMI 218 - SUPREME COURT] was considering the provisions of Section 143 of the Act and the provisions of Section 258 of Cr.P.C. It requires to mention here that in SUO MOTU Writ Petition (Cri.) No. 2 of 2020 for expeditious trial of cases under Section 138 of N.I.Act, 1881, it has been observed that Section 258 of the Cr.P.C. is not applicable to a summons case instituted on a complaint thus held that Section 258 cannot come into play in respect of the complaints filed under Section 138 of the Act. Further noted that M/s. Meters and Instruments (supra) in so far as it conferred power on the trial court to discharge an accused is not good law. Thus it can be considered that while keeping in view the scheme under provisions of N.I.Act, judgment of M/s. Meters and Instruments (supra) is to encourage the parties to settle the issue amicably and primarily the consent of the parties would be sought for closure of the proceedings under Section 138 of N.I.Act, and while compounding the matter under Section 147 of N.I.Act, the Court is required to assess the amount to be paid to the complainant in accordance with the object. Here in this case the total cheque amount has been paid by the petitioner-company to the respondent No.2-original complainant but the only issue is with regard to payment of interests and cost. Thus, in the fitness of the matter and the facts and circumstances of the case, it would be more appropriate that both the parties are directed to approach the trial court through the learned advocates and assist the court in assessing the interests and cost amount to be paid. It is thus directed that the presence of the parties may not be insisted and the court may take all endeavors to make closure of the case at the earliest. Petition disposed off. Issues Involved:1. Closure of proceedings under Section 138 of the Negotiable Instruments Act (N.I. Act).2. Exemption from personal appearance.3. Payment of the dishonored cheque amount and interest.4. Applicability of the Supreme Court judgment in M/s. Meters and Instruments Private Limited vs. Kanchan Mehta.5. Assessment of interest and costs by the trial court.Issue-wise Detailed Analysis:1. Closure of Proceedings under Section 138 of the N.I. Act:The petitioners sought an appropriate writ, order, or direction to close the proceedings in Criminal Case Nos. 87813, 87823, and 87810 of 2018, pending before the Additional Chief Metropolitan Magistrate, N.I. Act Court No. 27, Ahmedabad. The petitioners contended that the entire outstanding amount of the dishonored cheques had been repaid via RTGS before the returnable date. They relied on the Supreme Court's decision in M/s. Meters and Instruments Private Limited vs. Kanchan Mehta, which allows for the closure of such cases without the complainant's consent if the cheque amount with assessed costs and interest is paid.2. Exemption from Personal Appearance:Pending the final disposal of the petitions, the petitioners requested an exemption from personal appearance in the trial court, which was granted as interim relief.3. Payment of the Dishonored Cheque Amount and Interest:The petitioners argued that they had paid the total amount of the dishonored cheques, totaling Rs. 1,03,59,000/-, to the complainant via RTGS. The complainant, however, demanded an additional 15% interest on the amount, which the petitioners contested. The trial court was directed to assess the interest and cost amount to be paid, and the presence of the parties was not insisted upon for this purpose.4. Applicability of the Supreme Court Judgment in M/s. Meters and Instruments Private Limited vs. Kanchan Mehta:The petitioners relied on the Supreme Court's judgment, which states that the offence under Section 138 of the N.I. Act is primarily a civil wrong and should be tried summarily. The court can close the proceedings and discharge the accused if the cheque amount with assessed costs and interest is paid. However, it was noted that in a subsequent SUO MOTU Writ Petition (Cri.) No. 2 of 2020, the Supreme Court held that Section 258 of the Cr.P.C. is not applicable to summons cases instituted on a complaint, and the power to discharge an accused as conferred in M/s. Meters and Instruments is not good law.5. Assessment of Interest and Costs by the Trial Court:The court directed that both parties should assist the trial court in assessing the interest and cost amount to be paid. The trial court was encouraged to make all endeavors to close the case at the earliest, considering the total cheque amount had already been paid by the petitioner company.Conclusion:The petitions were disposed of with directions for the trial court to assess the interest and costs, and the presence of the parties was not insisted upon. The judgment emphasized the compensatory nature of Section 138 of the N.I. Act and encouraged the settlement of such matters amicably, aligning with the principles laid down by the Supreme Court in M/s. Meters and Instruments, albeit with the noted limitations from the subsequent SUO MOTU Writ Petition.