TaxTMI 
TaxTMI 
2018 (5) TMI 2157
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....3059/2013, 3061/2013, 3063/2013, 3068/2013 & 3069/2013) : Ms. Rituparna De Ghose And Ms. Joyti Singh For the Respondent in (CRR Nos.1956/2013,1957/2013, 1958/2013, 2010/2013, 3157/2013, 3158/2013, 2865/2013, 2592/2013 And 2593/2013) : Mr. Tirthankar Ghosh,Mr. Koushik Kundu,Mr. Satudru Lahiri, And Ms. Mrinali Majumder For the Union of India : Mr. Kaushik Chanda, Addl. Solicitor General,And Ms. Rajasshree Venkat Kundalia JUDGMENT 1. These bunch of applications filed under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as the Cr.P.C.) have been assigned to this Bench by the Hon'ble Acting Chief Justice by an order dated November 13, 2017 on the basis of a reference made by a learned Single Judge of this Court (Tarun Kumar Gupta, J.) to decide the following issues in the backdrop of the relevant provisions of law:- "(1) Whether the amendment of Section 202 of the Code of Criminal Procedure, 1973 as enacted vide Section 19 of the Criminal Procedure (Amendment) Act, 2005 (25 of 2005) casts a mandatory duty upon the Magistrate to conduct an inquiry under Section 202 of the Code before issuing process under Section 204 of the Code qua an accused who ....
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....nvestigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding: Provided that no such direction for investigation shall be made- (a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Sessions; or (b) Where the complaint has not been made by a Court, unless the complainant and the witnesses present (if any) have been examined on oath under section 200.... 5. In all the aforesaid revisional applications a common plea has been taken alleging that the petitioners have been residing at a place beyond the territorial jurisdiction of the concerned Magistrate Court, but process were issued against them under Section 204 Cr.P.C. without making necessary mandatory inquiry as contemplated under sub-section (1) of the Section 202 Cr.P.C. It is their common plea that on that score alone the orders of issuance of process under Section 204 Cr.P.C. and subsequent proceedings cannot be sustained in law. 6. Mr. Ayan Bhattacharya, leaned Counsel appearing in a number of cases for the petitioners and in some other cases for the priva....
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....3) CLJ (Cal) 390 and A. Devendran v. State of Tamil Nadu, reported in (1997) 11 SCC 720 in support of his above submissions. 12. With regard to the nature of inquiry under the aforesaid provisions of the Cr.P.C. qua an accused who resided outside the territorial limit of the Court of the concerned Magistrate, it is submitted by him that the objects and reasons appended to the amendment clarifies the purpose of amendment, which is to ascertain and find out as to whether or not there are sufficient grounds to proceed against the accused, and thus, to obviate any possibility of innocent persons being harassed by unscrupulous litigants and vexatious proceedings. According to him, in pre amendment stage, the learned Magistrate could take resort to provisions of Section 202 Cr.P.C. in law in respect of those cases where some shadow of doubt remained into the mind of the learned magistrate about the prima facie case. But after the amendment, even if at the stage of inquiry under Section 200 Cr.P.C., the learned Magistrate is satisfied that sufficient ground of proceedings against the proposed accused are made out, the Magistrate has to undergo the stage of Section 202 Cr.P.C. by carefull....
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....ligation under the instrument which was not discharged. Sections 142 and 143 of the said Act, 1881 brings some of the procedural provisions of the Cr.P.C. into the said Act, 1881 by way of legislation. According to him, under the provisions of sub-section (2) of Section 143 of the said Act, 1881 the procedure of summary trial as envisaged under Chapter XXI of Cr.P.C. will apply. In view of Sections 3 and 4 of the Cr.P.C., in absence of any contrary provision in the said Act, 1881 the general law qua inquiry under Sections 200 and 202 Cr.P.C. will apply. However, according to him, no Magistrate can take cognizance of an offence punishable under Section 138 of the said Act, 1881 on an oral complaint or on a police report. 18. According to him, under the amended provisions of Section 145 of the said Act, 1881, affidavit may be accepted as evidence during enquiry or trial. As a consequence, during enquiry under Section 200 Cr.P.C., instead of examining the complainant on dock, a Magistrate can accept the affidavit affirmed by him. Barring these provisions and a few others, according to him, the general procedure of Cr.P.C. will apply proprio vigore in respect of trial of offences puni....
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....stigation to be made by a police officer or by such other person as he thinks fit. It is further added by him that the insertion of the words "and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction" has been inserted by Section 19 of the Criminal Procedure (Amendment) Act, 2005 with effect from June 23, 2006 by the legislature to prevent innocent persons residing at far off places from harassment by unscrupulous persons from false complaints. According to him, though the use of the word "shall" in all circumstances is not decisive, bearing in mind the context or intention of the legislature the above provision is mandatory. 23. With regard to the mode of enquiry, it is submitted by him, that no specific mode or manner of enquiry is provided under Section 202 Cr.P.C. In the enquiry envisaged under Section 202 Cr.P.C. the witnesses are examined whereas under Section 200 Cr.P.C., examination of the complainant only is necessary with the option of examining the witnesses present, if any. 24. Reliance is placed by Mr. Ghosh on the decisions of Vijay Dhanuka v. Najima Mamtaj (supra) in support of his above submissions. 25. ....
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....y to negotiable instruments in business transactions. According to him, in our country, in a large number of commercial transactions the sanctity and credibility of issuance of cheques were eroded to a large extent resulting in incalculable loss, injury and inconvenience to the payee within and outside the country causing a serious setback. 30. According to him, when the above amendments came into existence, a complaint could be filed by the payee or holder in due course at 5 different places as observed by the Apex Court in the matter of K. Bhaskaran v. Sankaran Vaidhyan Balan & Anr., reported in (1999) 7 SCC 510. 31. In 2002, consequent upon further amendment of the said Act, 1881 taking effect from February 6, 2003, although the provision was made for condonation of the period of limitation, yet there was no change so far as the territorial jurisdiction for filing of complaint cases in respect of the dishonoured cheques were concerned. The above aspect was under consideration by the Hon'ble Supreme Court in the matter of Dashrath Rupsingh Rathod v. State of Maharashtra & Anr., reported in (2014) 9 SCC 129 and the Apex Court came to a finding that the territorial jurisdicti....
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..... Neeta Bhalla & Anr., reported in (2005) 8 SCC 89, Standard Chartered Bank v. State of Maharashtra & Ors., reported in (2016) 6 SCC 62 and Tamil Nadu Newsprint and Papers Ltd. v. D. Karunakar & Ors., reported in (2016) 6 SCC 78 in support of his above submissions. 37. It is submitted by Mr. Kaushik Chanda, learned Additional Solicitor General that the provisions of Section 202 Cr.P.C. is mandatory in nature. According to him, the amendment of Section 202 Cr.P.C., as enacted by virtue of Section 19 of the Criminal Procedure (Amendment) Act, 2005, casts a mandatory duty upon the Magistrate to conduct an enquiry under the aforesaid provision before issuing process under Section 204 of the Code in respect of an accused who resides outside the territorial limit of the Court of the learned Magistrate concern. It is also submitted by him that in view of the pronouncement of the Hon'ble Supreme Court the above provision cannot be interpreted in any other way. 38. Reliance is placed by Mr. Chanda on the decisions of Shivjee Singh v. Nagendra Tiwary & Ors. (supra), National Bank of Oman (supra), Udai Shankar Awasthi v. State of U.P. & Anr., reported in (2013) 2 SCC 435 and Vijay Dhanu....
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....rovides for a separate procedure of summary trial adhering to the directions of the Hon'ble Supreme Court given in the matter of Indian Bank Association (supra). It is further submitted by him that the procedure of summary trial 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. According to him, while following the procedure of summary trial, the non obstante clause in Section 145 of the said Act, 1881 allows for evidence of the complaint to be given on affidavit in absence of the accused. This would have been impermissible in a summary trial under the Cr.P.C. in view of the provisions of Sections 251 and 254 read with Section 273 Cr.P.C. However, the accused is fully protected as under sub-section (2) of Section 145 of the said Act, 1881, he has the absolute unqualified right to have the complainant and any or all of his witnesses summoned for cross-examination. 44. Reliance is placed by him on the decision of Mandvi Cooperative Bank Limited (supra) for the above proposition. 45. It is also submitted by him that in view of provisions of Section 145 of t....
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....y the Privy Council in interpreting the law relating to criminal procedure in the matter of Nazir Ahmad v. King Emperor, reported in AIR 1936 PC 253 and the relevant portion of the above decision is quoted below: ...It can hardly be doubted that a Magistrate would not be obliged to record any confession made to him if, for example, it were that of a self-accusing madman or for any other reason the Magistrate thought it to be incredible or useless for the purposes of justice. Whether a Magistrate records any confession is a matter of duty and discretion and not of obligation. The rule which applies is a different and not less well recognised rule, namely, that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden. This doctrine has often been applied to Courts- 1 Ch. D. 426 (19) at p.431- and although the Magistrate acting under this group of sections is not acting as a Court, yet he is a judicial officer and both as a matter of construction and of good sense there are strong reasons for applying the rule in question to S. 164. 50. In post-independence era in our count....
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....ns made to him. 51. In the matter of State of Jharkhand & Ors. v. Ambay Cements & Ors. (supra) it has been held by the Hon'ble Supreme Court that where a statute is penal in nature it must be strictly construed and followed and the relevant portion of the above decision is quoted below:- 26. Whenever the statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory. It is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. It is also settled rule of interpretation that where a statute is penal in character, it must be strictly construed and followed. Since the requirement, in the instant case, of obtaining prior permission is mandatory, therefore, non-compliance with the same must result in cancelling the concession made in favour of the grantee, the respondent herein. 52. The Hon'ble Supreme Court, in the matter of Shivjee Singh (supra) while dealing with the issue of non-examination of some witnesses....
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....trate of the first class empowered in this behalf by the Chief Judicial Magistrate may, after taking cognizance of an offence, make over the case for inquiry or trial to such other competent Magistrate as the Chief Judicial Magistrate may, by general or special order, specify, and thereupon such Magistrate may hold the inquiry or trial. 54. Under the provisions of Section 190 Cr.P.C. the competent Magistrate may take cognizance of any offence, subject to the provisions of Chapter XIV Cr.P.C., any Chief Judicial Magistrate is empowered under Section 192 Cr.P.C. to transfer the case for inquiry after taking cognizance to a competent Magistrate subordinate to him. Needless to point out that under the provisions of sub-section (2) of Section 12 Cr.P.C., an Additional Chief Judicial Magistrate shall have all or any of the powers of a Chief Judicial Magistrate under Cr.P.C. or under any other law for the time being in force as the High Court may direct and the transferee Magistrate is under obligation to examine the complaint and his witnesses and only thereafter to issue the process. 55. Chapter XV and XVI of Cr.P.C. contain various procedural provisions which are required to be follo....
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.... words; and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction. The note of clause of the aforesaid amendment runs as follows: false complaints are filed against persons residing at far of places simply to harass them. In order to see that innocent persons are not harassed by unscrupulous persons, this clause seeks to amend sub-section (1) of Section 202 to make it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction. He shall enquire into the case himself or by such other person as he thinks fit, for finding out whether or not there was sufficient ground for proceeding against the accused. The above amended provision came into force with effect from June 23, 2006 under notification No. S.O.923(E) dated June 21, 2006. 57. The interpretation of the above amendment as to whether the same casts a mandatory duty upon the learned Magistrate to conduct inquiry in sub-section (1) of Section 202 Cr.P.C. before issuing process under Section 204 Cr.P.C. was under consideration of the Hon'ble Supreme Court in the matter of National Bank of Oman (supra) and the finding of the A....
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....Court repeated and reiterated the above settled principles of law as under:- 11. Section 202 of the Code, inter alia, contemplates postponement of the issue of the process "in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction" and thereafter to either inquire into the case by himself or direct an investigation to be made by a police officer or by such other person as he thinks fit. In the face of it, what needs our determination is as to whether in a case where the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction, inquiry is mandatory or not. 12. The words "and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction" were inserted by Section 19 of the Code of Criminal Procedure (Amendment) Act (Central Act 25 of 2005) w.e.f. 23-6-2006. The aforesaid amendment, in the opinion of the legislature, was essential as false complaints are filed against persons residing at far off places in order to harass them. The note for the amendment reads as follows: "False complaints are filed against persons residing at far off places s....
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....the decisions of Shyamal Kumar Goswami & Anr. (supra) heavily. The decision of Shyamal Kumar Goswami & Anr. (supra) is based on the decisions of Rameshwar Jute Mills Ltd. v. Sushil Kumar Daga & Ors., reported in 2009 (2) CHN 138 and Biswanath Maheswari v. Nabbharat Tea Processing Pvt. Ltd., reported in 2010 (2) CHN 257. We are in disagreement with the above finding in view of the fact that the decision of Rameshwar Jute Mills Ltd. (supra) has been set aside by the Hon'ble Supreme Court by an order dated April 2, 2013 passed in the matter of Umesh Verma v. The Rameshwara Jute Mills Limited & Ors. (in re:-SLP (Crl.) No. 4432 of 2009). Further, in view of the decisions of the Hon'ble Supreme Court in the matter of Shivjee Singh (supra), National Bank of Oman (supra), Udai Shankar Awasthi (supra), and Vijay Dhanuka & Ors. (supra), the ratio laid down in the matter of Biswanath Maheswari (supra) has been impliedly overruled. B. The nature of enquiry to be undertaken by the learned Magistrate under sub-section (1) of Section 202 Cr.P.C. in the matter of an accused who resides outside the territorial jurisdiction of the Court concern:- 62. The term "inquiry" is defined under Sub....
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....s Court in Vadilal Panchal v. Dattatraya Dulaji Ghadigaonker with reference to Section 202 of the Criminal Procedure Code, 1898 (corresponding to Section 202 of the present Code) held that the inquiry under Section 202 was for the purpose of ascertaining the truth or falsehood of the complaint, i.e. for ascertaining whether there was evidence in support of the complaint so as to justify the issuance of process and commencement of proceedings against the person concerned. 66. The amended provision of sub-section (1) of Section 202 Cr.P.C. came up for consideration of the Hon'ble Supreme Court in the matter of National Bank of Oman (supra) and the following observation made in the above decision is hereunder:- 9. The duty of a Magistrate receiving a complaint is set out in Section 202 Cr.P.C. and there is an obligation on the Magistrate to find out if there is any matter which calls for investigation by a criminal court. The scope of enquiry under this section is restricted only to find out the truth or otherwise of the allegations made in the complaint in order to determine whether process has to be issued or not. Investigation under Section 202 Cr.P.C. is different from the ....
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....erved above, we do not find any error in the order impugned. In the result, we do not find any merit in the appeals and the same are dismissed accordingly. 68. In Vijay Dhanuka (supra) the aforesaid principle has been repeated and reiterated in the observation that under Section 200 Cr.P.C. the examining of complainant only is necessary with the option of examining the witnesses present, if any. Though no specific mode or manner of enquiry is provided under Section 202 Cr.P.C., in an enquiry under Section 202 Cr.P.C., the witnesses are examined for the purpose of deciding whether or not there is sufficient ground of proceeding against the accused. The relevant portion of the above decision is quoted below: 14. In view of our answer to the aforesaid question, the next question which falls for our determination is whether the learned Magistrate before issuing summons has held the inquiry as mandated under Section 202 of the Code. The word "inquiry" has been defined under Section 2 (g) of the Code, the same reads as follows: 2. (g) 'inquiry' means every inquiry, other than a trial, conducted under this Code by a Magistrate or court, It is evident from the aforesaid prov....
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....omplaint, should have directed the Magistrate to pass fresh orders following the provisions of Section 202 Cr.P.C.. Hence, we remit the matter to the Magistrate for passing fresh orders uninfluenced by the prima facie conclusion reached by the High Court that the bare allegations of cheating do not make out a case against the accused for issuance of process under Section 418 or 420 IPC. The CJM will pass fresh orders after complying with the procedure laid down in Section 202 Cr.P.C., within two months from the date of receipt of this order." D. Whether objections with regard to non-compliance of the amended provisions of sub-section (1) of Section 202 Cr.P.C. as incorporated by virtue of Section 19 of the Criminal Procedure (Amendment) Act, 2005 may be raised at the initial stage only or after much deliberation as well? 71. Chapter XXXV Cr.P.C. deals with the procedure relating to irregular proceedings in particular Section 465 Cr.P.C. of the above Chapter deals with the finding or sentence when reversible by reason of error, omission or irregularity which is quoted below:- 465. Finding or sentence when reversible by reason of error, omission or irregularity.- (1) Subject to t....
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..... for explaining the above provisions. The Apex Court observed as follows:- 15. It is true that if a Magistrate takes cognizance of an offence, issues process without there being any allegation against the accused or any material implicating the accused or in contravention of provisions of Sections 200 and 202, the order of the Magistrate may be vitiated, but then the relief an aggrieved accused can obtain at that stage is not by invoking Section 203 of the Code because the Criminal Procedure Code does not contemplate a review of an order. Hence in the absence of any review power or inherent power with the subordinate criminal courts, the remedy lies in invoking Section 482 of the Code. 75. In view of the above settled principles of law the relief an aggrieved accused can obtain is to file an application for revision under Section 482 Cr.P.C. 76. In the matter of Gita Ram (supra) it was observed by the Hon'ble Supreme Court that the object underlined in Section 465 Cr.P.C. is that if on a technical ground any party to the criminal proceedings is aggrieved he must raise the objection thereof at the earliest stage; if he did not raise it at the earliest stage he cannot be hea....
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.... by the learned Magistrate concerned taking cognizance of an offence issuing process without there being any allegation against accused or any material implicating the accused or any contravention of the provisions of Sections 200 and 202, the remedy lies in invoking Section 482 Cr.P.C. However, keeping in mind the object underlined in Section 465 Cr.P.C. that if on any technical ground any party to the criminal proceedings is aggrieved he must raise the objection thereof at the earliest stage, we hold that in the event of failure on the part of an aggrieved party to raise objection at the earliest stage, he cannot be heard on that aspect after the whole trial is over or even at a later stage after his participation in the trial. E. The scope of application of the amended provision of Sub-Section (1) of Section 202 Cr.P.C. as enacted under Section 19 of the Criminal Procedure (Amendment) Act, 2005, in case of offences punishable under Sections 138/141 of the Negotiable Instruments Act, 1881:- Chapter XVII was introduced in the Negotiable Act, 1981 by the Banking, Public Financial Institutions and Negotiable Instruments Law (Amendment) Act, 1988, with the object of promoting the ....
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....e, a party should not be allowed to get away from the penal provision of Section 138 of the Act. A contrary view should render Section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong. If we hold otherwise, by giving instructions to banks to stop payment of a cheque after issuing the same against a debt or liability, a drawer will easily avoid penal consequences under Section 138. Once a cheque is issued by a drawer, a presumption under Section 139 must follow and merely because the drawer issued notice to the drawee or to the bank for stoppage of payment it will not preclude an action under Section 138 of the Act by the drawee or the holder of the cheque in due course.... 80. In Hiten P. Dalal v. Bratindranath Banerjee, reported in (2001) 6 SCC 16, the above view was repeated and reiterated that a conjoint reading of Sections 138 and 139 of the said Act, 1881 speaks of presumption in favour of liability of the drawer of the cheques for the amounts for which the cheques are drawn and it is obligatory on the....
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.... Hon'ble Supreme Court in Rangappa v. Sri Mohan, reported in (2010) 11 SCC 441. 81. In Dashrath Rupsingh Rathod (supra) the Hon'ble Justice Vikramjit Sen observed that the Parliament consciously introduced Chapter XVII by virtue of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 for the purpose of converting civil liability into criminal content, inter alia, by deeming fiction of culpability in terms of the pandect comprising Sections 138 and succeeding sections. The relevant portion of the above decision is quoted below:- 15.2. We have undertaken this succinct study mindful of the fact that Parliamentary debates have a limited part to play in interpretation of statutes, the presumption being that legislators have the experience, expertise and language skills to draft laws which unambiguously convey their intentions and expectations for the enactments. What is palpably clear is that Parliament was aware that they were converting civil liability into criminal content inter alia by the deeming fiction of culpability in terms of the pandect comprising Section 138 and the succeeding sections, which severely curtail defenses to....
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.... and the relevant portion of the above decision is quoted below:- 18. It is clear that the non obstante clause has to be given restricted meaning and when the section containing the said clause does not refer to any particular provisions which it intends to override but refers to the provisions of the statute generally, it is not permissible to hold that it excludes the whole Act and stands all alone by itself. In other words, there requires to be a determination as to which provisions answers the description and which does not. While interpreting the non obstante clause, the Court is required to find out the extent to which the legislature intended to do so and the context in which the non obstante clause is used. We have already referred to the definition of complaint as stated in Section 2(d) of the Code which provides that the same needs to be in oral or in writing. The non obstante clause, when it refers to the Code only excludes the oral part in such definition. 84. By virtue of the Banking, Public Financial Institutions and Negotiable Instruments (Amendment) Act, 2015 (Act 26 of 2015), sub-section (2) of Section 142 and Section 142A have been inserted in the said Act, 1981....
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....mining whether it was summary trial or summons trial, the primary and predominant test to be adopted by the appellate court should be whether it was only the substance of the evidence that was recorded or whether the complete record of the deposition of the witness in their chief-examination, cross-examination and re-examination in verbatim was faithfully placed on record. The appellate court has to go through each and every minute detail of the trial court record and then examine the same independently and thoroughly to reach at a just and reasonable conclusion. 85. While interpreting the amended provisions of Section 145 of the said Act, 1881 in Radhey Shyam Garg (supra), the Hon'ble Supreme Court was pleased to take into consideration the non-obstante clause to arrive at a finding that the provisions of Code of Criminal Procedure, 1973 are not attracted. Further taking into consideration the term "may" in sub-section (2) of Section 145 and the term "shall" in sub-section (2) thereof using the term "shall", the Apex Court came to a finding that the terms have been used to point out the discretionary power of the Court conferred upon him by it by reason thereof. However, the ....
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.... the said affidavit to examine himself with regard to the contents thereof once over again. He may be cross-examined and upon completion of his evidence, he may be re-examined. Thus, the words "examine any person giving evidence on affidavit as to the facts contained therein, in the event, the deponent is summoned by the court in terms of sub-section (2) of Section 145 of the Act", in our opinion, would mean for the purpose of cross-examination. The provision seeks to attend a salutary purpose. The statements of objects and reasons for enacting the said provision, inter alia, reads as under: "4. Keeping in view of the recommendations of the Standing Committee on Finance and other representations, it has been decided to bring out, inter alia, the following amendments in the Negotiable Instruments Act, 1881, namely- (i) to (iii) * * * (iv) to prescribe procedure for dispensing with preliminary evidence of the complainant; (v) * * * (vi) to provide for summary trial of the cases under the Act with a view to speeding up disposal of cases;" 20. The object of enactment of the said provision is for the purpose of expedition of the trial. A criminal trial even otherwise is requ....
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....h the commission of offence under Section 138 is that inspite of the demand notice, the drawer of the cheque failed to make the payment within a period of 15 days from the date of receipt of the demand. The relevant portion of the above decision is quoted below:- 23. The scheme of the prosecution in punishing under Section 138 of THE ACT is different from the scheme of the Cr.P.C. Section 138 creates an offence and prescribes punishment. No procedure for the investigation of the offence is contemplated. The prosecution is initiated on the basis of a written complaint made by the payee of a cheque. Obviously such complaints must contain the factual allegations constituting each of the ingredients of the offence under Section 138. Those ingredients are: (1) that a person drew a cheque on an account maintained by him with the banker; (2) that such a cheque when presented to the bank is returned by the bank unpaid; (3) that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier; (4) that the payee demanded in writing from the drawer of the cheque the payment of the amount of money du....
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....er Section 138 is person specific. Therefore, the Parliament declared under Section 142 that the provisions dealing with taking cognizance contained in the Cr.P.C. should give way to the procedure prescribed under Section 142. Hence the opening of non-obstante clause under Section 142. It must also be remembered that Section 142 does not either contemplate a report to the police or authorise the Court taking cognizance to direct the police to investigate into the complaint. 89. It is necessary to take into consideration the vicarious liability of person (s) in charge of and responsible for conduct of business of a company in case of commission of offence of that company under Section 138 of the said Act, 1881. In order to find out the answer to the above question the provisions of Section 141 of the said Act, 1881 is required to be taken into consideration and the same is quoted below:- 141. Offences by companies.- (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deeme....
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.... business of the company, (3) any other person who is a director or a manager or a secretary or officer of the company, with whose connivance or due to whose neglect the company has committed the offence. 11. Normally an offence can be committed by human beings who are natural persons. Such offence can be tried according to the procedure established by law. But there are offences which could be attributed to juristic person also. If the drawer of a cheque happens to be a juristic person like a body corporate it can be prosecuted for the offence under Section 138 of the Act. Now there is no scope for doubt regarding that aspect in view of the clear language employed in Section 141 of the Act. In the expanded ambit of the word "company" even firms or any other associations of persons are included and as a necessary adjunct thereof a partner of the firm is treated as director of that company. 12. Thus when the drawer of the cheque who falls within the ambit of Section 138 of the Act is a human being or a body corporate or even firm, prosecution proceedings can be initiated against such drawer. In this context the phrase "as well as" used in Sub-section (1) of Section 141 of the Ac....
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....It uses the words "after considering" and "the Magistrate is of opinion that there is no sufficient ground for proceeding". These words suggest that the Magistrate has to apply his mind to a complaint at the initial stage itself and see whether a case is made out against the accused persons before issuing process to them on the basis of the complaint. For applying his mind and forming an opinion as to whether there is sufficient ground for proceeding, a complaint must make out a prima facie case to proceed. This, in other words, means that a complaint must contain material to enable the Magistrate to make up his mind for issuing process. If this were not the requirement, consequences could be far reaching. If a Magistrate had to issue process in every case, the burden of work before the Magistrate as well as the harassment caused to the respondents to whom process is issued would be tremendous. Even Section 204 of the Code starts with the words "if in the opinion of the Magistrate taking cognizance of an offence there is sufficient ground for proceeding". The words "sufficient ground for proceeding" again suggest that ground should be made out in the complaint for proceeding agains....
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.... made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial. 19. In view of the above discussion, our answers to the questions posed in the reference are as under: (a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied. (b) The answer to question posed in sub-para (b) has to be in negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liabili....
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....stitute an offence against a person, the complaint is liable to be dismissed. 93. The same view was repeated and reiterated once again by the Hon'ble Supreme Court in the matter of Tamil Nadu News Print and Papers Ltd. v. D. Karunakar & Ors., reported in (2016) 6 SCC 78. 94. Applying the doctrine of pith and substance to the provisions of Section 138 to Section 147 of the said Act, 1881, keeping in mind the interpretations of the aforesaid Sections by the Hon'ble Supreme Court as discussed hereinabove, we find the following salient features in the above provisions: (i) The complaint is filed under Section 138 of the said Act, 1881 furnishing best possible evidence. (ii) Unimpeachable documents are produced at the initial stage and are marked exhibits. (iii) Cause of issuance of cheque is backed by presumption under Section 139 of the said Act, 1881. (iv) On production of original evidence at initial stage, scope of subsequent improvement is minimized at the instance of the complaint. (v) Since the best set of evidence is available before the learned Magistrate, he is not making initial enquiry or in other words it is not a roving enquiry into the pros and cons o....
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....v. Bhiwani Denim & Apparels Ltd. And Others, reported in (2001) 7 SCC 401, the accused in case under Negotiable Instruments is exempted from appearing in person on receipt of the summon. 98. It is profitable to take into consideration Sub-Section (2) of Section 4 of the Cr.P.C. that provides that all offences under any law other than the Cr.P.C. shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. 99. In view of the observations and discussions made hereinabove, the decisions of Indian Bank of Association (supra), Indra Kumar Patodia (supra), Priyanka Srivastava & Anr. (supra), Rangappa (supra) do not help Mr. Ayan Bhattacharya, leaned Counsel appearing in a number of cases for the petitioners and in some other cases for the private opposite parties. 100. In view of the above, we find that in cases falling under Section 138 read with Section 141 of the N.I. Act, the Magistrate is not mandatorily required to comply with the provisions of Section 202 (1) before issuin....