TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 460
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....81 (NI Act) being CC No. 380/2020 has been set aside and remanded the matter back to the learned MM for fresh consideration. The relevant observations from the impugned order are set out below: "6. In this case, admittedly, the accused is residing beyond the territorial jurisdiction of the ld. Trial Court. Therefore, the ld. Trial Court, ought to have conducted an inquiry u/s. 202 CrPC before arriving at a conclusion that there is sufficient ground to proceed against the accused. However, in the instant case, the said inquiry was not conducted. In absence of the said mandatory inquiry, the impugned order of summoning of the petitioner cannot be legally sustained. Hence, the impugned order is hereby set aside. 7. The present case is remanded back with directions to the Ld. Trial Court to conduct the mandatory inquiry u/s. 202 CrPC for ascertaining whether all the ingredients of the offence punishable u/s. 138 NI Act including issuance of the cheque in question by the petitioner in discharge of his lawful liability are satisfied or not. In the said inquiry, the ld. Trial Court shall properly appreciate the Share Sale and Purchase Agreement dated 27.09.2019 between the parties to....
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....he learned MM to refer to the relevant clauses of the said agreement to determine the existence of a legally enforceable debt. In this regard, reliance is placed on the following judgments: i. Pepsi Foods Ltd. v. Judicial Magistrate, (1998) 5 SCC 749, ii. Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, (2023) 1 SCC 578. 8. I have heard the counsels for the parties and perused the material on record. 9. At the outset, reference may be made to Section 202 of the CrPC: "202. Postponement of issue of process.-(1) Any Magistrate, on receipt of a complaint of an offence of which he is authorised to take cognizance or which has been made over to him under Section 192, may, if he thinks fit, and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation 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 appe....
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.... of process. Section 145 of the Act provides that the evidence of the complainant may be given by him on affidavit, which shall be read in evidence in any inquiry, trial or other proceeding, notwithstanding anything contained in the Code. Section 145 (2) of the Act enables the court to summon and examine any person giving evidence on affidavit as to the facts contained therein, on an application of the prosecution or the accused. It is contended by the learned Amici Curiae that though there is no specific provision permitting the examination of witnesses on affidavit, Section 145 permits the complainant to be examined by way of an affidavit for the purpose of inquiry under Section 202. He suggested that Section 202 (2) should be read along with Section 145 and in respect of complaints under Section 138, the examination of witnesses also should be permitted on affidavit. Only in exceptional cases, the Magistrate may examine the witnesses personally. Section 145 of the Act is an exception to Section 202 in respect of examination of the complainant by way of an affidavit. There is no specific provision in relation to examination of the witnesses also on affidavit in Section 145. It be....
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....r that in cases under Section 138 of the NI Act, the mandatory inquiry as contemplated by Section 202 of the CrPC can be conducted by taking evidence of the complainant on affidavit. The inquiry need not be necessarily conducted by taking evidence on oath. Further, documents may be examined by the Trial Court for satisfaction as to the sufficiency of grounds for proceeding under Section 202 of the CrPC. 14. In light of the aforesaid legal position, it has to be determined whether the learned MM in the present cases has conducted an inquiry under Section 202 of the CrPC before issuance of summons to the Accused. 15. At this stage, reference may be made to the summoning orders passed by the learned MM in both the subject complaints. The summoning order in CC No. 380/2020 in CRL. M.C. 2480/2023 is set out below: "Pre-summoning Complainant's Evidence recorded. Documents exhibited. Arguments heard on the summoning aspect. This Court has perused the record of the case file. The accused has issued a cheque in favour of the complainant towards discharge of his liability which was returned unpaid as dishonoured vide cheque return memo. Thereafter, the legal notice of demand was i....
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.... whereas the Accused contends that the same have not been satisfied and there arises no legally enforceable debt. 19. In light of the presumption under Section 139 of the NI Act, a cheque given under Section 138 of the NI Act is presumed to be in discharge of a legally enforceable debt or other liability. The aforesaid presumption is rebuttable and the accused can rebut this presumption by leading evidence in this regard. Therefore, the contention of the Accused that a legally enforceable debt has not accrued in favour of the Complainant on account of non-fulfilment of the conditions in the Agreement would have to be proved by leading evidence at the time of trial. The learned MM is not required to go into this evidence while conducting an inquiry under Section 202 of the CrPC. 20. At the stage of issuance of summons, for the purpose of Section 202 of the CrPC read with section 145 of the NI Act, the learned MM is only required to examine whether the basic ingredients of an offence under Section 138 of the NI Act have been prima facie made out by the complainant and supported by the pre-summoning evidence led on behalf of the complainant. 21. In both the present cases, the compl....
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....ragraphs since there is a presumption to be drawn of there being a debt or liability in part or in whole of the drawer to the holder of the instrument, the court below cannot be said to have faulted upon in taking cognizance and in registering the offence. Since it is a rebuttable presumption and all the contentions and averments made by the counsel for the petitioner being his defence, it would be open for him to raise all these grounds at the stage of leading evidence including the defence of existence of legally enforceable debt or liability. However, there can be no doubt that at the time of filing of complaint there was always initial presumption which would be in favour of the complainant." We are in full agreement with the opinion of the High Court expressed in the above noted paragraphs which has been referred by the learned counsel for the appellant. It is well settled that the rebuttal can be made with reference to the evidence of the prosecution as well as of defence." 23. The aforesaid observations of the Supreme Court are fully applicable in the present case. 24. Further, it cannot be accepted that just because the summoning order of the MM does not make specific r....