TMI Blog2014 (5) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... sion. Section 145(1) gives complete freedom to the complainant either to give his evidence by way of affidavit or by way of oral evidence. The Court has to accept the same even if it is given by way of an affidavit. Second part of Section 145(1) provides that the complainant's statement on affidavit may, subject to all just exceptions, be read in evidence in any inquiry, trial or other proceedings. Section 145 is a rule of procedure which lays down the manner in which the evidence of the complainant may be recorded and once the Court issues summons and the presence of the accused is secured, an option be given to the accused whether, at that stage, he would be willing to pay the amount due along with reasonable interest and if the accused is not willing to pay, Court may fix up the case at an early date and ensure day-to-day trial. Few High Courts of the country have laid down certain procedures for speedy disposal of cases under Section 138 of the Negotiable Instruments Act - It is directed to all Criminal Courts in the country dealing with Section 138 cases to follow the above-mentioned procedures for speedy and expeditious disposal of cases falling under Section 138 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... introduced in the Negotiable Instruments Act by Section 4 of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, to enhance the acceptability of cheques in settlement of liability by making the drawer liable for penalties in case of bouncing of cheques due to insufficiency of funds, the desired object of the Amendment Act has not achieved. 4. Legislature has noticed that the introduction of Sections 138 to 142 of the Act has not achieved desired result for dealing with dishonoured cheques, hence, it inserted new Sections 143 to 147 in the Negotiable Instruments Act vide Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 for speedy disposal of cases relating to dishonour of cheques through summary trial as well as making the offence compoundable. But, no uniform practice is seen followed by the various Magistrate Courts in the country, as a result of which, the object and purpose for which the amendments were incorporated, have not been achieved. 5. Cheque, though acknowledged as a bill of exchange under the Negotiable Instruments Act and readily accepted in lieu of payment of money and is negotiable, the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure that genuine and honest bank customers are not harassed or put to inconvenience, sufficient safeguards have also been provided in the proposed new Chapter. Such safeguards are: (a) that no court shall take cognizance of such offence except on a complaint, in writing, made by the payee or the holder in due course of the cheque; (b) that such complaint is made within one month of the date on which the cause of action arises; and (c) that no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate or a Judicial Magistrate of the First Class shall try any such offence. 6. The objectives of the proceedings of Section 138 of the Act are that the cheques should not be used by persons as a tool of dishonesty and when cheque is issued by a person, it must be honoured and if it is not honoured, the person is given an opportunity to pay the cheque amount by issuance of a notice and if he still does not pay, he must face the criminal trial and consequences. Section 138 of the Negotiable Instruments Act, 1881, is given below for easy reference :- 138. Dishonour of cheque for insufficiency, etc., of funds in the account. - Where any cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cheque dishonestly. It is seen that once the cueque has been drawn and issued to the payee and the payee has presented the cheque and thereafter, if any instructions are issued to the bank for non-payment and the cheque is returned to the payee with such an endorsement, it amounts to dishonour of cheque and it comes within the meaning of Section 138 . 8. In Goa Plast (P) Ltd. v. Chico Ursula D'Souza [2004] 2 SCC 235, this Court, while dealing with the objects and ingredients of Sections 138 and 139 of the Act, observed as follows :- The object and the ingredients under the provisions, in particular, Sections 138 and 139 of the Act cannot be ignored. Proper and smooth functioning of all business transactions, particularly, of cheques as instruments, primarily depends upon the integrity and honesty of the parties. In our country, in a large number of commercial transactions, it was noted that the cheques were issued even merely as a device not only to stall but even to defraud the creditors. The sanctity and credibility of issuance of cheques in commercial transactions was eroded to a large extent. Undoubtedly, dishonour of a cheque by the bank causes incalculable los ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utions and organisations were examined by the Government in consultation with the Reserve Bank of India and other legal experts, and a Bill, namely, the Negotiable Instruments (Amendment) Bill, 2001 was introduced in the Lok Sabha on 24th July, 2001. The Bill was referred to Standing Committee on Finance which made certain recommendations in its report submitted to Lok Sabha in November, 2001. 4. Keeping in view 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 increase the punishment as prescribed under the Act from one year to two years; (ii) to increase the period for issue of notice by the payee to the drawer from 15 days to 30 days; (iii) to provide discretion to the Court to waive the period of one month, which has been prescribed for taking cognizance of the case under the Act; (iv) to prescribe procedure for dispensing with preliminary evidence of the complainant; (v) to prescribe procedure for servicing of summons to the accused or witness by the Court through speed post or empanell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement of, or in the course of, a summary trial under this section, it appears to the Magistrate that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Magistrate shall after hearing the parties, record an order to that effect and thereafter recall any witness who may have been examined and proceed to hear or rehear the case in the manner provided by the said Code. (2) The trial of a case under this section shall, so far as practicable, consistently with the interests of justice, be continued from day to day until its conclusion, unless the Court finds the adjournment of the trial beyond the following day to be necessary for reasons to be recorded in writing. (3) Every trial under this section shall be conducted as expeditiously as possible and an endeavour shall be made to conclude the trial within six months from the date of filing of the complaint. 11. Section 145 of the Act deals with the evidence on affidavit and reads as follows : 145. Evidence on affidavit. (1) Notwithstanding anything contained in the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if it is given by way of an affidavit. Second part of Section 145(1) provides that the complainant's statement on affidavit may, subject to all just exceptions, be read in evidence in any inquiry, trial or other proceedings. Section 145 is a rule of procedure which lays down the manner in which the evidence of the complainant may be recorded and once the Court issues summons and the presence of the accused is secured, an option be given to the accused whether, at that stage, he would be willing to pay the amount due along with reasonable interest and if the accused is not willing to pay, Court may fix up the case at an early date and ensure day-to-day trial. 15. Section 143 empowers the Court to try cases for dishonour of cheques summarily in accordance with the provisions of Section 262 to 265 of the Code of Criminal Procedure, 1973. The relevant provisions being Sections 262 to 264 are extracted hereinbelow for easy reference : 262. Procedure for summary trials. (1) In trials under this Chapter, the procedure specified in this Code for the trial of summons-ease shall be followed except as hereinafter mentioned. (2) No sentence of imprisonment f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for offence of dishonour of cheque since offence under Section 138 of the Act is a document based offence. We make it clear that if the proviso (a), (b) (c) to Section 138 of the Act are shown to have been complied with, technically the commission of the offence stands completed and it is for the accused to show that no offence could have been committed by him for specific reasons and defences. 17. Procedure for summary case has itself been explained by this Court in Nitinbhai Saevantilal Shah and another v. Manubhai Manjibhai Panchal and another [2011]9 SCC 638, wherein this Court held as under: 12. Provision for summary trials is made in Chapter XXI of the Code. Section 260 of the Code confers power upon any Chief Judicial Magistrate or any Metropolitan Magistrate or any Magistrate of the First Class specially empowered in this behalf by the High Court to try in a summary way all or any of the offences enumerated therein. Section 262 lays down the procedure for summary trial and sub-section (1) thereof inter alia prescribes that in summary trials the procedure specified in the Code for the trial of summons case shall be followed subject to the condition that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve also to be borne in mind by the Magistrate while dealing with cases under Section 138 of the Negotiable Instruments Act. 20. We notice, considering all those aspects, few High Courts of the country have laid down certain procedures for speedy disposal of cases under Section 138 of the Negotiable Instruments Act. Reference, in this connection, may be made to the judgments of the Bombay High Court in KSL and Industries Ltd. v. Mannalal Khandelwal and The State of Maharashtrathrough the Office of the Government Pleader [2005] CriLJ 1201, Indo International Ltd. and another v. State of Maharashtra and another [2005] 44 Civil CC (Bombay) and Harischandra Biyani v. Stock Holding Corporation of India Ltd. [2006] 4 MhLJ 381, the judgment of the Calcutta High Court in Magma Leasing Ltd. v. State of West Bengal and others [2007] 3 CHN 574 and the judgment of the Delhi High Court in Rajesh Agarwal v. State and another (2010) ILR 6 Delhi 610. 21. Many of the directions given by the various High Courts, in our view, are worthy of emulation by the Criminal Courts all over the country dealing with cases under Section 138 of the Negotiable Instruments Act, for which the following directio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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