2010 (7) TMI 279 - HC - Companies Law

Whether the accused under article 21 of the Constitution of India has a right of silence in a criminal trial and therefore he cannot be forced to disclose his defence? Held that - Since summoning order in all these cases have been issued it is now the obligation of these petitioners to take notice under section 251 of the Code of Criminal Procedure if not already taken and enter their plea of defence before the concerned Metropolitan Magistrate s court and make an application if they want to recall any witness. If they intend to prove their defence without recalling any complainant witness or any other witness they should do so before the court of Metropolitan Magistrate. These petitions are therefore hereby dismissed. The petitioners shall appear before the court of concerned Metropolitan Magistrate and trial shall proceed.

Summary

The core legal questions considered by the Court include:

1. Whether the High Court can quash complaints under section 138 of the Negotiable Instruments Act, 1881, on grounds that the learned Metropolitan Magistrate cannot recall their own summoning orders and that such complaints are not maintainable against the petitioners.

2. The scope and applicability of section 482 of the Code of Criminal Procedure, 1973, in quashing summoning orders passed under section 138 of the Negotiable Instruments Act.

3. The proper procedural framework for trial of offences under section 138, especially the applicability of summary trial provisions under sections 260 to 265 of the Code of Criminal Procedure and sections 143-145 of the Negotiable Instruments Act.

4. The extent to which defences raised by accused persons at the summoning stage can be considered by the High Court or the trial court.

5. The rights and obligations of the accused under the summary trial procedure, including the requirement to disclose defence at the first hearing and the burden of proof under section 106 of the Indian Evidence Act, 1872.

6. The permissibility and procedure for recalling complainant witnesses for cross-examination during summary trial under section 145 of the Negotiable Instruments Act.

7. The validity and modes of service of summons on accused persons under section 144 of the Negotiable Instruments Act and relevant provisions of the Code of Criminal Procedure.

8. The procedural approach where multiple accused are involved but some do not appear before the court.

9. The impact of the Supreme Court judgment in Damodar S. Prabhu v. Sayed Babalal H. on the conduct of trials under section 138 and the role of compromise or payment at the initial stage.

Issue-wise Detailed Analysis:

1. Jurisdiction of High Court under Section 482 CrPC to Quash Summoning Orders:

The Court relied on the precedent that section 482 CrPC is a remedy to quash complaints only where the complaint and material before the trial court at the summoning stage disclose no offence against the accused. The Court emphasized that the High Court cannot routinely intervene to quash summoning orders merely because the accused raises various defences such as non-directorship, sleeping partner status, issuance without consideration, or resignation from directorship. These are factual and legal defences to be raised before the trial court and not grounds for quashing at the threshold. The Court observed that many petitioners approach the High Court prematurely, treating it as a forum to avoid trial before the Metropolitan Magistrate, which is impermissible.

2. Summary Trial Procedure under Sections 143-145 of the Negotiable Instruments Act and Sections 260-265 CrPC:

The Court clarified that offences under section 138 are to be tried summarily by the Judicial or Metropolitan Magistrate as per the amended provisions. The summary trial provisions aim to expedite disposal and avoid prolonged litigation. The Court explained that the complainant's evidence is to be given by affidavit at the pre-summoning stage and this affidavit is to be read as evidence at the trial stage without the need for re-examination, except where the accused applies under section 145(2) to recall the complainant for cross-examination on specific points. The Court underscored that the Magistrate has the power to convert summary trial into summons trial if the nature of the case demands a sentence exceeding one year or other reasons, but reasons must be recorded and parties heard.

3. Obligations of the Accused at the First Hearing and Burden of Proof:

The Court held that upon appearance, the accused must furnish bail and disclose his defence under section 251 CrPC and section 263(g) CrPC. The accused cannot simply plead "not guilty" without stating the grounds of defence. Since the offence is technical and document-based, the accused bears the burden under section 106 of the Indian Evidence Act to prove defences such as non-issuance of cheque, forgery, or lack of authority. The Court rejected the argument that the accused's right to silence under Article 21 of the Constitution prohibits disclosure of defence at the outset, emphasizing that the burden to prove defences lies on the accused in such cases.

4. Treatment of Complainant's Evidence and Re-examination:

The Court emphasized that the complainant's affidavit evidence filed with the complaint suffices for both pre- and post-summoning stages. Re-examination or recalling of complainant witnesses is not routine but only upon a specific application by the accused under section 145(2) specifying the points for cross-examination. This prevents unnecessary delay and repetition of evidence, ensuring the summary nature of the trial is maintained. The Court cited the Bombay High Court's decision confirming that the complainant's examination-in-chief can be taken on affidavit and cross-examination is only upon request.

5. Service of Summons and Proceedings Against Multiple Accused:

Section 144 of the Negotiable Instruments Act and relevant CrPC provisions provide for valid service of summons by registered post, courier, or affixation if the accused evades service. The Court held that the trial should proceed against accused who have appeared and furnished bail without waiting for non-appearing accused unless the Magistrate considers that all accused must be tried together for valid reasons. This ensures expeditious disposal and prevents delay due to non-cooperation of some accused.

6. Impact of Supreme Court Judgment in Damodar S. Prabhu:

The Court directed that upon appearance, the accused should be informed of the option to make payment of the cheque amount either personally or through counsel to the complainant, which would end the proceedings. The accused can also apply for compromise at the first hearing. The Court noted that failure to compromise at the initial stage but doing so later may attract costs as per the Supreme Court ruling. This procedural direction aligns with the legislative intent to discourage protracted litigation and encourage early resolution.

7. Misuse of High Court's Inherent Powers and Need to Follow Proper Procedure:

The Court criticized the misuse of section 482 CrPC petitions by affluent accused to avoid trial before the Magistrate, often raising defences that should be dealt with at trial. The Court stressed that the High Court cannot usurp the trial court's jurisdiction by entertaining such petitions prematurely. The accused must appear before the Magistrate, file their defence, and proceed as per the summary trial procedure. The Court's directions aim to restore the balance between protecting accused rights and preventing abuse of process.

8. Procedural Steps for Summary Trial under Section 138:

The Court laid down a clear stepwise procedure:

Step I: On complaint presentation with affidavit, the Magistrate scrutinizes and takes cognizance if offence is made out, issuing summons.

Step II: Upon accused appearance, bail is furnished, plea of defence recorded, and case fixed for defence evidence unless an application under section 145(2) is filed to recall witnesses.

Step III: Court decides on any application to recall complainant witnesses; otherwise, defence evidence is recorded and complainant may cross-examine defence witnesses.

Step IV: Arguments are heard from both sides.

Step V: Judgment is delivered.

This procedure is designed to ensure expeditious disposal consistent with legislative mandate.

Conclusions:

The Court dismissed all pending petitions seeking quashing of summoning orders on grounds of defences that are to be raised at trial. The petitioners were directed to appear before the respective Metropolitan Magistrates and proceed with trial as per the prescribed summary procedure. The Court also directed circulation of this judgment among judicial officers to ensure uniform adherence to the summary trial provisions and prevent unnecessary delays.

Significant Holdings:

"Section 482 of the Code of Criminal Procedure can be resorted to only where the High Court is called upon to examine the complaint and the material available before the trial court at the time of summoning per se to arrive at a conclusion that no case was made out against the petitioner/accused."

"The accused cannot simply say 'I am innocent' or 'I plead not guilty' without disclosing specific defences at the first hearing under the summary trial procedure."

"The evidence of the complainant given by way of affidavit at the pre-summoning stage is sufficient for both pre- and post-summoning stages and need not be repeated unless the accused makes a specific application under section 145(2) of the Negotiable Instruments Act."

"The offence under section 138 of the Negotiable Instruments Act is a document-based technical offence and the burden of proving defences lies on the accused under section 106 of the Indian Evidence Act."

"The summary trial procedure prescribed under sections 143-145 of the Negotiable Instruments Act and sections 260-265 of the Code of Criminal Procedure must be strictly followed to ensure expeditious disposal of cases."

"The High Court cannot usurp the jurisdiction of the Metropolitan Magistrate by entertaining premature petitions under section 482 CrPC seeking quashing of complaints merely on the basis of defences that are to be raised at trial."

"Where multiple accused are involved, the court should proceed against those who appear and furnish bail without awaiting the appearance of others, unless the case requires joint trial."

"The accused should be informed at the first hearing of the option to make payment or compromise, as per the Supreme Court's ruling in Damodar S. Prabhu, to facilitate early resolution."