2010 (1) TMI 570 - SC - Companies Law

Whether sub-section (2) of section 145 of the Negotiable Instruments Act, 1881 confers an unfettered right on the complainant and the accused to apply to the Court seeking direction to give oral examination-in-chief of a person giving evidence on affidavit, even in respect of the facts stated therein and that if such a right is exercised, whether the Court is obliged to examine such a person in spite of the mandate of section 145(1) of the Act? Whether the provisions of section 145 of the Act, as amended by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 are applicable to the complaints under section 138 of the Act pending on the date on which the amendment came into force? In other words, do the amended provisions of section 145(1) and (2) of the Act operate retrospectively? Held that - There are two errors apparent in the reasoning of the High Court. First, if the Legislature in their wisdom did not think it proper to incorporate a word accused with the word complainant in section 145(1). . . . , it was not open to the High Court to fill up the self-perceived blank. Secondly, the High Court was in error in drawing an analogy between the evidences of the complainant and the accused in a case of dishonoured cheque. The case of the complainant in a complaint under section 138 of the Act would be based largely on documentary evidence. The accused, on the other hand, in a large number of cases, may not lead any evidence at all and let the prosecution stand or fall on its own evidence. In case the defence does lead any evidence, the nature of its evidence may not be necessarily documentary; in all likelihood the defence would lead other kinds of evidences to rebut the presumption that the issuance of the cheque was not in the discharge of any debt or liability. This is the basic difference between the nature of the complainant s evidence and the evidence of the accused in a case of dishonoured cheque. It is, therefore, wrong to equate the defence evidence with the complainant s evidence and to extend the same option to the accused as well.

Summary

Issues Involved:
1. Extent of the right of the accused under section 145(2) of the Negotiable Instruments Act, 1881.
2. Applicability of the provisions of sub-sections (1) and (2) of section 145 to proceedings pending on February 6, 2003.
3. Whether the right to give evidence on affidavit is also available to the accused.

Detailed Analysis:

1. Extent of the Right of the Accused under Section 145(2):
The primary issue was whether the accused has the right to insist that the complainant or his witness, who has given evidence on affidavit, should first give deposition in examination-in-chief before being cross-examined. The High Court held that the accused could cross-examine a person whose evidence is given on affidavit, but cannot insist on a fresh examination-in-chief. The Supreme Court upheld this view, emphasizing that section 145(2) does not suggest that the person giving evidence on affidavit must start with an examination-in-chief. The Court noted that the affidavit is in the nature of an examination-in-chief, and on being summoned, the deponent can only be cross-examined. This interpretation aligns with the legislative intent to simplify and expedite the trial process under sections 143 to 147 of the Act.

2. Applicability of Provisions to Pending Proceedings:
The second issue was whether the provisions of sub-sections (1) and (2) of section 145 apply to cases pending on February 6, 2003, when these provisions were inserted. The High Court held that these provisions are procedural and not substantive, thus applicable to pending cases. The Supreme Court agreed, citing that procedural laws typically apply retrospectively unless explicitly stated otherwise. The Court referenced the decision in Gurbachan Singh v. Satpal Singh, affirming that procedural changes do not affect substantive rights and are generally applied to ongoing cases.

3. Right of the Accused to Give Evidence on Affidavit:
The third issue was whether the accused could also give evidence on affidavit, similar to the complainant. The High Court permitted this, arguing there was no express bar against it and it would further the legislative intent of expediting trials. However, the Supreme Court disagreed, stating that the legislature did not provide this right to the accused in section 145(1). The Court emphasized that it is not within the judiciary's purview to fill perceived legislative gaps. The nature of evidence from the complainant and the accused differs significantly, and extending the same right to the accused would be inappropriate. Consequently, the Supreme Court set aside the High Court's direction allowing the accused to tender evidence on affidavit.

Conclusion:
The Supreme Court upheld the High Court's interpretation regarding the extent of the accused's right under section 145(2) and the retrospective applicability of the procedural provisions. However, it overturned the High Court's decision allowing the accused to give evidence on affidavit, reinforcing the principle that courts should not assume legislative functions. The appeals concerning the right to cross-examine without fresh examination-in-chief and the retrospective application of procedural provisions were dismissed, while the appeal regarding the accused's right to give evidence on affidavit was allowed.