Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(SC) 202

SUPREME COURT OF INDIA
S.A. Bobde, CJI., Nageswara Rao, B.R. Gavai, A.S. Bopanna, S. Ravindra Bhat, JJ.
In Re: EXPEDITIOUS TRIAL OF CASES UNDER SECTION
138 OF N.I. ACT 1881.
Suo Motu Writ Petition (Crl.) No.2 of 2020
Decided on : 16-04-2021

Advocates appeared:
For the Parties :Sidharth Luthra, Sr. Advocate, (A.C), K. Parameshwar, (A.C.), M. V. Mukunda, A. Sregurupriya, Rajat Mathur, Anmol Kheta, Sheezan Hashmi, Akshat Kumar, Tushar Mehta, Ld. SG, Vikramjit Banerjee, Ld. ASG., Neela Kedar Gokhle, P. V. Yogeshwaran, Divyansh H. Rathi, B. V. Balaram Das, Raj Bahadur Yadav, Manisha Ambwani, G.S. Makker, Saumya Sinha, Neeraj, AAG, Piyush Beriwal, Dr. Monika Gusain, Aviral Saxena, Vishwa Pal Singh, Mahfooz A. Nazki, Polanki Gowtham, Shaik Mohamad Haneef, T. Vijaya Bhaskar Reddy, Amitabh Sinha, Shrey Sharma, Shubhranshu Padhi, Ashish Yadav, Rakshit Jain, Vishal Banshal, Garima Prashad, AAG, Abhinav Agrawal, Harpreet Singh Gupta, Manish Kumar, Gaurav Agrawal, Raghvendra Kumar, Standing Counsel/Advocate, Anand Kumar Dubey, Narendra Kumar, Anupam Raina, Sunando Raha, Naresh K. Sharma, S. Udaya Kumar Sagar, Sweena Nair, Abhimanyu Tewari, Garima Prashad, Sr. Advocate, Abhinav Agrawal, V. G. Pragasam, S. Prabhu Ramasubramanian, M. Yogesh Kanna, Raja Rajeshwaran S, Aditya Chadha, Uma Prasuna Bachu, Jaspreet Gogia, Mandakini Singh, Karanvir Gogia, Shivangi Singhal, Ashima Mandla, Yashvardhan, Apoorv Shukla, Smita Kant, Ishita Farsaiya, Prabhleen Kaur, Garima Prashad, Avijit Mani Tripathi, T.K. Nayak, Pukhrambam Ramesh Kumar, Anupama Ngangom, Karun Sharma, Sachin Patil, Rahul Chitnis, Aaditya A. Pande, Geo Joseph, Jishnu M.L., Priyanka Prakash, Beena Prakash, G. Prakash, Aruna Mathur, Avneesh Arputham, For M/S. Arputham Aruna And Co, Shuvodeep Roy, KumarAnurag Singh, Addl. Standing Counsel Anando Mukherjee, Tulika Mukherjee, Vinay Garg, Upendra Mishra, Ashish Ranjan, Shuvodeep Roy, Kunal Chatterji, Maitrayee Banerjee, Pravar Veer Misra, Gopal Jha, Shreyash Bhardwaj, Applicant-in-person Romy Chacko, Shakthi Chand Jaidwal, Ashwin Romy, Satish Pandey, Salim Ansari, Sameer Parekh, R. Nedumaran, Sharan Thakur, Mahesh Thakur Advocate, Siddhartha Thakur, Vipasha Singh, Soumya Chakraborty, Sr. Advocate, Sanjai Kumar Pathak, Arvind Kumar Tripathi, Shashi Pathak, Sunil Kumar, Sr. Advocate, Jamnesh Kumar, Himanshu Shekhar, Eliza Bar, Pai Amit, P. H. Parekh, Sr. Advocate, Sameer Parekh, Kshatrashal Raj, Tanya Chaudhry, Pratyusha Priyadarshini, Nitika Pandey, For M/s Parekh & Co., Siddhesh Kotwal, Bansuri Swaraj, Divyansh Tiwari, Ana Upadhyay, Manya Hasija, Nirnimesh Dube, V. N. Raghupathy, Rachana Srivastava, Rachna Gandhi, Suhaan Mukerji, Vishal Prasad, Nikhil Parikshith, Abhishek Manchanda, Sayandeep Pahari, For M/S. PLR Chambers And Co., Shree Pal Singh, Abhimanyu Jhamba, Ashish Jhamb, Samir Ali Khan, Pragati Neekhra, Deepanwita Priyanka, Aniruddha P. Mayee, Apoorv Kurup, Nidhi Mittal, Uttara Babbar, Manan Bansal, Shweta Mohta, Sibo Sankar Mishra, Thomas P. Joseph, Sr. Advocate, V.K. Biju, Amlendu Kumar Akhilesh Kumar Jha, Abhay Pratap Singh, Shaji George, Rubina Jawed, Dr. Lalit Bhasin, Nina Gupta, P. V. Yogeswaran, Christi Jain, K. Enatoli Sema, Amit Kumar Singh, Apratim Animesh Thakur, Prachi Hasija, Arjun Garg, Shrutika Garg, Radhika Gautam, K.V. Jagdishvaran, G. Indira, Taruna Ardhendumauli Prasad, Parth Awasthi, Dr. Rajesh Pandey, Aswathi M.K., Ramesh Babu M. R., Manisha Singh, Nisha Sharma, Dr. Abhishek Atrey, Anando Mukherjee, Vinay Garg, Kunal Chatterji, Applicant-in-person Gopal Jha, Romy Chacko, Satish Pandey, Sameer Parekh, Mahesh Thakur, R. Nedumaran, Sanjai Kumar Pathak, Taruna Ardhendumauli Prasad, Himanshu Shekhar, Pai Amit, Nirnimesh Dube, M/S. Parekh & Co., V. N. Raghupathy, Shibashish Misra, Rachana Srivastava, M/S. Plr Chambers And Co., Samir Ali Khan, Shree Pal Singh, Pragati Neekhra, Raj Bahadur Yadav, Apoorv Kurup, Aniruddha P. Mayee, Sibo Sankar Mishra, Uttara Babbar, V. K. Biju, P. V. Yogeswaran, K. Enatoli Sema, Christi Jain, Radhika Gautam, Arjun Garg, G. Indira, Aswathi M.k., Abhishek Atrey, Ramesh Babu M. R., Dr. Monika Gusain, Manisha Ambwani, Vishwa Pal Singh, Mahfooz Ahsan Nazki, Manish Kumar, Shubhranshu Padhi, Narendra Kumar, Gaurav Agrawal, Anupam Raina, S.. Udaya Kumar Sagar, V. G. Pragasam, Abhimanyu Tewari, Jaspreet Gogia, M. Yogesh Kanna, Apoorv Shukla, Garima Prashad, Avijit Mani Tripathi, B. V. Balaram Das, Pukhrambam Ramesh Kumar, Sachin Patil, G. Prakash, Shuvodeep Roy, M/S. Arputham Aruna And Co, Advocates

IMPORTANT POINTS
(1) In a case tried summarily in which accused does not plead guilty, it is sufficient for Magistrate to record substance of evidence and deliver a judgment, containing a brief statement of reasons for his findings.
(2) Dishonour of cheque – Section 202 (2) of Code is inapplicable to complaints under Section 138 in respect of examination of witnesses on oath. In suitable cases, Magistrate can examine documents for satisfaction as to sufficiency of grounds for proceeding under Section 202.
(3) Judge’s duty is to interpret and apply law, not to change it to meet Judge’s idea of what justice requires, Court cannot add words to a statute or read words into it which are not there.

Headnote:
(A) Negotiable Instruments Act, 1881 – Section 138 and 143 – Criminal Procedure Code, 1973 – Sections 262 to 265 – Dishonour of cheque – Expeditious Trial of Cases – Service of summons on accused in a complaint filed under Section 138 of Act has been one of main reasons for delay in disposal of complaints – In a case tried summarily in which accused does not plead guilty, it is sufficient for Magistrate to record substance of evidence and deliver a judgment, containing a brief statement of reasons for his findings – There is a restriction that procedure for summary trials under Section 262 is not to be applied for any sentence of imprisonment exceeding three months – It is only in a case where Magistrate is of opinion that it may be necessary to sentence accused for a term exceeding one year that complaint shall be tried as a summons trial – Conversion by Trial Courts of complaints under Section 138 from summary trial to summons trial is being done mechanically without reasons being recorded – Result of such conversion of complaints under Section 138 from summary trial to summons trial has been contributing to delay in disposal of cases – Object of Section 143 of Act is quick disposal of complaints under Section 138 by following procedure prescribed for summary trial under the Code, to the extent possible – Discretion conferred on Magistrate by second proviso to Section 143 is to be exercised with due care and caution, after recording reasons for converting trial of complaint from summary trial to summons trial – Otherwise, purpose for which Section 143 of Act has been introduced would be defeated – High Courts may issue practice directions to Magistrates to record reasons before converting trial of complaints under Section 138 from summary trial to summons trial in exercise of power under second proviso to Section 143 of Act. (Paras 7 and 9)
(B) Criminal Procedure Code, 1973 – Section 202 – Negotiable Instruments Act, 1881 – Section 145 – Dishonour of cheque – Enquiry by Magistrate – Section 202 (2) of Code is inapplicable to complaints under Section 138 in respect of examination of witnesses on oath – Evidence of witnesses on behalf of complainant shall be permitted on affidavit – If Magistrate holds inquiry himself, it is not compulsory that he should examine witnesses – In suitable cases, Magistrate can examine documents for satisfaction as to sufficiency of grounds for proceeding under Section 202. (Para 12)
(C) Criminal Procedure Code, 1973 – Sections 219 and 220 – Joint trial – Offences that are committed as part of same transaction can be tried jointly as per Section 220 of Code – Whether a transaction can be regarded as same would necessarily depend upon particular facts of each case – It is generally thought that where there is proximity of time or place or unity of purpose and design or continuity of action in respect of a series of acts, it may be possible to infer that they form part of same transaction – It is, however, not necessary that every one of these elements should co-exist for a transaction to be regarded as the same – But if several acts committed by a person show a unity of purpose or design that would be a strong circumstance to indicate that those acts form part of same transaction – There is no ambiguity in Section 220 in accordance with which several cheques issued as a part of same transaction can be subject matter of one trial. (Para 15)
(D) Interpretation of Statute – Parameters – Conferring power on court by reading certain words into provisions is impermissible – Judge must not rewrite a statute, neither to enlarge nor to contract it – Whatever temptations statesmanship of policy-making might wisely suggest, construction must eschew interpolation and evisceration – He must not read in by way of creation – Judge’s duty is to interpret and apply law, not to change it to meet Judge’s idea of what justice requires – Court cannot add words to a statute or read words into it which are not there. (Para 20)
(E) Negotiable Instruments Act, 1881 – Section 138 and 143 – Criminal Procedure Code, 1973 – Sections 262 to 265 – Dishonour of cheque – Expeditious Trial of Cases – High Courts requested to issue practice directions to Magistrates to record reasons before converting trial of complaints under Section 138 of Act from summary trial to summons trial – Inquiry shall be conducted on receipt of complaints under Section 138 of Act to arrive at sufficient grounds to proceed against accused, when such accused resides beyond territorial jurisdiction of court – Suitable amendments be made to Act for provision of one trial against a person for multiple offences under Section 138 of Act committed within a period of 12 months, notwithstanding the restriction in Section 219 of Code – High Courts are requested to issue practice directions to Trial Courts to treat service of summons in one complaint under Section 138 forming part of a transaction, as deemed service in respect of all complaints filed before same court relating to dishonour of cheques issued as part of said transaction – Section 258 of Code is not applicable to complaints under Section 138 of Act. (Para 24)
Facts of the case:
Special Leave Petition (Criminal) No. 5464 of 2016 pertains to dishonour of two cheques on 27.01.2005 for an amount of Rs.1,70,000/-. The dispute has remained pending for the past 16 years. Concerned with the large number of cases filed under Section 138 of Negotiable Instruments Act, 1881 pending at various levels, a Division Bench of this Court decided to examine reasons for the delay in disposal of these cases. Registry was directed to register a Suo Motu Writ Petition (Criminal) captioned as “Expeditious Trial of Cases under Section 138 of N.I. Act 1881”.
Findings of Court:
All other points, which have been raised by Amicus Curiae in their preliminary report and written submissions and not considered herein, shall be subject matter of deliberation by the Committee. Any other issue relating to expeditious disposal of complaints under Section 138 of Act shall also be considered by the Committee.
Result : Matter to be listed before a Three Judges Bench.

Judgement Key Points

Key Holdings on Expeditious Trial of Section 138 NI Act Cases

Summary Trial Procedure: In summary trials where the accused does not plead guilty, the Magistrate need only record the substance of evidence and deliver a judgment with a brief statement of reasons for findings. (!)
Conversion from Summary to Summons Trial: Conversion of Section 138 complaints from summary to summons trial must not be mechanical; Magistrates must record reasons if converting under the second proviso to Section 143 NI Act, as the provision aims for quick disposal. High Courts should issue practice directions requiring such reasons. (!) (!) (!)
Inquiry under Section 202 CrPC: Section 202(2) CrPC does not apply to Section 138 complaints regarding oath examination of witnesses; complainant and witnesses' evidence can be on affidavit. Magistrates may examine documents alone in suitable cases for sufficiency of grounds, especially if accused is outside jurisdiction. (!) (!) (!) (!)
Joint Trials under Sections 219/220 CrPC: Multiple Section 138 offences within 12 months cannot exceed three per trial under Section 219 unless part of the same transaction (proximity of time/place, unity of purpose/design, continuity of action) under Section 220. Recommend legislative amendment to allow one trial for multiple such offences notwithstanding Section 219. (!) (!) (!) (!) (!)
Service of Summons: For cheques part of the same transaction, service in one Section 138 complaint before the same court constitutes deemed service for all related complaints. High Courts should issue practice directions to Trial Courts accordingly. (!) (!)
Inherent Powers and Recall of Summons: No inherent power for Trial Courts to review/recall issuance of process in Section 138 cases; Section 258 CrPC inapplicable to complaint-based summons cases under Section 143 NI Act. Exception under Section 322 CrPC if lack of jurisdiction. Consider legislative amendment for recall power. (!) (!) (!) (!) (!) (!) (!)
Pendency Reduction Measures: High Courts urged to refer pending Section 138 revisions/appeals to mediation. Committee to consider other issues like summons service reforms, bank account attachment, additional courts. (!) (!) (!)
Statutory Interpretation Principle: Courts cannot add words to or read words into statutes; duty is to interpret and apply law as enacted, without altering it for perceived justice. (!)

ORDER

1. Special Leave Petition (Criminal) No. 5464 of 2016 pertains to dishonour of two cheques on 27.01.2005 for an amount of Rs.1,70,000/-. The dispute has remained pending for the past 16 years. Concerned with the large number of cases filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter the Act) pending at various levels, a Division Bench of this Court consisting of two of us (the Chief Justice of India and L. Nageswara Rao, J.) decided to examine the reasons for the delay in disposal of these cases. The Registry was directed to register a Suo Motu Writ Petition (Criminal) captioned as "Expeditious Trial of Cases under Section 138 of N.I. Act 1881". Mr. Sidharth Luthra, learned Senior Counsel was appointed as Amicus Curiae and Mr. K. Parameshwar, learned Counsel was requested to assist him.

Notices were issued to the Union of India, Registrar Generals of the High Courts, Director Generals of Police of the States and Union Territories, Member Secretary of the National Legal Services Authority, Reserve Bank of India and Indian Banks' Association, Mumbai as the representative of banking institutions.

2. The learned Amici Curiae submitted a preliminary report on 11.10.2020 which was circulated to all the Respondents. On 19.01.2021, the learned Amici Curiae informed this Court that only 14 out of 25 High Courts had submitted their responses to the preliminary report. The Reserve Bank of India had also filed its suggestions. Seven Directors General of Police had filed their affidavits putting forward their views to the preliminary report. The parties who had not filed their responses were granted further time and the matter was listed on 24.02.2021 for final disposal. During the course of the hearing, it was felt by a Bench of three Judges, consisting of the Chief Justice of India, L. Nageswara Rao, J. and S. Ravindra Bhat, J. that the matter had to be considered by a larger bench in view of the important issues that arose for determination before this Court. The reference of the matter to a larger bench was also necessitated due to the submission made by the learned Amici Curiae that certain judicial pronouncements of this Court needed clarification. We have heard learned Amici Curiae, Advocates for some States, the learned Solicitor General of India, Mr. Vikramjit Banerjee, learned Additional Solicitor General of India, Mr. Ramesh Babu, Advocate for the Reserve Bank of India and Dr. Lalit Bhasin, Advocate for the Indian Banks' Association.

3. Chapter XVII inserted in the Act, containing Sections 138 to 142, came into force on 01.04.1989. Dishonour of cheques for insufficiency of funds was made punishable with imprisonment for a term of one year or with fine which may extend to twice the amount of the cheque as per Section 138. Section 139 dealt with the presumption in favour of the holder that the cheque received was for the discharge, in whole or in part, of any debt or other liability. The defence which may not be allowed in a prosecution under Section 138 of the Act is governed by Section 140. Section 141 pertains to offences by companies. Section 142 lays down conditions under which cognizance of offences may be taken under Section 138. Over the years, courts were inundated with complaints filed under Section 138 of the Act which could not be decided within a reasonable period and remained pending for a number of years.

4. This gargantuan pendency of complaints filed under Section 138 of the Act has had an adverse effect in disposal of other criminal cases. There was an imminent need for remedying the situation which was addressed by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002. Sections 143 to 147 were inserted in the Act, which came into force on 06.02.2003. Section 143 of the Act empowers the court to try complaints filed under Section 138 of the Act summarily, notwithstanding anything contained in the Code of Criminal Procedure, 1973 (hereinafter, 'the Code'). Sub-se