1. Complaint under Section 138, NI Act — Process issued by Magistrate — High Court set aside order for failure to conduct inquiry under Section 202, CrPC. (Para 3 )
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2023 Supreme(SC) 1281
SUPREME COURT OF INDIA
ABHAY S.OKA, PANKAJ MITHAL, JJ.
Vishwakalyan Multistate Credit Co Op Society Ltd. – Appellant
Versus
Oneup Entertainment Private Limited – Respondent
Criminal Appeal No.2484 of 2023(Arising out of S.L.P.(Crl.) No.6318 of 2023)
Decided on : 21-08-2023
Important Points
The Court held that for complaints under Section 138 of the NI Act where a Section 202 CrPC inquiry is necessary, the Trial Court should proceed with the inquiry following Constitution Bench guidelines, which permit evidence on affidavit or examination of documents to ensure an expeditious trial.
Subject
Criminal Law - Negotiable Instruments Act
Act Referred
Headnote
Negotiable Instruments Act - Jurisdiction - Inquiry under Section 202 of CRPC
Fact of the Case:
The appellant filed a complaint under Section 138 of the Negotiable Instruments Act. The High Court set aside the order issuing process due to the respondent's office being outside the jurisdiction of the Magistrate, without directing an inquiry under Section 202 of the CRPC.
Finding of the Court:
The Court modified the judgment and directed the Trial Court to proceed with the inquiry under Section 202 of the CRPC, guided by the Constitution Bench's direction to permit evidence of witnesses on affidavit and to conduct the inquiry expeditiously.
Issues: Jurisdiction of the Magistrate, Compliance with Section 202 of CRPC
Ratio Decidendi: The Court emphasized the need for the Trial Court to conduct an inquiry under Section 202 of the CRPC in cases under Section 138 of the NI Act, following the guidelines laid down by the Constitution Bench.
Final Decision: The appeal was partly allowed, and the Trial Court was directed to conduct the inquiry under Section 202 of the CRPC expeditiously, guided by the Constitution Bench's directions.
Legal Category Hierarchy
Advocates:
Advocate Appeared:
For the Appellant : Mr. Shashibhushan P. Adgaonkar, AOR, Mr. Omkar Jayant Deshpande, Adv., Mr. Rana Sandeep Bussa, Adv., Mr. Col. Amit Kumar, Adv., Mrs. Pradnya S Adgaonkar, Adv.
Advocate Appeared:
For the Appellant : Mr. Shashibhushan P. Adgaonkar, AOR, Mr. Omkar Jayant Deshpande, Adv., Mr. Rana Sandeep Bussa, Adv., Mr. Col. Amit Kumar, Adv., Mrs. Pradnya S Adgaonkar, Adv.
Table of Contents
2. Legality of process order issued without inquiry under Section 202, CrPC — Necessity of directing the Magistrate to conduct such inquiry after setting aside the order. (Para 3 )
3. The High Court correctly identified the illegality of issuing process without a Section 202, CrPC inquiry but failed to direct the Magistrate to perform said inquiry. (Para 3 )
4. In Section 138, NI Act cases, Section 202, CrPC inquiries can be conducted via affidavits or restricted to the examination of documents. (Para 4 )
5. Appeal partly allowed — High Court judgment modified — Trial Court directed to conduct inquiry under Section 202, CrPC expeditiously within one month. (Para 5 , 6 , 7 )
6. How can a Magistrate conduct an inquiry under Section 202 of the CrPC for complaints under Section 138 of the NI Act?
The Magistrate may permit evidence of witnesses on behalf of the complainant to be taken on affidavit or, in suitable cases, restrict the inquiry to the examination of documents without requiring witness examination. (Para 4 )
7. What is the legal consequence of failing to conduct a Section 202 CrPC inquiry when the respondent's office is outside the court's jurisdiction?
The order issuing process is considered illegal for non-compliance with the mandate of Section 202 of the CrPC. (Para 3 )
8. What direction should a court provide when setting aside a process order for non-compliance with Section 202 of the CrPC?
The court should direct the Trial Court to proceed from the stage of Section 202 of the CrPC to ensure the legal mandate is fulfilled. (Para 3 , 5 )
ORDER :
1. Leave granted.
2. Heard the learned counsel appearing for the appellant. Despite service, no one has entered appearance on behalf of the respondent.
3. The appellant is the complainant in a complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (for short "the NI Act"). On 26th June, 2021, the Judicial Magistrate issued process on the complaint. By the impugned judgment, the High Court has held that as the respondent was having its office outside the jurisdiction of the Court of the learned Magistrate, it was necessary for the learned Magistrate to hold an inquiry under Section 202 of the Code of Criminal Procedure, 1973 (for short "the CRPC"). In paragraph 15 of the impugned judgment, the High Court held that for non-compliance with the mandate of Section 202 of the CRPC, the order issuing process is illegal. Therefore, the High Court has proceeded to set aside the order issuing process. However, no further direction was issued by the High Court to the learned Judicial Magistrate to hold an inquiry under Section 202 of the CRPC.
4. We may note here that as far as complaints under Section 138 of the NI Act are concerned, this Court in Suo Motu Writ Petition (Criminal)No.2 of 2020 in the case of "In Re : Expeditious Trial of Cases Under Section 138 of N.I.Act, 1881[2021 SCC OnLine SC 325]" has laid down the guidelines. In clause (3) of paragraph 24 of the said decision, the Constitution Bench has directed as under:
"3) For the conduct of inquiry under Section 202 of the Code, evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit. In suitable cases, the Magistrate can restrict the inquiry to examination of documents without insisting for examination of witnesses."
5. We, therefore, modify the impugned judgment and direct the Trial Court to proceed from the stage of Section 202 of the CRPC. While doing so, the learned Magistrate will be guided by the direction issued by the Constitution Bench which is reproduced above.
6. With the above modification, the appeal is partly allowed.
7. The inquiry under Section 202 of the CRPC shall be conducted as expeditiously as possible and in any event within a period of one month from the date on which a copy of the order is received by the Trial Court.
