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IN THE HIGH COURT OF BOMBAY
KSL and Industries Ltd
Versus
Mannalal Khandelwal
Decided on 1/2/2005
Negotiable Instruments Act, 1881 - Sections 145(1), amending Act, 2002 - Evidence on affidavit - Point whether in viewing mandate of Section 145(1) of Act, Court is obliged to examine complaint even regarding matters which have been stated on affidavit. - Held, according to language of Section 145 of Act, the evidence (examination-in-chief) of complainant can be given on affidavit and thereafter if accused so wants he/she may request the Court to call complainant for cross-examination.
Negotiable Instruments Act, 1881 - Section 138 - About 4 lakh complaints under Section 138 pending in various Courts - Government directed to create additional posts of Civil Judges (J.D.) and their supporting staff for expeditious disposal of such complaints.
Negotiable Instruments Act, 1881 - Section 138 - Complaint of dishonour of cheque - Directions by High Court - Complaints must be disposed of as expeditiously as possible, and in any event, within six months from the date when the presence of the accused has been secured - In case the concerned judicial officer is not able to dispose of the complaint within six months, then, the concerned judicial officer must submit a report to the concerned Sessions Judge, indicating the reasons which led to delay in disposal of the complaint - The report submitted by the concerned judicial officer shall be taken into consideration while evaluating the performance of the concerned judicial officer.
Negotiable Instruments Act, 1881 - Section 138 - Complaint of dishonour of cheque - Directions by High Court - Every judicial officer must ensure that at least four cases in a month are disposed of by reasoned judgments.
Negotiable Instruments Act, 1881 - Section 138 - Complaint of dishonour of cheque - Directions by High Court - The Court must adopt pragmatic methods and must serve accused by all possible means of service, including E-mail - The Court would be justified, in appropriate cases, to take the help of concerned police station for the service on the accused - The Court should avoid giving long dates - Instead, the Court must repeatedly issue summons to secure the presence of the accused - The Court must ensure that the accused are not permitted to abuse the system.
Negotiable Instruments Act, 1881 - Section 138 - Complaint of dishonour of cheque - Directions by High Court - The High Court concerned must ensure that examination-in-chief, cross-examination and re- examination of the complainant must be concluded within three months of assigning the case - The Court has option of accepting affidavits of the witnesses, instead of examining them in Court - Witnesses to the complaint, and accused must be available for cross-examination as and when there is direction to this effect by the Court.
Negotiable Instruments Act, 1881 - Section 138 - Complaint of dishonour of cheque - Directions by High Court - The trial of these complaint cases under Section 138 of the Act be continued from day-to-day until its conclusion.
Negotiable Instruments Act, 1881 - Section 138 - Dishonour of cheque - Prosecution of accused - After presence of accused is secured an option be given to him whether, at that stage, he would be willing to pay the amount due along with reasonable interest. - Immediately after the presence of the accused is secured, an option be given to him whether, at that stage, he would be willing to pay the amount due, along with reasonable interest, and the Court may consider passing suitable order. But where the accused is not willing to pay the principal amount with interest even at that stage, the Court may fix up the case at an early date, and ensure day-to-day trial of the case.
Negotiable Instruments Act, 1881 - Section 138 - Drawer of cheque is not liable for prosecution if the cheque is given by way of a gift, present or donation and is dishonoured - Provisions would be attracted only when the cheque has been issued for the discharge of any debt or other legally enforceable liability. 1995 Cri LJ 1384 and 1995 (2) Crimes 795 - Followed.
Negotiable Instruments Act, 1881 - Sections 138 and 142 - Object and intention of incorporating the provisions were to lend greater acceptability and credibility to cheques as a trustworthy substitute for cash payment in business transactions. - Section 138 to 142 of the Negotiable Instruments Act in Chapter XVII were inserted in the Act by the Banking, Public Financial Institutions and Negotiable Instruments Law (Amendment) Act, 1988. The object and intention of incorporating these provisions were to lend greater acceptability and credibility to the business transactions and to establish that the cheques are a trustworthy substitute for cash payment. The other object and inherent intention of enacting the said provisions is clear, viz., that the Legislature was extremely keen and anxious in ensuring expeditious disposal of cases pertaining to dishonouring of cheques. The said amendments were, in fact, introduced primarily to accomplish the said object. 1995 Cri LJ 1384 and 1996 (2) SCC 739 - Referred.
Negotiable Instruments Act, 1881 - Section 145 [as amended by Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002] - Complainant can either give his evidence by way of affidavit or by way of oral evidence. - Sub-section (1) of Section 145 of the Negotiable Instruments Act gives complete freedom to the complainant either to give his evidence by way of affidavit or by way of oral evidence. If this is made on affidavit, the same has to be accepted and such affidavit is required to be kept on record by the Court. The second part of sub-section(1) provides that the complainant may give his evidence on affidavit and may, subject to all just exceptions, be read in evidence in any enquiry, trial or other proceeding. Thus, it is clear that once the evidence of the complainant is given on affidavit, it may be read in evidence in any enquiry, trial or other proceeding, and it may be subject to all just exceptions. According to the language of Section 145 of the Act, the evidence (examination-in-chief) of the complainant can be given on affidavit, and thereafter, if the accused so desires, he/she may request the Court to call the complainant for cross-examination.
Key Points: - The judgment mandates expeditious disposal of Section 138 complaints and sets a six-month limit from securing the accused’s presence, with reporting if delay occurs (!) (!) (!) . - It clarifies that under Section 145(1), the complainant may give evidence by affidavit or orally, and if on affidavit, may be read in evidence with cross-examination on request by the accused (!) (!) (!) (!) . - Directions include pragmatic service methods (including email and police aid), concluding examination-in-chief/cross-examination within three months, and day-to-day trial continuation; creation of additional judicial posts and appointment of officers to handle Section 138 cases exclusively (!) (!) (!) (!) (!) (!) . - The Court emphasizes the need to dispose of about four lakh pending complaints and to monitor compliance via quarterly reports (!) (!) . - The object of the amendments is to enhance credibility of cheques as a business instrument and to ensure expeditious disposal of such cases (!) (!) (!) .
DALVEER BHANDARI, CJ.
( 1 ) ALL these petitions emanate from the proceedings under Section 138 of the Negotiable instruments Act, 1881 (for short, "the Act" ). Therefore, we propose to decide these petitions by a common judgment.
( 2 ) THESE petitions raise following two issues, which are required to be determined:-
(I) Whether the complaint under Section 138 of the Act, according to the legislative mandate, requires to be adjudicated expeditiously and in any event, within six months from the date of the service of summons or warrants on the accused? (ii) Whether, in spite of mandate of Section 145 (1) of the Act, the Court is obliged to examine the complainant even in respect of matters which have been stated of affidavit?
( 3 ) NOW, we would deal with basic facts arid issues involved in individual petitions. Criminal Writ Petition No. 1228 of 2004 :
( 4 ) THE petitioner-Company approached this Court against the order of the learned Sessions Judge delivered in criminal Revision Application No. 713 of 2003 on 28th November, 2003 in proceedings emanated from Section 138 of the Act. The learned Metropolitan Magistrate, Mumbai, by his order dated 1st August, 2003, arrived at the conclusion that the amendment, more particularly in Section 145 of the Act, has been introduced by the Legislature with an intent to accelerate disposal of the cases. Subsection (1) has provided right and liberty to the Company to file its evidence (examination-in-chief) by way of an affidavit. The Court directed the matter to be placed for the crossexamination of the witness after examinationin-chief was tendered by filing affidavit.
( 5 ) AGGRIEVED by the order, accused-respondent, Mannalal Khandelwal, filed a Criminal Revision Application, No. 713 of 2003, before the learned Sessions Judge, greater Mumbai, at Mumbai. The learned additional Sessions Judge, by order dated 28th november, 2003, set aside the order dated 1st August, 2003 passed by the Metropolitan magistrate and consequently, the application filed by the respondent for recording of examination-in-chief in Court of the complainant's witness Dhananjay Varma was allowed. This petition is directed against the said order passed by the Additional Sessions judge on 28th November, 2003.
( 6 ) THE learned Single Judge of the court in the impugned order raised a question whether in spite of mandate of Section 145 (1) of the Act (which has been inserted by amending Act No. 55 of 2002 with effect from 6th February. 2003), the Court is obliged to examine the complainant even in respect of matters which have been stated on affidavit, which is to be treated as examination-in-chief of the witness. The learned Single judge has also referred to the observations of the supreme Court in Ameer Trading corporation Ltd. Vs. Shapoorji processing Ltd. , (2004)1 SCC 702 : [2004 (5) ALL MR (S. C.) 425], and order dated 2nd September, 2004 of this Court passed in Criminal Writ Petition No. 26 of 2004 in Raminder Singh Sahani Vs. Japfa oberoi Agro-Ltd. and Anr. The observation made in this case was that the law, as understood by another Single Judge of this court, is that in view of the expansive provision contained in Section 145 (2) of the act, in spite of filing of affidavit, the complainant is obliged to enter the witnessbox to depose in the same matter. According to the learned Single Judge, this aspect needs to be authoritatively decided by the Court, and reference was made by him to the Division bench of this Court. We propose to dispose of this Writ Petition, along with the other two petitions mentioned above, by a common judgment.
( 7 ) THE question involved in PIL nos. 151 and 157 of 2004 is broadly the same, therefore, we would like to decide these petitions by this common judgment.
( 8 ) PIL No. 151 of 2004 relates to cases pertaining to Section 138 of the Act. In this case, a criminal complaint was filed under section 138 of the Act against the accused, who issued a cheque for Rs. 3,15,300/- for disc
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