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IN THE HIGH COURT AT CALCUTTA
SHAMPA DUTT PAUL, J.
Usha Agarwalla – Appellant
Versus
M/s. Citicorp Finance (I) Ltd. – Respondent
CRR 1390 of 2019 With CRAN 1 of 2019 (Old No. CRAN 4836 of 2019)
Decided on : 24-07-2023
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 138 - PAYMENT OF CHEQUE AMOUNT - SECTION 202 CRPC - COMPLIANCE - SUMMARY OF PROCEEDINGS UNDER SECTION 138 OF THE NI ACT - INTERPRETATION OF SECTIONS 145 AND 202 OF THE NI ACT AND CRPC RESPECTIVELY - APPLICABILITY OF SECTION 202(2) CRPC TO COMPLAINTS UNDER SECTION 138 OF THE NI ACT - EXAMINATION OF WITNESSES ON AFFIDAVIT - APPLICABILITY OF SECTION 145 OF THE NI ACT - SCOPE AND PURPOSE OF SECTION 145 OF THE NI ACT - DISPENSING WITH STRICT COMPLIANCE OF SECTION 202 CRPC IN PROCEEDINGS UNDER SECTION 138 OF THE NI ACT - DIRECTIONS FOR MEDIATION - COURT'S EFFORTS TO SETTLE DISPUTE THROUGH MEDIATION.
Fact of the Case:
The petitioner challenged the proceedings initiated against her under Section 138 of the Negotiable Instruments Act, 1881, alleging that she was not the signatory to the dishonored cheque and that she had already paid the cheque amount by way of demand draft before receiving the summons.
Finding of the Court:
The court held that the payment was not made within the statutory period and that the proceedings under Section 138 of the NI Act were prima facie maintainable. However, the court also held that strict compliance with the provisions of Section 202 of the CrPC was not required in such cases, as per the Supreme Court's ruling in Re-expeditious Trial of Cases u/s 138 of the NI Act. The court directed the learned Magistrate to refer the case for mediation to the Secretary of the respective District Legal Services Authority, considering the alleged payment of the due amount.
Issues: 1. Whether the payment of the cheque amount within the statutory period was necessary to avoid proceedings under Section 138 of the NI Act? 2. Whether strict compliance with the provisions of Section 202 of the CrPC was required in proceedings under Section 138 of the NI Act?
Ratio Decidendi: 1. The court relied on the Supreme Court's decision in Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel, which held that a part payment of the cheque amount before its encashment would negate the existence of a legally enforceable debt on the date of maturity, thereby precluding an offence under Section 138 of the NI Act. 2. The court also relied on the Supreme Court's decision in Re-expeditious Trial of Cases u/s 138 of the NI Act, which held that Section 202(2) of the CrPC, requiring the examination of witnesses on oath in an inquiry under Section 202(1), was inapplicable to complaints under Section 138 of the NI Act. The court held that the evidence of witnesses on behalf of the complainant could be permitted on affidavit in such cases.
Final Decision: The court dismissed the revision petition and directed the learned Magistrate to refer the case for mediation to the Secretary of the respective District Legal Services Authority, with an effort to settle the dispute through mediation.
JUDGMENT :
Shampa Dutt Paul, J.
1. The present revision has been preferred praying for quashing of entire proceeding of complaint case being C/13276/2009 instituted under Section 138 of the Negotiable Instruments Act, 1881 (as amended up-to-date) pending before the Court of the Learned Metropolitan Magistrate, 9th Court at Calcutta including taking cognizance and all subsequent orders thereto.
2. The petitioner’s case is that on 18.03.2009, the opposite party filed complaint before the Learned Chief Metropolitan Magistrate at Calcutta therein alleging commission of offence under Section 138 of the NI Act against the present petitioner herein.
3. It has been alleged in the complaint that the petitioner herein had entered into a loan agreement with the opposite party, amounting to Rs.53,110/- and that in discharge of the aforementioned loan, the petitioner herein issued a cheque for the same amount, being cheque no. 272826 dated 30th November, 2008 drawn on ICICI Bank Ltd., Bhubaneshwar Branch, Unit No. III, Opposite Sriya Talkies, Off. Janpath, Bhubaneshwar – 751 001.
4. It has further been alleged in the aforementioned complaint that when the opposite party presented the cheque to his banker, the cheque was returned unpaid on 15.01.2009 along with the memorandum of dishonour containing the remark “Insufficient funds”. Thereafter the opposite party issued a demand notice under Section 138(b) of the NI Act dated 5th February, 2009 therein asking the petitioner herein to make payment of the aforementioned amount within fifteen day of the receipt of such letter, however, the amount allegedly remained unpaid even after the stipulated period of time and due to such the opposite party had to file the complaint under Section 138 of the NI Act.
5. The Learned Chief Metropolitan Magistrate took cognizance of the said complaint vide Order dated 18.03.2009 and was pleased to transfer the said case to the Court of the Learned Metropolitan Magistrate, 9th Court at Calcutta (hereinafter referred to as “learned Trial Court’) for hearing and disposal. Accordingly, Complaint Case No. C/13276 of 2009 was instituted against the petitioner herein.
6. Learned Trial Court was pleased to examine the opposite party herein under Section 200 of Cr.P.C. and was further pleased to issue process in the nature of summons thereby directing the petitioner herein to appear before the learned Trial Court on 29th May, 2009.
7. That even though the petitioner herein resided outside the jurisdiction of the learned Trial Court, the learned Trial Court did not postpone the issue of process as is mandated under Section 202 of the Cr.P.C.
8. The petitioner submits that the petitioner is not the signatory of the cheque, being cheque no. 272826 dated 30th November, 2008 drawn on ICICI Bank Ltd., Bhubaneshwar Branch, Unit No. III, Opposite Sriya Talkies, Off. Janpath, Bhubaneshwar – 751 001. The husband of the petitioner namely Kailash Agarwalla is actually the signatory of the cheque. Therefore, the entire cause of action does not have any locus standi as it cannot arise against the petitioner herein because the petitioner was not signatory to the cheque which was allegedly dishonoured.
9. Mr. Pawan Kumar Gupta, learned counsel for the petitioner has submitted that the petitioner received the demand notice issued by the opposite party but before receiving the summons, the petitioner herein, in good faith and bona fide interest, deposited a demand draft, being DD No. 978321 dated 25th February, 2009 amounting to Rs.53,110/- infavour of the opposite party. The demand draft amounted to a total of Rs.53,110/- which was the alleged amount of default has already been paid by the petitioner prior to receiving the copy of summons in the present case and the receipt of the same is already acknowledged by the complainant/opposite party.
10. That even after the payment of the loan amount by the petitioner herein, the opposite party wrongly filed the instant complaint against the petitioner h
Strict compliance with the provisions of Section 202 of the CrPC is not required in proceedings under Section 138 of the NI Act, and the evidence of witnesses on behalf of the complainant can be perm....
Payment of a part or whole of the sum represented on a cheque between the period when the cheque is drawn and when it is encashed upon maturity reduces the legally enforceable debt on the date of mat....
Issuance of summons without conducting inquiry under Section 202 of the Cr.P.C. is impermissible, making the cognizance under Section 138 of the N.I. Act unsustainable.
In cases under Section 138 of the Negotiable Instruments Act, the evidence of witnesses on behalf of the complainant shall be permitted on affidavit, and the sufficiency of grounds for proceeding und....
The court established that the issuance of a cheque, even if post-dated or issued as security, can constitute a legally enforceable debt under Sec. 138 of the N.I. Act, and that the inquiry under Sec....
The judgment establishes the rebuttable nature of the presumption under Section 139 of the NI Act and emphasizes the requirement to record the statement of the accused under Section 342 of J&K Cr.P.C....
(1) Incriminating circumstances, regarding which no explanation has been called from accused, cannot be used against him.(2) Dishonour of cheque – Unless part payment is endorsed on cheque as per Sec....
(1) Dishonour of cheque – A post-dated cheque issued after debt has been incurred would be covered by definition of ‘debt’ – However, if sum payable depends on a contingent event, then it takes colou....
The judgment highlights the significance of a valid notice as the foundation of a case under Section 138 of the N.I. Act and the necessity to comply with the statutory requirements for the notice to ....
Point of Law : Postponement of issue of process - The dictum is when Magistrate holds inquiry himself, it is not compulsory that he should examine The witnesses and in suitable cases Magistrate can e....
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