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IN THE HIGH COURT AT CALCUTTA
SHAMPA DUTT PAUL, J.
Usha Agarwalla @ Usha Agarwal – Appellant
Versus
M/s. Citicorp Finance (I) Ltd. – Respondent
CRR 1021 of 2019 With CRAN 1 of 2019 (Old No. CRAN 3142 of 2019)
Decided on : 24-07-2023
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 138 - SECTION 200 - SECTION 202 - Dishonour of Cheque - Payment of Cheque Amount - Compliance with Section 202 Cr.P.C. - Examination of Witnesses on Affidavit - Applicability of Section 202(2) Cr.P.C. - Interpretation of Section 145 of the NI Act - Legally Enforceable Debt - Offence under Section 138 NI Act.
Fact of the Case:
The petitioner, facing proceedings under Section 138 of the Negotiable Instruments Act for dishonor of a cheque, challenged the order issuing a warrant of arrest against her, claiming that the payment had already been made and the mandatory provision of Section 202 Cr.P.C. was not complied with by the Magistrate.
Finding of the Court:
The Court held that the payment was not made within the statutory period, making the proceedings under Section 138 NI Act prima facie maintainable. However, considering the Supreme Court's decision in Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, the Court found that the payment made by the petitioner reduced the legally enforceable debt on the date of maturity, and thus, the first respondent could not be deemed to have committed an offence under Section 138 of the Act.
Issues: 1. Whether the payment made by the petitioner reduced the legally enforceable debt on the date of maturity, thereby negating the offence under Section 138 of the Negotiable Instruments Act? 2. Whether the mandatory provision of Section 202 Cr.P.C. was complied with by the Magistrate in issuing the warrant of arrest against the petitioner?
Ratio Decidendi: 1. The Court relied on the Supreme Court's decision in Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, which held that if the drawer of a cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, the legally enforceable debt on the date of maturity would not be the sum represented on the cheque. 2. The Court also referred to the Supreme Court's decision in Re expeditious trial of cases u/s 138 of the N.I. Act and Sunil Todi v. The State of Gujarat, which held that Section 202(2) Cr.P.C. is inapplicable to complaints under Section 138 in respect of the examination of witnesses on oath and that the evidence of witnesses on behalf of the complainant shall be permitted on affidavit.
Final Decision: The Court allowed the revision petition, set aside the impugned order issuing a warrant of arrest against the petitioner, and directed the learned Magistrate to refer the case for mediation to the Secretary of the respective District Legal Services Authority.
JUDGMENT :
Shampa Dutt Paul, J.
1. The present revision has been preferred praying for quashing of the order dated 14.11.2018 and the entire proceeding of complaint case being C/13277/2009 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.
2. The petitioner’s case is that on 18.03.2009, the opposite party filed a complaint before the Learned Chief Metropolitan Magistrate at Calcutta alleging commission of offence under Section 138 of the NI Act against the present petitioner.
3. It has been alleged in the complaint that the petitioner 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 issued a cheque for the same amount, being cheque no. 272827 dated 30th November, 2008 drawn on ICICI Bank Ltd., Bhubaneshwar Branch, Unit No. III, Opposite Sriya Talkies, Off. Janpath, Bhubaneshwar – 751 001.
4. When the opposite party presented the cheque to his banker, the cheque was returned unpaid 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 13th February, 2009 asking the petitioner to make payment of the aforementioned amount within fifteen days of the receipt of such letter, however, the amount allegedly remained unpaid even after the stipulated period of time and as 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/13277 of 2009 was instituted against the petitioner.
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. 272827 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. On 14.11.2018 when the petitioner was not represented by the learned lawyer, the learned Trial Court by virtue of impugned order issued warrant against the petitioner and fixed 30.03.2019 for execution report.
10. It is submitted that until and unless the warrant is recalled and impugned order is set aside the petitioner shall be suffer irreparable loss and injury.
11. 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 two demand drafts, being DD No. 300971 dated 26th March, 2009 amounting to Rs.26,555/- and DD No. 112527 dated 30th March, 2009 amounting to Rs.26,555/- in favour of the opposite party. The demand drafts amounted to a total of Rs.53,110/- (Rs.26,555/- each) which was the alleged amount of default, has already been paid by the petitioner
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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....
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.
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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 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 ....
(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....
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The court cannot inquire into the reliability of the allegations in summary proceedings and no further inquiry is necessary if the summoning order demonstrates prima facie findings.
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....
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