S.223 BNSS Pre-Cognizance Hearing For Accused Not Applicable To S.138 NI Act Complaints: Karnataka High Court - 2025-04-28

Karnataka HC: Accused Not Entitled to Pre-Cognizance Hearing in Cheque Bounce Cases Under New BNSS

Bengaluru, India – The Karnataka High Court, in a significant ruling, has clarified that the new procedural requirement under Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) – which mandates giving an accused an opportunity of being heard before a Magistrate takes cognizance of an offence – does not apply to complaints filed under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) for cheque dishonour.

Justice ShivashankarAmarannavar , presiding over the bench, dismissed a criminal petition filed by Ashok S/o. Siddappa Bankar , who was an accused in a cheque bounce case initiated by Fayaz Aahmad S/o. Aurangzeb Naikar. The Court upheld the Magistrate's decision to take cognizance without prior notice to the accused, emphasizing the special nature of the NI Act.

The Core Legal Question

The central issue before the Court was whether the first proviso to Section 223(1) of the BNSS, which came into effect on July 1, 2024, is applicable to proceedings under Section 138 of the NI Act. Section 223 BNSS, corresponding to Section 200 of the erstwhile Code of Criminal Procedure (Cr.P.C.), 1973, introduced a new stipulation:

"Provided that no cognizance of an offence shall be taken by the Magistrate without giving the accused an opportunity of being heard:"

This marked a departure from the previous Cr.P.C. regime. The petitioner argued that this provision should apply universally, including to NI Act cases.

Court's Reasoning: Special Law Prevails

The High Court meticulously analyzed the interplay between the general procedural law (BNSS) and the special statute (NI Act). The judgment highlighted several key reasons for its conclusion:

1. NI Act as a Special Statute : The Court reiterated that the Negotiable Instruments Act is a special law, and Chapter XVII (Sections 138-148) thereof lays down a distinct procedure for dealing with offences of cheque dishonour.

2. Savings Clause in BNSS : Section 5 of the BNSS (akin to Section 5 of Cr.P.C.) explicitly states that nothing in the BNSS shall affect any special law or local law, unless there's a specific provision to the contrary. The Court found no such contrary provision regarding NI Act proceedings.

3. Madras High Court Precedent : The Court referred to a decision by the Madurai Bench of the Madras High Court in M/s.Ultimate Computer Care and Another Vs. M/s.S.M.K.Systems (12.02.2025), which held: > "Having regard to the fact that the N. I. Act has prescribed a special procedure, it is a Special Law within the meaning of Section 5 of the BNSS, 2023. Hence, the procedure of hearing the accused at the stage of taking cognizance as prescribed in the proviso to Section 223 BNSS shall not apply to complaints under Section 138 of the N.I.Act, 1881."

4. Supreme Court on Special vs. General Law : The judgment cited Supreme Court rulings like Mohd.Abdul Sammad Vs The State of Telangana (2024) and Suresh Nanda Vs CBI (2008), which affirm the principle that provisions of a special law prevail over general law.

5. Unique Nature of NI Act Proceedings : The Court underscored the distinct characteristics of Section 138 NI Act proceedings, terming them "quasi-criminal" and a "civil sheep in a criminal wolf’s clothing," as observed by the Apex Court in P. Mohan Raj & others Vs M/s. Shah Brothers Ispat Pvt. Ltd (2021). The primary aim is to enforce payment and protect the victim's interest. Specific provisions like Section 142 (cognizance on complaint by payee), Section 143 (summary trial), Section 145 (evidence on affidavit), and Section 147 (compoundable offences without court intervention) showcase its departure from general criminal procedure.

The Court observed:

"In view of NI Act prescribing a special procedure, procedure of hearing the accused at the stage of taking cognizance as prescribed in the first proviso to Section 223 of BNSS shall not apply to the complaints for offence under Section 138 of NI Act."

Distinguishing Conflicting Views

The Court also addressed and distinguished a co-ordinate bench decision in Basanagouda R.Patil (Yatnal) Vs. Shivananda S. Patil (2024), which had held that the accused must be heard under Section 223(1) BNSS before cognizance. Justice Amarannavar noted that Basanagouda dealt with IPC offences, not NI Act cases which follow a summary procedure.

Furthermore, a decision in Hanumesh S/o. Sharanappa Karanagi Vs. M/s.Karanagi Brothers Enterprise (11.02.2025), which applied the Basanagouda ruling to an NI Act case, was deemed to have overlooked the special status of the NI Act and the implications of Section 5 BNSS.

Final Decision and Implications

Dismissing the petition, the Court concluded:

"Since Negotiable Instrument Act, 1881 is special enactment and in view of Section 5 of BNSS r/w. Section 143 of NI Act as far as the cases tried by the learned Magistrates under Section 138 of NI Act, there is no need for the Magistrate to give an opportunity of being heard to the accused before taking cognizance on the complaint of payee/holder in due course of cheque for offence punishable under Section 138 of NI Act."

This ruling provides crucial clarity on the procedural aspects of cheque bounce cases under the new criminal justice system. It ensures that the summary and expeditious nature of NI Act proceedings, designed for swift resolution, is not impeded by the general procedural requirements introduced by the BNSS for other offences. The decision reinforces the legislative intent behind the NI Act as a special code aimed at upholding the sanctity of commercial transactions.