Source: Supreme Court

Why in News?

Recently, the Supreme Court in the matter of Atamjit Singh v. State of NCT of Delhi & Anr., has held that the time-barred nature of an underlying debt in proceedings under Section 138 of the Negotiable Instrument Act, 1881(NI Act) is a mixed question of law and fact which ought not to be decided by the High Court exercising jurisdiction under Section 482 of the Criminal Procedure Code, 1973 (CrPC).

What was the Background of Atamjit Singh v. State of NCT of Delhi & Anr. Case?

• In this case the complainant had filed a complaint under Section 138 of NIA on allegations that the respondent had issued a cheque to discharge their liability.
• The cheque was dishonored due to payment stopped by drawer and a summoning order was issued by the Trial Court.
• Thereafter, the Delhi High Court quashed the summoning order.
• Aggrieved by this, an appeal was filed before the Supreme Court which was later allowed by the Court.

What were the Court’s Observations?

• A bench of Justices Vikram Nath and Satish Chandra Sharma observed that the question regarding the time-barred nature of an underlying debt or liability in proceedings under Section 138 of the NI Act is a mixed question of law and fact which ought not to be decided by the High Court exercising jurisdiction under Section 482 of the CrPC.
• It was further held that once a cheque is issued and upon getting dishonored a statutory notice is issued, it is for the accused to dislodge the legal presumption available under the NI Act and could not have been adjudicated in an application filed by the Accused Under Section 482 of the CrPC.

What are the Relevant Legal Provisions?

Section 138 of NI Act

• This Section deals with the dishonor of cheque for insufficiency, etc., of funds in the account. It states that —

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honor the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless—

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation. - For the purposes of this section, debt or other liability means a legally enforceable debt or other liability.

Section 482 of CrPC

About:

• Section 482 of CrPC deals with the saving of inherent powers of the High Court, whereas the same provision has been covered under Section 528 of Bhartiya Nagarik Suraksha Sanhita, 2023 (BNSS).
• It states that nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.
• This section does not confer any inherent power on the High Courts, and it only recognizes the fact that High Courts have inherent powers.

Case Laws:

• In Sooraj Devi v. Pyare Lal and Anr. (1981), the Supreme Court held that the inherent power of the Court could not be exercised for doing that which is specifically prohibited by the Code of Criminal Procedure, 1973.
• In Vinod Kumar, IAS. v. Union of India and Ors. (2021), the Supreme Court observed that dismissal of an earlier petition under Section 482 CrPC would not bar filing of a subsequent petition thereunder in case the facts so justify.