Source: Delhi High Court

Why in News?

• Recently, the Delhi High Court held that the learned Magistrate is only required to examine whether the basic ingredients of an offence under Section 138 of the Negotiable Instruments Act, 1881 (NIA) have been prima facie made out by the complainant and supported by the pre-summoning evidence led on behalf of the complainant.
• The aforesaid observation was made in the matter of Northern India Paint Colour & Varnish Co. LLP v. Sushil Chaudhary.

What is the Background of Northern India Paint Colour & Varnish Co. LLP v. Sushil Chaudhary Case?

• Both the present petitions raise similar issues and hence are being taken up together for disposal by the Delhi High Court.
• The first petition has been filed by the petitioner/complainant Northern India Paint Colour and Varnish Co. LLP (Complainant) impugning the order dated 15th February, 2023 passed by the learned Additional Sessions Judge (ASJ), Tis Hazari Courts, Delhi, whereby the summoning order dated 9th January, 2020 passed by the Metropolitan Magistrate (MM), Central, Tis Hazari Courts, Delhi, in a complaint case under Section 138 of the NIA.
• The present case is remanded back with directions to the Trial Court to conduct the mandatory inquiry under Section 202 of the Code of Criminal Procedure, 1973 (CrPC) for ascertaining whether all the ingredients of the offence punishable under section 138 NIA including issuance of the cheque in question by the petitioner in discharge of his lawful liability are satisfied or not.
• The second petition has been filed by the petitioner Sushil Chaudhary seeking quashing of the order dated 27th January, 2020 passed by the learned Metropolitan Magistrate, whereby the Accused has been summoned in a case filed by the Complainant under Section 138 of the NIA on the ground that the mandatory inquiry under Section 202 of the CrPC has not been conducted by the learned Magistrate.

What were the Court’s Observations?

• Justice Amit Bansal observed that at the stage of issuance of summons, for the purpose of Section 202 of the CrPC read with section 145 of the NIA, the learned Metropolitan Magistrate is only required to examine whether the basic ingredients of an offence under Section 138 of the NIA have been prima facie made out by the complainant and supported by the pre-summoning evidence led on behalf of the complainant.
• The Court upheld the summoning orders passed in a complaint case under Section 138 NIA, observing that evidence need not be gone into by the Magistrate while conducting inquiry under Section 202 CrPC read with Section 145 of NIA.
• The Court further noted that the documents may be examined by the Trial Court for satisfaction as to the sufficiency of grounds for proceeding under Section 202 of the CrPC.

What are the Relevant Legal Provisions Involved in it?

Section 138, NIA

• 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 145, NIA

• This section deals with the evidence on affidavit. It states that-

(1) Notwithstanding anything contained in the CrPC the evidence of the complainant may be given by him on affidavit and may, subject to all just exceptions be read in evidence in any enquiry, trial or other proceeding under the said Code.
(2) The Court may, if it thinks fit, and shall, on the application of the prosecution or the accused, summon and examine any person giving evidence on affidavit as to the facts contained therein.

Section 202, CrPC

• This section deals with the postponement of the issue of process. It states that-

(1) Any Magistrate, on receipt of a complaint of an offence of which he is authorized to take cognizance or which has been made over to him under section 192, may, if he thinks fit, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding.

Provided that no such direction for investigation shall be made, --

(a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session; or

(b) where the complaint has not been made by a Court, unless the complainant and the witnesses present (if any) have been examined on oath under section 200.

(2) In an inquiry under sub- section (1), the Magistrate may, if he thinks fit, take evidence of witnesses on oath.

Provided that if it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session, he shall call upon the complainant to produce all his witnesses and examine them on oath.

• (3) If an investigation under sub- section (1) is made by a person not being a police officer, he shall have for that investigation all the powers conferred by this Code on an officer- in- charge of a police station except the power to arrest without warrant.