Source: Allahabad High Court (Neutral Citation No. - 2023: AHC:198523)

Why in News?

The Allahabad High Court (HC) has emphasized that proceedings governed by the Negotiable Instruments Act, 1881 (NI Act) should be resolved promptly, avoiding unnecessary technical complications in the matter of Ram Dhari Pal v. State of UP and 2 Others.

What is the Background of Ram Dhari Pal v. State of UP and 2 Others Case?

• The present application has been filed to direct the Additional Civil Judge/Judicial Magistrate, Jaunpur, to conclude the trial of the complaint case under Section 138 of N.I. Act, District Jaunpur within the stipulated period.
  • The contention of the learned counsel for the applicant is that though this complaint under NI Act was filed in the year 2022, but the trial could not yet conclude it.
  • It was further submitted that as per Section 143(2) of the NI Act, the trial for the offence should be conducted on day-to-day basis and it is further provided under Section 143(3) that the trial should be concluded within six months from the date of filing of the complaint.
  • Reliance was placed upon the case Indian Bank Association and others v. Union of India and others (2014), in which the Supreme Court (SC) has issued direction for expeditious disposal of the cases under NI Act.

What were the Court’s Observations?

• The HC took note of the following guidelines passed by the SC in the case of In Re: Expeditious Trial of Cases under Section 138 NI Act (2021):
  • 1) The High Courts are requested to issue practice directions to the Magistrates to record reasons before converting trial of complaints under Section 138 of the Act from summary trial to summons trial.
  • 2) Inquiry shall be conducted on receipt of complaints under Section 138 of the Act to arrive at sufficient grounds to proceed against the accused, when such accused resides beyond the territorial jurisdiction of the court.
  • 3) For the conduct of inquiry under Section 202 of the Code, evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit. In suitable cases, the Magistrate can restrict the inquiry to examination of documents without insisting for examination of witnesses.
  • 4) We recommend that suitable amendments be made to the Act for the provision of one trial against a person for multiple offences under Section 138 of the Act committed within a period of 12 months, notwithstanding the restriction in Section 219 of the Code.
  • 5) The High Courts are requested to issue practice directions to the Trial Courts to treat service of summons in one complaint under Section 138 forming part of a transaction, as deemed service in respect of all the complaints filed before the same court relating to dishonour of cheques issued as part of the said transaction.
  • 6) Judgments of this Court in Adalat Prasad and Subramanium Sethuraman have interpreted the law correctly and we reiterate that there is no inherent power of Trial Courts to review or recall the issue of summons. This does not affect the power of the Trial Court under Section 322 of the Code to revisit the order of issue of process in case it is brought to the court's notice that it lacks jurisdiction to try the complaint.
  • 7) Section 258 of the Code is not applicable to complaints under Section 138 of the Act and findings to the contrary in Meters and Instruments (supra) do not lay down correct law. To conclusively deal with this aspect, amendment to the Act empowering the Trial Courts to reconsider/recall summons in respect of complaints under Section 138 shall be considered by the Committee constituted by an order of this Court dated 10.03.2021.
  • 8) All other points, which have been raised by the Amici Curiae in their preliminary report and written submissions and not considered herein, shall be the subject matter of deliberation by the aforementioned Committee. Any other issue relating to expeditious disposal of complaints under Section 138 of the Act shall also be considered by the Committee.
• Taking note of the Supreme Court’s abovementioned directions the HC directed the Additional Civil Judge/Judicial Magistrate, Jaunpur to conclude the trial of the complaint case expeditiously preferably within six months in accordance with the statutory provision of Sections 143(2) and 143(3) of the NI Act.

What are the Legal Provisions Involved?

Negotiable Instruments Act, 1881 (NI Act)

• Section 138: Dishonour of cheque for insufficiency, etc., of funds in the account — 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 honour 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 provision 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, 5 [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 of other liability” means a legally enforceable debt or other liability.

Section 143 - Power of Court to try cases summarily —

• (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 all offences under this Chapter shall be tried by a Judicial Magistrate of the first class or by a Metropolitan Magistrate and the provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may be, apply to such trials: Provided that in the case of any conviction in a summary trial under this section, it shall be lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding one year and an amount of fine exceeding five thousand rupees:
• Provided further that when at the commencement of, or in the course of, a summary trial under this section, it appears to the Magistrate that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Magistrate shall after hearing the parties, record an order to that effect and thereafter recall any witness who may have been examined and proceed to hear or rehear the case in the manner provided by the said Code.
• (2) The trial of a case under this section shall, so far as practicable, consistently with the interests of justice, be continued from day to day until its conclusion, unless the Court finds the adjournment of the trial beyond the following day to be necessary for reasons to be recorded in writing.
• (3) Every trial under this section shall be conducted as expeditiously as possible and an endeavour shall be made to conclude the trial within six months from the date of filing of the complaint.