Case Title: In Re Expeditious Trial Of Cases Under Section 138 of N.I Act
The Supreme Court Constitution Bench has instructed that Magistrates shall record reasons before changing the summary trial of complaints under Section 138 of the Negotiable Instruments Act to a summons trial in the exercise of power under the second proviso to Section 143 of the Act.
The court observed that such conversion from summary trial to summons trial is done mechanically without reasons being documented, which contributes to the delay in case disposition.
This was stated in the order issued by the Constitution bench, which also included Justices L Nageswara Rao, BR Gavai, AS Bopanna, and S Ravindra Bhat, in the suo moto case In re Expeditious Trial of Cases Under Section 138 NI Act.
Section 143 of the Act states that Sections 262–265 of the CrPC apply to all offences under Chapter XVII of the Act. The second proviso authorises the Magistrate to change the summary trial to a summons trial if he believes that a term of imprisonment of more than one year is required or that it is undesirable to try the matter summarily, after documenting reasons.
The Court also observed that, "Section 202 of the Code confers jurisdiction on the Magistrate to conduct an inquiry for the purpose of deciding whether sufficient grounds justifying the issue of process are made out. The amendment to Section 202 of the Code with effect from 23.06.2006, vide Act 25 of 2005, made it mandatory for the Magistrate to conduct an inquiry before issue of process, in a case where the accused resides beyond the area of jurisdiction of the court."
The Court relied on these significant cases to carve out the necessary guidelines in present case: Vijay Dhanuka v. Najima Mamtaj, Abhijit Pawar v. Hemant Madhukar Nimbalkar and Birla Corporation Limited v. Adventz Investments and Holdings Limited.
Amicus Curiae Senior Advocate Siddharth Luthra argued before the Court that summary trials are routinely converted to summons trials mechanically and that the High Courts should issue practise directions to the Trial Courts requiring them to record cogent and sufficient reasons before converting a summary trial to a summons trial.
The bench added that,
"...the second proviso to Section 143 mandates that the Magistrate has to record an order spelling out the reasons for such conversion. The object of Section 143 of the Act is quick disposal of the complaints under Section 138 by following the procedure prescribed for summary trial under the Code, to the extent possible.
The discretion conferred on the Magistrate by the second proviso to Section 143 is to be exercised with due care and caution, after recording reasons for converting the trial of the complaint from summary trial to summons trial. Otherwise, the purpose for which Section 143 of the Act has been introduced would be defeated."
Based on these observations, the bench issued certain directions to expedite the trial of cheque dishonour cases under Section 138 NI Act.