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M/S. Nova Electricals, Jalgaon v. State Of Maharashtra & Anr.
Factual and Procedural Background
Respondent No. 2, Shri Vyas Dhanwarsha Sahakari Bank Limited, Yaval, advanced a loan of Rs. 3 lakhs to the applicant under the category of “hypothecation cash credit loan”. The entire loan amount was withdrawn by the applicant on 20th October, 2000, with repayment due on or before 20th September, 2001. As the repayment was not made, the respondent issued a cheque which was dishonoured upon presentation. Following service of notice and failure to repay, the respondent initiated criminal proceedings under Section 138 of the Negotiable Instruments Act and Section 420 of the Indian Penal Code before the Court of Judicial Magistrate, First Class, Yaval.
The learned Magistrate, after considering a limitation objection and finding the proceedings initiated within the prescribed period, found a prima facie case and issued process on 26th November, 2002. The applicant appeared and the matter progressed to the stage of recording the plea. However, it was later discovered that verification of the complaint was not recorded due to inadvertence. Respondent No. 2 filed an application on 29th March, 2005 to cure this irregularity, but no order was passed. Consequently, the applicant approached this Court seeking quashing of the entire proceedings on the ground of non-recording of verification.
Legal Issues Presented
- Whether the omission to record verification of the complaint under Section 200 of the Criminal Procedure Code vitiates the order of issuance of process?
- Whether the proceedings can be quashed on the ground of non-recording of verification?
- What is the proper remedy for the omission to record verification by the Magistrate?
Arguments of the Parties
Applicant's Arguments
- The applicant challenged the legality of the order issuing process, without pressing for quashing of the entire proceedings at this stage.
- It was submitted that issuance of process cannot be justified as verification under Section 200 Cr. P.C was not recorded.
Respondent's Arguments
- The respondents acknowledged that verification is mandatory under Section 200 Cr. P.C but contended that the omission was inadvertent and sought to cure the irregularity by filing an application.
- They argued that the complainant cannot be penalized for the Court’s omission to record verification.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| S.W Palnitkar & Others v. State of Bihar, (2002) 1 SCC 241 : AIR 2001 SC 2960 | Clarification on the mandatory nature of examination and verification under Section 200 Cr. P.C to prevent frivolous or vexatious complaints. | The Court relied on this precedent to emphasize that verification is not a mere formality but a substantive step to ascertain genuineness of the complaint before issuing process. |
Court's Reasoning and Analysis
The Court recognized that verification under Section 200 of the Criminal Procedure Code is mandatory and is to be recorded by the Magistrate, not the complainant. The purpose of verification is to enable the Magistrate to assess whether the complaint is genuine or frivolous, thereby preventing abuse of the judicial process.
In the instant case, the verification was not recorded due to inadvertence, and although an application was filed to cure this defect, no order was passed on it. The Court held that non-recording of verification invalidates the order for issuance of process, as the Magistrate cannot proceed without first ascertaining the genuineness of the complaint through verification.
However, since the omission was not attributable to the complainant but to the Court, the complainant cannot be penalized by quashing the entire proceedings. Instead, the appropriate remedy is to quash only the order issuing process and direct the Trial Court to proceed from the stage of verification.
Holding and Implications
The Court quashed and set aside the order for issuance of process dated 26th November, 2002 passed by the learned Judicial Magistrate, First Class.
The Trial Court was directed to proceed from the stage of recording verification in accordance with Section 200 Cr. P.C. This decision does not quash the entire proceedings but rectifies the procedural irregularity ensuring compliance with mandatory legal requirements. No new precedent was set; the ruling enforces established procedural safeguards to prevent issuance of process without proper verification.
1. Rule. Rule made returnable forthwith. With the consent of respective parties, matter is taken up for hearing.
2. At the outset, Shri S.S Choudhari, learned counsel for applicant stipulates that the challenge is to the legality of the order of issuance of process and, therefore, quashing of the proceedings is not pressed at this stage.
3. Respondent No. 2 Shri Vyas Dhanwarsha Sahakari Bank Limited, Yaval, had advanced loan of Rs. 3 lakhs in the category of “hypothecation cash credit loan”.
4. Entire loan of Rs. 3 lakhs was withdrawn by the applicant on 20th October, 2000. The loan was to be repaid on or before 20th September, 2001. As repayment was not done, applicant issued a cheque drawn on Janata Sahakari Bank Limited, Jalgaon. The cheque was presented for encashment but was dishonoured. After service of notice, as applicant failed to make repayment within stipulated period, respondent No. 2 initiated proceedings in respect of offence punishable under Section 138 of the Negotiable Instruments Act and 420 of the Indian Penal Code, in the Court of Judicial Magistrate, First Class, Yaval.
5. After complaint was filed, the matter was argued on the point of limitation, As the learned Magistrate was convinced that proceeding is initiated within the prescribed period of limitation he proceeded to consider the allegation and on finding that prima facie case has been made out, passed a detailed order for issue of process on 26th November, 2002. In due course, applicant appeared and the matter was posted for re cording of plea of the accused from time to time. When the matter was ripe for being taken up for hearing, Respondent No. 2 found that on account of inadvertence verification was not recorded. He, therefore, filed an application on 29th March, 2005 for curing of the irregularity. No order has been passed on this application. In these circumstances, the applicant approached this Court for quashing of the entire proceedings on the ground that verification is not recorded.
6. It is not in dispute that the act of verification is to be performed by the Court. The complainant cannot be penalized for omission to record verification by the Court. It is also not in dispute that the parameters for quashing of the entire proceeding are quite different, inasmuch as for quashing of proceeding, it has to be established that either there is no cause of action or the proceeding would amount to an abuse of process of Court. This is not the case here. In this view of the matter, prayer is rightly restricted only to the legality of the impugned order of is suing process passed on 20th November, 2002. Time and again, provisions of Section 200 of the Criminal Procedure Code, has been interpreted by this Court. Section 200 itself makes it clear that verification is mandatory. It would be appropriate to reproduce relevant portion of Section 200, Cr. P.C at this juncture:
“200 : A Magistrate taking cognizance of an offence on complaint shall examine upon oath the complainant and the witnesses present, if any, and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate:
Provided that, when the complaint is made in writing, the Magistrate need not examine the complainant and the witnesses—
(a) and (b)…”
7. Recording of verification is not a mere formality. By recording verification, the Magistrate has to ascertain whether the com plaint is genuine or frivolous. The object of verification is to discourage frivolous proceeding. The Magistrate has to apply his mind to the facts of the case and to decide whether all formalities are completed and whether grounds to proceed with the matter for redressal of genuine grievance exist. This aspect has been dealt with by the Apex Court in the matter of S.W Palnitkar & Others v. State of Bihar, reported in (2002) 1 SCC 241 : (AIR 2001 SC 2960). The Apex Court has observed in para No. 15 as under:
“15. In case of a complaint under Section 200, Cr. P.C or I.P.C a Magistrate can take cognizance of the offence made out and then has to examine the complainant and his witnesses, if any, to ascertain whether a prima facie case is made out against the accused to issue process so that the issue of process is prevented on a complaint which is either false or vexatious or intended only to harass. Such examination is provided in order to find out whether there is or not sufficient ground for proceeding………”
8. It is only after the verification that the Magistrate can proceed to examine whether there are sufficient grounds for proceeding and if he is satisfied that prima facie case for issuance of process is made out, then he can issue process against the accused in respect of the offence alleged in the com plaint.
9. Generally the procedure followed is that after the complaint is filed, verification and statement of witnesses, if any, are immediately recorded and then the issue of process is contemplated. In the present case, complaint has been filed on 5th February, 2002. On 3rd April, 2002, the point of limitation was raised. On 26th November, 2002 the order for issuance of process is passed. It appears that because of the issue of limitation and on account of inadvertence, verification has not been recorded. Shri S.S Choudhary, learned counsel for applicant has rightly submitted that in any case issuance of process cannot be justified as the verification is not done. There cannot be any dispute about this proposition. As already pointed out earlier, recording of verification is mandatory under Section 200 of the Cr. P.C Respondents also do not dispute this proposition. In fact, when the omission came to their knowledge, an application is filed on 29th March, 2005 for curing the irregularity. Unfortunately, no order has been passed on this application. Be that, as it may: the fact remains that omission appears to be on account of inadvertence. The verification is to be recorded by the Court, there fore, for omission to record verification the respondents cannot be penalized. In these circumstances, the proper course would be to quash the order for issuance of process and direct the Trial Court to proceed from the stage of verification. In this view of the matter, the impugned order in respect of issue of process dated 26th November, 2002 passed by the learned Judicial Magistrate, First Class is quashed and set aside. The trial Court is directed to proceed from the stage of verification. Rule is made absolute in above terms.
10. Order accordingly.
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