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Smart Summary

Factual and Procedural Background

The petitioner, who is one of the directors of a company, faced a complaint under Section 138 of the Negotiable Instruments Act. Summoned in his capacity as director, the petitioner had filed an application for exemption from personal appearance and for recalling the summoning order or dropping the proceedings, which had been pending for over two years. On 17.7.2003, the learned Additional Sessions Judge (ASJ) dismissed the petitioner's application for exemption from personal appearance on the ground that the counsel representing the petitioner had also irresponsibly made a similar application on behalf of another accused (Accused No. 4) two months earlier. The ASJ rejected the petitioner's application and ordered the issuance of non-bailable warrants (NBWs) against the petitioner and the co-accused. The petitioner challenged this order, contending that the ASJ acted on improper presumptions, failed to decide the substantive application for recalling the summoning order, and issued NBWs in a case involving a bailable offence without proper justification.

Legal Issues Presented

  1. Whether the learned ASJ was justified in dismissing the petitioner's application for exemption from personal appearance based on the conduct of the counsel in a separate application for a co-accused.
  2. Whether the issuance of non-bailable warrants against the petitioner was lawful in the absence of reasons recorded in writing and in a case involving a bailable offence.
  3. Whether the learned ASJ erred in not deciding the pending application for recalling the summoning order or dropping the proceedings before issuing coercive process.
  4. What procedural safeguards and principles govern the issuance of warrants of arrest under Section 87 of the Criminal Procedure Code (Cr.P.C) in cases under Section 138 of the Negotiable Instruments Act.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
K.M Mathew v. State of Kerala (1992) 1 SCC 217 The fact that process has already been issued is no bar to dropping the proceedings as the order issuing process is an interim order and not a judgment. The Court directed that applications for recalling summoning orders or dropping proceedings must be decided expeditiously and that the issuance of process does not preclude such decisions.

Court's Reasoning and Analysis

The Court analyzed the impugned order and found it to be legally unsound and procedurally improper. The learned ASJ dismissed the petitioner's application for exemption from personal appearance based on an unsubstantiated presumption that the counsel had acted irresponsibly in a prior application for a co-accused. The Court emphasized that such extraneous conjectures or innuendos against another accused or counsel cannot justify rejection of the petitioner's application. The issuance of non-bailable warrants was held to be contrary to the safeguards under Section 87 of the Cr.P.C, which requires the court to record reasons in writing and limits the issuance of warrants to cases where the accused is absconding or fails to appear without reasonable excuse after service of summons. The Court underscored the fundamental importance of personal liberty and the need for judicial discretion to be exercised sparingly and judiciously. Furthermore, the Court criticized the ASJ for not deciding the substantive application for recalling the summoning order or dropping the proceedings, which had been pending for over two years, and instead resorting to punitive measures prematurely. The Court also noted the growing backlog of cases under Section 138 of the Negotiable Instruments Act and issued directions to ensure expeditious disposal of such applications and proper adherence to procedural safeguards regarding personal appearance and issuance of warrants.

Holding and Implications

The Court allowed the petition, quashing the impugned order dated 17.7.2003, and cancelled the non-bailable warrants issued against the petitioner.

The petitioner was exempted from personal appearance until the pending application for dropping the proceedings is decided. The learned ASJ was directed to decide this application expeditiously, within six months. The Court also issued binding directions to trial courts handling cases under Section 138 of the Negotiable Instruments Act, mandating that:

  • Applications for recalling summoning orders or dropping proceedings must be decided at the earliest, not exceeding six months.
  • Personal appearance of accused shall not be insisted upon, nor coercive processes like warrants issued, until such applications are decided.
  • If such applications are dismissed, summons shall be issued first, and warrants only thereafter following the procedure under Section 87 of Cr.P.C with written reasons.

The decision does not establish new precedent but clarifies and reinforces established procedural safeguards regarding issuance of warrants and personal appearance in criminal trials under the Negotiable Instruments Act, aiming to reduce unnecessary coercive measures and backlog in courts.

    Suresh V. Chaturvedi Petitioner v. Aes Control Pvt. Ltd

    J.D Kapoor, J.:— Impugned order dated 17.7.2003 passed by Sh. A.K Garg, learned Addl. Sessions Judge reflects the strange and preposterous way the application of the petitioner for exemption from personal appearance was dealt with. Petitioner (Accused No. 2) paid the price of engaging the same counsel which his co-accused (Accused No. 4) had engaged as the learned ASJ dismissed the application of the petitioner on the highly unjudicial premise that since similar application was made on behalf of accused No. 4 in an irresponsible manner on the last date by the counsel who happens to be the counsel of petitioner, he would not proceed on the presumption that the application on behalf of petitioner has been made today on proper instructions. Not only the application was dismissed but the most coercive process of nonrbailable warrant was ordered to be issued against the petitioner.

    2. To imagine that the counsel was having similar instructions for the petitioner he had from his co-accused is beyond imagination. Impugned order reads like this:-

    “Shri H.P Sharma, Advocate makes an application on behalf of Accused No. 2 for exemption from personal appearance. He states that the Accused has to attend a meeting of C.D.R at Bombay at which he has to represent the Accused Company. As regards that Accused No. 4 Shri Sharma, counsel for the accused states that the whereabouts of that accused are not known on the last date Shri Sharma had made an application for exemption from personal appearance. This means that he was in touch with the Accused No. 4 on the last date. I am not prepared to believe that he has lost touch with Accused No. 4 during intervening period of 2 months. It is clear that either Shri Sharma was not properly instructed on the last date or the true facts are not being disclosed today. Since an application for exemption was made on behalf of Accused No. 4 in an irresponsible manner on the last date, I will not proceed on the exemption today that the application on behalf of Accused No. 2 has been made today on proper instructions. Therefore, the application of Accused No. 2 is rejected. Issue Non-Bailable Warrant against Accused No. 2 and 4.”

    3. Petitioner is stated to be one of the Directors of the Company of Bombay against whom complaint under Section 138 of the Negotiable Instruments Act is pending. He has been summoned as accused in his capacity as one of the Directors. On 17.7.2003 he was required to appear in the Court as on that day his application for recalling the summoning order and dropping the proceedings against him was fixed for arguments.

    4. The learned ASJ was required to only deal with the grounds mentioned in the application and not to introduce extraneous innuendos or his make-believe surmises or conjectures. In no way the observations made by the learned ASJ against accused No. 4 or his counsel even if he was representing another accused could have been used or even referred to while dealing with the application of the petitioner.

    5. More worse was that instead of deciding the application for recalling the summoning order or dropping the proceedings which is pending for more than two years, the learned ASJ proceeded hot only to reject his application for personal appearance but he straightaway issued non-bailable warrants. It is not understandable what kind of sadistic pleasure was being drawn by the court in issuing NBWs straight away for an offence which is of a bailable nature. It was not a case of an accused who was absconding or whose presence was difficult to procure through ordinary summons.

    6. Every criminal court is a creature of Cr.P.C It is neither above it nor can it rise above it. Power of the court to issue warrant of arrest in lieu of or in addition to summons flows from the provisions of Section 87 of Cr.P.C It provides as under:-

    87. Issue of warrant in lieu of, or in addition to, summons:-

    A court may, in any case in which it is empowered by this Code to issue a summons for the appearance of any person, issue, after recording its reasons in writing, a warrant for his arrest-

    (a) if, either before the issue of such summons, or after the issue of the same but before the time fixed for his appearance, the court sees reason to believe that he has absconded or will not obey the summons; or

    (b) if at such time he fails to appear and the summons is proved to have been duly served in time to admit of his appearing in accordance therein and no reasonable excuse is offered for such failure.

    7. Bare perusal of these provision shows that ordinarily the court shall always issue summons for appearance of any person. It can issue warrant of arrest for appearance of any person only in the following eventualities and that too by recording reasons in writing:-

    (a) If the court sees the reason to believe that he has absconded or will not obey the summons or

    (b) If he has without reasonable excuse failed to appear inspite of service of summons.

    8. Such is the importance of a liberty of a person which is a highly precious and cornerstone of democratic set up that even the court has to provide reasons in writing before issuing warrants of arrest. It shows that power or discretion of the court in this regard has also shackles. More unbridled the power more sparingly, cautiously and judiciously it should be exercised. Absolute power should not be exercised arbitrarily.

    9. This Court cannot be unmindful of the fact that the learned ASJ was seized of the application of the petitioner for recalling the summoning order or dropping the proceedings on the ground that there was complete absence of a triable case against him and had fixed the same for argument. Instead of deciding the said application which was to be argued by the counsel and not b\ the petitioner the learned ASJ resorted to punitive course.

    10. Thus from any aspect or angle the impugned order is examined, if cannot stand and has to go as it is wholly illegal, harsh and against the rudimentary principles or provisions of law and procedure. In the result, the petition is allowed. NBWs stand cancelled.

    11. In the given facts and circumstances, petitioner shall be exempted from personal appearance till his application for dropping the proceedings is decided. Learned ASJ shall decide the application as expeditiously as possible but not later than six months though provisions of Section 143. of the Negotiable Instruments Act cast obligation upon the court to conduct the trial as expeditiously as possible and to make an endeavour to conclude the trial within six months from the date of filing of the complaint.

    12. Before parting, this Court is constrained to issue directions to the learned trial courts as day in and day out large number of petitions are being received by this Court where straightaway non-bailable warrants are issued either after rejection of the application for exemption or for non-appearance of the accused on one date of hearing. In large number of cases applications particularly by the Directors of Companies as is in the instant case for dropping of proceedings on the ground that they were neither responsible nor in charge of the conduct of the business of the Company are pending decision for years and their presence is being insisted on every date of hearing and no fruitful proceedings are being taken up and in many cases even proceedings have been stayed where each and every nominated director of the companies has been impleaded as accused.

    13. Ever increasing case load of complaints under Section 138 of the Negotiable Instruments Act is resulting in malignant growth of backlog requiring more court time which is unproductive in the sense that it is not expended in actual trial time. Consequence is that the victim i.e the complainants are more at receiving ends than the culprits as on the one hand their grievance is not being redressed expeditiously while on the other hand actual culprits are not being brought to book. Complainants are suffering partly either for their own ignorance or adopting an arm-twisting tactic by impleading each and every director of the company whereas Section 141 of the Negotiable Instruments Act relating to offences by the companies allows the prosecution of only those persons who were at the time of offence in charge of and responsible to the Company for the conduct of its business. This provision was brought on the statute Book on the recommendations of Standing Committee on Finance and other representations to exempt those directors from prosecution who are nominated as directors of a company by virtue of their holding any office or employment in the Central Government or State government or a Financial Corporation owned or controlled by the Central Government or State Government, as the case may be.

    14. With a view to minimise this malaise and incessant flow of avoidable petitions before this Court arising out of instant kind of orders, following directions are issued to the Courts trying the cases under Section 138 of the Act:-

    (i) Wherever an application by the accused for recalling the summoning order or dropping of proceedings even moved after process has been issued against the applicant is pending or is moved, the court shall decide the said application at first instance as the Supreme Court has taken the view in K.M Mathew v. State of Kerala (1992) 1 SCC 217 that the fact the process has already been issued is no bar to drop the proceedings as the order issuing the process is an interim order and not a judgment. These applications shall be decided as expeditiously as possible but not later than six months from the date either already fixed in the case or to be fixed from the date of this order.

    (ii) Till the application is decided, the trial court shall not insist for the personal appearance of the applicant nor shall issue any coercive process like warrant of arrest as the arguments on the application are ordinarily addressed by the counsel and no adjournment shall be given on account of the absence of the applicant-accused.

    (iii) In case the application is dismissed, the trial court shall procure the presence of the applicant at first instance by way of summons and thereafter shall strictly follow the procedure prescribed by Section 87 of Cr.P.C and the guidelines provided in this order while issuing the warrant of arrest. However, this procedure is applicable in every case where presence is procured through warrant of arrest.

    15. Copy of this order be sent to (i) all the Judicial Officers and (ii) Presidents of all the Bars of Delhi for bringing it to the notice of members of the Bar.

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    Comments

    Suresh V. Chaturvedi Petitioner v. Aes Control Pvt. Ltd
    (Jul 24, 2003)