Kishore Pallei Petitioner v. Aruna Kumar Panda Opp. Party

B.K NAYAK, J.

Order dated 17.02.2012 passed by the learned J.M.F.C, Khallikote in I.C.C No. 2 of 2006 directing the complainant to come ready with his witnesses on the next date for evidence de novo has been assailed in this criminal revision.

2. The complaint case in question is one under Section 138 of the Negotiable Instruments Act, 1981 (in short “the N.I Act”). The trial of the complaint case began on 22.08.2008 by following summons procedure as contained in Chapter-XX of the Code of Criminal Procedure, 1973 by the then J.M.F.C When the complaint case had been fixed for argument after closure of evidence from both sides, the present J.M.F.C, Khallikote joined on transfer in place of his predecessor-in-office. Without hearing arguments, the learned J.M.F.C passed the impugned order holding that in terms of Section 143(1) of the N.I Act a complaint case under Section 138 of the said Act is to be tried in summary procedure as provided in Sections 262 to 265 of the Cr.P.C and that departure from summary procedure is possible only when the requirement of the second proviso to Section 143(1) of the N.I Act is satisfied, that is to say, if the Magistrate passes an order after hearing both parties 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 for any other reason it was undesirable to try the case summarily. The learned J.M.F.C has stated in the order that neither at the commencement nor in course of trial under the section any such order has been passed. He, therefore, instead of hearing arguments, fixed the complaint case for de novo trial to 29.02.2012 and directed the complainant to come ready with his witnesses in view of the provision prescribed in Section 326(3), Cr.P.C

3. The learned counsel for the accused-petitioner contended that since the trial of the complaint case was held by following summons procedure and not summary procedure, Section 326(3) of the Cr.P.C was not a bar for the learned J.M.F.C to proceed further from the stage of argument of the case. It is also his submission that adoption of summary procedure in terms of Section 143(1) of the N.I Act for trial of the complaint case is not mandatory in view of the expression, “as far as may be” occurring in sub Section (1) of Section 143 of the Act read with the second proviso, and therefore, the trial conducted in the instant complaint case by following summons procedure cannot be said to be illegal and, therefore, the impugned order directing for de novo trial is unsustainable. The learned counsel appearing for the complainant-opposite party also supports the contention raised by the learned counsel for the petitioner.

4. Since the matter relates to interpretation of the provisions of the N.I Act, particularly Section 143 thereof, the learned Advocate General was requested to address the Court. According to him, the mandate of sub Section (1) of Section 143 is to adopt summary procedure for trial of complaint case under Section 138 of the N.I Act and the only exception has been carved out in the second proviso to Section 143(1) which visualizes two contingencies for departing from summary procedure at the commencement or at any stage of trial only if the Magistrate passes an order to that effect after hearing the parties.

5. In the instant case for coming to the conclusion that he cannot act upon the evidence recorded by his predecessor-in-office, the learned J.M.F.C has held that since his predecessor-in-office commenced the trial by following summons procedure without passing any order as required under the second proviso to Section 143(1) of the N.I Act, the procedure so adopted shall be regarded as evidence being recorded under Chapter-XXI of the Cr.P.C, that is, summary procedure and, therefore, in view of the bar contained in Section 326(3) of the Cr.P.C he cannot act upon the evidence recorded by his predecessor-in-office and hence a de novo trial was required. For the applicability of Section 326(3) of the Cr.P.C, the learned J.M.F.C has relied upon the decision of the apex Court reported in AIR 2011 SC 3076: Nitinbhai Saevatilal Shah v. Manubhai Manjibhai Panchal

6. In Nitinbhai Saevatilal Shah (supra), the apex Court was considering the legality of a conviction under Section 138 of the N.I Act recorded by a Magistrate on the basis of evidence recorded by his predecessor-in-office adopting summary procedure of trial. Therefore, the apex Court considering the applicability of sub Section (3) of Section 326 of the Cr.P.C held as under:

“14. The mandatory language in which Section 326(3) is couched, leaves no manner of doubt that when a case is tried as a summary case a Magistrate, who succeeds the Magistrate who had recorded the part or whole of the evidence, cannot act on the evidence so recorded by his predecessor. In summary proceedings, the successor Judge or Magistrate has no authority to proceed with the trial from a stage at which his predecessor has left it. The reason why the provisions of sub Sections (1) and (2) of Section 326 of the Code have not been made applicable to summary trials is that in summary trials only substance of evidence has to be recorded. The Court does not record the entire statement of witness. Therefore, the Judge or the Magistrate who has recorded such substance of evidence is in a position to appreciate the evidence led before him and the successor Judge or Magistrate cannot appreciate the evidence only on the basis of evidence recorded by his predecessor. Section 326(3) of the Code does not permit the Magistrate to act upon the substance of the evidence recorded by his predecessor, the obvious reason being that if succeeding Judge is permitted to rely upon the substance of the evidence recorded by his predecessor, there will be a serious prejudice to the accused and indeed, it would be difficult for a succeeding Magistrate himself to decide the matter effectively and to do substantial justice.”

7. Having held that a succeeding Magistrate cannot act on the evidence recorded by his predecessor-in-office in a trial conducted in summary procedure as because he is not competent to do so in view of the provision of Section 326(3) of the Cr.P.C, the apex Court held that it would not merely be a case of irregularity but of want of competency. Nitinbhai Saevatilal Shah (supra) did not decide the question whether Section 143(1) of the N.I Act is mandatory or directory, nor such question arose for consideration.

In the instant case admittedly the trial commenced by adopting the procedure contained in Chapter-XX of the Cr.P.C, i.e, summons procedure. However, in view of the provision for summary trial engrafted in sub Section (1) of Section 143 of the N.I Act., the learned J.M.F.C has stated that the said provision being mandatory the evidence recorded by his predecessor-in-office must be regarded to have been done under Chapter-XXI of the Cr.P.C, i.e, by following summary procedure.

This reasoning is totally fallacious as because violation of a mandatory provision of law may render the proceeding vitiated by illegality and, therefore, void, but it cannot be treated or regarded as following the procedure mandated by law.

8. Since the observation of the learned J.M.F.C in the impugned order that Section 143(1) of the N.I Act is mandatory in nature is under challenge and that it was brought to the notice of this court by the learned members of the Bar that there is no uniformity in the procedure adopted by the competent Judicial Magistrates of the State in trying complaints under Section 138 of the N.I Act, it has become incumbent to settle the position with regard to the true import of Section 143(1) of the N.I Act.

9. In order to appreciate the issue, it is essential to see the relevant provisions of the Act along with the objects and reasons for their enactment. Sections 138 to 142 of the N.I Act were brought into existence by way of amendment by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988. Section 138, thus brought into the statute book, made provision for punishing the drawer of a cheque with imprisonment up to one year or with fine extending to twice the amount of the cheque or with both if the cheque is dishonoured. For filing the complaint against the drawer of the cheque certain safeguards were also provided.

10. Sections 143 to 147 of the N.I Act were inserted in the Act in 2002 by way of amendment by Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002. The amendment also brought out a number of changes in the existing provisions of Sections 138 to 142. The reasons for which Sections 143 to 147 were introduced in the Act have been noticed by the apex Court in paragraphs 16 to 18 of the judgment reported in (2010) 3 SCC 83: Mandvi Cooperative Bank Limited v. Nimesh B. Thakore in the context of deciding the scope and ambit of Section 145 of the Act, which run as under:

“16. Complaints under Section 138 of the Act came to be filed in such large numbers that it became impossible for the courts to handle them within a reasonable time and it also had a highly adverse effect on the courts' normal work in ordinary criminal matters. A remedial measure was urgently required and the legislature took action by introducing further amendments in the Act by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002. The 2002 Amendment inserted in the Act for the first time Sections 143 to 147 besides bringing about a number of changes in the existing provisions of Sections 138 to 142.

17. Section 143 gave to the court the power to try cases summarily; Section 144 provided for the mode of service of summons; Section 145 made it possible for the complaint to give his evidence on affidavit; Section 146 provided that the bank's slip would be prima facie evidence of certain facts and Section 147 made the offences under the Act compoundable.

18. The statement of Objects and Reasons appended to the Bill stated as follows:

“The Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negoitable Instruments Act, 1881, namely, Sections 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques. Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the courts to deal with such matters has been found to be cumbersome. The courts are unable to dispose of such cases expeditiously in a time-bound manner in view of the procedure contained in the Act.

2. A large number of cases are reported to be pending under Sections 138 to 142 of the Negotiable Instruments Act in various courts in the country. Keeping in view the large number of complaints under the said Act pending in various courts, a working group was constituted to review Section 138 of the Negotiable Instruments Act, 1881 and make recommendations as to what changes were needed to effectively achieve the purpose of that section.

3. The recommendations of the Working Group along with other representations from various institutions and organizations were examined by the Government in consultation with Reserve Bank of India and other legal experts, and a Bill, namely, the Negotiable Instruments (Amendment) Bill, 2001 was introduced in the Lok Sabha on 24.07.2001 The Bill was referred to the Standing Committee on Finance which made certain recommendations in its report submitted to Lok Sabha in November, 2001.

4. Keeping in view the recommendations of the Standing Committee on Finance and other representations, it has been decided to bring out, inter alia, the following amendments in the Negotiable Instruments Act, 1881, namely:-

(i) to increase the punishment as prescribed under the Act from one year to two years;

(ii) to increase the period for issue of notice by the payee to the drawer from 15 days to 30 days;

(iii) to provide discretion to the court to waive the period of one month, which has been prescribed for taking cognizance of the case under the Act;

(iv) to prescribe procedure for dispensing with preliminary evidence of the complaint;

(v) to prescribe procedure for servicing of summons to the accused or witness by the court through speed post or empanelled private couriers;

(vi) to provide for summary trial of the cases under the Act with a view to speeding up disposal of cases;

(vii) to make the offences under the Act compoundable;

(viii) to exempt those Directors from prosecution under Section 141 of the Act 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 the State Government, as the case may be;

(ix) to provide that the Magistrate trying an offence shall have power to pass sentence of imprisonment for a term exceeding one year and amount of fine exceeding five thousand rupees;

(x) to make the Information Technology act, 2000 applicable to the Negotiable Instruments Act, 1881 in relation to electronic cheques and truncated cheques subject to such modifications and amendments as the Central Government, in consultation with the Reserve Bank of India, considers necessary for carrying out the purposes of the Act, by notification in the Official Gazette; and

(xi) to amend definitions of ‘bankers’ books’ and ‘certified copy’ given in the Bankers' Books Evidence Act, 1891.

5. The proposed amendments in the Act are aimed at early disposal of cases relating to dishonour of cheques, enhancing punishment for offenders, introducing electronic image of a truncated cheque and a cheque in the electronic form as well as exempting an official nominee Director from prosecution under the Negotiable Instruments Act, 1881.

6. The Bill seeks to achieve the above objects.”

11. Section 143 of the Act, which is relevant for the purpose of this case is extracted hereunder:

“143. Power of court to try cases summarily.-(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), 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.”

12. Sections 143 to 147 of the Act introduced by way of amendment relate to the procedure. In Mandvi Cooperative Bank Limited (supra) with respect to the nature of such provisions, the apex Court held as under:

“20. It may be noted that the provisions of Sections 143, 144, 145 and 147 expressly depart from and override the provisions of the Code of Criminal Procedure, the main body of adjective law for criminal trials. The provisions of Section 146 similarly depart from the principles of the Evidence Act. Section 143 makes it possible for the complaints under Section 138 of the Act to be tried in the summary manner, except, of course, for the relatively small number of cases where the Magistrate feels 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.

21. It is, however, significant that the procedure of summary trials is adopted under Section 143 subject to the qualification “as far as possible”, thus, leaving sufficient flexibility so as not to affect the quick flow of the trial process. Even while following the procedure of summary trials, the non obstante clause and the expression “as far as possible” used in Section 143 coupled with the non obstante clause in Section 145 allow for the evidence of the complainant to be given on affidavit, that is, in the absence of the accused. This would have been impermissible (even in a summary trial under the Code of Criminal Procedure) in view of Sections 251 and 254 and especially Section 273 of the Code. The accused, however, is fully protected, as under sub-section (2) of Section 145 he has the absolute and unqualified right to have the complainant and any or all of his witnesses summoned for cross-examination.

25. It is not difficult to see that Sections 143 to 147 lay down a kind of a special code for the trial of offences under Chapter XVII of the Negotiable Instruments Act and Sections 143 to 147 were inserted in the Act by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 to do away with all the stages and processes in a regular criminal trial that normally cause inordinate delay in its conclusion and to make the trial procedure as expeditious as possible without in any way compromising on the right of the accused for a fair trial. Here we must take notice of the fact that cases under Section 138 of the Act have been coming in such great multitude that even the introduction of such radical measures to make the trial procedure simplified and speedy has been of little help and cases of dishonoured cheques continue to pile up giving rise to an unbearable burden on the criminal court system.”

13. Section 143(1) of the Act starts with a non-obstante clause expressly overriding the provisions of the Cr.P.C inasmuch as the legislative intent is to adopt summary procedure of trial of the complaint under Section 138 of the N.I Act. But for the provision of Section 143(1) of the Act, the procedure under Chapter-XX of the Cr.P.C, i.e, summons procedure, would be adopted for trial of a complaint case under Section 138 of the N.I Act. Having regard to the provision of Section 143(1) with its legislative intent and the observation of the apex Court in the case of Mandvi Cooperative Bank Limited (supra) it is to be held that Section 143(1) of the N.I Act providing for summary procedure of trial is mandatory in nature subject to the exception carved out in the second proviso thereof. In other words, trial of a complaint case under Section 138 of the N.I Act has to be conducted in summary procedure in normal course. However, the summary procedure may be departed from or dispensed with only if the Magistrate in terms of the second proviso to Section 143(1) of the N.I Act, after hearing the parties passes an order to the effect that the nature of the case is such that a sentence exceeding one year may have to be passed or for any other reason it is undesirable to try the case summarily. Without an order being passed to this effect the Magistrate cannot depart from the summary procedure. Any departure from such procedure will render the trial vitiated by illegality. The passing of an order not to follow the summary procedure of trial may be passed suo motu or on the application of either of the parties, but both the parties must be heard before such order is passed. This view of mine also finds support from the decision of the Madras High Court in Crl. RC. (MD) No. 2 of 2011: Swaminatha Pillai… v. Mr. A. Senthil Kumar…. decided on 17.02.2011

14. It is brought to the notice of this Court that the Judicial Magistrates in the State often adopt the summons procedure for trial of complaint under Section 138 of the N.I Act without passing an order in accordance with the second proviso to Section 143(1). This Court therefore directs that a copy of this order be forwarded to all the Sessions Judges, Chief Judicial Magistrates and Judicial Magistrates First Class for future guidance. The Judicial Magistrates First Class shall henceforth conduct trial of complaints under Section 138 of the N.I Act, keeping in view the observations made herein above in all cases in which evidence from both sides has not been closed. Wherever evidence from both sides has already been closed or complaints already disposed of the matters shall not be re-opened for fresh trial by the Magistrates, or as the case may be by the appellate or revisional court.

15. So far as the instant complaint case is concerned since evidence from both sides has already been recorded by following summons procedure, the direction given by the learned J.M.F.C Khallikote in the impugned order for de novo trial is quashed. The learned J.M.F.C is directed to hear arguments immediately and dispose of the complaint case within a period of two months from today. The CRLREV is disposed of. The interim order of stay of the complaint case stands vacated. Send back the L.C.R forthwith.