HP HC | Whether the trial court can exercise any discretion while entertaining an application under S.145 of the NI Act; HC elucidates upon procedural nuances

Himachal Pradesh High Court: Vivek Thakur, J. while setting aside the impugned order, relied on settled legal precedents and discussed at length, the powers of the Magistrate in proceeding with an application under Section 145 of the Negotiable Instrument Act, 1881.

 Background

Present petition was filed assailing the impugned order dated 08-04-2019 passed by Additional Chief Judicial Magistrate, whereby an application filed on behalf of accused-petitioner under Section 145(2) of Negotiable Instrument Act (‘NI Act’ in short), has been dismissed.

 Issue

  1. Whether the Court has any discretion in an application made under Section 145 (2) of the Negotiable Instrument Act, 1881, for the purpose of summoning and examining any person giving evidence on affidavit?
  2. Whether the procedure adopted by the Magistrate Court, while entertaining the application aforementioned, just and proper?

 Observation

With respect to issue 1, Court considered the case of Mandvi Cooperative Bank Ltd. v. Nimesh B. Thakore, (2010) 3 SCC 83, wherein it was held, “… two words i.e. ‘may’ and ‘shall’ in Section 145(2) NI Act have been used by the Legislature with reference to the ‘Court’ and with reference to the ‘prosecution or accused’ respectively and therefore, it is beyond doubt that in the event of an application made by the prosecution or accused, the Court would be obliged to summon the person giving evidence on affidavit in terms of Section 145(1) of NI Act without having any discretion in the matter and therefore, if an application is made under Section 145(2) of NI Act either by prosecution or by the accused, the Court must call the person, who has given evidence on affidavit, for examining him again as to the facts contained therein. Intention of Legislature, in this regard, is very clear as the Legislature has used two distinct and different words i.e. ‘may’ and ‘shall’ for two different situations and it is not made mandatory for the Court to summon and examine the persons filing the affidavit in all eventuality, but a discretion has been given to the Court to call such witnesses, if Court feels it necessary, but in the case of application filed by ‘prosecution’ or ‘accused’, by using word ‘shall’, it has been made mandatory to summon and examine such person.”  The Court further rejected the findings of the Magistrate court stating that there has been gross illegality in dismissing the application filed by the petitioner accused.

With respect to issue 2, Court referred a catena of judgments discussing the procedure to be adopted while entertaining an application under Section 145 of the NI Act, 1881. Reiterating the observation of the Supreme Court in the aforementioned case, the Court said, “… Sections 143 to 147 lay down a kind of a special code for the trial of offences under Chapter XVII of NI Act and these Sections were inserted in the Act by Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 to do away with all stages and processes in a regular criminal trial which normally cause inordinate delay in its conclusion and also to make the trial procedure as expeditious as possible without, in any way, compromising on the right of accused for a fair trial. Therefore, right of the accused for having a fair trial can never be ignored by any Court particularly where it leads to curtailment of personal liberty.” The said observation was backed by another judgment of the Supreme Court as rendered in, Meters and Instruments Pvt. Ltd. v. Kanchan Mehta, (2018) 1 SCC 560. Elaborating further, the Court cited the case of Omprakash Shivprakash v. K.I. Kurikose, (1998) 8 SCC 633, wherein dealing with similar provision of Section 16A of the Prevention of Food Adulteration Act 1954, empowering the Judicial Magistrate to try the offence under Section 16(1) of the said Act in summary way, observed that Chapter XXI of Criminal Procedure Code (“CrPC”), 1973, deals with summary trial wherein “Section 262 CrPC provides that procedure, specified for trial of summons cases, shall be followed for summary trial, but subject to some variations as necessary keeping in view provisions of special Code dealing with the case, and Chapter XX of CrPC is titled as ‘Trials of summons cases by Magistrates’ wherein Section 251 of CrPC is a commencing provision which requires that on appearance of accused or bringing him before the Magistrate, the particulars of offence shall be stated to him and he shall be asked whether he pleads guilty or not and therefore, it has been held that if the Magistrate opts to hold summary trial, ‘trial’ of offence under the said Act begins when the Magistrate asks the accused whether he pleads guilty or not as envisaged in Section 251 of the Code. It is further held that evidence in a ‘trial’ can be adduced only after recording the plea of accused as envisaged in the said Section.”

Narrowing down to the present case, the Court herein observed, “Section 143 of NI Act empowers the Court to try the cases summarily by applying Sections 262 to 265 (both inclusive) of CrPC ‘as far as may be’ applicable. In view of provisions of Section 262 CrPC, procedure for trial of summons case, as provided in Sections 251 to 259 CrPC contained in Chapter XX of CrPC, is to be followed in summary trial with variations keeping in view provisions of Sections 263 to 265 CrPC and in trial under NI Act, it shall be subject to further variations in consonance with provisions of NI Act. Section 251 CrPC provides that immediately on appearance of accused before the Magistrate, the particulars of the offence, of which he is accused, shall be stated to him and he shall be asked whether he pleads guilty or has any defence to make, but it would not be necessary to frame a formal charge. Therefore, trial in case of summary trial under NI Act shall also commence after asking the accused as to whether he pleads guilty or has any defence to make as envisaged in Section 251 CrPC In case of regular trial, other than summary trial and summons case trial, trial shall begin on framing of charge under provisions contained in Chapter XVII of the CrPC… Sub-section (2) of Section 262 CrPC provides that no sentence of imprisonment for a term exceeding three months shall be passed in the case of any conviction under Chapter XXI of CrPC. But provisions of first proviso to Section 143 of NI Act empowers the Magistrate to pass a sentence of imprisonment upto one year and an amount of fine exceeding Rs.5000/- on conviction in a summary trial. Therefore, limit to impose the sentence as provided under Section 262 (2) of CrPC is not applicable in the summary trial under NI Act but it shall be governed by second proviso of Section 143 of NI Act. Second proviso to Section 143 of NI Act also empowers the Magistrate, if it appears to him, keeping the nature of case, that a sentence of imprisonment for a term exceeding the term provided under first proviso may have to be passed or that, for any other reason, it is undesirable to try the case summarily, to recall the witness who may have been examined and to proceed to hear or re-hear the case in the manner provided by the CrPC but after hearing the parties and recording the order to that effect. It gives discretion to the Magistrate either to proceed summarily or otherwise for a regular trial, as warranted in the facts and circumstances of the case. Furthermore, the Court categorically said, “Section 145 of NI Act provides filing of evidence of complainant on affidavit with further provision that the said evidence may, subject to all just exceptions, be led in evidence in any inquiry, trial or other proceedings under the CrPC. Therefore, in a case under Section 138 of NI Act, the Magistrate is empowered to accept the evidence of complainant on affidavit even before the commencing of trial during its preliminary inquiry at the time of taking the cognizance of the offence under NI Act. The rider that the said affidavit shall be subject to all just exceptions means that the evidence, so filed on affidavit, shall be evidence ‘admissible’ under the Indian Evidence Act and further provision for reading the said affidavit in evidence in any inquiry, trial or other proceedings empowers the Magistrate not to ask for fresh affidavit on or after commencing of trial but to read the same affidavit in evidence again after the commencement of trial if the accused does not plead guilty.”

The Court concluded on issue 2, in the words, “It is evident from record that on the very first day of appearance of accused neither charge was framed nor Notice of Accusation was put to him and it was also not recorded that substance of accusation was communicated to him for his response as to whether he pleads guilty or has any defence to make. After putting the substance of accusation/Notice of Accusation to the accused, in case of not pleading guilty by him, the Magistrate would have either recorded substance of accusation to follow the procedure in summary trial or would have followed procedure for regular trial after putting notice of accusation or framing the charge as the case may be and thereafter would have asked the complainant to lead any further evidence, if any, in support of his case and thereafter occasion to entertain application under Section 145(2) of NI Act would have arisen to pray for summoning and examining the persons who might have given evidence on affidavit i.e. only after filing/leading any other further evidence or opting for not to lead further evidence by the complainant not prior to that.”

Decision

Allowing the present petition, the Court said, “Serious mistake committed by the trial Court is not mere irregularity but illegality”. It further issued necessary directions to the trial court of considering the said application “…after putting notice of accusation to accused, at the stage of or after calling for further evidence of complainant, if any, to be filed/led on behalf of complainant in support of his case.”[Vikas Sharma v. Vishant Bali,  2020 SCC OnLine HP 2876, decided on 08-12-2020]


Sakshi Shukla, Editorial Assistant has put this story together

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