The Supreme Court of India (the Court) had in the judgment titled J. Vedhasingh v. R.M. Govindan1 referred to a larger Bench the question as to whether an accused can be tried based on a similar set of facts for an offence under Section 1382 of the Negotiable Instruments Act, 1881 (the NI Act) as well as an offence such as Section 4203 under the Penal Code, 1860 (IPC). The reference to the larger Bench was necessitated by the conflicting judgments by the Bench of equal strength of the Supreme Court in G. Sagar Suri v. State of U.P.4 (G. Sagar Suri) and Sangeetaben Mahendrabhai Patel v. State of Gujarat5 (Sangeetaben Mahendrabhai). In G. SagarSuri6, the Court had ruled that a complaint based on a similar set of facts for an offence under the NI Act, 18817 and Section 420 IPC constitutes an abuse of process of law, whereas the Court in Sangeetaben Mahendrabhai8 had ruled against quashing the subsequent complaint on the basis that the ingredients for Section 138 of the NI Act and Section 420 IPC are different and the same are not hit by the bar of double jeopardy under Section 3009 of the Code of Criminal Procedure, 1973 (CrPC). It is commonly seen that a case for cheating under Section 420 IPC, amongst other offences prescribed in IPC, are subsequently pressed into action after the dishonour of cheque quite independent of pursuing a complaint under Section 138 of the NI Act. However, the prosecution under specific (i.e. the NI Act), as well as general law (i.e. IPC) based on a similar set of facts and allegations, may be seen as an abuse of the process of law. It is important to note that neither of the two sections explicitly bar parallel prosecution of complaints and that any bar thereof has to satisfy the requirements of Section 300 CrPC. As the question is pending before a larger Bench, this article analyses the law pertaining to Section 138 of the NI Act and Section 420 IPC insofar as it limits or bars parallel prosecution of complaints on the basis that the same constitutes an abuse of process of law. This article attempts to place the ruling of the two conflicting judgments in context and thereupon derive an answer as to whether there exists a bar on the prosecution of complaints based on similar allegations under Section 420 IPC and Section 138 of the NI Act.
Brief facts of the case
In J. Vedhasingh10, the appellant had lodged a complaint against Respondents 1 to 4 under Sections 120-B11, 40612, 420 and 3413 IPC after filed a complaint under Section 138 of the NI Act. The Madras High Court had quashed the institution of the case under Sections 120-B, 406, 420 and 34 IPC pending against the Respondents 1 to 4 ruling that the continuance of proceedings for complaint under IPC whilst complaint under Section 138 of the NI Act is pending on the same facts and cause of action would amount to an abuse of process of the court. Seized by the impugned judgment of the Madras High Court, the Supreme Court adverted to two legal propositions for which reference was sought to the larger Bench; firstly, whether the ratio of the judgment, in G. Sagar Suri14 and Kolla Veera Raghav Rao v. Gorantla Venkateswara Rao15 lay down the correct law? Secondly, whether on a similar set of allegations of fact the accused can be tried for an offence under the NI Act and also for offences under IPC?
Analysis of the pronouncements made in G. Sagar Suri and Sangeetaben Mahendrabhai
In G. Sagar Suri16, the complainant had alleged that the repeated dishonour of the cheque was a fraudulent act committed with common consent to cheat and grab the money of the complainant company. The complainant had first instituted a complaint under Section 138 of the NI Act before the Court of Additional Chief Judicial Magistrate, Ghaziabad. Subsequently, an FIR was lodged for offences under Sections 406 and 420 IPC. In G. Sagar Suri17, the Court ruled that the invocation of the jurisdiction of a criminal court for the alleged commission of offences under Sections 406/420 IPC was an abuse of the process of law. The Court had expressly recorded that there was no basis for the complainant to prosecute the appellants under Sections 406/420 IPC. In G. Sagar Suri18, the complainant had failed to substantiate misrepresentations made and how the complainant company was duped. Pertinently, apart from making the omnibus statement that the appellant with dishonest intentions and misrepresentation got a loan from the complainant company, there were no allegations of any corrupt practices by any of the accused. In G. Sagar Suri19, the Court had observed that the whole attempt of the complainant was evidently to rope in all the members of the Managing Director’s family without regard to their role or participation in the alleged offences.
On the other hand, an appeal was preferred in Sangeetaben Mahendrabhai20 against the judgment of the High Court of Gujarat wherein the High Court had dismissed the application filed by the appellant under Section 48221 CrPC for quashing a criminal case pending before the Chief Judicial Magistrate, Patan on the plea of double jeopardy for the reason that the appellant had already been tried and dealt under the provisions of Section 138 of the NI Act, 1881. In Sangeetaben Mahendrabhai22, Respondent 2 had filed a complaint under Section 138 of the NI Act and an FIR under Sections 406/420 IPC for the offence of criminal breach of trust, cheating, abetment, etc. The appellant stood acquitted in the criminal case under Section 138 of the NI Act and submitted that he cannot be tried again for the same offence. The Court in Sangeetaben Mahendrabhai23 ruled that although there may be some overlapping of facts for complaint under NI Act and Section 420 IPC, the ingredients of the two offences are entirely different and thus any subsequent case is not barred under law.
Against this factual backdrop, it is evident that the ruling of G. Sagar Suri24 is limited to the quashing of proceedings on the basis that the subsequent complaint under Sections 406/420 IPC was motivated. The ruling of G. Sagar Suri25 does not address the question of whether prosecution of complaints based on a similar set of facts under the NI Act and IPC constitutes an abuse of the process of law in itself. In G. Sagar Suri26, the Supreme Court had undertaken a view based on the facts that the subsequent complaint under the facts of the instant case was an abuse of the process of law. The said conclusion in itself cannot be taken as the basis to suggest that subsequent prosecution of the complaint under the provisions of the NI Act and IPC would amount to an abuse of the process of law or fall foul of the doctrine of double jeopardy as prescribed under Section 300 CrPC.
On the other hand, Sangeetaben Mahendrabhai27 had stipulated that the subsequent institution of a complaint under IPC after a complaint under the NI Act does not amount to the accused being punished twice for the same offence as the said two offences are different in nature. The Court in Sangeetaben Mahendrabhai28 had distinguished the judgment of G. Sagar Suri29 by holding that the issue as to whether the ingredients of both the offences were the same had neither been raised nor decided by the Court in the judgment of G. Sagar Suri30. The question of whether parallel prosecution under the NI Act and IPC constitutes an abuse of the process of law itself was not adjudicated by the Court in G. Sagar Suri31. Similarly, the Court in Kolla Veera Raghav Rao32 had held that once the conviction under Section 138 of the NI Act has been recorded, the question of complaint under Section 420 IPC is hit by Section 300 CrPC as well as Article 20(2)33 of the Constitution of India (the Constitution).
The tenability of successive complaints based on similar set of allegations: Indicia of identical offence and the bar of double jeopardy
Section 300 CrPC provides that a person who has once been tried by the court for an offence shall not be liable to be tried again for the same offence, or on the same facts for any other offence. The principle of double jeopardy is a well-established principle of criminal law. The rule of double jeopardy is also enshrined in Article 20(2) of the Constitution which provides that no person shall be prosecuted and punished more than once for the same offence. Moreover, Section 26 of the General Clauses Act, 189734 also provides that where an act or omission constitutes an offence under two or more enactments, then the offender shall not be liable to be punished twice for the same offence. The crucial requirement for attracting Section 300 CrPC is that the previous and subsequent complaint constitutes the same offence i.e. they should be identical. If, however, the two offences are distinct, then notwithstanding that the two allegations of facts in the two complaints might be similar, the benefits of the bar of double jeopardy cannot be invoked. Thus, the pertinent question is whether parallel prosecution under NI Act and IPC would amount to punishing the accused twice for the same offence.
The Court in Sangeetaben Mahendrabhai35 ruled that the ingredients of the two offences, namely, Section 138 of the NI Act and Section 420 IPC differ in terms of ingredients and do not constitute the same offence.36 In terms of whether the two complaints amount to the same offence or not, the test is whether the former offence and the offence subsequently charged have the ingredients in the sense that the facts constituting the one is sufficient to justify a conviction of the other. In State of Bombay v. S.L. Apte37, the Court had held that a plea of autrefois acquit is not applicable unless it is shown that the verdict of acquittal of the previous charge necessarily involves an acquittal of the latter. In order to determine whether the two offences are identical, it is necessary to analyse and compare not the allegations in the two complaints but the ingredients of the two offences.38 In Sangeetaben Mahendrabhai39, the Court ruled that it was the facts justifying the conviction and not the facts relied on by the prosecution that is necessary for the application of the doctrine of double jeopardy.
Given the difference in the facts justifying the conviction, the Court in Sangeetaben Mahendrabhai40 ruled that the bar of Section 300 CrPC did not prevent the subsequent institution of a complaint under IPC once the complaint was instituted under Section 138 of the NI Act. The ingredients of the two offences may be different even when one may afford a notice for the latter offence.41 It may be noted that the courts across the country have made similar distinctions based on ingredients for subsequent prosecution based on a similar set of facts and allegations under the Food Safety and Standards Act, 2006,42 Section 79 of the Information Technology Act, 200043 Section 5(2) of the Prevention of Corruption Act, 1947 and Section 409 IPC44.
The reference to a larger Bench in J. Vedhasingh45 provides the Court with an opportunity to definitively answer as to whether the institution of a complaint under IPC after a complaint has been filed under the NI Act would be hit by the bar of Section 300 CrPC or not. As seen above, the applicability of the bar of double jeopardy is conditional on the two offences being identical in terms of facts justifying convictions. In this regard, reference to the larger Bench would provide the Court with an opportunity to address the differences in the ingredients of Section 138 of the NI Act and Section 420 IPC as identified by the Court in Sangeetaben Mahendrabhai46 and rule as to whether the same would amount to an abuse of process of law. A decision on the referred question of law would bring much-needed clarity to the jurisprudence of Section 138 of the NI Act insofar as it intersects with other economic offences provided in IPC.
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2. Negotiable Instruments Act, 1881, S. 138.
3. Penal Code, 1860, S. 420.
7. Negotiable Instruments Act, 1881.
9. Code of Criminal Procedure, 1973, S. 300.
11. Penal Code, 1860, S. 120-B.
12. Penal Code, 1860, S. 406.
13. Penal Code, 1860, S. 34.
21. Criminal Procedure Code, 1973, S. 482.
33. Constitution of India, Art. 20(2).
34. General Clauses Act, 1897, S. 26.
36. In Sangeetaben Mahendrabhai v. State of Gujarat, (2012) 7 SCC 621, the Supreme Court relied on the following to establish the different ingredients between offence under Section 138 of the NI Act and Section 420 IPC:
In the prosecution under Section 138 of the NI Act, the mens rea i.e. fraudulent or dishonest intention at the time of issuance of the cheque is not required to be proved. However, in the case under IPC, the issue of mens rea may be relevant.
The offence punishable under Section 420 IPC is a serious one as the sentence of 7 years can be imposed.
In the case under NI Act, there is a legal presumption that the cheque had been issued for discharging the antecedent liability and that presumption can only be rebutted only by the person who draws the cheque. Such a requirement is not there in the offences under IPC.
In the case under the NI Act, if a fine is imposed, it is to be adjusted to meet the legally enforceable liability. There cannot be such a requirement in the offences under the IPC.
The case under the NI Act can only be initiated by filing a complaint. However, in a case under IPC, such a condition is not necessary.
38. State of Bombay v. S.L. Apte, AIR 1961 SC 578.
41. Bhagwan Swarup Lal Bishan Lal v. State of Maharashtra, AIR 1965 SC 682.
42. State of Maharashtra v. Sayyed Hassan Sayyed Subhan, (2019) 18 SCC 145; Food Safety and Standards Act, 2006.
43. Gagan Harsh Sharma v. State of Maharashtra, 2018 SCC OnLine Bom 17705; Information Technology Act, 2000, S. 79.
44. Om Parkash Gupta v. State of U.P., AIR 1957 SC 458 and State of M.P. v. Veereshwar Rao Agnihotri, AIR 1957 SC 592; Prevention of Corruption Act, 1947, S. 5(2) and Penal Code, 1860, S. 409.