Case BriefsHigh Courts

Jammu and Kashmir High Court, Srinagar: Sanjeev Kumar, J., while addressing a matter in respect to Section 138 NI Act, stated that

“…issuance of process and putting a person to trial is a serious matter and the Magistrate, while exercising such power cannot afford to be mechanical or lackadaisical.”

Petitioner has sought quashment of the Order passed b Judicial Magistrate in the case file titled as Aijaz Ahmad Dar v. Zulfikar Ahmad Dar, whereby and where under trial court has while taking cognizance of complaint filed by the respondent under Section 138 of the Negotiable Instruments Act, has issued the process for appearance of the accused (petitioner).

Respondent instituted a complaint under Section 138 NI Act against the petitioner in trial court. It was alleged that respondent had lent more than two crores and seventy-five thousand to the petitioner through different modes.

Petitioner had paid part of the said amount and was reluctant t pay the balance amount. But the matter was settled in the month of October/November 2019. Petitioner discharged his liability by making payment of Rs 40 Lakhs in cash and issued 4 cheques for amount of Rs 32 Lakhs and amount of Rs 10 lakhs was to be paid in a short period of time.

Further, it was stated that before the respondent could present the cheques for encashment to the bank, he was requested by the petitioner not to present cheque dated 10-05-2020 for an amount of Rs.10 lacs for encashment with a promise that petitioner would make the payment of the entire amount once the lockdown imposed by the Government due to COVID-19 was lifted.

Petitioner did not keep his promise and respondent presented the remaining three cheques which were all dishonoured for the reason of insufficient balance. On informing the petitioner about the same, he was requested by the respondent to pay the amount of Rs 42 lakhs but he avoided the same.

In view of the above, respondent served a demand notice. Despite having received the same, petitioner failed to liquidate the amount and hence the respondent filed the complaint which is impugned in the present petition.

Analysis, Law and Decision 

Understanding of the term ‘Cognizance’

High Court explained the meaning of the word “Cognizance”. The said word means ‘knowledge’ or ‘notice’ and taking cognizance of offence means, ‘taking notice’ or ‘become aware of the alleged commission of offence’.

The term ‘cognizance of offence’ is nowhere defined in the Code of Criminal Procedure.

Further, the Bench stated that Sections 190 to 199 of the CrPC deal with method and the limitations, subject to which various criminal Courts ought to take cognizance of offences.

In the Supreme Court decision of R. R. Chari v. State of U.P, AIR 1962 SC 1573, held that:

 “Taking cognizance does not mean any formal action or accepted action of any kind but occurs as soon as a magistrate, as such involves his mind to the suspected commission of the offence.”

Court observed that generally the Magistrates, before whom the complaint of facts constituting offences are presented, mix up the ‘cognizance’ and the ‘issuance of process’.

The cognizance in matters like the present one is taken under Section 190 CrPC and it is only after the Magistrates takes cognizance under Section 190 CrPC, he proceeds to record the preliminary statement of the complainant and his witness, if any present, so as to find out whether the allegation in the complaint, which constitutes an offence, are substantiated.

Sometimes on not being satisfied after taking cognizance, the Magistrate postpones the issue of process and resorts to inquiry under Section 202 of CrPC.

Preliminary Statement and Section 138 NI Act

High Court made a very pertinent observation that, in the matter of complaint under Section 138 NI Act, in which the ingredients of offence are clearly pleaded and made out with the support of documentary evidence, the omission to discuss the preliminary statement of the complainant and his witness may be an irregularity, but that would not vitiate proceedings unless in the Court’s opinion a failure of justice has in fact been occasioned.

In view of the above-stated discussion, Court did not accept the plea of the petitioner that for not discussing and analysing preliminary statements of complainant and his witness the impugned order is vitiated.

Another observation laid down in view of the facts of the present matter was that, in a case involving the dispute purely of a civil nature, the criminal law cannot be set in motion but, it is equally well settled that certain offences like the offences of cheating, criminal breach of trust, criminal misappropriation and offence under section 138 of the NI Act do arise out of the civil transactions and if the ingredients of offence/offences are made out, criminal law too can be set in motion alongside the civil remedy for resolution of the dispute. 

Mens Rea and Dishonour of Cheque

Section 138 creates a statutory offence in the matter of dishonour of cheques on the grounds of insufficiency of funds in the account maintained by a person with the banker and that it exceeds the amount arranged to be paid. Generally, in the criminal law, mens rea is an essential component of crime but dishonour of cheque is a criminal offence where there is no need to prove a mens rea.

In the present matter, enough material was appended to put the petitioner on notice to face the trial.

Hence, complaint filed by the respondent and impugned summoning order issued by the trial court were fully in consonance with the law and required no interference.

In view of the above, petition was dismissed. [Zulfikar Hussain Dar v. Aijaz Ahmad Dar, 2021 SCC OnLine J&K 345, decided on 17-05-2021]

Case BriefsHigh Courts

Manipur High Court: In a petition filed under Section 482 of Code of Criminal Procedure for quashing criminal compliant filed before the Judicial Magistrate, 1st Class, Churachandpur, MV Muralidaran, J., observed that

“It was incumbent upon the court below to have first discovered the basic nature of the dispute which altogether involves question of actual payment.”

The petitioner 1 and 2 are the Chief and Secretary of Lamdan Village Authority. The respondent was the ex-Secretary of Lamdan Village Authority and had voluntarily resigned from the post on 21-10-2013.

The respondent challenged the proceedings of the Special General Body Meeting held on 08-06-2013 thereby appointing the present petitioner-accused 1 as Chief before the customary Court as well as before the Deputy Commissioner, Churachandpur , his objection was, however, rejected as the petitioner-accused 1 was properly appointed. A Civil Suit was also filed by the respondent to restrain petitioner-accused 1 from acting as Chief and declare him the Chief of the Village but he did not succeed in that as well. The present respondent then filed the criminal complained before the Judicial Magistrate, 1st Class, Churachandpur regarding cutting down of trees belonging to the common forest and selling them without the consent of the villagers.

The present petition was filed on the ground that the respondent had given the incorrect facts about the civil suit and had also filed a malicious complaint in order to harass the petitioner-accused 1 and failed to appear before the concerned Magistrate. There was a non-disclosure of material facts relating to payment of full transaction in a money claim.

The main issue was as to whether the petition filed by the complainant before the Judicial Magistrate, 1st Class, Churachandpur is confined to civil dispute and the course of action so adopted is abuse of process of the Court?

The Court observed that after perusal of the statement of the complainant-respondent and witnesses and careful scrutiny of records, it is established that the dispute relates to the civil nature, moreover, the respondent has concealed the material and relevant facts relating to the actual transaction that took place.

The Court relied on the judgment in the case of GHCL Employees Stock Option Trust v. India Infoline Ltd., (2013) 2 SCC (Crl) 414 wherein the Supreme Court had elaborately discussed the controversy in hand and held that

“There is no dispute with regard to the legal proposition that the case of breach of trust or cheating are both a civil wrong and a criminal offence, but under certain situations where the act alleged would predominantly be a civil wrong, such an act does not constitute a criminal offence.”

The Court was, of the opinion that the lower Court failed to determine the nature of dispute first which was predominantly of civil nature and was deliberately categorized as a criminal offence in order to wreck vengeance.

The Court also relied on the judgment in the case of Inder Mohan Goswami v.  State of Uttaranchal, (2007) 12 SCC 1, wherein it was held that,

“The High Courts have been invested with inherent powers, both in civil and criminal matters, to achieve a salutary public purpose. A court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution.”

Applying the said principle to the case at hand, the Court observed that

“The inherent power under Section 482 CrPC is not to be exercised by this Court generally to stifle the legitimate prosecution but here the prosecution has been launched, in concealment of material facts in the name of wrecking vengeance on the applicants”.

Perusing the statement of the complainant and witness recorded under Sections 200 and 202 Cr.P.C. respectively, in support of the complaint the Court came to the conclusion that

“no whisper regarding manner of committing forgery has been made which may give credence to the money claim. Perusal of the record further shows that as per annexures appended to the present application, the matter has been finally settled amicably. It is surprising that after the Petitioners had made it specific allegations regarding the respondent.”

The Court noticed that the complainant “very cleverly chose to brand a civil dispute as criminal offence”. It is obvious that the entire proceedings initiated at the instance of the complainant is in abuse of the process of the Court and the ends of justice requires that such proceedings which have been initiated with an ulterior motive should not be allowed to go unchecked as that would adversely affect the ends of Justice. When the dispute in question is discovered to be predominantly of civil nature then an attempt to make it criminal offence should be thwarted and discouraged. The payment made in full satisfaction of the transaction is to be ascertained on the face of evidence and documents which may be scrutinized by the civil court of the competent jurisdiction.

“The complainant instead of choosing proper forum for realization of the claimed outstanding amount, has chosen a different path which will not serve the ultimate purpose of full payment. The dispute in question is purely of civil nature and the proceedings in question are discovered to be misuse of the process of the Court and the same cannot be allowed to go on any further.”

Allowing the petition, the Court held that the entire proceeding was initiated with an ulterior motive and is an abuse of the process of the Court and the ends of Justice and therefore is liable to be quashed.

[M. Khuripou v. Pamei Dimpu, Crl. Petn. No. 24 of 2014, decided on 28-02-2020]


Appearance made before the Court by:

For the Petitioner/Accused (s) : Advocate N. Umakanta

For the Respondent : Advocate S. Abung