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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]