Criminal Appeal No. ... of 2010, Arising out of SLP (Crl.) No. 3915/2006 with Criminal Appeal No(S). ... of 2010, Arising out of SLP (Crl.) No(s). 4760/2006, 5689/2006, 1106/2007, 6442/2007, 6443/2007 and 6703/2007. Case: Mandvi Co-op Bank Ltd. Vs Nimesh B. Thakore. Supreme Court (India)
| Case Number | Criminal Appeal No. ... of 2010, Arising out of SLP (Crl.) No. 3915/2006 with Criminal Appeal No(S). ... of 2010, Arising out of SLP (Crl.) No(s). 4760/2006, 5689/2006, 1106/2007, 6442/2007, 6443/2007 and 6703/2007 |
| Counsel | Ranjit Kumar, Sr. Adv., Bhargava V. Desai, Rahul Gupta, Reema Sharma, Jatin Zaveri, Gagan Chhabra, Vipin Gupta, Siddharth Bhatnagar, Pawan Kumar Bansal, T. Mahipal, Jay Savla, Anmaol Doijode, Manju Sharma, V.B. Joshi, Kailash Pandey, Pragya S. Baghel, Ravi Naik, Manik Karanjawala, Sonia Nigam, Rachna Gupta, Niraj Sharma and Ravindra Keshavrao ... |
| Judges | Tarun Chatterjee and Aftab Alam, JJ. |
| Issue | Negotiable Instruments Act, 1881 - Sections 138, 145; Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 - Sections 143,144, 145, 146, 147; Negotiable Instruments Laws (Amendment) Act, 1988; Information Technology Act, 2000; Code of Criminal Procedure, 1973; Indian Evidence Act |
| Citation | AIR 2010 1402 (SC) , I(2010) BC 600 , 2010 (1) BomCR 614 , JT 2010 (1) SC 259 , 2010 (1) KLT 321 (SC) , 2010 (2) MPHT 397 , 2010 (I) OLR 306 (SC) , 2010 (1) SCALE 188 , (2010) 3 SCC 83 , [2010] 98 SCL1 39 (SC) , 2010 (1) UJ 454 (SC) |
| Judgement Date | January 11, 2010 |
| Court | Supreme Court (India) |
Judgment:
Aftab Alam, J.
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Leave granted
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In these appeals we are required to consider the special provisions laid down by section 145 of the Negotiable Instruments Act, 1881 (the Act', hereinafter) for a dishonoured cheque trial and to consider how far certain assertions made by the accused are in accordance with the provisions contained in the two sub-sections of that section.
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The High Court had before it a large number of writ petitions and applications under section 482 of the Code of Criminal Procedure. Most of those petitions were filed on behalf of the accused but a few were also at the instance of the complainants. On the basis of the grievances made and reliefs prayed for in those petitions the High Court framed the following two questions as arising for its consideration:
" (A) Whether sub-section (2) of section 145 of the Negotiable Instruments Act, 1881, (for short, "the Act") confers an unfettered right on the complainant and the accused to apply to the court seeking direction to give oral examination-in-chief of a person giving evidence on affidavit, even in respect of the facts stated therein and that if such a right is exercised, whether the court is obliged to examine such a person in spite of the mandate of section 145(1) of the Act?
(B) Whether the provisions of section 145 of the Act, as amended by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002, (for short "the amending Act of 2002") are applicable to the complaints under section 138 of the Act pending on the date on which the amendment came into force? In other words, do the amended provisions of section 145(1) and (2) of the Act operate retrospectively? "
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Answering the questions after a detailed and careful consideration of all the relevant provisions and earlier decisions of courts, the High Court held that the person (complainant or his witness) giving evidence on affidavit may be summoned by the court for putting questions as envisaged under section 165 of the Evidence Act (vide paragraph 24 of the judgment). He would also be summoned on an application made by the accused but the right of the accused is limited to cross-examination of the witness. In terms of section 145(2) the accused can undoubtedly cross-examine a person whose evidence is given on affidavit but the accused cannot insist that the witness, on coming to court, should first depose in examination-in-chief even in respect of matters which are already stated by him on affidavit (vide paragraph 25 of the judgment). The High Court further explained that for the prosecution the occasion to summon any of its witnesses who have given their evidence on affidavit may arise in two ways. The prosecution may summon a person who has given his evidence on affidavit and has been cross-examined for "re-examination". This right of the prosecution, the High Court observed, was not in dispute before it. The prosecution may also have to summon a witness whose evidence is given on affidavit in case objection is raised by the defence regarding the validity and/or sufficiency of proof of some document(s) submitted along with the affidavit. In that event the witness may be summoned to appear before the court to cure the defect and to have the document(s) properly proved by following the correct legal mode (vide paragraph 26 of the judgment).
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The High Court then considered the claim of the accused that any evidence in defence, like the complainant's evidence, may also be given on affidavit. It upheld the claim observing as follows:
"....Merely because, section 145(1) does not expressly permit the accused to do so, does not mean that the Magistrate cannot allow the accused to give his evidence on affidavit by applying the same analogy unless there is just and reasonable ground to refuse such permission. There is no express bar on the accused to give evidence on affidavit either in the Act or in the Code.........I find no justified reason to refuse permission to the accused to give his evidence on affidavit subject to the provisions contained in sections 315 and 316 of the Code."
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Coming then to the question (B), the High Court had no difficulty in holding that the provisions of sub-sections (1) and (2) of section 145 were not substantive but only procedural in nature and, therefore, those provisions would be applicable to the cases pending on the date they came into force.
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Apart from considering the two questions the High Court also laid down, on the request of the parties, a number of guidelines (vide sub-paragraphs (a) to (r) of paragraph 45 of the judgment) in regard to the procedure that the trial court, the complainant and the accused should follow in a dishonoured cheque trial on a complaint made under section 138 of the Act. We may have to refer to some of those guidelines later, at an appropriate place in this judgment.
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The High Court judgment has given rise to these seven appeals, in which the following three issues arise for consideration by this court:
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The extent of the right of the accused under section 145(2) of the Act: whether the right of the accused is limited to cross-examination of any person giving evidence on affidavit or is it open to the accused to insist that notwithstanding the evidence earlier given on affidavit, on coming to the court the complainant or his witness should first give deposition in examination-in-chief before being cross-examined by him? (appeals arising from SLP (Crl.) No.4760/2006, SLP (Crl.) No.5689/2006, SLP (Crl.) No.1106/2007, SLP (Crl.) No.6442/2007, SLP (Crl.) No.6443/2007, SLP (Crl.) No.6703/2007)
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Whether the provisions of sub-sections (1) and (2) of section 145 of the Act would apply to proceedings that were pending on February 6, 2003, the date on which those provisions were inserted in the Act? (appeal arising from SLP (Crl.) No.4760/2006).
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Whether the right to give evidence on affidavit as provided to the complainant under section 145(1) of the Act is also available to the accused? (appeal arising from SLP (Crl.) No.3915/2006)
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For a proper appreciation of the issues it would be necessary to examine the relevant legal provisions and to ascertain the object and reasons for which those provisions were brought into existence by making amendments in the Negotiable Instruments Act, 1881. The Negotiable Instruments Act was amended first by the Banking Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 and a second time by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002. The first amendment inserted Chapter XVII in the Act, comprising sections 138 to 143. Section 138 made, for the first time in the legislative history of the country, the issuance of a cheque by any person in discharge of any debt or liability owed by him to its holder, that was not honoured by the banker because of insufficiency of funds in the account, a penal offence for the drawer that would make him liable to punishment with imprisonment that might extend to one year (now, two years after the second amendment with effect from February 6, 2003) or with fine that might extend to twice the amount of the cheque or both; the four clauses of the proviso then laid down the preconditions to attract the section, as safeguards for the honest drawer. Section 139 created a presumption (rebuttable!) that the cheque was issued by the drawer in discharge of any debt or liability owed by him to its holder. Section 140 provided that it would not be open to the accused in a prosecution under section 138 to take the plea that when he issued the cheque he had no reason to believe that on presentation, the cheque may be dishonoured for the reasons stated in that section. Section 141 dealt with offences by companies. Section 142 laid down the conditions subject to which alone the court would take cognizance of any offence punishable under section 138 of the Act.
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The statement of objects and reasons appended to the bill explaining the provisions of the new chapter stated as follows:
align=justify>"This clause [clause (4) of the Bill] inserts a new Chapter XVII in the Negotiable Instruments Act, 1881. The provisions contained in the new Chapter provide that where any cheque drawn by a person for the discharge of any liability is returned by the bank unpaid for the reason of the insufficiency of the amount of money standing to the credit of the account on which the cheque was drawn or for the reason that it exceeds the arrangements made by the drawer of the cheque with the bankers for that account, the drawer of such cheque shall be deemed to have committed an offence. In that case, the drawer, without prejudice to the other provisions of the said Act, shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both.
The provisions have also been made that to constitute the said offence:-
(a) such cheque should have been presented to the bank within a period of six months of the date of its drawal or within the period of its validity, whichever is earlier; and
(b) the payee or holder in due course of such cheque should have made a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within fifteen days of the receipt of the information by him from the bank regarding the return of the cheque unpaid; and
(c) the drawer of such cheque should have failed to make the payment of the said amount of money to the payee or the holder in due course of the cheque within fifteen days of the receipt of the said notice.
It has also been provided that it shall be presumed, unless the contrary is proved, that the holder of such cheque received the cheque in the discharge of a liability. Defences which may or may not be allowed in any prosecution for such offence have also been provided to make the provisions...
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