Crl.M.C.No. 2652/2010 & Crl.Misc. A. No. 13888-89/2010, Crl.M.C.No. 2653/2010 & Crl.Misc. A. No. 13890-91/2010, Crl.M.C.No. 2654/2010 & Crl.Misc. A. No. 13892-93/2010, Crl.M.C.No. 2655/2010 & Crl.Misc. A. No. 13894-95/2010, Crl.M.C.No. 2656/2010 & Crl.Misc. A. No. 13896-97/2010, Crl.M.C.No. 2657/2010 & Crl.Misc. A. No. 13898-99/2010 + Crl.M.C..... Case: Shree Raj Travels & Tours Ltd. & Ors. Vs Destination of the World (Subcontinent) Private Limited. High Court of Delhi (India)
| Case Number | Crl.M.C.No. 2652/2010 & Crl.Misc. A. No. 13888-89/2010, Crl.M.C.No. 2653/2010 & Crl.Misc. A. No. 13890-91/2010, Crl.M.C.No. 2654/2010 & Crl.Misc. A. No. 13892-93/2010, Crl.M.C.No. 2655/2010 & Crl.Misc. A. No. 13894-95/2010, Crl.M.C.No. 2656/2010 & Crl.Misc. A. No. 13896-97/2010, Crl.M.C.No. 2657/2010 & Crl.Misc. A. No. 13898-99/2010 + Crl.M.C.... |
| Counsel | For Appellant: Mr. Siddharth Luthra, Sr. Advocate with Mr. Jatin Zaveri & Mr. Arshdeep, Advocates |
| Judges | Shiv Narayan Dhingra, J. |
| Issue | Negotiable Instruments Act - Sections 138, 139, 141, 145(2); Criminal Procedure Code - Section 251; Companies Act - Section 291; Indian Evidence Act - Section 106 |
| Judgement Date | September 23, 2010 |
| Court | High Court of Delhi (India) |
Judgment:
Shiv Narayan Dhingra, J.
1. This bunch of petitions has been filed by the petitioners who have been summoned by the learned Metropolitan Magistrate on a complaint by respondent under Section 138 of the Negotiable Instruments Act (in short NI Act) because of dishonour of cheque issued by the company. This Court in its judgment titled as Rajesh Agarwal v. State and Anr. Crl.MC No. 1996/2010 decided on 28th July, 2010 had considered prevailing scenario of cases under Section 138 and after considering the provisions of NI Act, Cr.P.C. and the fact that the trial of cheque-dishonour cases had to proceed in a summary trial manner observed as under:
11. The trial under section 138 of NI Act cannot be carried like any other summons trial under IPC offences. The documents placed on record of the Court about the dishonour of cheque are the documents from banks and unless the accused says that these documents are forged, or he had not issued the cheque at all, he did not have any account in the bank, the cheque was not signed by him, the cheque book was forged by the complainant or other similar claim, the evidence of the complainant about dishonour of cheque cannot be questioned, nor the complainant can be asked to depose before the court again. If the case u/s 138 N.I. Act, which is document based, is not tried in summary manner, the sole purpose of making this offence summary trial stands defeated. Thus in all cases under section 138 of N.I. Act, once evidence is given by way of affidavit, at the stage of pre-summoning, the same evidence is to be read by the court at post summoning stage and the witness need not be recalled at post summoning stage unless court of MM, for reasons, considers it necessary.
2. This Court also specified the steps in a complaint under Section 138 to be taken as under:
17. The summary trial procedure to be followed for offences u/s 138 N.I. Act would thus be as under:
Step I: On the day complaint is presented, if the complaint is accompanied by affidavit of complainant, the concerned MM shall scrutinize the complaint & documents and if commission of offence is made out, take cognizance & direct issuance of summons of accused, against whom case is made out.
Step II: If the accused appears, the MM shall ask him to furnish bail bond to ensure his appearance during trial and ask him to take notice u/s 251 Cr. P.C. and enter his plea of defence and fix the case for defence evidence, unless an application is made by an accused under section 145(2) of N.I. Act for recalling a witness for cross examination on plea of defence.
Step III: If there is an application u/s 145(2) of N.I. Act for recalling a witness of complainant, the court shall decide the same, otherwise, it shall proceed to take defence evidence on record and allow cross examination of defence witnesses by complainant.
Step IV: To hear arguments of both sides. Step V: To pass order/judgment.
18. In all above Criminal Miscellaneous Petitions the petitioners have come to this Court raising one or the other defence. I consider that since summoning order in all these cases have been issued, it is now the obligation of these petitioners to take notice under section 251 of Cr. P.C., if not already taken, and enter their plea of defence before the concerned MM court and make an application, if they want to recall any witness. If they intend to prove their defence without recalling any complainant witness or any other witness, they should do so before the Court of MM. These petitions are, therefore, hereby dismissed.
3. The learned Counsel for the petitioners in petitions at hand however, submitted that petitioners were Directors of M/s Raj Travels & Tours Ltd. and no specific averments were made by the complainant in the complaint regarding how the Directors were responsible for dishonour of the cheque and the only averment made by the complainant in the complaint was that the petitioners being Directors of the company were responsible for the day-to-day conduct of business and it is submitted that this was not sufficient to summon the Directors. Reliance was placed on various judgments.
4. As noted by this Court that the effort of the Directors of companies is to prolong the trials under Section 138 NI Act. While when the cheque issued by a Company is dishonoured and notice of demand is issued, the propriety calls that the company should pay the amount against dishonoured cheque on receiving notice from the person to whom cheque was issued, however instead of paying the cheque amount and settle the issue, the effort is to deprive the complainant of the cheque amount. 5. Supreme Court had considered the purpose of provisions of the Negotiable Instruments Act and the changes made therein in Damodar S. Prabhu v. Syed Babalal H. AIR 2010 SC 1907 and had observed that the intent of legislature was to provide a strong criminal remedy in order to deter the worryingly high incidence of dishonour of cheques. It was further observed that the dishonour of cheque can best be described as a regulatory offence that has been created to serve the public interest in ensuring the reliability of these instruments.
6. However, whatever be the law, it is apparent that the incidence of dishnour of cheques had not reduced because the law has not been implemented with same seriousness with which it was enacted, nor the Courts are ensuring that the trial of these cases take place in a summary manner as desired by the legislature without putting complainant and accused on equal footing. Today, complainant gets more harassed than the accused in pursuing a complaint under Section 138 NI Act, because of the fact that every summoning order is assailed on one or the other ground and the complainant is forced to contest the legality of orders of the MM in cases under Section 138 at the very initial stage putting complainant to a greater disadvantage. In all cases, complainants are not the companies rather in most of the cases complainants are individuals and they have to fight an unequal legal battle against companies, who have enough funds to spend on litigation and charge it to the company account. No effort is made by these companies to compromise the matter in terms of the judgment of Supreme Court in Damodar S. Prabhu v. Syed Babalal H.(supra).
7. It is a matter of common knowledge that when companies are floated and public issues are brought, big advertisements are issued giving big names as Directors and promoters of the company. These names are the names of successful CEOs, or Directors who have achieved success in other fields. Due to...
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