In a recent judgment, Justice Amit Bansal of the Delhi High Court upheld the summoning orders passed in a complaint case under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The court emphasized that at the stage of issuing summons, the Metropolitan Magistrate (MM) need not delve into the evidence but should focus on whether the basic ingredients of the offence have been prima facie made out by the complainant and supported by pre-summoning evidence.
Brief Facts of the Case:
The petitioner in CRL.M.C. 2480/2023 was Northern India Paint Colour and Varnish Co. LLP, while the respondent was Sushil Chaudhary. In CRL.M.C. 4141/2023, Sushil Chaudhary was the petitioner, and Thriving Farm Builders Pvt Ltd. was the respondent. Both cases raised similar legal issues and were thus consolidated for joint disposal.
Sushil Chaudhary sought the quashing of the order dated 27th January 2020, passed by the Metropolitan Magistrate (MM), Central, Tis Hazari Courts, Delhi. This order summoned Chaudhary in CC No. 886/2020, filed by Northern India Paint Colour and Varnish Co. LLP under Section 138 of the NI Act. The primary contention in both cases revolved around the validity of the summoning orders and the inquiry conducted under Section 202 of the Code of Criminal Procedure, 1973 (CrPC).
Contentions of the Parties:
Northern India Paint Colour and Varnish Co. LLP, the complainant in both cases, argued that the mandatory inquiry under Section 202 of the CrPC was duly conducted by the learned MM. The complainant contended that the summoning orders were based on adequate pre-summoning evidence, and it was not necessary for the MM to examine witnesses at this stage. The petitioner emphasized the presumption under Section 139 of the NI Act and asserted that the legally enforceable debt would be determined during the trial.
On the other hand, Sushil Chaudhary, the accused, contested the summoning orders, claiming that the learned MM failed to conduct the mandatory inquiry under Section 202 of the CrPC. The accused argued that a detailed examination of the terms and conditions of the Share Sale and Purchase Agreement between the parties was essential to ascertain the existence of a legally enforceable debt. Chaudhary's contention focused on the necessity for the MM to delve into the specifics of the agreement before issuing a summons.
Observations of the Court:
The Delhi High Court began by emphasizing that the mandatory inquiry under Section 202 of the Code of Criminal Procedure, 1973 (CrPC), need not necessarily involve witness examination. It reiterated the guidelines laid down in the case of Re: Expeditious Trial of Cases Under Section 138 of NI Act 1881, stating that the inquiry under Section 202 of the CrPC, read with Section 145 of the NI Act, could be conducted by taking the complainant's evidence on affidavit. The court highlighted that this approach aimed at expediting trials in complaints filed under Section 138 of the NI Act.
Justice Bansal dismissed the contentions raised by the accused, highlighting that accepting such an argument would result in a full trial being conducted before the issuance of summons, contrary to the Supreme Court's directive in Re: Expeditious Trial. The court underscored that, at the stage of issuing summons, the MM was only required to examine whether the basic ingredients of the offence under Section 138 of the NI Act had been prima facie made out by the complainant.
The court further relied on the presumption under Section 139 of the NI Act, stating that the contention regarding a legally enforceable debt would be subject to evidence and determination during the trial. Justice Bansal concluded that the learned MM had appropriately conducted the necessary inquiry under Section 202 of the CrPC before issuing the summons, upholding the summoning orders in both cases.
The decision of the Court:
As a result, CRL.M.C. 2480/2023 was allowed, and the order dated February 15, 2023, by the learned ASJ was set aside, while CRL.M.C. 4141/2023 was dismissed, affirming the order dated January 27, 2020, by the learned MM.
Case Name: Northern India Paint Colour and Varnish Co. LLP v. Sushil Chaudhary
Coram: Hon’ble Mr. Justice Amit Bansal
Case No.: CRL.M.C. 2480/2023, CRL.M.A. 9435/2023 (stay)
Advocates of the Petitioner: Mr. Kotla Harshavardhan, Ms. Mansi Sood, Ms. Rishbha Arora and Mr. Divyank Yadav, Advocates.
Advocates of the Respondent: Mr. Viraj Datar, Senior Advocate with Mr. Atul T.N. and Ms. K. Pallavi, Advocates
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