Alok Rajgardia vs State Of U.P. And Others
2017 Latest Caselaw 7517 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

								   	    Reserved
 
										A.F.R.
 
In Chamber
 

 
Case :- APPLICATION U/S 482 No. - 14336 of 2004
 

 
Applicant :- Alok Rajgardia
 
Opposite Party :- State Of U.P. And Others
 
Counsel for Applicant :- Neeraj Pandey,G.S. Chaturvedi
 
Counsel for Opposite Party :- Govt. Advocate
 

 

 
Hon'ble J.J. Munir,J.

The applicant Alok Rajgardia is the drawer of a bounced cheque and has been summoned by the learned XIIIth Additional Chief Judicial Magistrate, Room No. 46, Agra vide order dated 29.04.2004 to stand his trial for an offence punishable under Section 138 Negotiable Instruments Act.

The aforesaid order has been passed in Complaint Case No. 3020 of 2004 (M/S S.E. Investments Limited vs. Radhika Automobiles Pvt. Ltd. and others.) and hereinafter is referred to as the impugned order; the complaint giving rise to Complaint Case No. 3020 of 2004 last mentioned is hereinafter referred to as the 'Complaint'. Alok Rajgardia is hereinafter referred to as the ''Drawer' whereas the M/S S.E. Investments Limited-opposite party no. 2 is hereinafter referred to as the "Payee'.

That facts material on the basis of which the Complaint was laid by the Payee are that the Payee are a duly incorporated company engaged in the business of financing purchase of motor vehicles, consumer durables and machinery on hire purchase secured by hypothecation. On 10.02.2000, the Drawer along with his brother Ashok Rajgardia and father K. L. Rajgardia and Vikas Nahar came to the office of the Payee requesting finance for machinery on hire purchase in the name of his company M/s Radhika Automobiles Pvt. Ltd. After satisfying themselves about the authority and antecedents of the Drawer, the Payee financed a sum of Rs. 28,00,000/- whereon Rs, 10,50,000/- were hire charges aggregating a total sum of Rs. 38,50,000/- in favour of M/s Radhika Automobiles Pvt. Ltd on condition that the Drawer would repay the loan in 35 monthly installments each worth Rs. 1,10,000/- commencing w.e.f. 10.02.2000. On 04.11.2000, the Drawer again visited the office of the Payee and requested finance to purchase two Baleno cars and one Maruti AC Car on hire purchase basis in the name of the company, that is to say, M/s Radhika Automobiles Pvt. Ltd. The Payee on being satisfied that the Drawer had requisite authority given by the Board of Directors of the Company under reference to raise finance granted in the meeting of the Board held on 28.09.2000 proceeded to process the request and financed a sum of Rs. 16,50,000/- to purchase three cars under a hire purchase agreement whereon a sum of Rs. 4,12,502/- worked out as hire charges, the loan thus aggregating to a sum of Rs. 20,62,502/-. The aforesaid loan was also advanced in favour of M/s Radhika Automobiles Pvt. Ltd and was repayable in 23 monthly installments of Rs. 89,674/- commencing 04.11.2000.

It is alleged that the Drawer issued cheque bearing no. 594446 on behalf of the company M/s Radhika Automobiles Pvt. Ltd dated 12.09.2002 worth of Rs. 50,00,000/- drawn on Canara Bank, Belanganj, Agra to discharge the company's liability and debt due on account of the loan as aforesaid.

The Drawer deposited the said cheque in account maintained with Central Bank of India, Agra for collection but the cheque was returned dishonoured by the Drawer's Bank with a remark "Funds Insufficient" on 13.09.2002. The Payee received information about the dishonour from his bank on 14.09.2002.

The Payee upon receipt of intimation of dishonour of the cheque in question sent notices dated 28.09.2002 by registered post to the four accused arrayed in the Complaint which includes the company, M/s Radhika Automobiles Pvt. Ltd, and, the Drawer, besides his brother and father, that were served upon the Drawer on 01.10.2002.

It is averred in the Complaint that despite service of notice within 15 days of intimation of dishonour of the cheque and expiry of the period of 15 days required by law from date of service of notice on the Drawer, the Drawer failed to make good the Rs. 50,00,000/- due on the dishonoured cheque, and, till the date of the Complaint.

The Complaint was accompanied by the cheque issued by the Drawer that was dishonoured in original, the bank memo from the Canara Bank, Belanganj, Agra, that is to say, the bankers to the Drawer, the memo of intimation of dishonour by the Central Bank of India, Civil Lines Branch, Agra, that is to say, the bankers to the Payee, a copy of notice dated 28.09.2002, and, registered postal receipts showing dispatch of notices besides the hire purchase agreement and statement of account relating to the Payee to show that the cheque was issued to liquidate a legally enforceable debt. The Drawer alleged that on allegations in the Complaint, the Drawer be summoned and punished for committing an offence under Section 138 Negotiable Instruments Act and Section 420 IPC.

The Complaint was filed on 13.11.2000.

Evidence in support of the Complaint was recorded on the basis of an affidavit under Section 200 Cr.P.C. read with Section 145 of the Negotiable Instruments Act, a copy of which has been annexed as annexure no. 2 to the affidavit filed in support of the Application.

The learned Magistrate by means of the impugned order has proceeded to summon the Drawer for offences punishable under Section 138 Negotiable Instruments Act as well as Section 420 IPC. As the Drawer did not respond to the summons, warrants of arrest were issued by the Magistrate by an order dated 04.10.2004. These proceedings are discernible from a perusal of the order sheet annexed as annexure no. 4 to the affidavit in support of the Application.

It is at this stage of proceedings before the Magistrate that the Drawer approached this Court through the instant Application under Section 482 Cr.P.C. filed on 13.12.2004 seeking to quash the Complaint as well as impugned order and the consequential warrants of arrest dated 04.10.2004. This Court by an order dated 15.12.2004 proceeded to issue notice to the Payee returnable in six weeks directing the matter to be listed thereafter, and, by an interim order stayed further proceedings in the case before the Magistrate.

The following interim order was recorded by this Court on 15.12.2004:

"Heard learned counsel fo rthe applicant, learned A.G.A., and also perused the material on record.

Connect with Crl. Misc. Application NO. 13431 of 2004.

		As per facts mentioned in paragraphs no. 16 to 18 of the 			affidavit, it is submitted that only on the basis of the 			affidavit, summoning order has been passed against the 			applicant which is illegal.
 
		Issue notice to O.P. No. 2 to file counter affidavit within six 		weeks.
 
		List thereafter in the next cause list.
 
		Till then, the further proceedings of complaint case no. 3020 		of 2004, M/s S.E. Investments Ltd. Vs. Radhika 				Automobiles Pvt. 	Ltd. And others, under Section 138 of 			Negotiable Instruments Act  and Section 420 I.P.C., pending 		in the 	court of XIII A.C.M.-Room No. 46, Agra shall 			remain stayed against the applicant only."
 

It may be noticed here that this Court while passing the interim order dated 15.12.2004 ordered the instant Criminal Misc. Application to be connected with Criminal Misc. Application No. 13431 of 2004 which is directed against the impugned order but at the instance of co-accused Ashok Rajgardia and K.L. Rajgardia who have been summoned for an offence punishable under Setion 420 IPC alone.

Notice issued to the Payee by this Court was served upon them as would appear from the Office report dated 26.02.2005 but no appearance has been put in on their behalf. This Court, accordingly, by an order dated 09.03.2005 granted further time to the Payee to file a counter affidavit and extended the interim order passed on 15.12.2004 until further orders.

At the hearing on 18.11.2017 also, no one put in appearance on behalf of the Payee as was the position way back in the year 2005 when the interim order was extended. The matter is accordingly being heard with the assistance of Sri Neeraj Pandey, learned counsel appearing on behalf of the Applicant and learned AGA on behalf of the State.

The first point in challenge to the Complaint and the impugned order made by Sri Neeraj Pandey is to the effect that the complainant has not examined himself on oath under Section 200 Cr.P.C. by deposing in the witness box as required by law; rather he has filed his evidence in support of the complaint to serve as a statement under Section 200 Cr.P.C. through an affidavit taking aid of the provisions of Section 145 Negotiable Instruments Act that permit a complainant to do so. It is pointed out by Sri Neeraj Pandey that the provisions of Section 145 Negotiable Instruments Act have been brought in through an amendment by Act No. 55 of 2002 with effect from 06.02.2003 whereas the Complaint was instituted on 13.11.2002, a fact apparent on a bare perusal of the record. Sri Pandey has urged that the provisions of Section 145 Negotiable Instruments Act on the strength of which the Payee's affidavit has been accepted for the complainant's evidence under Section 200 Cr.P.C. are not at all available to the Payee as valid procedure to pursue the complaint before the Magistrate inasmuch as the provisions of Section 145 Negotiable Instruments Act (supra) have been introduced with effect from 06.02.2003 and, therefore, cannot have retrospective operation or apply to complaints pending on the date of enforcement of the Amending Act (The Act No. 55 of 2002).

It is no doubt true that on un-controverted facts the date on which the Complaint was filed, provisions of Section 145 Negotiable Instruments Act were not to be found on the statute book. These were introduced through the Negotiable Instruments (Amendment and Miscellaneous Provision) Act, 2002 or Act No. 55 of 2002 vide Section 10 of the amending Act with effect from 06.02.2003. The complaint in the instant case was filed as already said on 13.11.2002. What, however, needs to be noticed that the Drawer's evidence on affidavit was accepted by the Magistrate on 06.02.2004 and the impugned order came to be passed on 29.04.2004. Thus, by the time the complainant's evidence came to be recorded the provisions of Section 145 Negotiable Instruments Act had come to be enacted dispensing with the need to have that evidence recorded on oath in the witness box under Section 200 Cr.P.C. The impugned order was passed thereafter.

The question, therefore, that falls for determination is: 'whether the provisions of Section 145 Negotiable Instruments Act would be applicable retrospectively to proceedings pending on the date when provisions of the Act No. 55 of 2002 came into force, that is to say, on 06.02.2003?'

The submission of Sri Neeraj Pandey pressed with much vehemence is that the provisions of Act No. 55 of 2002 would not apply retrospectively to pending complaints, particularly, as the provisions of Section 138 Negotiable Instruments Act are penal in nature, do not hold much substance, the issue being set at rest from what appears to be one of the early decisions rendered after a very copious and searching analysis by the Bombay High Court in Peacock Industries Limited & others vs. Budhrani Finance Ltd & others reported in 2007(1) Crimes 271 where the question involved, as the one here, was formulated as question (b) in the following words set out in paragraph 2 of the report:

"(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? "

The question was squarely answered vide paragraphs-32 to 35 of the report which reads thus:

32. Next I would like to consider the question whether the provisions of Section 145 of the Act, operate prospectively or retrospectively. This question is essentially raised in Writ Petition No.1659 of 2005 and Writ Petition No.2063 of 2005. Mr.Lopo Singh, learned Counsel for the petitioner, based his arguments on the judgment of the Supreme Court in Hitendra Vishnu Thakur and Ors. v. The State of Maharashtra and Ors. 1994 Supreme Court Cases (Cri.) 1087. In the light of the law laid down by the Supreme Court in that case it was submitted that the amended provisions of Section 145 clearly affect substantive rights of the accused contained in Chapter XX and XXI and Section 461 of the Code as well as the rights of accused under various provisions of the Evidence Act relating to examination of the witnesses.

33. On the other hand Mr.Aney, learned senior counsel appearing for the complainant in that case submitted that this question is no longer res integra and it has been answered by this Court in M/s.Indraprastha Holdings Ltd. v. Shri Vijay J.Shah and Anr. CDJ 2006 BHC 149. He further submitted that where the Amending Act is to substantive law it operates prospectively whereas any amendment to procedural law it must operate retrospectively unless a contrary intention is seen in the amending Act. In support of this proposition, he too placed reliance upon the judgments of the Supreme Court in Hitendra Thakur's case and on Rajendrakumar v. Kalyan . Mr.Aney further submitted that the Code of Criminal Procedure and the Evidence Act are general laws and are statutes primarily of a procedural or enabling nature, and the rights created thereunder can always be altered or changed by the Legislature specifically intended for special situations. The Legislature is competent to legislate on a class of offences and to provide separate procedure to deal with the same. He then submitted that in view of the non-obstante clause in Section 145, the provisions of the Code cannot have any bearing, and their inapplicability cannot be seen as a denial of a substantive right.

34. This Court in M/s.Indraprastha Holdings Ltd. (supra) has considered the very question whether the provisions of the Negotiable Instruments Act, 1881 as amended by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 are applicable to the complaints under Section 138 of the Act which are pending on the date on which the Amending Act came into force. While dealing with the said question several judgments of the Supreme Court including the judgment in the case of Hitendra Thakur (supra), on which heavy reliance was placed upon, the learned Single Judge held that most of the provisions inserted by the Amending Act of 2002 and in particular Section 145 are purely procedural in nature and there is nothing in the Amending Act to indicate that the provisions therein were intended to apply prospectively. The said judgment also quoted the principles culled out from Hitendra Thakur's case, and observed that every litigant has a vested right in substantive law, and that amendment which created new disabilities or created new rights and liabilities only would be prospective in operation. I do Page 2486 agree with the view expressed by the learned Single Judge in M/s. Indraprastha Holdings Ltd. I, however, would like to add few more lines in support of that view.

35. A bare look at the provisions contained in Chapter XX and XXI or Section 461 of the Code would show that there is nothing contained therein that could be said to amount substantive right. Chapter XX deals with the trial of summons case whereas Chapter XXI is concerned with summary trials. Both chapters are in fact concerned with the procedure to be followed in summons or summary trials. The provisions contained in these chapters did not indicate any substantive right. Moreover, the provisions of Section 145 begin with a non-obstante clause carving out exception to the provisions of the Code. Therefore, even if it is accepted that any of the provisions contained in Chapter XX and XXI or Section 461 creates substantive right, the effect of non-obstante clause is to exclude anything adverse that may be contained in the Code while interpreting and implementing the amended provisions of Section 145. The Code of Criminal Procedure and the Evidence Act are general laws and the rights created thereunder cannot be termed as substantive rights or vested rights of substantive nature causing any prejudice whatsoever to the accused by the Amending Act of 2002 and in particular Section 145. A bare perusal of Section 145 show that both the sub-sections (1) and (2) as introduced by the Amending Act of 2002 fall within the realm of procedural law, and hence they would be applicable to the pending cases since there is no vested right in an accused in the procedural law. Moreover, the object which influenced the Parliament to introduce the provisions of Section 145 cannot be overlooked. The observations of the Supreme Court in Rajendra Kumar's case (supra) are also useful. The Supreme Court in that case has observed that some differentiation exists between a procedural statute and statute dealing with substantive rights and in the normal course of events, matters of procedure are presumed to be retrospective unless there is an express ban on to its retrospectivity. It is against this backdrop the provisions contained in Section 145 cannot be said to have prospective effect and it must operate retrospectively."

It was thus held in re Peacock Industries Limited (supra) by the Bombay High Court that the provisions contained under Section 145 of Negotiable Instruments Act do not have prospective effect and must be held to operate retrospectively. The very elaborate and wholesome treatment of the issue would not leave anything for this Court to take a different view but before this Court would enter its respectful agreement to the view expressed by the Bombay High Court, there is to guide an authoritative pronouncement by the Supreme Court in M/s Mandavi Co-op Bank Ltd. v. Nimesh B. Thakore reported in JT 2010(1) SC 259 where in paragraphs-28 & 29 of the report, it has been held thus:

"28. Mr. Ranjit Kumar also made a feeble attempt to contend that the provisions of sections 143 to 147 inserted in the Act with effect from February 6, 2003 would operate prospectively and would not apply to cases that were pending on that date. The High Court has considered the issue in great detail and has rightly taken the view that the provisions of sections 143 to 147 do not take away any substantive rights of the accused. Those provisions are not substantive but procedural in nature and would, therefore, undoubtedly, apply to the cases that were pending on the date the provisions came into force. We are fully in agreement and in order to buttress the view taken by the High Court we will only refer to a decision of this court.

29. In Gurbachan Singh v. Satpal Singh and Ors [JT 1989(4) SC 38:1990 (1) SCC 445], the court was called upon to consider whether section 113A of the Evidence Act that created a presumption as to abetment of a suicide by a married woman would operate retrospectively or prospectively. The court held:

"37. The provisions of the said section do not create any new offence and as such it does not create any substantial right but it is merely a matter of procedure of evidence and as such it is retrospective and will be applicable to this case. It is profitable to refer in this connection to Halsbury's Laws of England, Fourth Edition, Volume 44 page 570 wherein it has been stated that:

"The general rule is that all statutes, other than those which are merely declaratory or which relate only to matters of procedure or of evidence, are prima facie prospective, and retrospective effect is not to be given to them unless, by express words or necessary implications, it appears that this was the intention of the legislature..."

38. It has also been stated in the said volume of Halsbury's Laws of England at page 574 that:

"The presumption against retrospection does not apply to legislation concerned merely with matters of procedure or of evidence; on the contrary, provisions of that nature are to be construed as retrospective unless there is a clear indication that such was not the intention of Parliament.""

(emphasis supplied)

The decision of their Lordships of Supreme Court in re M/s Mandavi Co-op Bank Ltd (supra) clinches the possible scope for argument, if any, available to Sri Neeraj Pandy, though, in the opinion of this Court, the decision of the Bombay High Court had set the controversy at rest.

Thus, this Court finds no substance in the submission of Sri Neeraj Pandey that the Payee could not have been permitted to lead evidence on affidavit on the basis of provisions of Section 145 Negotiable Instruments Act introduced subsequent to the filing of the complaint by Act No. 55 of 2002 with effect from 06.02.2003. The said provision is available to a complainant whose complaint was pending on the date when the Section 145 Negotiable Instruments Act last mentioned came into force. Thus, the submission of Sri Neeraj Pandey that the provisions of Section 145 of the Negotiable Instruments Act introduced through Act No. 55 of 2002 with effect from 06.02.2003 cannot have retrospective operation and , therefore, would not apply to pending cases is not fit to be accepted.

The second limb of challenge to the impugned order is to the effect that the Magistrate could not have summoned the applicant for an offence punishable under Section 420 IPC based an affidavit evidence of the Drawer taken on record in place of his evidence in the dock on oath under Section 200 Cr.P.C. Sri Pandey contends that the special procedure envisaged under Section 145 Negotiable Instruments Act is available only to the complainant who invokes the provisions of Section 138 of the said Act. The said provisions would have no application in cases of offences other than Section 138, and, surely not to an offence punishable under the Penal Code like Section 420 IPC.

A perusal of chapter XVII of the Negotiable Instruments Act shows that it is titled as "Of Penalties in case of Dishonour of Certain Cheques for Insufficiency of Funds in the Accounts." The aforesaid chapter with Sections 138 to 142 was introduced in the Negotiable Instruments Act by Act No. 16 of 1988 with effect from 01.04.1989.

The above provisions were incorporated in the Act aforesaid for the purposes of safeguarding and sustaining the credibility of commercial transactions and to ensure that transactions through this particular Negotiable Instrument, that is, a cheque becomes a dependable way of transacting business. The provision was rigorously used with proliferation of litigation by way of complainants under Section 138 of the said Act. It was felt that the procedure provided under the Code of Criminal Procedure for recording of evidence under Sections 200 and 202 Cr.P.C. obliging a complainant to tender evidence on oath in the dock was not in keeping with the special context of a prosecution under Section 138 Negotiable Instruments Act. It was, therefore, that the Parliament with the object of ensuring that the procedure in a complaint under Section 138 Negotiable Instruments Act becomes less cumbersome, and, pending trials as well as new trials are expedited, introduced the provisions of Section 143 to 147 to the existing Chapter XVII of the said Act.

Section 145 of the Negotiable Instruments Act is being quoted in extenso:

145. Evidence on affidavit.--

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the evidence of the complainant may be given by him on affidavit and may, subject to all just exceptions be read in evidence in any enquiry, trial or other proceeding under the said Code.

(2) The Court may, if it thinks fit, and shall, on the application of the prosecution or the accused, summon and examine any person giving evidence on affidavit as to the facts contained therein.

A contextual analysis of the provisions of Section 145 of the Act leaves no manner of doubt that the special procedure enabling the complainant to give evidence on affidavit notwithstanding anything contained in the Code of Criminal Procedure is a procedure available only in relation to a complaint for an offence punishable under Section 138 Negotiable Instruments Act. In the opinion of the Court, the said special procedure cannot be utilized or invoked by a complaint, the Drawer, in this case, to prosecute the accused for an offence under Penal Code; in this case, the Payee under Section 420 IPC. Thus, the impugned order summoning the applicant to stand his trial for an offence punishable under Section 420 IPC on the basis of affidavit evidence received by the learned Magistrate with the aid of Section 145 of the Negotiable Instruments Act is manifestly illegal and cannot be sustained. Thus, the impugned order in so far as it relates to summoning the applicant for an offence punishable under Section 420 IPC is not sustainable and is liable to be quashed.

In the result, the instant application is partly allowed. The impugned order only to the extent that it summons the applicant to stand his trial for an offence punishable under Section 420 IPC is quashed. The rest of the order by which the applicant has been summoned to stand trial for an offence punishable under Section 138 of the Negotiable Instruments Act is upheld.

The Magistrate would proceed with the complaint under Section 138 of the Negotiable Instruments Act in accordance with law and conclude the trial in accordance with provisions of Section 143 (2) &(3) of the Act. Interim order dated 15.12.2004 stands vacated.

Let a copy of this judgment be certified to the Magistrate concerned forthwith.

Order Date :-01.12.2017

Deepak