Calcutta High Court (Appellete Side)

Usha Agarwalla vs M/S. Citicorp Finance (I) Ltd on 24 July, 2023

                     IN THE HIGH COURT AT CALCUTTA
                      Criminal Revisional Jurisdiction
                             APPELLATE SIDE

Present:

The Hon'ble Justice Shampa Dutt (Paul)



                                CRR 1390 of 2019

                                         With

                                CRAN 1 of 2019

                          (Old No. CRAN 4836 of 2019)

                                 Usha Agarwalla

                                          Vs.

                          M/s. Citicorp Finance (I) Ltd.



For the Petitioner                   : Mr. Pawan Kumar Gupta,
                                       Ms. Sofia Nesar,
                                       Mr. Santanu Sett.


For the Opposite Party               : None.



Heard on                             :    06.07.2023

Judgment on                          : 24.07.2023

Shampa Dutt (Paul), J.:

1.     The present revision has been preferred praying for quashing of entire

     proceeding of complaint case being C/13276/2009 instituted under

     Section 138 of the Negotiable Instruments Act, 1881 (as amended up-to-

     date) pending before the Court of the Learned Metropolitan Magistrate,
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     9th Court at Calcutta including taking cognizance and all subsequent

     orders thereto.

2.      The petitioner's case is that on 18.03.2009, the opposite party filed

     complaint before the Learned Chief Metropolitan Magistrate at Calcutta

     therein alleging commission of offence under Section 138 of the NI Act

     against the present petitioner herein.

3.      It has been alleged in the complaint that the petitioner herein had

     entered into a loan agreement with the opposite party, amounting to

     Rs.53,110/- and that in discharge of the aforementioned loan, the

     petitioner herein issued a cheque for the same amount, being cheque no.

     272826 dated 30th November, 2008 drawn on ICICI Bank Ltd.,

     Bhubaneshwar Branch, Unit No. III, Opposite Sriya Talkies, Off.

     Janpath, Bhubaneshwar - 751 001.

4.      It has further been alleged in the aforementioned complaint that when

     the opposite party presented the cheque to his banker, the cheque was

     returned unpaid on 15.01.2009 along with the memorandum of

     dishonour containing the remark "Insufficient funds". Thereafter the

     opposite party issued a demand notice under Section 138(b) of the NI Act

     dated 5th February, 2009 therein asking the petitioner herein to make

     payment of the aforementioned amount within fifteen day of the receipt

     of such letter, however, the amount allegedly remained unpaid even after

     the stipulated period of time and due to such the opposite party had to

     file the complaint under Section 138 of the NI Act.

5.      The Learned Chief Metropolitan Magistrate took cognizance of the said

     complaint vide Order dated 18.03.2009 and was pleased to transfer the
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     said case to the Court of the Learned Metropolitan Magistrate, 9th Court

     at Calcutta (hereinafter referred to as "learned Trial Court') for hearing

     and disposal. Accordingly, Complaint Case No. C/13276 of 2009 was

     instituted against the petitioner herein.

6.      Learned Trial Court was pleased to examine the opposite party herein

     under Section 200 of Cr.P.C. and was further pleased to issue process in

     the nature of summons thereby directing the petitioner herein to appear

     before the learned Trial Court on 29th May, 2009.

7.      That even though the petitioner herein resided outside the jurisdiction

     of the learned Trial Court, the learned Trial Court did not postpone the

     issue of process as is mandated under Section 202 of the Cr.P.C.

8.      The petitioner submits that the petitioner is not the signatory of the

     cheque, being cheque no. 272826 dated 30th November, 2008 drawn on

     ICICI Bank Ltd., Bhubaneshwar Branch, Unit No. III, Opposite Sriya

     Talkies, Off. Janpath, Bhubaneshwar - 751 001. The husband of the

     petitioner namely Kailash Agarwalla is actually the signatory of the

     cheque. Therefore, the entire cause of action does not have any locus

     standi as it cannot arise against the petitioner herein because the

     petitioner was not signatory to the cheque which was allegedly

     dishonoured.

9. Mr. Pawan Kumar Gupta, learned counsel for the petitioner has

     submitted that the petitioner received the demand notice issued by the

     opposite party but before receiving the summons, the petitioner herein,

     in good faith and bona fide interest, deposited a demand draft, being DD

     No. 978321 dated 25th February, 2009 amounting to Rs.53,110/- in
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  favour of the opposite party. The demand draft amounted to a total of

  Rs.53,110/- which was the alleged amount of default has already been

  paid by the petitioner prior to receiving the copy of summons in the

  present case and the receipt of the same is already acknowledged by the

  complainant/opposite party.

10.   That even after the payment of the loan amount by the petitioner

  herein, the opposite party wrongly filed the instant complaint against the

  petitioner herein.

11.   That the impugned proceeding is otherwise bad in law and liable to be

  quashed.

12.   There is no representation on behalf of the opposite party in spite of

  due service.

13.   The petitioner has filed copies of documents in support of her

  contention that the total cheque amount has been paid by way of one

  demand draft being DD No. 978321 dated 25.02.2009. The cheque in

  this case is dated 30.10.2008. As stated in the petition of complaint it

  was dishonoured on 15.01.2009.

14.   Notice was issued on 06.02.2009.

15.   Thus, it is clear from the materials on record that the payment

  towards the petitioner's liability was not within the notice period.

16.   The Hon'ble Supreme Court in Dashrathbhai Trikambhai Patel vs

  Hitesh Mahendrabhai Patel, in Criminal Appeal No. 1497 of 2022,

  on 11 October, 2022, held:-


           "30. In view of the discussion above, we summarise
           our findings below:
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           (i) For the commission of an offence under Section 138,
           the cheque that is dishonoured must represent a
           legally enforceable debt on the date of maturity or
           presentation;

           (ii) If the drawer of the cheque pays a part or whole of
           the sum between the period when the cheque is drawn
           and when it is encashed upon maturity, then the
           legally enforceable debt on the date of maturity would
           not be the sum represented on the cheque;

           (iii) When a part or whole of the sum represented on
           the cheque is paid by the drawer of the cheque, it must
           be endorsed on the cheque as prescribed in Section
           56 of the Act. The cheque endorsed with the payment
           made may be used to negotiate the balance, if any. If
           the cheque that is endorsed is dishonoured when it is
           sought to be encashed upon maturity, then the offence
           under Section 138 will stand attracted;

            (iv) The first respondent has made part-payments after

the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the „legally enforceable debt‟ on the date of maturity. Thus, the first respondent cannot be deemed to have committed an offence under Section 138 of the Act when the cheque was dishonoured for insufficient funds; and

(v) The notice demanding the payment of the „said amount of money‟ has been interpreted by judgments of this Court to mean the cheque amount. The conditions stipulated in the provisos to Section 138 need to be fulfilled in addition to the ingredients in the substantive part of Section

138. Since in this case, the first respondent has not committed an offence under Section 138, the validity of the form of the notice need not be decided."

17. In this case, it is clear that the payment was not made within the

statutory period. So the proceedings under Section 138 N.I. Act is prima

facie maintainable.

18. The next contention of the petitioner is that the mandatory provision

of Section 202 Cr.P.C. has not been complied with by the learned

Magistrate.

19. Section 200 Cr.P.C. lays down:-

"200. Examination of complainant.-A Magistrate taking cognizance of an offence on complaint shall examine upon oath the complainant and the witnesses present, if any, and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate:

Provided that, when the complaint is made in writing, the Magistrate need not examine the complainant and the witnesses-

(a) if a public servant acting or- purporting to act in the discharge of his official duties or a court has made the complaint; or

(b) if the Magistrate makes over the case for inquiry or trial to another Magistrate under section 192:

Provided further that if the Magistrate makes over the case to another Magistrate under section 192 after examining the complainant and the witnesses, the latter Magistrate need not re- examine them."

20. Section 202 Cr.P.C. lays down:-

"202. Postponement of issue of process.

(1) Any Magistrate, on receipt of a complaint of an offence of which he is authorised to take cognizance or which has been made over to him under Section 192, may, if he thinks fit, [and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction,] postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding:

Provided that no such direction for investigation shall be made,--

(a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session; or

(b) where the complaint has not been made by a Court, unless the complainant and the witnesses present (if any) have been examined on oath under section 200.

(2) In an inquiry under sub- section (1), the Magistrate may, if he thinks fit, take evidence of witnesses on oath:

Provided that if it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session, he shall call upon the complainant to produce all his witnesses and examine them on oath.

(3) If an investigation under sub- section (1) is made by a person not being a police officer, he shall have for that investigation all the powers conferred by this Code on an officer- in- charge of a police station except the power to arrest without warrant."

21. The proceedings in this case is under Section 138 of the

Negotiable Instruments Act.

22. A Five Judge Bench of the Supreme Court in expeditious trial

of cases (for proceedings u/s 138 N.I. Act), on April 16, 2021 has

held in respect of compliance of the provision under Section 202

Cr.P.C. in such cases as follows:-

"12. Another point that has been brought to our notice relates to the interpretation of Section 202 (2) which stipulates that the Magistrate shall take evidence of the witness on oath in an inquiry conducted under Section 202 (1) for the purpose of issuance of process. Section 145 of the Act provides that the evidence of the complainant may be given by him on affidavit, which shall be read in evidence in any inquiry, trial or other proceeding, notwithstanding anything contained in the Code. Section 145 (2) of the

Act enables the court to summon and examine any person giving evidence on affidavit as to the facts contained therein, on an application of the prosecution or the accused. It is contended by the learned Amici Curiae that though there is no specific provision permitting the examination of witnesses on affidavit, Section 145 permits the complainant to be examined by way of an affidavit for the purpose of inquiry under Section 202. He suggested that Section 202 (2) should be read along with Section 145 and in respect of complaints under Section 138, the examination of witnesses also should be permitted on affidavit. Only in exceptional cases, the Magistrate may examine the witnesses personally. Section 145 of the Act is an exception to Section 202 in respect of examination of the complainant by way of an affidavit. There is no specific provision in relation to examination of the witnesses also on affidavit in Section 145. It becomes clear that Section 145 had been inserted in the Act, with effect from the year 2003, with the laudable object of speeding up trials in complaints filed under Section 138. If the evidence of the complainant may be given by him on affidavit, there is no reason for insisting on the evidence of the witnesses to be taken on oath. On a holistic reading of Section 145 along with Section 202, we hold that Section 202 (2) of the Code is inapplicable to complaints under Section 138 in respect of examination of witnesses on oath. The evidence of witnesses on behalf of the complainant shall be permitted on affidavit. If the Magistrate holds an inquiry himself, it is not compulsory that he should examine witnesses. In suitable cases, the Magistrate can examine documents for satisfaction as to the sufficiency of grounds for proceeding under Section

202."

23. In Sunil Todi vs The State of Gujarat, Criminal Appeal No. 1446

of 2021, on 3 December, 2021, held:-

"38. Section 145 of the NI Act provides that evidence of the complainant may be given by him on affidavit, which shall be read in evidence in an inquiry, trial or other proceeding notwithstanding anything contained in the CrPC. The Constitution Bench held that Section 145 has been inserted in the Act, with effect from 2003 with the laudable object of speeding up trials in complaints filed under Section

138. Hence, the Court noted that if the evidence of the complainant may be given by him on affidavit, there is no reason for insisting on the evidence of the witnesses to be taken on oath. Consequently, it was held that Section 202(2) CrPC is inapplicable to complaints under Section 138 in respect of the examination of witnesses on oath. The Court held that the evidence of witnesses on behalf of the complainant shall be permitted on affidavit. If the Magistrate holds an inquiry himself, it is not compulsory that he should examine witnesses and in suitable cases the Magistrate can examine documents to be satisfied that there are sufficient grounds for proceeding under Section 202."

24. In the present case as seen from the order dated 18.03.2009 the

Magistrate took evidence on affidavit along with documents under

Section 200 Cr.P.C. and considered the case to be suitable for issuing

process under Section 202 Cr.P.C. on examination of the documents

and the evidence of the complainant on affidavit and being satisfied

as to the sufficiency of grounds for proceeding under Section 202

Cr.P.C.

25. Thus the order dated 18.03.2009 passed by the learned

Metropolitan Magistrate, 9th Court, Calcutta being in accordance with

law (Re expeditious trial of cases u/s 138 of the N.I. Act (Supra)

and Sunil Todi vs The State of Gujarat, (Supra)) needs no

interference.