Citation : 2025 Latest Caselaw 6195 Ori
Judgement Date : 24 June, 2025
AFR IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No. 2479 of 2024
An application under Section 482 of the Code of Criminal Procedure.
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1. Satyabadi Sahu
2. Suresh Kumar Sahu ...... Petitioners
-versus-
Santosh Kumar Muni ...... Opp. Party
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For Petitioners : Mr. Manoranjan Acharya, Advocate
For Opp. Party : Mr. Jugala Kishore Panda, Advocate
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CORAM:
HON'BLE MISS JUSTICE SAVITRI RATHO
JUDGMENT
24.06.2025
Savitri Ratho, J This application under Section 482 of the Code of
Criminal Procedure has been filed challenging the order dated
01.07.2023 passed by the learned Sub Divisional Judicial
Magistrate (in short "SDJM"), Berhampur in 1.C.C. No. 219 of
2023, taking cognizance of the offence under Section 138 of the
Negotiable Instruments Act (in short "NI Act") and the criminal
proceeding i.e. pending against the petitioners. The relevant portion
of the prayer is extracted below :-
"It is therefore prayed that in view of the submissions made above, the CRLMC be admitted, records be called for and after hearing the parties the same be allowed and the order of cognizance dt. 01.07.2023 passed in l.C.C. case No. 219 of 2023 and the entire criminal proceeding i.e. l.C.C. case No. 219 of 2023 pending in the court of the learned SDJM Berhampur may kindly be quashed in the interest of justice"......
CASE OF THE COMPLAINANT
2. The complainant-opposite party (hereinafter "the
complainant") is the owner of Bhagyalaxmi Bhandar Milk Point.
The accused - petitioners (hereinafter "the petitioners") and the
complainant are known to each other. The petitioners are running a
rice mill at Golapali under Aska Police Station. The petitioners
used to supply rice to the father of the complainant. His father died
in the year 2020 and the complainant took over the business of his
father and paid Rs.22,00,000/- in advance to the petitioners in
February, 2022, for providing him five loads of rice in two months
intervals. When the petitioners did not supply the rice to him, he
demanded return of the advanced amount. After repeated visits and
requests, on 17.03.2023 the petitioners gave him a cheque bearing
no. 009671 of Corporation Bank, Aska Branch for Rs.22,00,000/-
On 21.03.2023 the complainant deposited the cheque in
his account at SBI Main Branch, Berhampur but it was returned to
him on the same day as the said cheque was an old one. After
consulting to the petitioners, regarding the dishonour of cheque the
complainant on 03.04.2023 again deposited the aforementioned
cheque in his account at Axis Bank, Berhampur for encashment.
The cheque was not cleared but the same was dishonoured and
retuned to him on the same day. On 20.04.2023 the complainant
sent a statutory demand notice through his advocate by registered
post to the petitioners which was received on 28.04.2023. the
petitioners gave a false denial on 06.05.2023. As they did not make
payment till 13.05.2023, the complainant filed 1.C.C. No. 219 of
2023 in the Court of the learned S.D.J.M., Berhampur for
realisation of the cheque amount.
REPLY OF THE PETITIONERS TO THE STATUTORY
NOTICE.
3. The petitioners replied to the notice on 06.05.2023
stating that cheque in question was lost in the year 2020 for which
the petitioners had intimated to the bank on 15.07.2020 to stop
payment. From the legal notice the petitioners learned that the
complainant had stolen the cheque and tried to encash it to put the
petitioners to financial loss. Corporation Bank had merged with
Union Bank of India in the year 2020 and the cheque was not
circulation, so how could the cheque be placed by the complainant.
The petitioners proposed to initiate a criminal case against the
complainant for utilizing a stolen cheque unless he refrained from
making baseless allegations.
IMPUGNED ORDER
4. On 01.07.2023 the learned S.D.J.M., Berhampur found
existence of prima facie materials to proceed against the petitioners
and took cognizance of the offence under Sec. 138 N.I. Act. and
issued summons to the petitioners, after conducting enquiry on
verification of documents namely - xerox copy of cheque along
with original one for verification, copy of advocate notice,
original postal receipt, cheque return memo and court fee
worth of Rs.1000/- only.
SUBMISSIONS
5. Mr. M.R. Acharya, learned counsel for the petitioners
submitted that the order of cognizance is liable to be set aside on
the following grounds, namely:-
(i) The cheques were not dishonored on account of lack of
sufficient funds in the account of the petitioners or because the
amount mentioned in the cheque exceeded the arrangement made
with the bank. The cheques were returned as Corporation bank had
merged with Union Bank and the cheques were no longer valid
instruments.
(ii) The cheques had been lost for which instruction had been
sent to the bank on 15.07.2020 to stop payment. But the cheques
have been subsequently misutilised by the complainant.
(ii) Corporation Bank had merged with Union Bank on
01.04.2020, so the old cheques of Corporation bank could not have
been issued to the complainant.
6. The following grounds though not raised during hearing
of the case, have been mentioned in the CRLMC:-
iii) No initial statement of the complainant has been
recorded either orally or through affidavit.
iv) The ground that cognizance could not have been taken
without conducting enquiry under Section 202 Cr.P.C. as the
petitioners reside out side the jurisdiction of the Court
v) The case could not have been filed in the Court of the
learned S.D.J.M.,Berhampur as the issuing bank is located in Aska.
vi) Cognisance of the offence has been taken mechanically
by only looking at the documents.
7. The following documents have been annexed to the
CRLMC :-
i) One page of the Notification GSR 154 (E) dated
04.03.2020 of the Central Government containing"The
Amalgamation of Andhra Bank and Corporation Bank into Union
Bank of India Scheme" as Annexure 1.
ii) Copy of the order of cognizance, the complaint petition,
the cheque return memo of Axis bank, legal notice dated
20.04.2023, reply dated 06.05.2023 of the petitioners, letter dated
15.07.2020 addressed to the Branch Manager Corporation Bank,
Aska, and letter dt. 22.03.2023 to the Branch Manager Union
Bank, Aska as Annexure 2 Series.
8. In support of his submission that the order of cognizance
should be set aside as no offence under Section 138 of the N.I. Act
is made out against the petitioner in view of the non existence of
Corporation Bank when the cheque was presented, Mr. Acharya,
learned counsel for the petitioners relied on the decision of the
Allahabad High Court in the case of Smt. Archana Singh Gautam
vs. State of U.P. & Another in Case No. 9536 of 2024 decided on
05.06.2024.
9. Mr. Jugala Kishore Panda, learned counsel for the
opposite party relied on the decisions of this Court in the case of
Laxmikanta Sahu vs. Santosh Kumar Muni (CRLMC No. 2058
of 2024 decided on 20.02.2025) and in the case of Satyabadi Sahu
& Another vs. Chitta Ranjan Panda (CRLMC No. 2138 of 2024
decided on 23.12.2024). He also submits that in CRLMC No. 2138
of 2024, the present petitioners were the accused and had
approached this Court under Section 482 of Cr.P.C. raising the
same objections to the order of cognizance and this Court while
setting aside the order of cognisance, remitted back the case to the
learned trial Court for recording his pre-summoning/initial
statement under Section 202 of Cr.P.C. before issuing summons.
STATUTORY PROVISIONS
10. Section 200 and Section 202 of the Cr.P.C. and Section
138 and Section 145 of the NI Act, which are relevant for deciding
the case are extracted below:-
"Section 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."
"Section- 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."
"Section 138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to
have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice."
"Section 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."
JUDICIAL PRONOUNCEMENTS
11. In the case of Smt. Archana Singh Gautam (supra), the
Allahabad High Court has held as follows:-
"6. After hearing the rival submission of the counsel for the parties and perused the record, it is clear that the Allahabad Bank had merged into the Indian Bank on 01.04.2020. Thereafter, a wide circular was made by the Indian Bank in newspapers mentioning the fact that all the cheques issued by Allahabad Bank can be exchanged with the cheques of Indian Bank by 30.09.2021, and the cheque from Allahabad Bank will be honoured by 30.09.2021. Therefore, the cheque issued by the Allahabad Bank was valid till 30.09.2021, and all the cheques of Allahabad Bank which were presented before the Indian Bank till 30.09.2021, were honoured by the Indian Bank, and after 30.09.2021, cheques issued from the account maintained by the erstwhile Allahabad Bank were declared invalid for honouring. Section 138 N.I. Act prescribes the condition for initiation of proceeding on bouncing the cheque in the proviso (a) of Section 138 N.I. Act. As per the proviso (a) of Section 138 N.I.
Act, cheque must be presented to the Bank during its validity. Section 138 N.I. Act is being quoted as under:-
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the Bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that Bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for [a term which may be extended to two years'], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless--
(a) the cheque has been presented to the Bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the Bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice."
7. From the perusal of Section 138 N.I. Act, it is clear that if any invalid cheque is presented before the Bank and the same was dishonoured, then there is no liability under Section 138 N.I. Act would be attracted, and the cheque of Allahabad Bank is invalid after 30.09.2021 after merging the Allahabad Bank into the Indian Bank on 01.04.2020. Therefore, dishonouring such cheques after 30.09.2021 will not attract liability u/s 138 N.I. Act.
8. It is also relevant to mention here that as per Section 118 (b) of N.I. Act a cheque shall be deemed to be drawn on the date which is mentioned in the cheque even if same may post dated.
9. In the present case, a cheque dated 02.06.2023 of erstwhile Allahabad Bank was presented to the Indian Bank on 21.08.2023, and the same was returned on 25.08.2023 with the endorsement "wrongly delivered not drawn on us". Therefore, the cheque in question was invalid on the date of presentation before the Indian Bank."
In the case of Laxmikanta Sahu (supra), this Court had
held:-
"6. Section 143 (2) of N.I. Act mandate that the cases of present nature needs to be disposed of as expeditiously as possible within a period of six months. Keeping in view the mandate of law, I am of the considered view that the technical objection raised by the opposite party needs to be cured at any stage, for that the proceeding
shall not delayed. Hence, I allow the petition and set aside the order dated 29.06.2023 passed by the learned S.D.J.M., Berhampur in 1CC Case No.217 of 2023 and remit back the matter to the learned trial court for affording opportunity to the complainant to record the pre-summoning/initial statement under Section 202 Cr.P.C. and the trial court shall proceed in accordance with law thereafter."
In the case of Satyabadi Sahu (supra), this Court in
similar circumstances, after referring to the decisions of the
Supreme Court in the case of K.S. Joseph vs Philips Carbon Black
Ltd & another : (2016) 64 OCR (SC) 361 and Suo-Motu Writ
petition (Crl) No. 2 of 2020 and this Court in CRLMC No.3347 of
2018 decided on 09.07.2021, has set aside the impugned order
and remitted the matter to the learned trial Court for affording
opportunity to the complainant to record presummoning / initial
statement under Section 202 Cr.P.C. before issuing summons
below held as follows:-
"8.... It appears from the impugned order that the trial Court has not resorted to the procedure contemplated under Section 202 Cr.P.C. and by dispensing with the recording of the presummoning evidence proceeded to take cognizance of the offence under Section 138 of the N.I. Act on the basis of the documents form part of the
complaint. Therefore, the impugned order is not sustainable. Accordingly the impugned order dated 10.08.2023 passed by the learned S.D.J.M., Berhampur in 1.C.C. Case No.329 of 2023 is set aside and the matter is remitted back to the learned trial Court for affording opportunity to the complainant to record the presummoning/ initial statement under Section 202 Cr.P.C. before issuance of summons to the petitioners. Thereafter, the learned trial Court shall proceed with the complaint in accordance with law.
9. Needless to note that, the trial for commission of offence under Section 138 of the N.I. Act mandated to be completed within the stipulated time framed as prescribed under the statute. Therefore, it is expected that the trial Court would do well to see that the case is disposed of as expeditiously as possible."
In Suo Motu Writ Petition (Crl) No.2 of 2020 (supra),
the Supreme Court has held as follows: -
"INQUIRY UNDER SECTION 202 OF THE CODE IN RELATION TO SECTION 145 OF THE ACT.
10. Section 202 of the Code confers jurisdiction on the Magistrate to conduct an inquiry for the purpose of deciding whether sufficient grounds justifying the issue of process are made out. The amendment to Section 202 of the Code with effect from 23.06.2006, vide Act 25 of 2005, made it mandatory for the Magistrate to conduct an inquiry before issue of process, in a case where the
accused resides beyond the area of jurisdiction of the court. (See: Vijay Dhanuka & Ors. v. Najima Mamtaj & Ors.: 2014) 14 SCC 638, Abhijit Pawar v. Hemant Madhukar Nimbalkar and Anr: (2017) 3 SCC 528, and Birla Corporation Limited v. Adventz Investments and Holdings Limited & Ors. (2019) 16 SCC 610). There has been a divergence of opinion amongst the High Courts relating to the applicability of Section 202 in respect of complaints filed under Section 138 of the Act. Certain cases under Section 138 have been decided by the High Courts upholding the view that it is mandatory for the Magistrate to conduct an inquiry, as provided in Section 202 of the Code, before issuance of process in complaints filed under Section 138. Contrary views have been expressed in some other cases. It has been held that merely because the accused is residing outside the jurisdiction of the court, it is not necessary for the Magistrate to postpone the issuance of process in each and every case. Further, it has also been held that not conducting inquiry under Section 202 of the Code would not vitiate the issuance of process, if requisite satisfaction can be obtained from materials available on record.
11. The learned Amici Curiae referred to a judgment of this Court in K.S. Joseph v. Philips Carbon Black Ltd & Anr. (2016) 11 SCC 105 where there was a discussion about the requirement of inquiry under Section 202 of the Code in relation to complaints filed under Section 138 but the question of law was left open. In view of the
judgments of this Court in Vijay Dhanuka (supra), Abhijit Pawar (supra) and Birla Corporation (supra), the inquiry to be held by the Magistrate before issuance of summons to the accused residing outside the jurisdiction of the court cannot be dispensed with. The learned Amici Curiae recommended that the Magistrate should come to a conclusion after holding an inquiry that there are sufficient grounds to proceed against the accused. We are in agreement with the learned Amici.
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."
ANALYSIS AND CONCLUSION
12. In view of the submissions made by the learned counsel
for parties, the statutory provisions laid above and judicial
pronouncements cited above, the following points emerge for
consideration:-
i) Whether the dishonour of the cheque in the present
case attracts liability under Section 138 of the N.I. Act?
ii) Whether enquiry under Section 202 of the Cr.P.C
could have been dispensed with before issuing process?
and
iii) Whether summons could have been issued without
conducting enquiry under Section 202 of the Cr.P.C.?
13. Section - 138 of the N.I. Act makes it clear that it is not
every return of a cheque, which is an offence. To make out an
offence under Section 138 of the N.I. Act, the cheque must have
been returned 'unpaid' either because the amount of money
standing to the credit of that account is insufficient to honor the
cheque or that it exceeds the amount arranged to be paid from that
account by an agreement made with the bank.
14. The Reject Memo annexed to the CRLMC appears to be
incomplete. A perusal reveals that the reason for rejection of the
cheque is : "CHI REJECT Drawee bank for Item is in not -clearing
mode or has been"...
15. In the reply to the statutory notice sent by the
complainant, the petitioners have made serious allegations that the
complainant has stolen the cheque and misutilised it. But their
signatures in the cheque have not been denied and no FIR or
complaint has been made against the complainant of stealing the
cheque or misutilising it.
16. While it is the case of the petitioner that he had
informed the Bank in the year 2020 that the cheques had been
stolen and to stop payment and in his reply to the statutory notice,
he had informed the complainant about theft of the cheques and
that cheques were no longer valid as Corporation bank was no
longer in existence as it had merged with Union bank , but this has
to be proved by adducing evidence.
17. That Corporation Bank had merged with Union Bank is
not disputed. But whether the petitioners have issued the cheque in
the year 2023 as claimed by the complainant or the cheque has
been misutulised by the complainant in the absence of any legal
liability has to be proved by adducing evidence.
18. As the complainant has claimed that there existed a legal
liability for which the cheque had been issued and the signature on
the cheque has not been denied by the petitioners, I am not inclined
to quash the proceedings.
19. But perusal of the impugned order reveals that no enquiry
under Section - 202 Cr.P.C. has been conducted before taking
cognizance of the offence under Section 138 of the N.I. Act and
issuing summons to the petitioners. In view of the decision of the
Supreme Court in the case of in Suo Motu Writ petition (Crl) 2 of
2020 (supra), and as the petitioners reside outside the jurisdiction
of the learned SDJM Berhampur, the matter is required to remitted
to the Court of the learned SDJM Berhampur for conducting such
enquiry. Such enquiry can be conducted by accepting affidavits of
the complainant and witnesses if any.
CONCLUSION
20. In view of the above discussion, I am satisfied that the
contentions raised by the learned counsel for the petitioner for
quashing the proceedings cannot be adjudicated in exercise of
power under Section 482 of the Cr.P.C., by conducting a mini trial
at this stage.
21. It is however apparent that the learned SDJM has taken
cognizance of the offence under Section - 138 of the N.I. Act,
without conducting an enquiry under Section - 202 Cr.P.C. As
decided by the Supreme Court , enquiry is necessary but this can be
done by affording opportunity to the complainant to record the
initial statement and statements of witnesses under Section
202 Cr.P.C., by accepting affidavits of the complainant and his
witnesses.
22. As the trial for commission of offence under Section
138 of the N.I. Act is mandated to be completed within the time
prescribed under the statute, it is expected that the trial Court shall
complete the enquiry expeditiously.
23. It is clarified that the petitioners shall be at liberty to
raise their contentions regarding merit of the complaint case before
the learned Trial Court during trial and if they do so, the learned
Trial Court shall decide the same based on evidence adduced, in
accordance with law, without being influenced by any of the
observations made in this order.
24. The CRLMC and IAs are according disposed of.
Digitally Signed ...................... Signed by: SUKANTA KUMAR BEHERA Designation: Senior Stenographer (Savitri Ratho) Reason: Authentication Location: Orissa High Court, Cuttack Judge Date: 30-Jun-2025 20:44:10
Orissa High Court, Cuttack.
The 24th June, 2025.
Sukanta
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