Punjab-Haryana High Court
Amarjeet Singh Grewal And Another vs Vinod Aggarwal on 24 January, 2025
Neutral Citation No:=2025:PHHC:010861
124 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CRM-M-4045-2025
Date of decision: 24.01.2025
Amarjeet Singh Grewal and another ....Petitioners
Versus
Vinod Aggarwal ...Respondent
CORAM: HON'BLE MR. JUSTICE HARPREET SINGH BRAR
Present: Mr. Simranjeet S. Sarwara, Advocate
for the petitioners.
HARPREET SINGH BRAR, J. (ORAL)
1. The present petition has been preferred under Section 528,
Bharatiya Nagarik Suraksha Sanhita, 2023 (hereinafter 'BNSS') seeking
quashing of complaint bearing No. NIA/487/2022 dated 30.03.2022 titled
'Vinod Aggarwal Vs. Amarjeet Singh Grewal' filed under Section 138 of the
Negotiable Instruments Act, 1881 (hereinafter 'NI Act') (Annexure P-6) as well
as summoning order dated 07.08.2023 passed by learned Judicial Magistrate 1st
Class, Jagadhri (Annexure P-8), and all subsequent proceedings arising
therefrom.
2. Brief facts of the case are that the accused/petitioners are running a
partnership firm M/s K.G. Enterprises and are engaged in the business of
supplying high quality Khairwood and related wood products and on
16.12.2016, the petitioner and the respondent entered formal agreement under
which the petitioners were to supply approximately 2500 quintals of
Khairwood to the respondent and the respondent made initial payment of Rs.40
lakh towards the said supply in good faith. Thereafter, the petitioners, in
alignment with the request of the respondent and to ensure good business
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relations, given the security cheques bearing No.000317 to 000323 amounting
to Rs.10 lakh each drawn on ICICI Bank, Phase 5, Mohali. It is further alleged
that due to an unfortunate circumstance, the National Green Tribunal, Delhi,
imposed a ban on the processing and supply of Khairwood between 2016 and
2019, as a result of which, the petitioners were unable to supply the Khairwood
to the respondent for a certain period lead to a temporary disruption in the
business transaction between the parties. Thereafter, due to COVID-19
pandemic, there were several business activities were not in action, as a
consequence, respondent discontinued its business operations and engaged in
unlawful conduct that amounted to abuse of process, coercion and undue
harassment.
3. Learned counsel for the petitioners inter alia contends that there is
no legally enforceable debt. Further, the agreement has become void due to the
order passed by the National Green Tribunal and with the fraudulent intent, the
complaint has been instituted. Further, a civil suit (Annexure P-2) in this
regard has already been filed by the petitioners. Further, the impugned
summoning order has been passed in a mechanical manner and even the drill of
Section 225 of BNSS has not been followed.
4. Having heard the learned counsel for the petitioners and after
perusing the record of the case, it transpires that the drill of Section 225 BNSS
(erstwhile Section 202 Cr.P.C.) was not followed before issuance of process.
Hence, the following question props up for the consideration of this Court-
"Is the drill of Section 225 BNSS mandatory to be followed in
cases pertaining to Section 138 of the Negotiable Instruments Act,
1881?"
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5. A study of Section 225 BNSS is called for, which is reproduced
below:
Section 225. 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 212, 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 223.
(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 Sanhita on an officer in charge of a police station
except the power to arrest without warrant.
6. Time and again, the constitutional courts have reiterated that the
drill of Section 202 Cr.P.C. (now Section 225 BNSS) is mandatory in nature. A
two Judge bench of Hon'ble Supreme Court in Abhijit Pawar vs. Hemant
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Madhukar 2017(3) SCC 528, speaking through Justice A.K. Sikri has held as
follows:
"28. No doubt, the argument predicated on Section 202 of the
Cr.P.C. was raised for the first time by A-1 before the High Court.
Notwithstanding the same, being a pure legal issue which could be
tested on the basis of admitted facts on record, the High Court
could have considered this argument on merits. It is a settled
proposition of law that a pure legal issue can be raised at any
stage of proceedings, more so, when it goes to the jurisdiction of
the matter (See : National Textile Corpn. Ltd. Vs. Nareshkumar
Badrikumar Jagad; [(2011) 12 SCC 695].
29. We may like to record that though Mr. Bhatt had refuted the
arguments founded on Section 202 of Cr.P.C., even he had
submitted that in case this Court is satisfied that mandatory
requirement of Section 202 is not fulfilled by the learned
Magistrate before issuing the process, this Court can direct the
Magistrate to do so. Mr. Bhatt, for this purpose, referred to the
judgment in the case of the National Bank of Oman.
30. For the aforesaid reasons, Criminal Appeal arising out of SLP
(Crl) No. 9318 of 2012 is allowed thereby quashing the notice
dated 24 th November, 2009 in respect of A-1 with direction to the
learned Magistrate to take up the matter afresh qua A-1 and pass
necessary orders as are permissible in law, after following the
procedure contained in Section 202, Cr.P.C."
Reliance in this regard can also be placed on the judgment rendered
by the Hon'ble Supreme Court in National Bank of Oman vs. Barakara Abdul
Aziz and another 2013(2) SCC 488 and this Court in Dr. Jasminder Kaur vs.
Raj Karan Singh Boparai CRM-M-20260-2008.
7. This issue has also been dealt with a Constitution bench of the
Hon'ble Supreme Court In re: Expeditious Trial of Cases under Section 138
NI Act 1881 in Suo Moto Writ Peition (Crl.) No.2 of 2020, analysed the said
issue and concluded as follows:
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"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, Abhijit Pawar v. Hemant Madhukar Nimbalkar and Anr. and
Birla Corporation Limited v. Adventz Investments and Holdings
Limited & Ors.). 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. 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
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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." (emphasis added)
8. Furthermore, the following directions were issued in In re:
Expeditious Trial of Cases under Section 138 NI Act 1881(supra):
"24. The upshot of the above discussion leads us to the following
conclusions:
1) The High Courts are requested to issue practice directions to
the Magistrates to record reasons before converting trial of
complaints under Section 138 of the Act from summary trial to
summons trial.
2) Inquiry shall be conducted on receipt of complaints under
Section 138 of the Act to arrive at sufficient grounds to proceed
against the accused, when such accused resides beyond the
territorial jurisdiction of the court.
3) For the conduct of inquiry under Section 202 of the Code,
evidence of witnesses on behalf of the complainant shall be
permitted to be taken on affidavit. In suitable cases, the
Magistrate can restrict the inquiry to examination of documents
without insisting for examination of witnesses.
4) We recommend that suitable amendments be made to the Act for
provision of one trial against a person for multiple offences under
Section 138 of the Act committed within a period of 12 months,
notwithstanding the restriction in Section 219 of the Code.
5) The High Courts are requested to issue practice directions to
the Trial Courts to treat service of summons in one complaint
under Section 138 forming part of a transaction, as deemed
service in respect of all the complaints filed before the same court
relating to dishonour of cheques issued as part of the said
transaction.
6) Judgments of this Court in Adalat Prasad (supra) and
Subramanium Sethuraman (supra) have interpreted the law
correctly and we reiterate that there is no inherent power of Trial
Courts to review or recall the issue of summons. This does not
affect the power of the Trial Court under Section 322 of the Code
to revisit the order of issue of process in case it is brought to the
court's notice that it lacks jurisdiction to try the complaint.
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7) Section 258 of the Code is not applicable to complaints under
Section 138 of the Act and findings to the contrary in Meters and
Instruments (supra) do not lay down correct law. To conclusively
deal with this aspect, amendment to the Act empowering the Trial
Courts to reconsider/recall summons in respect of complaints
under Section 138 shall be considered by the Committee
constituted by an order of this Court dated 10.03.2021.
8) All other points, which have been raised by the Amici Curiae in
their preliminary report and written submissions and not
considered herein, shall be the subject matter of deliberation by
the aforementioned Committee. Any other issue relating to
expeditious disposal of complaints under Section 138 of the Act
shall also be considered by the Committee."(emphasis added)
9. The intention behind Section 202 Cr.P.C. (now Section 225 BNSS)
is to ensure that sufficient grounds exist in order to proceed against an accused
in a private complaint. As such, it is pertinent that the concerned Court passes
an order indicating substantial compliance of the aforementioned provision, in
view of the directions issued in In re: Expeditious Trial of Cases under
Section 138 NI Act 1881(supra).
10. In view of the discussion above, the present petition is allowed and
the summoning order dated 07.08.2023 passed by learned Judicial Magistrate
1st Class, Jagadhri (Annexure P-8), is set aside. The matter is remanded back to
concerned Court to consider the matter afresh in accordance with law, by taking
recourse to Section 225 BNSS.
11. Pending miscellaneous application(s), if any, shall also stand
disposed of.
(HARPREET SINGH BRAR)
JUDGE
24.01.2025
Neha
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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