Punjab-Haryana High Court
Neeru Goel And Others vs Liberty Shoes Ltd Thr Its Authorizer ... on 27 January, 2025
Author: Sandeep Moudgil
Bench: Sandeep Moudgil
Neutral Citation No:=2025:PHHC:014531
CRM-M-4473-2025 - 1-
133 IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CRM-M-4473-2025
DECIDED ON: 27.01.2025
NEERU GOEL AND OTHERS
....PETITIONERS
VERSUS
LIBERTY SHOES LIMITED
...RESPONDENT
CORAM: HON'BLE MR. JUSTICE SANDEEP MOUDGIL.
Present: Mr. Ashim Aggarwal, Advocate
for the petitioners.
SANDEEP MOUDGIL, J
1. Relief Sought
The present petition has been filed under Section 482 Cr.P.C. read
with Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023 seeking
quashing of complaint bearing case No.31 of 2020 (Annexure P-1) and
consequential proceedings arising therefrom along-with summoning order
dated 14.02.2020 (Annexure P-4) passed by learned Judicial Magistrate Ist
Class, Karnal as well as the order dated 13.11.2024 (Annexure P-8) passed by
learned Additional Sessions Judge, Karnal in CRR-207-2022.
2. Facts
Brief facts of the case are that the petitioners who were directors of
M/s Elators Traders Pvt. Ltd. had been dealing with the respondent-Company
and purchasing their foot wears and ancillary items under the brand name
called 'Liberty' from time to time through various invoices. It is further alleged
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that in discharge of their liability and to clear the outstanding amount of
Rs.16,89,007.29/-, the petitioners issued a cheque bearing No.508910 dated
30.10.2019 amounting to Rs.6 lakh of 'Yes Bank', Delhi, in favour of the
respondent-Company as part payment against the outstanding amount but the
same was dishonoured and hence, the said complaint has been filed.
3. Submissions
On behalf of the petitioners:
Learned counsel for the petitioners inter alia contends that only
allegation against the petitioners is that they are the directors of M/s Elators
Traders Pvt. Ltd. Company and taking care of day to day activities. The cheque
in question was signed by one Swati Goel who was the director in-charge of the
business. He further submits that there is no specific allegation against the
petitioners and 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. Analysis
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?"
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
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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.
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
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
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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.
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:
"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.).
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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
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)
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
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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.
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
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expeditious disposal of complaints under Section 138 of the Act
shall also be considered by the Committee."(emphasis added)
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).
5. Conclusion
In view of the discussion above, the present petition is allowed and
the summoning order dated 14.02.2020 passed by learned Judicial Magistrate
1st Class, Karnal (Annexure P-4), is hereby 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.
Pending miscellaneous application(s), if any, shall also stand
disposed off.
(SANDEEP MOUDGIL)
27.01.2025 JUDGE
Sham
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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