C482/900/2022
2023 Latest Caselaw 2182 UK

               Office Notes,
              reports, orders
SL.          or proceedings or
      Date                                         COURT'S OR JUDGES'S ORDERS
No            directions and
             Registrar's order
              with Signatures

                                 C482 No.900 of 2022
                                 Hon'ble Sharad Kumar Sharma, J.

Mr. Lalit Sharma, learned counsel for the applicants.

Mr. Vipul Sharma, learned counsel for the respondent.

The complaint proceeding, at the behest of the respondent, under Section 138 of the Negotiable Instruments Act (for short "N.I. Act"), stood instituted on 21.08.2021 as against three opposite parties i.e. M/s Pandey Beej Bhandar, Laxmi Chandra Pandey and Vikram Kumar Pandey, Pandey Beej Bhandar, Sarai Rustam, Kamlapur, Mungra, Badsahpur, District Jaunpur, Uttar Pradesh.

On the initiation of the proceedings by the respondent under Section 138 of the N.I. Act, the summons were issued by the Court of Additional Chief Judicial Magistrate, Rudrapur, District Udham Singh Nagar. While issuing the summoning order on 09.09.2021, the Court has observed, that the same has been issued in compliance with the directives issued by the High Court vide its Circular No.10/UHC/Admin- B/v(a)6/2020 dated 01.09.2021.

In fact, what is being contemplated by the directives issued by the Hon'ble High Court for the purpose of governing the proceedings under Section 138 of the N.I. Act, with regards to the streamlining of the procedure, it has provided, that where the accused persons, who are required to be summoned, if they are residents of the territory outside the jurisdiction of the Court, then obviously the compliance of Section 202 of the Cr.P.C. is required to be mandatory made by the learned trial Court prior to issuance of the summons. The relevant paragraph nos.2 and 3, since have already been quoted in the impugned order, these are not being extracted.

Now, the question which emerges for consideration is as to whether the learned trial Court, while issuing the summons, has complied with the provisions contained under Section 202 of the Cr.P.C. or not, which is examined as hereunder.

If the entire summoning order is taken into consideration, and particularly, the observation which has been made by the Court in paragraph no.5 and 6 of the summoning order, the Court has considered the material before it for the purpose of satisfying the terms and conditions as provided under Section 202 of the Cr.P.C. and its after appreciating the evidence, the Court has come to a conclusion, that issuance of the summons to the present applicants was justified, if the complaint proceedings were drawn under Section 138 of the N.I. Act.

In fact, learned counsel for the applicants argues that the compliance made in paragraph no.5 and 6 of the impugned summoning order may not be treated as to be a strict and complete compliance of the provisions under Section 202 of the Cr.P.C. in accordance with the guidelines as framed by the Hon'ble High Court on 01.09.2021.

To answer this question, learned counsel for the respondent has referred to judgment of the Constitution Bench of the Hon'ble Supreme Court, wherein the Constitution Bench in a Suo Motu Writ Petition (Crl.) No.2 of 2020, on suo moto cognizance being taken with regards to the proceedings under Section 138 of the N.I. Act, having sensed that since the same are being unnecessarily delayed because of the procedural flaw, had dealt with the aspect as to what would be the magnitude of considering the implications of Section 202 of the Cr.P.C. and the same has been considered in paragraph no.10, 11 and 12 of the said judgment, which are extracted hereunder:-

"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 v. Najima Mamtaj1, Abhijit Pawar v. Hemant Madhukar Nimbalkar2 and Birla Corporation Limited v. Adventz Investments and Holdings Limited3). 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.4 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."

To summarize the observation made by the Constitution Bench, the compliance of Section 202 of the Cr.P.C., as provided by the Hon'ble Apex Court in case if it is, at all, to be read with in the light of the circular issued by the Hon'ble High Court, in compliance of the judgment of the Constitution Bench of the Hon'ble Apex Court, it is only a prima facie satisfaction, which is required by the Court to be recorded for the purpose of satisfying itself as to whether, at all, the summons are required to be issued to the accused persons, who are residents outside the territorial domain of the Court and have been seeking cognizance of the offence under Section 138 of the N.I. Act.

Since the guidelines framed by the Hon'ble Apex Court in paragraph nos.10, 11 and 12 as aforesaid and, later on, as circulated by the High Court vide its circular of 01.09.2021, it is shown to have been complied with while issuing the summoning order as it is reflected from the observations as made in paragraph no.5 of the said judgment. It should be taken as to be a complete satisfaction with regards to the conditions given by the circular for compliance of Section 202 of the Cr.P.C.

Thus, the summoning order issued under Section 138 of the N.I. Act, as against the present applicants, cannot be said to be in violation of the guidelines framed by the Hon'ble Apex Court or that of the directives issued by the Hon'ble High Court thereto. Thus, the summoning order cannot be said to be bad from the said perspective.

The second argument which has been extended by the learned counsel for the applicants is that, if the instruments itself is taken into consideration, it refers to that the opposite party no.2 and 3 to the complaint proceedings, they are the signatories on behalf of the opposite party no.1 to the complaint.

He submits that the instrument in itself only bears the signature of opposite party no.3 to the complaint. As such, the instrument itself was bad in law and it cannot be treated as to be a negotiable instrument under Section 138 of the N.I. Act to draw a proceeding against the present applicants.

In order to elaborate this argument in the context of one of the partners being signatory to the instruments, it will require an appreciation of the document of partnership or the proprietorship as it may be, whichever is existing inter se between the opposite party to the proceedings under Section 138 of the N.I. Act, as to who would be the authorized signatory on behalf of the opposite party no.1 to the complaint proceedings.

This consideration with regards to the effect of Mr. Vikram Kumar Pandey, being the only signatory of the instrument, would be absolutely a factual determination, which is required to be made by the trial Court and, particularly, in the absence of any such pleading or a document being placed by the applicant on record, to question the summoning order on the said pretext.

Since the summoning order itself satisfies the directives as issued by the Hon'ble High Court vide its circular issued in furtherance of the guidelines of the Constitution Bench of the Hon'ble Apex Court, wherein Section 202 of the Cr.P.C. apparently seems to be complied with, hence, this C482 Application is being dismissed with the liberty left open for the applicants to raise all the questions qua the instruments issued by the applicants as against the complainant and with regards to its propriety and its validity.

           Subject    to   the   aforesaid,    the      C482
Application stands dismissed.


                            (Sharad Kumar Sharma, J.)
                                  10.08.2023
Sukhbant