Case Note & Summary
The Bombay High Court was seized of a reference to a Full Bench arising from Criminal Writ Petition No. 2523 of 2010, filed by the accused (Chief Financial Officer of the accused company) seeking quashing of the process issued in a complaint under Section 138 of the Negotiable Instruments Act, 1881. The complaint was lodged by M/s Emco Dynatorq Pvt Ltd, which had advanced an Inter Corporate Deposit of Rs. 20,00,000 to the accused company. The cheque issued in repayment was dishonoured for insufficient funds. The complainant filed a complaint along with an affidavit of its Manager verifying the facts, and the Judicial Magistrate, First Class, Thane, issued process solely on the basis of that affidavit without examining the complainant orally. The petitioner contended that this violated the mandatory requirement of Section 200 of the Code of Criminal Procedure, 1973, which obliges the Magistrate to examine the complainant upon oath and reduce the substance to writing. During the hearing, a Single Judge of the High Court expressed a prima facie view that the earlier judgments of the Court in Amarnath Baijnath Gupta and Maharaja Developers, which had held that Section 145 of the NI Act does not override Section 200 CrPC and that examination on oath is mandatory even in NI Act cases, needed reconsideration. This was in view of the large pendency of similar cases (3.44 lakh in Mumbai, 7 lakh in Maharashtra) and the common practice of accepting affidavits in lieu of examination. The Single Judge referred the following question of law to a Full Bench: Whether, in view of Section 145 of the NI Act, a Magistrate taking cognizance of a complaint under Section 138 with documents and an affidavit verification is still obliged to examine the complainant and witnesses on oath before issuing process. The reference also involved Criminal Application No. 3478 of 2010 with similar facts. The Full Bench comprised Chief Justice Mohit S. Shah, Justice V.M. Kanade, and Justice Smt. R.P. Sondurbaldota. The judgment was reserved on October 12, 2010 and pronounced on December 07, 2010. The text provided only contains the reference order and factual background, without the final decision.
Headnote
A) Negotiable Instruments - Complaint Procedure - Interaction between S.145 NI Act and S.200 CrPC - Section 145, Negotiable Instruments Act, 1881; Section 200, Code of Criminal Procedure, 1973 - The Full Bench was called upon to resolve the question whether a Magistrate, before issuing process on a complaint under Section 138 of the NI Act, must examine the complainant on oath as mandated by Section 200 CrPC, given that Section 145 NI Act permits evidence by affidavit. The reference arose from a Single Judge's prima facie view that earlier judgments of the High Court in Amarnath Baijnath Gupta and Maharaja Developers, which held such examination mandatory, required reconsideration in light of the large volume of pending cases and the practice of accepting affidavits (Paras 1-4).
B) Criminal Procedure - Issuance of Process - Scope of Section 200 CrPC in Summary NI Act Cases - Section 200, Code of Criminal Procedure, 1973 - The referring order highlighted the conflict between the procedural requirement of examining the complainant on oath and the special provision of Section 145 NI Act which allows evidence by affidavit; the earlier judgments had held that Section 145 does not override Section 200, leading to numerous quashing petitions. The Full Bench was to determine the correct position of law (Paras 3-4).
Issue of Consideration
Whether, in view of the provisions of Section 145 of the Negotiable Instruments Act, 1881 (added by Act No.55 of 2002), a Metropolitan Magistrate or Judicial Magistrate, First Class, taking up a complaint under Section 138 of the Negotiable Instruments Act, 1881, along with documents in support thereof and a verification made in the affidavit in support of the complaint, is still obliged to examine on oath the complainant and his witnesses before issuing process on the complaint.
Law Points
- Interpretation of Section 145 Negotiable Instruments Act
- 1881
- read with Sections 118
- 138
- 139
- 142
- 143 and 146
- interplay with Section 200 Code of Criminal Procedure
- 1973
- whether Section 145 overrides Section 200 at pre-summoning stage
- mandatory nature of examination on oath
- reconsideration of earlier High Court judgments
Case Details
2010 LawText (BOM) (12) 72
CRIMINAL WRIT PETITION NO. 2523 OF 2010 ALONG WITH CRIMINAL APPLICATION NO. 3478 OF 2010
Mohit S. Shah, C.J., V.M. Kanade, Smt. R.P. Sondurbaldota
Mr. S.V. Marwadi for Petitioner, Mr. M.R. Tidke, Additional Public Prosecutor for State, Mr. Ashish Chavan for Applicant, Mr. Jatin Shah for Respondent in other matter, Mr. Yashpal Thakur for Respondent No.2
Mr. Rajesh Bhalchandra Chalke (Petitioner in Writ Petition); Nikhil Vasantlal Merchant, Manepanda Joyappa Subbaiah, Ashok Kumar Ram Gopal Doda (Applicants in Criminal Application)
State of Maharashtra; M/s Emco Dynatorq Pvt. Ltd. (Respondent No.2 in Writ Petition); Global Trade Finance Ltd. (Respondent No.2 in Criminal Application)
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Nature of Litigation
Writ petition under Article 227 of the Constitution of India and Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of the process issued by the Judicial Magistrate, First Class, in a complaint under Section 138 of the Negotiable Instruments Act, 1881, on the ground of non-compliance with Section 200 CrPC.
Remedy Sought
The petitioner (accused No.3) sought to quash the order issuing summons on the ground that the Magistrate accepted an affidavit in lieu of examining the complainant on oath, which was mandated by Section 200 CrPC.
Filing Reason
The Magistrate issued process based solely on the affidavit filed by the complainant's authorised representative, without examining the complainant orally on oath, contrary to the procedure prescribed under Section 200 of the Code of Criminal Procedure.
Previous Decisions
The Single Judge expressed a prima facie view that the earlier judgments of the Bombay High Court in Amarnath Baijnath Gupta and Maharaja Developers, which held that compliance with Section 200 CrPC is mandatory even in cases under Section 138 NI Act and that Section 145 NI Act does not override it, required reconsideration, and accordingly referred the matter to a Full Bench.
Issues
Whether, in view of the provisions of Section 145 of the Negotiable Instruments Act, 1881, a Metropolitan Magistrate or Judicial Magistrate, First Class, taking up a complaint under Section 138 of the NI Act, along with documents in support thereof and a verification made in the affidavit in support of the complaint, is still obliged to examine on oath the complainant and his witnesses before issuing process on the complaint.
Submissions/Arguments
The petitioner contended that the Magistrate erred in issuing process solely on the basis of the affidavit, without examining the complainant on oath as required by Section 200 CrPC, which is mandatory even in cases under Section 138 NI Act.
Reliance was placed on the decisions of the Bombay High Court in Amarnath Baijnath Gupta and Maharaja Developers, which held that the provisions of Section 145 NI Act do not override Section 200 CrPC and that the examination of the complainant on oath is mandatory before issuance of process.
Judgment Excerpts
whether, in view of the provisions of Section 145 NI Act (added by Act No.55 of 2002), a Metropolitan Magistrate or Judicial Magistrate, First Class, taking up a complaint under Section 138 of the NI Act, along with documents in support thereof and a verification made in the affidavit in support of the complaint, is still obliged to examine on oath the complainant and his witnesses before issuing process on the complaint?
Large number of cases have been filed in this Court for quashing complaints on account of improper verification. There are 3,44,000 cases pending in the City of Mumbai alone and about 7,00,000 cases pending in the State of Maharashtra.
Procedural History
The complaint under Section 138 of the Negotiable Instruments Act was filed by Respondent No.2 on 16 November 2009 before the Judicial Magistrate, First Class, Thane. The complainant filed a verification affidavit of its Manager on 18 December 2009. On the same date, the Magistrate passed an order issuing summons to the accused under Section 138 NI Act. Accused No.3, the petitioner, filed Criminal Writ Petition No. 2523 of 2010 before the Bombay High Court under Article 227 of the Constitution and Section 482 CrPC seeking quashing of the process order, contending that the Magistrate failed to examine the complainant on oath as required by Section 200 CrPC. During the hearing, the learned Single Judge expressed a prima facie view that earlier judgments of the Court in Amarnath Baijnath Gupta and Maharaja Developers, which had held that examination on oath under Section 200 CrPC is mandatory despite Section 145 NI Act, required reconsideration. The matter was referred to a Full Bench for determination of the question of law. The Full Bench heard the matter along with a connected Criminal Application No. 3478 of 2010, and reserved judgment on October 12, 2010.
Acts & Sections
- Negotiable Instruments Act, 1881: 118, 138, 139, 142, 143, 145, 146
- Code of Criminal Procedure, 1973: 200, 482
- Constitution of India: 227
- Companies Act, 1956: 293
