Cr.P.C. Digest

Negotiable Instruments Act, 1881 (26 of 1881)

Section 138 -- Indian Penal Code, 1860 (45 of 1860), Section 406, 420 -- Constitution of India, Article 226 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 154, 156(3), 200, 210, 482 – Quashing of FIR – Abuse of process of law -- Inherent power of High Court -- Complaint u/s 138 of the NI Act pending -- After a period of three months, an application u/s 156(3) Cr.P.C. seeking registration of FIR – Ld. Magistrate declined to order registration of FIR and decided to inquire into the matter by treating the same as complaint case -- Ld. Sessions Judge remanded back the matter to the learned Magistrate with directions to pass a speaking order – Thereafter, after a period of two years, impugned FIR against the appellants with police station with the similar contents and allegations which were levelled in the application u/s 156(3) Cr.P.C – Complainant is not proceeding further with his application u/s 156(3) Cr.P.C., which is pending since last five years – In the FIR, no reference of application u/s 156(3) Cr.P.C. and complaint u/s 138 of the NI Act – Held, impugned FIR is nothing but an abuse of process of law and can be said to be filed with a view to harass the appellants -- High Court ought to have exercised the powers under Article 226 of the Constitution of India/482 Cr.P.C. and ought to have quashed the impugned FIR to secure the ends of justice – Appeal allowed, impugned criminal proceedings/FIR registered u/ss 420/406 IPC quashed.

(SC) Decided on: 01.03.2021

Section 138, 141 -- Cheque bounce case of Company – Incharge of the affairs of the Company, no document to support – Accused neither Director nor a signatory of cheque -- Quashing of complaint -- (a) The complaint is based on a Memorandum of Understanding, which is not signed by the petitioner and is rather signed by accused No.3. The dishonoured cheques were given to the complainant at the time of signing of the Memorandum of Understanding. (b) The cheque numbers of the disputed cheques are duly mentioned in the body of the Memorandum of Understanding signed by accused No.3, which show that he was the person In-charge of the Company as he entered into a Memorandum of Understanding on behalf of accused No.1-Company and had issued the cheques in favour of the complainant. (c) Even the cheques are not signed by the petitioner and the same are signed by accused Nos.2 and 3. (d) In the complaints, the only allegation in para 3 is that accused No.4-petitioner is In-charge of the affairs of accused No.1-Company, however, there is no document to support this version and rather in the reply filed by the complainant in High Court, nowhere reflects that the petitioner is the In-charge of the affairs of accused No.1-Company, in any manner. (e) There is nothing on record to support the complaints that the petitioner is one Director of accused No.1-Company as it is the case of the petitioner that he never remained the Director of accused No.1-Company at any stage and this fact is not disputed in the reply. Summoning orders and all other subsequent proceedings arising therefrom, are ordered to be quashed qua the petitioner.

(P&H HC) Decided on: 05.03.2020

Section 138, 141 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Offence against Director of Company – Issuance of process – Quashing of Complaint -- Supreme Court summarized the law as follows: a) Once in a complaint filed under Section 138 read with Section 141 of the NI Act the basic averment is made that the Director was in charge of and responsible for the conduct of the business of the company at the relevant time when the offence was committed, the Magistrate can issue process against such Director; b) If a petition is filed under Section 482 of the Code for quashing of such a complaint by the Director, the High Court may, in the facts of a particular case, on an overall reading of the complaint, refuse to quash the complaint because the complaint contains the basic averment which is sufficient to make out a case against the Director. c) In the facts of a given case, on an overall reading of the complaint, the High Court may, despite the presence of the basic averment, quash the complaint because of the absence of more particulars about role of the Director in the complaint. It may do so having come across some unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or totally acceptable circumstances which may clearly indicate that the Director could not have been concerned with the issuance of cheques and asking him to stand the trial would be abuse of the process of the court. Despite the presence of basic averment, it may come to a conclusion that no case is made out against the Director. Take for instance a case of a Director suffering from a terminal illness who was bedridden at the relevant time or a Director who had resigned long before issuance of cheques. In such cases, if the High Court is convinced that prosecuting such a Director is merely an arm-twisting tactics, the High Court may quash the proceedings. It bears repetition to state that to establish such case unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or some totally acceptable circumstances will have to be brought to the notice of the High Court. Such cases may be few and far between but the possibility of such a case being there cannot be ruled out. In the absence of such evidence or circumstances, complaint cannot be quashed; d) No restriction can be placed on the High Court’s powers under Section 482 of the Code. The High Court always uses and must use this power sparingly and with great circumspection to prevent inter alia the abuse of the process of the Court. There are no fixed formulae to be followed by the High Court in this regard and the exercise of this power depends upon the facts and circumstances of each case. The High Court at that stage does not conduct a mini trial or roving inquiry, but, nothing prevents it from taking unimpeachable evidence or totally acceptable circumstances into account which may lead it to conclude that no trial is necessary qua a particular Director.

(SC) Decided on: 17.10.2014

Section 138, 145 – Dishonour of cheque – Complaint u/s 138 of NI Act – Evidence of Complainant – Procedure of -- Complainant can give his evidence by way of an affidavit and such affidavit shall be read in evidence in any inquiry, trial or other proceedings in the Court, which makes it clear that a complainant is not required to examine himself twice i.e. one after filing the complaint and one after summoning of the accused -- Affidavit and the documents filed by the complainant along with complaint for taking cognizance of the offence are good enough to be read in evidence at both the stages i.e. pre-summoning stage and the post summoning stage -- In other words, there is no necessity to recall and re-examine the complaint after summoning of accused, unless the Magistrate passes a specific order as to why the complainant is to be recalled -- In summary trial, after the accused is summoned, his plea is to be recorded under Section 263(g) Cr.P.C. and his examination, if any, can be done by a Magistrate and a finding can be given by the Court under Section 263(h) Cr.P.C. and the same procedure can be followed by a Magistrate for offence of dishonour of cheque since offence under Section 138 of the Act is a document based offence -- If the proviso (a), (b) & (c) to Section 138 of the Act are shown to have been complied with, technically the commission of the offence stands completed and it is for the accused to show that no offence could have been committed by him for specific reasons and defences.

(SC) Decided on: 21.04.2014

Section 138, 141 – Sick Industrial Companies (Special Provisions) Act (1 of 1986), Section 22-A – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Constitution of India, Article 227 -- Dishonour of Cheque -- Prosecution of the Company/ Directors – Company declared Sick -- Maintainability of complaint u/s 138 of NI Act -- In a case in which the BIFR has submitted its report declaring a company as ‘sick’ and has also issued a direction u/s 22-A restraining the company or its directors not to dispose of any of its assets except with consent of the Board then the contention raised that a criminal case for the alleged offence u/s 138 NI Act cannot be instituted during the period in which the restraint order passed by the BIFR remains operative cannot be rejected outright -- Whether the contention can be accepted or not will depend on the facts and circumstances of the case -- For instance, before the date on which the cheque was drawn or before expiry of the statutory period of 15 days after notice, a restraint order of the BIFR u/s 22-A was passed against the company then it cannot be said that the offence u/s 138 NI Act was completed -- In such a case it may reasonably be said that the dishonoring of the cheque by the bank and failure to make payment of the amount by the company and/or its Directors is for reasons beyond the control of the accused -- In such circumstances it would be unjust and unfair and against the intent and purpose of the statute to hold that the Directors should be compelled to face trial in a criminal case.

(SC) Decided on: 23.02.2000