Tarun Mathur & Anr. v. Anil Jain

15. This Court is of the view that summons issued in a complaint case under Section 138 of the NI Act may be quashed if it is prima facie apparent from the complaint that the complainant has not presented even an iota of evidence for filing the said complaint which shows occurrence of an offence.

16. In the case of HMT Watches Limited v. M.A. Abida, (2015) 11 SCC 776, the Hon'ble Supreme Court held as under:

security or not, or whether there was outstanding liability or not is a question of fact which could have been determined only by the trial court after recording evidence of the parties. In our opinion, the High Court should not have expressed its view on the disputed questions of fact in a petition under Section 482 of the Code of Criminal Procedure, to come to a conclusion that the offence is not made out. The High Court has erred in law in going into the factual aspects of the matter which were not admitted between the parties. The High Court further erred in observing that Section 138(b) of the NI Act stood uncomplied with, even though Respondent 1 (accused) had admitted that he replied to the notice issued by the complainant. Also, the fact, as to whether the signatory of demand notice was authorised by the complainant company or not, could not have been examined by the High Court in its jurisdiction under Section 482 of the Code of Criminal Procedure when such plea was controverted by the complainant before it.” (emphasis supplied)..”

17. In A.S. Pharma (P) Ltd. v. Nayati Medical (P) Ltd., 2024 SCC OnLine SC 2539, the Hon’ble Supreme Court observed as under:

party concerned and not where a specific remedy is provided by the statute concerned. We may further add here that certainly the power Under Section 482, Code of Criminal Procedure, is not invocable, ignoring the factor which is sine qua non for the exercise of power to compound the offence(s) under N.I. Act viz., the consent of the complainant.”

18. Upon perusal of the aforesaid judgments, it is made out that it has been emphasized time and again by the Hon’be Supreme Court that the High Court while exercising powers under Section 482 CrPC must bear in mind that whenever a proceeding under the NI Act has been challenged under the said provision, it should not express its view on the disputed question of facts to arrive at a conclusion that the offence is not made out as the same would amount to error of law.

19. Inherent powers of High Court cannot be taken for granted by the party against whom summons under Section 138 of the NI Act have been issued and the litigants must abhor filing of petitions in a routine manner.

20. The petitioner in the instant case has asserted that the learned ASJ failed to appreciate that the learned Trial Court issued summons without going through the records of the case as per which the cheques in question were of different banks and issued by different persons/signatories as well as the same pertain to different transactions.

21. Upon perusal of the records of the present case, it is made out that after considering the contents made in the petition as well as the documents alongwith the complaint, and the evidences which have been filed alongwith the affidavit, the learned Magistrate has passed a detailed and reasoned order while issuing the summons.

22. A revision petition was filed challenging the order dated 8th April, 2021 in case CC No. 4449/2019, passed by the learned Trial Court. In this order, the learned Trial Court summoned the petitioners herein for an offence under Section 138 of the NI Act and served a notice under Section 251 CrPC.

23. The petitioners argued that the learned Trial Court failed to consider that one of the cheques belonged to a joint account, signed only by the petitioner no. 2. Thus, the petitioner no. 1 should not have been summoned for the cheque signed by the petitioner no. 2, and vice versa. They further contended that a consolidated complaint involving two different cheques issued by two different persons from two separate banks should not be tried together as it is not maintainable.

24. The learned ASJ reviewed the records and found that the respondent filed the case under Section 138 of the NI Act, alleging that the petitioners herein received a loan from the respondent due to their friendly relations, for which they issued the cheques in question. These cheques were dishonored, and a demand notice was subsequently sent, to which the petitioners did not respond by paying the cheque amount.

25. The learned ASJ observed that both the cheques were given as part of the same transaction, and under Section 223 CrPC, individuals accused of offenses arising from the same transaction could be tried together. Additionally, since separate notices under Section 251 CrPC had been framed against each petitioner, the learned ASJ found no prejudice to their rights by trying them jointly.

26. Thus, the learned ASJ found no legal infirmity, material illegality, or jurisdictional error in the learned Trial Court’s order to summon the petitioners and frame the notice against them and the revision petition was dismissed.

27. As per the settled principle of law, summons can be issued only, when, prima facie, a case is made out on the basis of documents alongwith the complaint, its contents and the evidences filed alongwith the affidavit.

28. The two previous Courts have taken the same view and the learned Trial Court, has also, passed a reasoned order after considering the arguments advanced by learned counsel for the petitioners at the stage of summoning.

29. This Court is of the view that the Court concerned has taken into consideration the submissions made as well as the contents of the petition, and thereafter, rejected the revision petition by way of passing a detailed and reasoned order, by upholding the summoning order passed by the learned Trial Court.

30. The learned ASJ in this case has correctly upheld the order of the learned Trial Court to summon the petitioners under Section 138 of the NI Act, based on the settled principles of law. According to these principles, summons can be issued when, prima facie, a case is made out through the complaint, supporting documents, and evidence filed with the affidavit. Here, the learned Trial Court carefully reviewed these materials, issuing a reasoned summoning order and framed notice only after considering the details provided. This approach aligns with established legal practice, underscoring that a Court should ensure there is enough preliminary evidence to proceed without delving deeply into disputed factual questions at the summoning stage.

31. Moreover, it is well established by the Hon’ble Supreme Court that the Courts should avoid expressing views on disputed factual questions to conclude whether an offence has been made out when proceedings under the NI Act are challenged in a higher Court, such as the High Court, under Section 482 CrPC.

32. Engaging with these questions at this stage would be evidently a premature adjudication of factual issues meant for trial. Therefore, the learned ASJ’s reasoning that both cheques were issued as part of the same transaction further validates the summoning order.

33. It is noted that under Section 223 of the CrPC, individuals accused of offences within the same transaction may be tried together, which in this case avoids the inefficiency of separate trials for related matters. The learned ASJ noted that separate notices under Section 251 CrPC were framed for each petitioner, safeguarding their rights while enabling a joint trial without causing prejudice. Thus, the learned ASJ’s order appropriately balances procedural fairness with judicial efficiency, justifying the dismissal of the revision petition and this Court does not find any kind of irregularity thereto.

34. With respect to the same, this Court is of the opinion that whether the cheques pertain to different transactions and whether the criminal complaint can be adjudicated in view of the aforesaid objection raised by the petitioners is a disputed question of fact which requires trial and thus, the present petition does not hold any merit.

35. This Court does not find any material on record which can be stated to be of sterling quality warranting invocation of the jurisdiction of this Court under Section 482 CrPC at this stage when the learned Trial Court has issued summons and framed notice of charge against the petitioners.

36. Before parting, this Court deems it imperative to state that in contemporary practice, a complainant in proceedings under Section 138 of the NI Act often endures greater procedural hardship than the accused. This stems primarily from the trend wherein every summoning order issued by the Magistrate is challenged on various grounds. Such challenges compel the complainant to defend the validity of the Magistrate’s orders at the preliminary stages of the case.

37. This tactic not only delays the proceedings but also places the complainant at a significant disadvantage, undermining the objective of Section 138 of the NI Act as a mechanism for swift redressal of dishonored cheques. Consequently, the complainant, rather than swiftly obtaining relief, is embroiled in protracted legal battles that detract from the intended efficiency of the summary trial process envisioned under the said Act and its high time that the same must be avoided as it not only violates the intent of the legislature but also increases unnecessary burden upon the litigants as well as the High Courts.

38. In view of the above facts and circumstances, it is held that there is no illegality in the order dated 14th March, 2023 passed by the learned ASJ in CR No. 627/22 and the same is hereby upheld.

39. Accordingly, the instant petition, along with the pending applications, if any, stands dismissed.

40. The order be uploaded on the website forthwith.