Court No. - 13
Case :- APPLICATION U/S 482 No. - 19036 of 2018 Applicant :- Anand Hem Chandra Srivastava Opposite Party :- State Of U.P. And Another Counsel for Applicant :- Shivendra Bahadur Counsel for Opposite Party :- G.A.
Hon'ble Ajit Kumar,J.
This application under Section 482 Cr.P.C. has been filed seeking quashing of the proceedings in complaint case no. 13354 of 2017 (Vipin Jain v. Anand Metal Ispat Ltd. ) under Section 138 Negotiable Instrument Act, P.S. Kidwai Nagar, District Kanpur Nagar as well as summoning order dted 12.3.2018 passed by ACMM/ Additional Civil Judge (S.D.) Room No. 2 Kanpur Nagar.
Heard learned counsel for the parties, learned A.G.A. for the State and perused the record.
The arguments advanced on behalf of learned counsel for the applicant is that there was a business transaction between the parties and on account of some technical business problems, the supply of the goods worth Rs. 22, 57,991/- could only be made to the complainant's firm from period 14.4.2017 and 19.7.2017 as against supply of goods worth Rs. 35,00,000/-. The deficiency was made good by the complainant by giving updated cheque of Rs. 12,00,000/- and entire dues have been cleared. It is contended that the cheque was undated because of the good faith and mutual trust between the parties in sale and supply of goods and there was no intention to defraud the complainant in any manner whatsoever. In the statement regarding debit from account of the applicant and credit in the account of complainant has also been brought on record as Annexure 4 to the affidavit filed in support of the application.
From the bare perusal of the summoning order dated 12.3.2018, it is clear beyond any doubt that learned Magistrate has applied his mind to the impugned complaint and the statement of the complainant recorded under Section 200 Cr.P.C. and also the material as well as the evidence brought on record and is prima facie justified in issuing summons, and therefore, no interference by this Court in exercise of power under Section 482 Cr.P.C. is warranted.
However, since it is a case of a cheque amounting to Rs.
12,00,000/- (two lacs) being dishonored for insufficiency of fund in the Bank account, it is always open for the applicant to make the loss good, caused to the victim-complainant and then either to get the case compounded with mutual agreement. Proceeding being summary in nature, the endeavour should be to conclude it amicabally instead of prolonging the case giving opportunity to the parties to try to gain an edge over the other by challenging miscellaneous orders at different stages of trial. Noting down the concern of the Attorney General that in the absence of statutory guidelines, parties are choosing compounding as a method of last resort instead of resorting to it immediately after taking of the cognizance of the complaint by the Magistrate and that this tendency has resulted is unnecessary pendency of the litigation, which otherwise subject to the willingness of the parties can be brought to an end through compounding, the Supreme Court has laid down the guidelines in the case of Damodar S. Prabhu v. Sayed Babalal H. (2010) 5 SCC 663. Paragraph 21 of the judgement reads as under :-
"21. With regard to the progression of litigation in cheque bouncing cases, the learned Attorney General has urged this Court to frame guidelines for a graded scheme of imposing costs on parties who unduly delay compounding of the offence. It was submitted that the requirement of deposit of the costs will act as a deterrent for delayed composition, since at present, free and easy compounding of offences at any stage, however belated, gives an incentive to the drawer of the cheque to delay settling the cases for years. An application for compounding made after several years not only results in the system being burdened but the complainant is also deprived of effective justice. In view of this submission, we direct that the following guidelines be followed:
THE GUIDELINES
(i) In the circumstances, it is proposed as follows:
(a) That directions can be given that the Writ of Summons be suitably modified making it clear to the accused that he could make an application for compounding of the offences at the first or second hearing of the case and that if such an application is made, compounding may be allowed by the court without imposing any costs on the accused.
(b) If the accused does not make an application for compounding as aforesaid, then if an application for compounding is made before the Magistrate at a subsequent stage, compounding can be allowed subject to the condition that the accused will be required to pay 10% of the cheque amount to be deposited as a condition for compounding with the Legal Services Authority, or such authority as the Court deems fit.
(c) Similarly, if the application for compounding is made before the Sessions Court or a High Court in revision or appeal, such compounding may be allowed on the condition that the accused pays 15% of the cheque amount by way of costs.
(d) Finally, if the application for compounding is made before the Supreme Court, the figure would increase to 20% of the cheque amount."
Again in the case of Meters and Instruments Private Limited and Another v. Kanchan Mehta (2018) 1 SCC 560, it was held that the object of introducing Section 138 and other provisions of Chapter XVII in the Act in the year 1988 was to enhance the acceptability of cheques in the settlement of liabilities. The Court vide elaborating the various aspects regarding the trial under Section 138 of Negotiable Instrument Act in the light of various judgements previously passed, the Court held thus :
"18.1 Offence under under Section 138 of the Act is primarily a civil wrong. Burden of proof is on accused in view presumption under Section 139 but the standard of such proof is "preponderance of probabilities". The same has to be normally tried summarily as per provisions of summary trial under the CrPC but with such variation as may be appropriate to proceedings under Chapter XVII of the Act. Thus read, principle of Section 258 CrPC will apply and the Court can close the proceedings and discharge the accused on satisfaction that the cheque amount with assessed costs and interest is paid and if there is no reason to proceed with the punitive aspect.
18.2. The object of the provision being primarily compensatory, punitive element being mainly with the object of enforcing the compensatory element, compounding at the initial stage has to be encouraged but is not debarred at later stage subject to appropriate compensation as may be found acceptable to the parties or the Court.
18.3. Though compounding requires consent of both parties, even in absence of such consent, the Court, in the interests of justice, on being satisfied that the complainant has been duly compensated, can in its discretion close the proceedings and discharge the accused.
18.4. Procedure for trial of cases under Chapter XVII of the Act has normally to be summary. The discretion of the Magistrate under second proviso to Section 143, to hold that it was undesirable to try the case summarily as sentence of more than one year may have to be passed, is to be exercised after considering the further fact that apart from the sentence of imprisonment, the Court has jurisdiction under Section 357(3) CrPC to award suitable compensation with default sentence under Section 64 IPC and with further powers of recovery under Section 431 CrPC With this approach, prison sentence of more than one year may not be required in all cases.
18.5. Since evidence of the complaint can be given on affidavit, subject to the Court summoning the person giving affidavit and examining him and the bank's slip being prima facie evidence of the dishonor of cheque, it is unnecessary for the Magistrate to record any further preliminary evidence. Such affidavit evidence can be read as evidence at all stages of trial or other proceedings. The manner of examination of the person giving affidavit can be as per Section 264 CrPC. The scheme is to follow summary procedure except where exercise of power under second proviso to Section 143 becomes necessary, where sentence of one year may have to be awarded and compensation under Section 357(3) is considered inadequate, having regard to the amount of the cheque, the financial capacity and the conduct of the accused or any other circumstances.
19. In view of the above, we hold that where the cheque amount with interest and cost as assessed by the Court is paid by a specified date, the Court is entitled to close the proceedings in exercise of its powers under Section 143 of the Act read with Section 258 CrPC. As already observed, normal rule for trial of cases under Chapter XVII of the Act is to follow the summary procedure and summons trial procedure can be followed where sentence exceeding one year may be necessary taking into account the fact that compensation under Section 357(3) CrPC with sentence of less than one year will not be adequate, having regard to the amount of cheque, conduct of the accused and other circumstances.
20. In every complaint under Section 138 of the Act, it may be desirable that the complainant gives his bank account number and if possible e-mail ID of the accused. If e-mail ID is available with the Bank where the accused has an account, such Bank, on being required, should furnish such e-mail ID to the payee of the cheque. In every summons, issued to the accused, it may be indicated that if the accused deposits the specified amount, which should be assessed by the Court having regard to the cheque amount and interest/cost, by a specified date, the accused need not appear unless required and proceedings may be closed subject to any valid objection of the complainant . If the accused complies with such summons and informs the Court and the complainant by e-mail, the Court can ascertain the objection, if any, of the complainant and close the proceedings unless it becomes necessary to proceed with the case. In such a situation, the accused's presence can be required, unless the presence is otherwise exempted subject to such conditions as may be considered appropriate. The accused, who wants to contest the case, must be required to disclose specific defence for such contest. It is open to the Court to ask specific questions to the accused at that stage. In case the trial is to proceed, it will be open to the Court to explore the possibility of settlement. It will also be open to the Court to consider the provisions of plea bargaining. Subject to this, the trial can be on day to day basis and endeavour must be to conclude it within six months. The guilty must be punished at the earliest as per law and the one who obeys the law need not be held up in proceedings for long unnecessarily."
In view of the above emerging legal position, learned counsel for the applicant is in agreement for such course of action if opportunity is afforded to approach the Court as per the guidelines laid down by the Supreme Court (supra). The request prayed for, is allowed.
In view of legal position in cases of dishonored cheque has come to be crystallized by the Supreme Court laying down guidelines for amicable conclusion of the summary trial under Section 138 N.I. Act. Since, petitioner has paid up entire amount, it is hereby directed that he shall move appropriate application through council in the light of the directions of the Supreme Court before the learned Magistrate who shall consider the same and disposed of the same within parameters and guidelines for Supreme Court in the aforesaid case.
In the meanwhile, therefore, it is further provided that until the disposal of the application, no coercive action shall be taken against the applicant in connection with the aforesaid case.
However, in the event of failure on the part of the applicant in moving application within the prescribed period or fail to reach to a compromise for compounding, the court below shall proceed with the trial of the case in accordance with law.
With the aforesaid observations and directions, the application under Section 482 Cr.P.C is disposed of.
Order Date :- 29.5.2018 Sanjeev