Accused resides outside Jurisdiction - Nature of Enquiry by Magistrate u/s. 202 (1) Cr.P.C. [Case Law]

Criminal Procedure Code, 1973 - S. 202 (1) - Criminal Procedure (Amendment) Act, 2005 - S. 19 - Amendment is aimed to prevent innocent persons, who are residing outside the territorial jurisdiction of the Magistrate concerned, from harassment by unscrupulous persons from false complaints - The use of expression “shall”, looking to the intention of the legislature to the context, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate.

Criminal Procedure Code, 1973 - S. 202 (1) - Criminal Procedure (Amendment) Act, 2005 - S. 19 - the Magistrate concerned is to ward of false complaints against such persons who reside at far of places with a view to save them from unnecessary harassment and the Magistrate concerned is under obligation to find out if there is any matter which calls for investigation by Criminal Court in the light of the settled principles of law holding an enquiry by way of examining the witnesses produced by the complainant or direct an investigation made by a police officer.

Criminal Procedure Code, 1973 - S. 202 - Postponement of issue of process - When an order of issuing summon is issued by a Magistrate against an accused who is residing at a place beyond the area in which he exercises his jurisdiction without conducting an enquiry under Section 202 Cr.P.C., the matter is required to be remitted to the Magistrate concerned for passing fresh orders uninfluenced by the prima facie conclusion reached by the Appellate Court.

Criminal Procedure Code, 1973 - S. 465 - If on any technical ground any party to the criminal proceedings is aggrieved he must raise the objection thereof at the earliest stage - In the event of failure on the part of an aggrieved party to raise objection at the earliest stage, he cannot be heard on that aspect after the whole trial is over or even at a later stage after his participation in the trial.

Negotiable Instruments Act, 1881 - Ss. 138 & 141 - In cases falling under Section 138 read with Section 141 of the N.I. Act, the Magistrate is not mandatorily required to comply with the provisions of Section 202 (1) before issuing summons to an accused residing outside the territorial jurisdiction of the Magistrate concerned.

IN THE HIGH COURT AT CALCUTTA

Criminal Revisional Jurisdiction

Judgment on: 03/05/2018

Present: The Hon’ble Justice Debasish Kar Gupta And The Hon’ble Justice Shekhar B. Saraf 

CRR 1600 of 2013 S.S. Binu vs. State of West Bengal & Anr. with CRR 2801 of 2013 Varun Jain vs. Hirajuli Tea Co. Ltd. with CRR 2915 of 2013 Manjeet Gaba vs. M/s. Srie Equipment Finance Pvt. Ltd. with CRR 2916 of 2013 Mangat Singh Gaba vs. M/s. Srie Equip Finance Pvt. Ltd. with CRR 2917 of 2013 Mangat Singh Gaba @ Mangat Gaba vs. M/s. Srie Equipment Finance Pvt. Ltd. with CRR 2924 of 2013 Ashish Jhunjhunwala vs. Kotak Mahindra Bank Ltd. 

with CRR 2925 of 2013 Ashish Jhunjhunwala vs. Kotak Mahindra Bank Ltd. with CRR 2926 of 2013 Ashish Jhunjhunwala vs. Kotak Mahindra Bank Ltd. with CRR 2927 of 2013 Ashish Jhunjhunwala vs. Kotak Mahindra Bank Ltd. with CRR 2928 of 2013 Ashish Jhunjhunwala vs. Kotak Mahindra Bank Ltd. with CRR 2929 of 2013 Ashish Jhunjhunwala vs. Kotak Mahindra Bank Ltd. with CRR 2930 of 2013 Ashish Jhunjhunwala vs. Kotak Mahindra Bank Ltd. with CRR 2931 of 2013 Ashish Jhunjhunwala vs. Kotak Mahindra Bank Ltd. with CRR 2932 of 2013 Ashish Jhunjhunwala vs. Kotak Mahindra Bank Ltd. 

with CRR 2947 of 2013 Debasish Bauri & Ors. vs. State & Anr. with CRR 2955 of 2013 Sangita Kothari vs. Avinash Chandra Malpani with CRR 2956 of 2013 Ranjit Singh Kothari vs. Avinash Chandra Malpani with CRR 2957 of 2013 Anand Kothari vs. Avinash Chandra Malpani With CRR 3032 of 2013 With CRAN 3246 of 2013 Kaberi Saha –Vs- State & Anr. with CRR 3059 of 2013 Rohitash Kumar Mittal vs. Stewart and Mackerticj Wealth Magt Mtrd with CRR 3061 of 2013 Rohitash Kumar Mittal vs. Stewart and Mackerticj Wealth Magt Mtrd with CRR 3063 of 2013 Rohitash Kumar Mittal vs. Stewart and Mackerticj Wealth Magt Mtrd with CRR 3066 of 2013 Rohitash Kumar Mittal vs. Stewart and Mackertich Comm. Ltd. with CRR 3068 of 2013 Rohitash Kumar Mittal vs. Stewart and Mackertich Comm. Ltd. with CRR 3069 of 2013 Rohitash Kumar Mittal vs. Stewart and Mackertich Wealth Magt Ltd. 

with CRR 3126 of 2013 with CRAN 3255 of 2013 Aditya Mukherjee –Vs- State & Anr. with CRR 2525 of 2013 Marjeet Gaba –Vs- State of West Bengal & Ors. with CRR 2526 of 2013 Manjeet Gaba vs. State of W.B. & Ors. with CRR 1956 of 2013 Pawan Kr. Agarwal vs. The State with CRR 1957 of 2013 Pawan Kr. Agarwal vs. The State with CRR 1958 of 2013 Pawan Kr. Agarwal vs. The State with CRR 2010 of 2013 Pawan Kr. Agarwal vs. The State with CRR 3646 of 2014 Bhushan Bhandari & Anr. –Vs- State of W.B. with CRR 2865 of 2013 Pawan Kumar Agarwal –Vs- M/s. R. Piyarilal Iron & Steel Pvt. Ltd. with CRR 2592 of 2013 Pawan Kumar Agarwal –Vs- M/s. R. Piyarilal Iron & Steel Pvt. Ltd. with CRR 2593 of 2013 Pawan Kumar Agarwal –Vs- M/s. R. Piyarilal Iron & Steel Pvt. Ltd. with CRR 3157 of 2013 Pawan Kumar Agarwal –Vs- M/s. R. Piyarilal Iron & Steel Pvt. Ltd. with CRR 3158 of 2013 Pawan Kumar Agarwal –Vs- M/s. R. Piyarilal Iron & Steel Pvt. Ltd. with CRR 3002 of 2013 Vikram Mordani –Vs- Navin Construction & Credit Pvt. Ltd.

For the petitioner in CRR Nos.1600/2013, 2801/2013, 2915/2013, 2916/2013, 2917/2013, 2924/2013, 2925/2013,2926/2013,2927/2013, 2928/2013, 2929/2013, 2930/2013, 2931/2013, 2932/2013, 2947/2013, 2955/2013, 2956/2013, 2957/2013, 3032/2013 with CRAN 3246/2013, 3059/2013, 3061/2013, 3063/2013, 3066/2013, 3068/2013, 3069/2013, 3126/2013 with CRAN 3255/2013, 2525/2013, 2526/2013, 1956/2013, 1957/2013, 1958/2013, 2010/2013, 3646/2014, 2865/2013, 2592/2013, 2593/2013, 3157/2013 & 3158/2013.

For the petitioner in CRR No.3002/2013 For the opp. party in CRR Nos.3059/2013, 3061/2013, 3063/2013, 3068/2013 & 3069/2013 For the opp. party in CRR Nos.1956/2013, 1957/2013, 1958/2013, 2010/2013, 3157/2013, 3158/2013, 2865/2013, 2592/2013 & 2593/2013.

For the Union of India : Mr. Ayan Bhattacharya, Mr. Indrajit Adhikari Mr. Pawan Kumar Gupta, Mr. Anjan Dutta, Mr. Anand Keshari, Mr. Amitava Ray, Mr. Ganesh Jajodia, Mr. Rohit Jalan, Mr. Sharequl Haque, Mr. Ozair Elahi, Mrs. A. Ghosh Mondal Mr. Soumya Nag : Mr. Nilay Sengupta, Ms. Swati Agarwal : Ms. Rituparna De Ghose, Ms. Joyti Singh : Mr. Tirthankar Ghosh, Mr. Koushik Kundu, Mr. Satudru Lahiri, Ms. Mrinali Majumder : Mr. Kaushik Chanda, Addl. Solicitor General, Ms. Rajasshree Venkat Kundalia 

J U D G M E N T

Debasish Kar Gupta , J. : 

1. These bunch of applications filed under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as the Cr.P.C.) have been assigned to this Bench by the Hon’ble Acting Chief Justice by an order dated November 13, 2017 on the basis of a reference made by a learned Single Judge of this Court (Tarun Kumar Gupta, J.) to decide the following issues in the backdrop of the relevant provisions of law:-

“(1) Whether the amendment of Section 202 of the Code of Criminal Procedure, 1973 as enacted vide Section 19 of the Criminal Procedure (Amendment) Act, 2005 (25 of 2005) casts a mandatory duty upon the Magistrate to conduct an inquiry under Section 202 of the Code before issuing process under Section 204 of the Code qua an accused who resides outside the territorial limit of the Court of the said Magistrate? 

(2) What will be the nature of such inquiry under Section 202 of the Code qua an accused who resides outside the territorial limit of the said Court? 

(3) Whether non-compliance of such inquiry in terms of Section 202 (as amended vide Section 19 of the Criminal Procedure (Amendment) Act 2005 (25 of 2005) will invalidate or vitiate the order of process so issued? 

(4) Whether non-compliance of such inquiry in terms of Section 202 (as amended vide Section 19 of the Criminal Procedure (Amendment) Act 2005 (25 of 2005) can be raised only at the initial stage of the proceedings or after much deliberation as well? 

(5) Whether the amendment of Section 202 of the Code of Criminal Procedure, 1973 as enacted vide Section 19 of the Criminal Procedure (Amendment) Act 2005 (25 of 2005) will apply in case of offences punishable under Section 138/141 of the Negotiable Instruments Act, 1881?” 

2. The accused persons of the respective criminal cases bearing CRR Nos.2987 of 2013 and 2988 of 2013 filed their respective revisional applications under Section 482 Cr.P.C. for quashing their criminal proceedings arising out of 420/406/120B of the Indian Penal Code, 1860 (hereinafter referred to as the I.P.C.) 

3. Excepting the aforesaid applications, the rest of the revisional applications have been filed praying for quashing of the criminal cases filed under Sections 138/141 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the said Act, 1881).

4. Section 19 of the Criminal Procedure (Amendment) Act, 2005 has been promulgated by the legislature for amending sub-section (1) of Section 202 Cr.P.C. which came into force with effect from June 23, 2006. By virtue of the aforesaid amendment, the word “shall” has been inserted in subsection (1) of Section 202 Cr.P.C. After the above amendment sub-section (1) of Section 202 Cr.P.C. runs as follows:-

202. Postponement of issue of process.– (1) Any Magistrate, on receipt of a complaint of an offence of which he is authorized to take cognizance or which has been made over to him under section 192, may, if he thinks fit, and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding: Provided that no such direction for investigation shall be made– (a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Sessions; or (b) Where the complaint has not been made by a Court, unless the complainant and the witnesses present (if any) have been examined on oath under section 200.. . . .

5. In all the aforesaid revisional applications a common plea has been taken alleging that the petitioners have been residing at a place beyond the territorial jurisdiction of the concerned Magistrate Court, but process were issued against them under Section 204 Cr.P.C. without making necessary mandatory inquiry as contemplated under sub-section (1) of the Section 202 Cr.P.C. It is their common plea that on that score alone the orders of issuance of process under Section 204 Cr.P.C. and subsequent proceedings cannot be sustained in law.

6. Mr. Ayan Bhattacharya, leaned Counsel appearing in a number of cases for the petitioners and in some other cases for the private opposite parties, advanced arguments claiming that the inquiry as contemplated under sub-section (1) of Section 202 Cr.P.C. in respect of the accused persons residing at a place beyond the territorial jurisdiction of the learned Magistrate, which has been brought into the statute by the legislature by way of the aforesaid amendment, is mandatory in nature. According to him, the provision is mandatory as it will be evident not only from the use of the word “shall” but also from the notes on clauses as enunciated by the legislature making the amendment.

7. Reliance is placed by Mr. Bhattacharya on the decisions of National Bank of Oman vs. Barakara Abdul Aziz & Anr., reported in (2013) 2 SCC 488, Udai Shankar Awasthi vs. State of U.P., reported in (2013) 2 SCC 435, Vijay Dhanuka & Ors. vs. Najima Mamtaj & Ors., reported in (2014) 14 SCC 638, Abhijit Pawar vs. Hemant Madhukar Nimbalkar & Anr., reported in 2016 (12) SCALE 788 in support of his above submissions.

8. It is further submitted by Mr. Bhattacharya that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden.

9. Reliance is placed by Mr. Bhattacharya on the decision of Taylor vs. Taylor, reported in (1875) 1 Ch. D. 426, Nazir Ahmad vs. Emperor, reported in AIR 1936 PC 253 and State of U.P. vs. Singhara Singh, reported in AIR 1964 SC 358 in support of his above submissions.

10. It is also submitted by Mr. Bhattacharya that if a mandatory provision of law is not complied with, any action taken in ignorance of such provision is a nullity in the eye of law even if prejudice is not caused. He added that non-compliance of sub-section (1) of Section 202 Cr.P.C. affects a very substantive right of the accused interfering with the fundamental rights and liberty of an individual. Therefore, the question of prejudice will not stand in the way unlike in cases of non-compliance of directory provisions of law.

11. Reliance is placed by Mr. Bhattacharya on the decisions of Shyamal Kumar Goswami & Anr. vs. Ashim Mukherjee, reported in (2014) 1 C Cr. LR (Cal) 150, Harilal Shaw vs. State of West Bengal, reported in 89 CWN 557, Subramanian Swamy vs. Union of India, Ministry of Law & Or., reported in 2016 (5) SCALE 379, M/s. Nishka Properties (Pvt.) Ltd. & Anr. vs. The State of West Bengal & Anr., reported in 2013 (3) CLJ (Cal) 390 and A. Devendran vs. State of Tamil Nadu, reported in (1997) 11 SCC 720 in support of his above submissions.

12. With regard to the nature of inquiry under the aforesaid provisions of the Cr.P.C. qua an accused who resided outside the territorial limit of the Court of the concerned Magistrate, it is submitted by him that the objects and reasons appended to the amendment clarifies the purpose of amendment, which is to ascertain and find out as to whether or not there are sufficient grounds to proceed against the accused, and thus, to obviate any possibility of innocent persons being harassed by unscrupulous litigants and vexatious proceedings. According to him, in pre amendment stage, the learned Magistrate could take resort to provisions of Section 202 Cr.P.C. in law in respect of those cases where some shadow of doubt remained into the mind of the learned magistrate about the prima facie case. But after the amendment, even if at the stage of inquiry under Section 200 Cr.P.C., the learned Magistrate is satisfied that sufficient ground of proceedings against the proposed accused are made out, the Magistrate has to undergo the stage of Section 202 Cr.P.C. by carefully scrutinizing the entire case before him. He however added, an inquiry under Section 202 Cr.P.C. is not in the nature of a trial and the scope is extremely limited. Nevertheless, it is to be conducted to find out the extent of involvement of an accused, who resides outside the locality of the Magistrate, and furthermore to arrive at a conclusion the prosecution qua such an accused is not vexatious.

13. Pointing out the decision of the Apex Court in the matter of A. R. Antulay vs. Ramdas Sriniwas Nayak & Anr., reported in (1984) 2 SCC 500, it is submitted by Mr. Bhattacharya that the observation made by the Apex Court in the above case that the provision of Section 202 Cr.P.C. was enabling in nature was the position at the pre amendment stage. According to him, the above provision has been made mandatory by way of amendment of sub-section (1) of Section 202 Cr.P.C. as observed by the Apex Court in the matter of National Bank of Oman (supra).

14. Reliance is also placed on the decision of State of Jharkhand & Ors. vs. Ambay Cements & Anr., reported in (2005) 1 SCC 368 and Vijaysinh Chandubha Jadeja vs. State of Gujarat, reported in (2011) 1 SCC 609 in this regard.

15. Regarding the consequences of non-compliance of inquiry under sub-section (1) of Section 202 Cr.P.C. it is submitted by him that raising of an objection at an early stage, i.e. at pre-trial stage will invalidate or vitiate the order of process.

16. However, Mr. Bhattacharya further submits that raising of an objection by an accused residing outside the territorial jurisdiction of the Court of the learned Magistrate concerned against the order of process issued without complying with the provisions of sub-section (1) of Section 202 Cr.P.C., cannot be entertained at a belated stage, i.e. after recording of the evidence of the respective parties or at the stage of compliance of the provisions of Section 313 Cr.P.C.

17. Regarding the applicability of the amended provisions of sub-section (1) of Section 202 Cr.P.C. on the Negotiable Instruments Act, 1881 (hereinafter referred to as the said Act, 1881), it is submitted by Mr. Bhattacharya that in order to achieve the object of the said Act, 1881 the legislature thought it proper to make provision in the said Act, 1881 for conferring certain privileges to the mercantile instruments contemplated under it and provided special procedure in case of the obligation under the instrument which was not discharged. Sections 142 and 143 of the said Act, 1881 brings some of the procedural provisions of the Cr.P.C. into the said Act, 1881 by way of legislation. According to him, under the provisions of sub-section (2) of Section 143 of the said Act, 1881 the procedure of summary trial as envisaged under Chapter XXI of Cr.P.C. will apply. In view of Sections 3 and 4 of the Cr.P.C., in absence of any contrary provision in the said Act, 1881 the general law qua inquiry under Sections 200 and 202 Cr.P.C. will apply. However, according to him, no Magistrate can take cognizance of an offence punishable under Section 138 of the said Act, 1881 on an oral complaint or on a police report.

18. According to him, under the amended provisions of Section 145 of the said Act, 1881, affidavit may be accepted as evidence during enquiry or trial. As a consequence, during enquiry under Section 200 Cr.P.C., instead of examining the complainant on dock, a Magistrate can accept the affidavit affirmed by him. Barring these provisions and a few others, according to him, the general procedure of Cr.P.C. will apply proprio vigore in respect of trial of offences punishable under the said Act, 1881 or in other words, according to him, the non-obstinate clauses appended to the various sections of the said Act, 1881 does not exclude the operation of the rest of the provisions of Cr.P.C. Reliance is placed by Mr. Bhattacharya on the decisions of Indian Bank Association vs. Union of India & Ors., reported in (2014) 5 SCC 590 and Indra Kumar Patodia vs. Reliance Industries Ltd. & Ors., reported in (2012) 13 SCC 1.

19. It is added by Mr. Bhattacharya that amendments in Chapter XVII of the said Act, 1881, which has been inserted in the said Act, 1881, by virtue of the Negotiable Instruments (Amendment) Act, 1988, with effect from April 1, 1989, takes umbrage of non-obstinate clauses in Sections 142, 143, 144, 145 and 147 of the said Act, 1881. Section 147 of the said Act, 1881 declares the offence under Section 138 to be compoundable in nature.

20. According to Mr. Bhattacharya, Cr.P.C. categories four types of procedures in trial, one of such is summary trial which is a truncated version of summary trial. Even to reach the stage of summons trial or summary trial which opens with examination under Section 251 Cr.P.C., one has to pass through the stages of Sections 190, 200, 202 and 204 Cr.P.C. Therefore, according to him, under no stretch of imagination it can be said that the amendment of Section 202 Cr.P.C. will be inapplicable in respect of a trial of an offence under Section 138 of the said Act, 1881. He added that the provision of Section 139 of the said Act, 1881 is also not a decisive factor in adjudication of this issue because it encapsulates a presumption of law that an accused is deemed to be innocent until proven otherwise.

21. Reliance is placed by Mr. Bhattacharya on the decisions of Priyanka Srivastava & Anr. vs. State of Uttar Pradesh & Ors., reported in (2015) 6 SCC 287 and Rangappa vs. Sri Mohan, reported in (2010) 11 SCC 441 in support of his above submissions.

22. It is submitted by Mr. Tirthankar Ghosh, learned Counsel appearing on behalf of the complainant/opposite parties in some of the aforesaid applications, that according to the settled principles of law, Section 202 Cr.P.C. contemplates pronouncement of the issue of process in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction and thereafter to enter enquiry into the case by himself or direct an investigation to be made by a police officer or by such other person as he thinks fit. It is further added by him that the insertion of the words “and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction” has been inserted by Section 19 of the Criminal Procedure (Amendment) Act, 2005 with effect from June 23, 2006 by the legislature to prevent innocent persons residing at far off places from harassment by unscrupulous persons from false complaints. According to him, though the use of the word “shall” in all circumstances is not decisive, bearing in mind the context or intention of the legislature the above provision is mandatory.

23. With regard to the mode of enquiry, it is submitted by him, that no specific mode or manner of enquiry is provided under Section 202 Cr.P.C. In the enquiry envisaged under Section 202 Cr.P.C. the witnesses are examined whereas under Section 200 Cr.P.C., examination of the complainant only is necessary with the option of examining the witnesses present, if any.

24. Reliance is placed by Mr. Ghosh on the decisions of Vijay Dhanuka vs. Najima Mamtaj (supra) in support of his above submissions.

25. With regard to the question of the consequence of non-compliance of such enquiry in terms of Section 202 Cr.P.C. as amended by virtue of Section 19 of the Criminal Procedure (Amendment) Act, 2005, it is submitted by Mr. Ghosh that the question of the accused on receipt of summons approaching the Court and making an application for dismissal of complaint under Section 203 Cr.P.C. on a reconsideration of material available on record is impermissible because by then Section 203 Cr.P.C. has already been over and the Magistrate has proceeded further to Section 204 Cr.P.C. So, if a Magistrate takes cognizance of an offence, issues process without there being allegation against any accused or any material implicating the accused or in contravention of the provisions of Sections 200 and 202, the order of Magistrate may be vitiated and on that occasion then the relief an accused person can obtain at that stage is by invoking Section 482 Cr.P.C. so that the Court may pass an appropriate order remanding the matter back to the learned Magistrate for compliance of the provisions of Section 202 Cr.P.C.

26. Reliance is placed by Mr. Ghosh on the decisions of Kanti Bhadra Shaw & Anr. vs. State of West Bengal, reported in (2000) 1 SCC 722, Manharibhai Muljibhai Kakadia & Anr. vs. Shaileshbhai Mohanbhai Patel & Ors., reported in (2012) 10 SCC 517 and Shivjee Singh vs. Nagendra Tiwary & Ors., reported in (2010) 7 SCC 578 in support of his above submissions.

27. However, according to him, initiation of a proceeding by an accused person under Section 482 Cr.P.C. on the above ground at a belated stage is not permissible.

28. Reliance is placed by Mr. Ghosh on the decisions of State of H.P. vs. Gita Ram, reported in (2000) 7 SCC 452 and State of M.P. vs. Bhooraji & Ors., reported in (2001) 7 SCC 679 in support of his above submissions.

29. Regarding the applicability of the amended provisions of Section 202 Cr.P.C. in the case of offences punishable under Sections 138/141 of the said Act, 1881, it is submitted by Mr. Ghosh that Chapter XVII has been inserted in the said Act, 1881, containing Sections 138 to 142 in the said Act, 1881 by the legislature by enacting the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, with the object of promoting and inculcating faith in the efficacy of banking system and its operation and giving credibility to negotiable instruments in business transactions. According to him, in our country, in a large number of commercial transactions the sanctity and credibility of issuance of cheques were eroded to a large extent resulting in incalculable loss, injury and inconvenience to the payee within and outside the country causing a serious setback.

30. According to him, when the above amendments came into existence, a complaint could be filed by the payee or holder in due course at 5 different places as observed by the Apex Court in the matter of K. Bhaskaran vs. Sankaran Vaidhyan Balan & Anr., reported in (1999) 7 SCC 510.

31. In 2002, consequent upon further amendment of the said Act, 1881 taking effect from February 6, 2003, although the provision was made for condonation of the period of limitation, yet there was no change so far as the territorial jurisdiction for filing of complaint cases in respect of the dishonoured cheques were concerned. The above aspect was under consideration by the Hon’ble Supreme Court in the matter of Dashrath Rupsingh Rathod vs. State of Maharashtra & Anr., reported in (2014) 9 SCC 129 and the Apex Court came to a finding that the territorial jurisdiction is restricted to the Court within whose local jurisdiction the offence was committed, which in the present context is where the cheque is dishonoured by the bank on which it is drawn.

32. It is submitted by him that the provisions of Section 143 to 147 of the said Act, 1881, were inserted by way of amendment of the said Act, 1881, in 2002 with effect from February 6, 2003. The significance of such amendment was incorporation of the provisions of Sections 145 and 146 in the said Act, 1881, making it clear that the legislature by way of amendment dispensed with the preliminary stages of criminal proceedings which are akin to the Cr.P.C. According to him, the procedure, the manner in which the complaint is to be dealt with as also the significance of Section 145 of the said Act, 1881 have been interpreted by the Hon’ble Supreme Court in the decisions of Radhey Shyam Garg vs. Naresh Kumar Gupta, reported in (2009) 13 SCC 201, Mandvi Cooperative Bank Limited vs. Nimesh B. Thakore, reported in (2010) 3 SCC 83, Indian Bank Association & Anr. vs. Union of India, reported in (2014) 5 SCC 590 and N. Harihara Krishnan vs. J. Thomas, reported in 2017 (8) Supreme 674.

33. It is also submitted by him that the object of insertion of subsections (2) and (3) in Section 143 of the said Act, 1881 is to ensure speedy trial within six months from the date of filing of the complaint.

34. Reliance is placed by Mr. Ghosh on the decisions of Indian Bank Association (supra), Indra Kumar Patodia (supra) and J.V. Baharuni & Anr. vs. State of Gujarat, reported in (2014) 10 SCC 494 in support of his above submissions.

35. It is submitted by Mr. Ghosh that in the case of proprietorship concerns, single person is an accused and therefore, drawer of the cheque or his authorised signatory would be an accused. According to him, in case of partnership firm, signatory(s) to the cheque, managing partner and the partners who have been referred to by way of an averment in the petition of complaint, i.e. the persons responsible for day to day business of the firm or in charge of the firm at the time of commission would be the persons accused. In case of Body Corporate or company the issue that how far plea of falsity or false implication are tenable has already been settled by the Hon’ble Supreme Court.

36. Reference is made by Mr. Ghosh to the decisions of S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla & Anr., reported in (2005) 8 SCC 89, Standard Chartered Bank vs. State of Maharashtra & Ors., reported in (2016) 6 SCC 62 and Tamil Nadu Newsprint and Papers Ltd. vs. D. Karunakar & Ors., reported in (2016) 6 SCC 78 in support of his above submissions.

37. It is submitted by Mr. Kaushik Chanda, learned Additional Solicitor General that the provisions of Section 202 Cr.P.C. is mandatory in nature. According to him, the amendment of Section 202 Cr.P.C., as enacted by virtue of Section 19 of the Criminal Procedure (Amendment) Act, 2005, casts a mandatory duty upon the Magistrate to conduct an enquiry under the aforesaid provision before issuing process under Section 204 of the Code in respect of an accused who resides outside the territorial limit of the Court of the learned Magistrate concern. It is also submitted by him that in view of the pronouncement of the Hon’ble Supreme Court the above provision cannot be interpreted in any other way.

38. Reliance is placed by Mr. Chanda on the decisions of Shivjee Singh vs. Nagendra Tiwary & Ors. (supra), National Bank of Oman (supra), Udai Shankar Awasthi vs. State of U.P. & Anr., reported in (2013) 2 SCC 435 and Vijay Dhanuka etc. vs. Najima Mamtaj (supra) in support of his above submissions.

39. Regarding the nature of enquiry, it is submitted by him that the provisions of Section 202 Cr.P.C. has two objects: (1) to enable the Magistrate to scrutinize carefully the allegations made in the complaint with a view to prevent a person named therein as accused from being called upon to face an unnecessary, frivolous or meritless complaint, and (2) to find out whether there is some material to support the allegations made in the complaint. Or in other words, according to him, the learned Magistrate concerned is under obligation to arrive at a satisfaction after due application of mind regarding the involvement of the accused in the commission of offence.

40. Reliance is placed by him on the decisions of Manharibhai Muljibhai Kakadia (supra), National Bank of Oman (supra) and Abhijit Pawar vs. Hemant Madhukar Nimbalkar & Ors., reported in (2017) 3 SCC 528 in support of his above submissions.

41. It is further submitted by him that the object of incorporating the word “shall” in sub-section (1) of Section 202 Cr.P.C. is for protection of innocent persons from harassment and, objection can be raised alleging non-compliance of the above provision at any stage.

42. Reliance is placed by him on the decision of Abhijit Pawar (supra).

43. Regarding the applicability of the amended provisions of Sub-Section (1) of Section 202 Cr.P.C. in case of offence punishable under Sections 138/141 of the said Act, 1881, our attentions have been drawn towards the provisions of sub-section (2) of Section 4 Cr.P.C. to submit that all offences under any law apart from Indian Penal Code, shall be inquired into, tried, and otherwise dealt with according to the provisions of Cr.P.C., but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offence. It is submitted by him that the provisions of Sections 143, 144, 145, 146 and 147 provide for summary trial, mode of service of summons, evidence on affidavit, treating of Bank’s slip as prima facie evidence of certain facts and offences to be compoundable respectively. Our attention has further been drawn to the fact that all the provisions of Sections 143, 144, 145 and 147 begin with a non obstante clause. Therefore, according to him, the said Act, 1881, provides for a separate procedure of summary trial adhering to the directions of the Hon’ble Supreme Court given in the matter of Indian Bank Association (supra). It is further submitted by him that the procedure of summary trial is adopted under Section 143 subject to the qualification “as far as possible”, thus, leaving sufficient flexibility so as not to affect the quick flow of the trial process. According to him, while following the procedure of summary trial, the non obstante clause in Section 145 of the said Act, 1881 allows for evidence of the complaint to be given on affidavit in absence of the accused. This would have been impermissible in a summary trial under the Cr.P.C. in view of the provisions of Sections 251 and 254 read with Section 273 Cr.P.C. However, the accused is fully protected as under sub-section (2) of Section 145 of the said Act, 1881, he has the absolute unqualified right to have the complainant and any or all of his witnesses summoned for cross-examination.

44. Reliance is placed by him on the decision of Mandvi Cooperative Bank Limited (supra) for the above proposition.

45. It is also submitted by him that in view of provisions of Section 145 of the said Act, 1881, it is a matter of discretion for the learned Magistrate to call upon the complainant or his witness upon oath. Therefore, according to him, compliance of the provisions of Section 202 Cr.P.C. in an application filed under Section 138 of the said Act, 1881 is within the discretion of the learned Magistrate concerned and non-compliance of the same does not ipso facto vitiate the proceedings.

46. Reliance is placed by Mr. Chanda on the decision of the High Court of Bombay in the matter of Rejul Ketan Raj vs. Reliance Capital Ltd. & Ors., reported in MANU/MH/0140/2016 in support of his above submissions.

47. We have heard the learned Counsels appearing for the respective parties at length and we have given our anxious considerations to the issues involved in this bunch of matters. We address the issues involved in the reference as under:-

A. Requirement of conducting enquiry or directing investigation under the provisions of Sub-Section (1) of Section 202 Cr.P.C. before issuing process where accused is residing beyond territorial jurisdiction of the Magistrate concerned :-

48. At the very outset let us recollect the long standing settled principles of law relating to the mode of exercising a statutory power by a Court when such power is conferred for the first time upon it. Lord Jessel M.R. observed in Taylor vs. Taylor, reported in (1875) 1 Ch D 426 (at page 431) that when a statutory power is conferred for the first time upon a Court, and the mode of exercising it is pointed it means that no other mode is to be adopted. The relevant portion of the above decision is quoted below:-

. . . . When a statutory power is conferred for the first time upon a Court, and the mode of exercising it is pointed out, it means that no other mode is to be adopted. For instance, the 16th section says that the proceeding is to be by petition. It is enabling, I know, in form, that the application may be by petition; but no other process can be adopted. That has been decided on a great variety of Acts where the application has been directed to be by petition, and it has been laid down that that being the mode pointed out by the Act which conferred the jurisdiction, you must exercise the jurisdiction (as the 2nd section of this Act says in terms, though it was not necessary) according to the provisions of the Act.

49. The above settled principles of law was applied by the Privy Council in interpreting the law relating to criminal procedure in the matter of Nazir Ahmad vs. King Emperor, reported in AIR 1936 PC 253 and the relevant portion of the above decision is quoted below:-

. . . . It can hardly be doubted that a Magistrate would not be obliged to record any confession made to him if, for example, it were that of a selfaccusing madman or for any other reason the Magistrate thought it to be incredible or useless for the purposes of justice. Whether a Magistrate records any confession is a matter of duty and discretion and not of obligation. The rule which applies is a different and not less well recognised rule, namely, that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden. This doctrine has often been applied to Courts– 1 Ch. D. 426 (19) at p.431– and although the Magistrate acting under this group of sections is not acting as a Court, yet he is a judicial officer and both as a matter of construction and of good sense there are strong reasons for applying the rule in question to S. 164.

50. In post-independence era in our country, the above settled principles of law has been adopted by the Hon’ble Supreme Court in interpreting the provisions of Section 164 Cr.P.C. in the matter of State of U.P. vs. Singhara Singh & Ors., reported in AIR 1964 SC 358 and the relevant portion of the above decision is quoted below:-

7. In Nazir Ahmed's case, 63 Ind App 372 : (AIR 1936 PC 253 (2) the Judicial Committee observed that the principle applied in Taylor v. Taylor, (1876) 1 Ch. D 426 to a Court, namely, that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden, applied to judicial officers making a record under S. 164 and, therefore, held that magistrate could not give oral evidence of the confession made to him which he had purported to record under S. 164 of the Code. It was said that otherwise all the precautions and safeguards laid down in Ss. 164 and 364, both of which had to be read together, would become of such trifling value as to be almost idle and that "it would be an unnatural construction to hold that any other procedure was permitted than that which is laid down with such minute particularity in the sections themselves.

8. The rule adopted in Taylor v. Taylor (1876) 1 Ch. D 426 is well recognised and is founded on sound principle. Its result is that if a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed. The principle behind the rule is that if this were not so, the statutory provision might as well not have been enacted. A magistrate, therefore, cannot in the course of investigation record a confession except in the manner laid down in S. 164. The power to record the confession had obviously been given so that the confession might be proved by the record of it made in the manner laid down. If proof of the confession by other means was permissible, the whole provision of S. 164 including the safeguards contained in it for the protection of accused persons would be rendered nugatory. The section, therefore, by conferring on magistrates the power to record statements or confessions, by necessary implication, prohibited a magistrate from giving oral evidence of the statements or confessions made to him.

51. In the matter of State of Jharkhand & Ors. vs. Ambay Cements & Ors. (supra) it has been held by the Hon’ble Supreme Court that where a statute is penal in nature it must be strictly construed and followed and the relevant portion of the above decision is quoted below:-

26. Whenever the statute prescribes that a particular act is to be done in a particular manner and also lays down that failure to comply with the said requirement leads to severe consequences, such requirement would be mandatory. It is the cardinal rule of interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. It is also settled rule of interpretation that where a statute is penal in character, it must be strictly construed and followed. Since the requirement, in the instant case, of obtaining prior permission is mandatory, therefore, non-compliance with the same must result in cancelling the concession made in favour of the grantee, the respondent herein.

51. The Hon’ble Supreme Court, in the matter of Shivjee Singh (supra) while dealing with the issue of non-examination of some witnesses mentioned in protest petition-cum-complaint in the light of the provisions of sub-section (2) of Section 202 Cr.P.C. observed that the provisions contained in Cr.P.C. are required to be interpreted keeping in view the well recognized rule of construction that procedural prescriptions are meant for doing substantial justice. In the event, the violation of procedural provision does not result in denial of fair hearing or causes prejudice to the parties, the same has to be treated as directory notwithstanding the use of word “shall” and the relevant portion of the above decision is quoted below:-

7. We have considered the respective submissions. By its very nomenclature, CrPC. is a compendium of law relating to criminal procedure. The provisions contained therein are required to be interpreted keeping in view the well recognized rule of construction that procedural prescriptions are meant for doing substantial justice. If violation of the procedural provision does not result in denial of fair hearing or causes prejudice to the parties, the same has to be treated as directory notwithstanding the use of word ‘shall'.

52. Chapter XIV of Cr.P.C. deals with conditions requisite for initiation of proceedings. Provisions of Sections 190 to 199 Cr.P.C. deals with the above conditions. In dealing with the above Chapter the provisions of Sections 190 and 192 are relevant for the present bunch of proceedings and those are quoted below:-

190. Cognizance of offences by Magistrates.– (1) Subject to the provisions of this Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under sub-section (2), may take cognizance of any offence– (a) upon receiving a complaint of facts which constitute such offence; (b) upon a police report of such facts; (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.

(2) The Chief Judicial Magistrate may empower any Magistrate or the second class to take cognizance under sub-section (1) of such offences as are within his competence to inquire into or try.

192. Making over of cases to Magistrate.– (1) Any Chief Judicial Magistrate may, after taking cognizance of an offence, make over the case for inquiry or trial to any competent Magistrate subordinate to him.

(2) Any Magistrate of the first class empowered in this behalf by the Chief Judicial Magistrate may, after taking cognizance of an offence, make over the case for inquiry or trial to such other competent Magistrate as the Chief Judicial Magistrate may, by general or special order, specify, and thereupon such Magistrate may hold the inquiry or trial.

53. Under the provisions of Section 190 Cr.P.C. the competent Magistrate may take cognizance of any offence, subject to the provisions of Chapter XIV Cr.P.C., any Chief Judicial Magistrate is empowered under Section 192 Cr.P.C. to transfer the case for inquiry after taking cognizance to a competent Magistrate subordinate to him. Needless to point out that under the provisions of sub-section (2) of Section 12 Cr.P.C., an Additional Chief Judicial Magistrate shall have all or any of the powers of a Chief Judicial Magistrate under Cr.P.C. or under any other law for the time being in force as the High Court may direct and the transferee Magistrate is under obligation to examine the complaint and his witnesses and only thereafter to issue the process.

54. Chapter XV and XVI of Cr.P.C. contain various procedural provisions which are required to be followed by the learned Magistrate for taking cognizance, issuing of process, dismissal of complaint, supply of copies of documents and statements to the accused and commitment of the case to the Court of Session when the offence is triable exclusively by that Court. Section 200 Cr.P.C. provides for examination of the complaint on oath and witnesses present, if any. The above provision is quoted below:-

200. Examination of complainant.– A Magistrate taking cognizance of an offence on complaint shall examine upon oath the complainant and the witnesses present, if any, and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate: Provided that, when the complaint is made in writing, the Magistrate need not examine the complaint and the witnesses– (a) if a public servant acting or purporting to act in the discharge of his official duties or a Court has made the complaint; or (b) if the Magistrate makes over the case for inquiry or trial to another Magistrate under section 192: Provided further that if the Magistrate makes over the case to another Magistrate under section 192 after examining the complainant and the witnesses, the latter Magistrate need not re-examine them.

55. Prior to amendment of sub-section (1) of Section 202 Cr.P.C. by virtue of Section 19 of the Criminal Procedure (Amendment) Act, 2005, the learned Magistrate concerned, on receipt of a complaint of an offence of which he was authorized to take cognizance or which had been made over to him under Section 192 Cr.P.C., might if he thought it fit, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thought fit, for the purpose of deciding whether or not there was sufficient ground for proceeding subject to the condition that no such direction for investigation should be made where it appeared to the learned Magistrate that the offence complained of was triable exclusively by the Court of Session; or where the complaint had not been made by a Court, unless the complainant and the witnesses present (if any) had been examined under Section 200 Cr.P.C. Sub-section (1) of Section 202 Cr.P.C. has been amended by the Criminal Procedure (Amendment) Act, 2005, inserting the following words; and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction. The note of clause of the aforesaid amendment runs as follows: false complaints are filed against persons residing at far of places simply to harass them. In order to see that innocent persons are not harassed by unscrupulous persons, this clause seeks to amend sub-section (1) of Section 202 to make it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction. He shall enquire into the case himself or by such other person as he thinks fit, for finding out whether or not there was sufficient ground for proceeding against the accused. The above amended provision came into force with effect from June 23, 2006 under notification No.S.O.923(E) dated June 21, 2006.

56. The interpretation of the above amendment as to whether the same casts a mandatory duty upon the learned Magistrate to conduct inquiry in sub-section (1) of Section 202 Cr.P.C. before issuing process under Section 204 Cr.P.C. was under consideration of the Hon’ble Supreme Court in the matter of National Bank of Oman (supra) and the finding of the Apex Court is quoted below:-

11. We are of the view that the High Court has correctly held that the above-mentioned amendment was not noticed by the CJM, Ahmednagar. The CJM had failed to carry out any enquiry or order investigation as contemplated under the amended Section 202 CrPC. Since it is an admitted fact that the accused is residing outside the jurisdiction of the CJM, Ahmednagar, we find no error in the view taken by the High Court.

12. All the same, the High Court instead of quashing the complaint, should have directed the Magistrate to pass fresh orders following the provisions of Section 202 CrPC. Hence, we remit the matter to the Magistrate for passing fresh orders uninfluenced by the prima facie conclusion reached by the High Court that the bare allegations of cheating do not make out a case against the accused for issuance of process under Section 418 or 420 IPC. The CJM will pass fresh orders after complying with the procedure laid down in Section 202 CrPC, within two months from the date of receipt of this order.” 

57. In Udai Shankar Awasthi (supra) the Hon’ble Supreme Court repeated and reiterated the same view with regard to the above issue and the relevant portion of the above decision is quoted below:-

26. The Magistrate had issued summons without meeting the mandatory requirement of Section 202 Code of Criminal Procedure, though the Appellants were outside his territorial jurisdiction. The provisions of Section 202 Code of Criminal Procedure were amended vide Amendment Act 2005, making it mandatory to postpone the issue of process where the accused resides in an area beyond the territorial jurisdiction of the Magistrate concerned. The same was found necessary in order to protect innocent persons from being harassed by unscrupulous persons and making it obligatory upon the Magistrate to enquire into the case himself, or to direct investigation to be made by a police officer, or by such other person as he thinks fit for the purpose of finding out whether or not, there was sufficient ground for proceeding against the accused before issuing summons in such cases. (See also: Shivjee Singh v. Nagendra Tiwary & Ors. MANU/SC/0433/2010 : AIR 2010 SC 2261; and National Bank of Oman v. Barakara Abdul Aziz & Anr. MANU/SC/1123/2012 : JT 2012 (12) SC 432).” 

58. In the matter of Vijay Dhanuka & Ors. (supra) the Hon’ble Supreme Court repeated and reiterated the above settled principles of law as under:-

11. Section 202 of the Code, inter alia, contemplates postponement of the issue of the process “in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction” and thereafter to either inquire into the case by himself or direct an investigation to be made by a police officer or by such other person as he thinks fit. In the face of it, what needs our determination is as to whether in a case where the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction, inquiry is mandatory or not.

12. The words “and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction” were inserted by Section 19 of the Code of Criminal Procedure (Amendment) Act (Central Act 25 of 2005) w.e.f. 23-6-2006. The aforesaid amendment, in the opinion of the legislature, was essential as false complaints are filed against persons residing at far off places in order to harass them. The note for the amendment reads as follows: “False complaints are filed against persons residing at far off places simply to harass them. In order to see that innocent persons are not harassed by unscrupulous persons, this clause seeks to amend subsection (1) of Section 202 to make it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction he shall enquire into the case himself or direct investigation to be made by a police officer or by such other person as he thinks fit, for finding out whether or not there was sufficient ground for proceeding against the accused.” The use of the expression ‘shall’ prima facie makes the inquiry or the investigation, as the case may be, by the Magistrate mandatory. The word “shall” is ordinarily mandatory but sometimes, taking into account the context or the intention, it can be held to be directory. The use of the word “shall” in all circumstances is not decisive. Bearing in mind the aforesaid principle, when we look to the intention of the legislature, we find that it is aimed to prevent innocent persons from harassment by unscrupulous persons from false complaints. Hence, in our opinion, the use of the expression “shall” and the background and the purpose for which the amendment has been brought, we have no doubt in our mind that inquiry or the investigation, as the case may be, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate.

13. In view of the decision of this Court in Udai Shankar Awasthi v. State of U.P., this point need not detain us any further as in the said case, this Court has clearly held that the provision aforesaid is mandatory.. . . .

59. Therefore, the above issue is no more res integra. According to the settled principles of law, the amendment of sub-section (1) of Section 202 Cr.P.C. by virtue of Section 19 of the Criminal Procedure (Amendment) Act, 2005, is aimed to prevent innocent persons, who are residing outside the territorial jurisdiction of the Learned Magistrate concerned, from harassment by unscrupulous persons from false complaints. The use of expression “shall”, looking to the intention of the legislature to the context, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate.

60. It will not be out of context to consider the fact that the learned Single Judge while referring this bunch of cases to us, placed reliance on the decisions of Shyamal Kumar Goswami & Anr. (supra) heavily. The decision of Shyamal Kumar Goswami & Anr. (supra) is based on the decisions of Rameshwar Jute Mills Ltd. vs. Sushil Kumar Daga & Ors., reported in 2009 (2) CHN 138 and Biswanath Maheswari vs. Nabbharat Tea Processing Pvt. Ltd., reported in 2010 (2) CHN 257. We are in disagreement with the above finding in view of the fact that the decision of Rameshwar Jute Mills Ltd. (supra) has been set aside by the Hon’ble Supreme Court by an order dated April 2, 2013 passed in the matter of Umesh Verma vs. The Rameshwara Jute Mills Limited & Ors. (in re:-SLP (Crl.) No.4432 of 2009). Further, in view of the decisions of the Hon’ble Supreme Court in the matter of Shivjee Singh (supra), National Bank of Oman (supra), Udai Shankar Awasthi (supra), and Vijay Dhanuka & Ors. (supra), the ratio laid down in the matter of Biswanath Maheswari (supra) has been impliedly overruled.

B. The nature of enquiry to be undertaken by the learned Magistrate under sub-section (1) of Section 202 Cr.P.C. in the matter of an accused who resides outside the territorial jurisdiction of the Court concern :– 

61. The term “inquiry” is defined under Sub-Section (g) of Section 2 Cr.P.C which is quoted below:-

2.(g) “inquiry” means every inquiry other than trial, conducted under this court by a Magistrate or court.” 

62. The above provision purports that every inquiry other than a trial conducted by the Magistrate or court is an inquiry under Section 200 Cr.P.C. Examination of complaint only is necessary with the option of examining the witness present, if any, under the inquiry under Section 202 Cr.P.C., the witnesses are examined for the purpose of deciding whether or not there is sufficient ground for proceeding against the accused.

63. In Chandra Deo Singh Vs. P. C. Bose reported in AIR 1963 SC 1433 a four Judges Bench of the Hon’ble Supreme Court considered Section 202 of the old Criminal Procedure and held as under:-

8. . . . the object of the provisions of Section 202 (corresponding to present Section 202 of the Code), was to enable the Magistrate to form an opinion as to whether process should be issued or not and to remove from his mind any hesitation that he may have felt upon the mere perusal of the complaint and the consideration of the complainant’s evidence on oath.

64. The Hon’ble Supreme Court while considering the objects underlined the provisions of Section 202 Cr.P.C. in Manharibhai Muljibhai Kakadia & Anr. (supra) and made the following observations:-

“20. Section 202 of the Code has twin objects; one, to enable the Magistrate to scrutinize carefully the allegations made in the complaint with a view to prevent a person named therein as accused from being called upon to face an unnecessary, frivolous or meritless complaint and the other, to find out whether there is some material to support the allegations made in the complaint. The Magistrate has a duty to elicit all facts having regard to the interest of an absent accused person and also to bring to book a person or persons against whom the allegations have been made. To find out the above, the Magistrate himself may hold an inquiry under Section 202 of the Code or direct an investigation to be made by a police officer. The dismissal of the complaint under Section 203 is without doubt a pre-issuance of process stage. The Code does not permit an accused person to intervene in the course of inquiry by the Magistrate under Section 202. The legal position is no more res integra in this regard. More than five decades back, this Court in Vadilal Panchal v. Dattatraya Dulaji Ghadigaonker with reference to Section 202 of the Criminal Procedure Code, 1898 (corresponding to Section 202 of the present Code) held that the inquiry under Section 202 was for the purpose of ascertaining the truth or falsehood of the complaint, i.e. for ascertaining whether there was evidence in support of the complaint so as to justify the issuance of process and commencement of proceedings against the person concerned.

65. The amended provision of sub-section (1) of Section 202 Cr.P.C. came up for consideration of the Hon’ble Supreme Court in the matter of National Bank of Oman (supra) and the following observation made in the above decision is hereunder:-

9. The duty of a Magistrate receiving a complaint is set out in Section 202 Cr.PC and there is an obligation on the Magistrate to find out if there is any matter which calls for investigation by a criminal court. The scope of enquiry under this section is restricted only to find out the truth or otherwise of the allegations made in the complaint in order to determine whether process has to be issued or not. Investigation under Section 202 CrPC is different from the investigation contemplated in Section 156 as it is only for holding the Magistrate to decide whether or not there is sufficient ground for him to proceed further. The scope of enquiry under Section 202 CrPC is, therefore, limited to the ascertainment of truth or falsehood of the allegations made in the complaint: (i) on the materials placed by the complainant before the court; (ii) for the limited purpose of finding out whether a prima facie case for issue of process has been made out; and (iii) for deciding the question purely from the point of view of the complainant without at all adverting to any defense that the accused may have.

66. In Vijay Dhanuka (supra), it has been held that under Section 200 Cr. P.C, examination of complainant only is necessary with the option of examining the witnesses present, if any, whereas in enquiry under Section 202 Cr. P.C., the witnesses are examined for the purpose of deciding whether or not there is sufficient ground for proceeding against the accused. The relevant portion of the above decision is set out below: 

17. In view of our answer to the aforesaid question, the next question which falls for our determination is whether the learned Magistrate before issuing summons has held the inquiry as mandated under Section 202 of the Code. The word “inquiry” has been defined under Section 2 (g) of the Code, the same reads as follows: 

“2. xxx xxx xxx 

(g) “inquiry” means every inquiry, other than a trial, conducted under this Code by a Magistrate or Court; 

xxx xxx xxx”.

It is evident from the aforesaid provision, every inquiry other than a trial conducted by the Magistrate or Court is an inquiry. No specific mode or manner of inquiry is provided under Section 202 of the Code. In the inquiry envisaged under Section 202 of the Code, the witnesses are examined whereas under Section 200 of the Code, examination of the complainant only is necessary with the option of examining the witnesses present, if any.

18. This exercise by the Magistrate, for the purpose of deciding whether or not there is sufficient ground for proceeding against the accused, is nothing but an inquiry envisaged under Section 202 of the Code. In the present case, as we have stated earlier, the Magistrate has examined the complainant on solemn affirmation and the two witnesses and only thereafter he had directed for issuance of process. In view of what we have observed above, we do not find any error in the order impugned. In the result, we do not find any merit in the appeals and the same are dismissed accordingly.

67. In Vijay Dhanuka (supra) the aforesaid principle has been repeated and reiterated in the observation that under Section 200 Cr.P.C. the examining of complainant only is necessary with the option of examining the witnesses present, if any. Though no specific mode or manner of enquiry is provided under Section 202 Cr.P.C., in an enquiry under Section 202 Cr. P.C., the witnesses are examined for the purpose of deciding whether or not there is sufficient ground of proceeding against the accused. The relevant portion of the above decision is quoted below: 14. In view of our answer to the aforesaid question, the next question which falls for our determination is whether the learned Magistrate before issuing summons has held the inquiry as mandated under Section 202 of the Code. The word “inquiry” has been defined under Section 2 (g) of the Code, the same reads as follows: 

2. (g) ‘inquiry’ means every inquiry, other than a trial, conducted under this Code by a Magistrate or court, It is evident from the aforesaid provision, every inquiry other than a trial conducted by the Magistrate or the court is an inquiry. No specific mode or manner of inquiry is provided under Section 202 of the Code. In the inquiry envisaged under Section 202 of the Code, the witnesses are examined whereas under Section 200 of the Code, examination of the complainant only is necessary with the option of examining the witnesses present, if any. This exercise by the Magistrate, for the purpose of deciding whether or not there is sufficient ground for proceeding against the accused, is nothing but an inquiry envisaged under Section 202 of the Code.

15. In the present case, as we have stated earlier, the Magistrate has examined the complainant on solemn affirmation and the two witnesses and only thereafter he had directed for issuance of process.

68. Therefore, keeping in mind the object sought to be achieved by way of amendment of sub-section (1) of Section 202 Cr.P.C., the nature of enquiry as indicated in Section 19 of the Criminal Procedure (Amendment) Act, 2005, the Magistrate concerned is to ward of false complaints against such persons who reside at far of places with a view to save them for unnecessary harassment and the Learned Magistrate concerned is under obligation to find out if there is any matter which calls for investigation by Criminal Court in the light of the settled principles of law holding an enquiry by way of examining the witnesses produced by the complainant or direct an investigation made by a police officer as discussed hereinabove.

C. Whether non-compliance of such enquiry in terms of Sub-Section (1) of Section 202 (as amended) under Section 19 of the Criminal Procedure (Amendment) Act, 2005 will invalidate or vitiate the order of process so issued? 

69. It has already been settled that when an order of issuing summon is issued by a learned Magistrate against an accused who is residing at a place beyond the area in which he exercises his jurisdiction without conducting an enquiry under Section 202 Cr.P.C., the matter is required to be remitted to the learned Magistrate concerned for passing fresh orders uninfluenced by the prima facie conclusion reached by the Appellate Court. Reference may be made to the decision of National Bank of Oman (supra) and the relevant portion of the above decision is quoted below:-

12. All the same, the High Court instead of quashing the complaint, should have directed the Magistrate to pass fresh orders following the provisions of Section 202 CrPC. Hence, we remit the matter to the Magistrate for passing fresh orders uninfluenced by the prima facie conclusion reached by the High Court that the bare allegations of cheating do not make out a case against the accused for issuance of process under Section 418 or 420 IPC. The CJM will pass fresh orders after complying with the procedure laid down in Section 202 CrPC, within two months from the date of receipt of this order.” 

D. Whether objections with regard to non-compliance of the amended provisions of sub-section (1) of Section 202 Cr.P.C. as incorporated by virtue of Section 19 of the Criminal Procedure (Amendment) Act, 2005 may be raised at the initial stage only or after much deliberation as well? 

70. Chapter XXXV Cr.P.C. deals with the procedure relating to irregular proceedings in particular Section 465 Cr.P.C. of the above Chapter deals with the finding or sentence when reversible by reason of error, omission or irregularity which is quoted below:-

465. Finding or sentence when reversible by reason of error, omission or irregularity.– (1) Subject to the provisions hereinabove contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered by a Court of appeal, confirmation or revision on account of any error, omission or irregularity in the complaint, summons, warrant, proclamation, order, judgment or other proceedings before or during trial or in any inquiry or other proceedings under this Code, or any error, or irregularity in any sanction for the prosecution, unless in the opinion of that Court, a failure of justice has in fact been occasioned thereby.

(2) In determining whether any error, omission or irregularity in any proceeding under this Code, or any error, or irregularity in any sanction for the prosecution has occasioned a failure of justice, the Court shall have regard to the fact whether the objection could and should have been raised at an earlier stage in the proceedings.

71. Section 472 of the above Chapter deals with continuing offence which is quoted below:-

472. Continuing offence. – In the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues.

72. As discussed hereinabove, the satisfaction of the learned Magistrate concerned that there is a sufficient ground for proceeding with the complaint either by way of examination of complainant and the witnesses or by the enquiry contemplated under Section 202 Cr.P.C., is a condition precedent for issuing process under Section 204 Cr.P.C. It is a preliminary stage and the stage of hearing the accused would only arise at a subsequent stage provided for in the later provisions of the Cr.P.C., or in other words, up to the stage of complying with the provisions of Section 204 Cr.P.C. the accused has no role to play. The question of making an application by the accused before the Learned Magistrate concerned for dismissal of the complaint under Section 203 Cr.P.C. or a reconsideration of the material available on record is impermissible on receipt of summons approaching the Court for the reason that by then Section 203 is over and the learned Magistrate concerned has proceeded further to Section 204 Cr.P.C.

73. In Adalat Prasad vs. Rooplal Jindal & Ors., reported in (2004) 7 SCC 338, a three Judges Bench of the Hon’ble Supreme Court took into consideration the provisions of Sections 200, 202 and 204 Cr.P.C. for explaining the above provisions. The Apex Court observed as follows:-

15. It is true that if a Magistrate takes cognizance of an offence, issues process without there being any allegation against the accused or any material implicating the accused or in contravention of provisions of Sections 200 and 202, the order of the Magistrate may be vitiated, but then the relief an aggrieved accused can obtain at that stage is not by invoking Section 203 of the Code because the Criminal Procedure Code does not contemplate a review of an order. Hence in the absence of any review power or inherent power with the subordinate criminal courts, the remedy lies in invoking Section 482 of the Code.

74. In view of the above settled principles of law the relief an aggrieved accused can obtain is to file an application for revision under Section 482 Cr.P.C.

75. In the matter of Gita Ram (supra) it was observed by the Hon’ble Supreme Court that the object underlined in Section 465 Cr.P.C. is that if on a technical ground any party to the criminal proceedings is aggrieved he must raise the objection thereof at the earliest stage; if he did not raise it at the earliest stage he cannot be heard on that aspect after the whole trial is over. The relevant portion of the above decision is quoted below:-

6. We are distressed to note that learned Single Judge was not told by the government advocate of the fallout of such a view, if taken by the Single Judge, that it means all the witnesses once examined in full should be called back again, and the whole chief-examination, cross-examination, re-examination and questioning of the accused under Section 313 of the Code, hearing arguments, then examination of defense witnesses further, again final arguments to be heard and preparation of judgment once again. The very object underlined in Section 465 of the Code is that if on any technical ground any party to the criminal proceedings is aggrieved he must raise the objection thereof at the earliest stage. If he did not raise it at the earliest stage he cannot be heard on that aspect after the whole trial is over.

76. While dealing with the provisions of question of delay in approaching the Court in a criminal proceeding for a rightful cause, or even for the violation of the fundamental rights in the matter of Udai Shankar Awasthi (supra) it has been observed by the Hon’ble Supreme Court that approaching the Court at a belated stage has always been considered as a good ground for its rejection at the threshold. The relevant portion of the above decision is quoted below:-

28. Approaching the court at a belated stage for a rightful cause, or even for the violation of the fundamental rights, has always been considered as a good ground for its rejection at the threshold. The ground taken by the learned Counsel for Respondent No.2 that the cause of action arose on 20.10.2009 and 5.11.2009, as the Appellants refused to return money and other materials, articles and record, does not have substance worth consideration. In case a representation is made by the person aggrieved and the same is rejected by the competent statutory authority, and such and order is communicated to the person aggrieved, making repeated representations will not enable the party to explain the delay.

77. In view of the above we have no hesitation to arrive at a conclusion that the first occasion for an aggrieved accused to raise objection for issuing summon against him comes after the provision of Section 204 is invoked. Since Cr.P.C. does not contemplate a review of an order passed by the learned Magistrate concerned taking cognizance of an offence issuing process without there being any allegation against accused or any material implicating the accused or any contravention of the provisions of Sections 200 and 202, the remedy lies in invoking Section 482 Cr.P.C. However, keeping in mind the object underlined in Section 465 Cr.P.C. that if on any technical ground any party to the criminal proceedings is aggrieved he must raise the objection thereof at the earliest stage, we hold that in the event of failure on the part of an aggrieved party to raise objection at the earliest stage, he cannot be heard on that aspect after the whole trial is over or even at a later stage after his participation in the trial.

E. The scope of application of the amended provision of Sub-Section (1) of Section 202 Cr.P.C. as enacted under Section 19 of the Criminal Procedure (Amendment) Act, 2005, in case of offences punishable under Sections 138/141 of the Negotiable Instruments Act, 1881 :-

Chapter XVII was introduced in the Negotiable Act, 1981 by the Banking, Public Financial Institutions and Negotiable Instruments Law (Amendment) Act, 1988, with the object of promoting the efficacy of banking operation and for ensuring credibility in business transactions through banks. The above Chapter contained Sections 138 to 142. Section 138 of the said Act, 1881, deals with dishonour of cheque for insufficiency, etc., of funds in the account. Section 139 of the above Act speaks of presumption in favour of the holder. According to the provisions of Section 140 of the above Act, it should not be a defense in prosecution for an offence under Section 138 that the drawer had no reason to believe when he had issued the cheque that the cheque might be dishonoured on presentment for the reasons stated in the above Section. Section 141 of the above Act deals with offence by the companies. Section 142 of the above Act deals with procedure for taking cognizance of offences under the above Act notwithstanding anything contained in the Code of Criminal Procedure, 1973.

78. In Goaplast Pvt. Ltd. vs. Shri Chico Ursula D’Souza & Anr., reported in (2003) 3 SCC 232, the Hon’ble Supreme Court observed that by countermanding payment of post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the said Act, 1881 taking into consideration the presumption that a cheque is issued in discharge of any debt or other liability, which could be rebutted by adducing evidence and the burden of proof being on the person who wants to rebut the presumption, coupled with the object of Chapter XVII of the said Act, 1881. The Apex Court made further observation to the effect that once a cheque is issued by a drawer a presumption under Section 139 must follow and merely because the drawer issued notice to the drawee or to the bank for stoppage of payment, it would not preclude an action under Section 138 of the Act by the drawee or the holder of the cheque in due course. The relevant portion of the above decision is quoted below:-

6. . . . . Thus it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act which is to promote the efficacy of banking operation and to ensure credibility in business transactions through banks persuades us to take a view that by countermanding payment of post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act. A contrary view should render Section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong. If we hold otherwise, by giving instructions to banks to stop payment of a cheque after issuing the same against a debt or liability, a drawer will easily avoid penal consequences under Section 138. Once a cheque is issued by a drawer, a presumption under Section 139 must follow and merely because the drawer issued notice to the drawee or to the bank for stoppage of payment it will not preclude an action under Section 138 of the Act by the drawee or the holder of the cheque in due course . . . .

79. In Hiten P. Dalal vs. Bratindranath Banerjee, reported in (2001) 6 SCC 16, the above view was repeated and reiterated that a conjoint reading of Sections 138 and 139 of the said Act, 1881 speaks of presumption in favour of liability of the drawer of the cheques for the amounts for which the cheques are drawn and it is obligatory on the Court to raise this presumption in every case where the factual basis for raising of presumption had been established. According to the Apex Court, this introduced an exception to the general rule as to the burden of proof in criminal cases shifting the onus on to the accused and the relevant portion of the above decision is quoted below:-

22. Because both Sections 138 and 139 require that the Court ‘shall presume’ the liability of the drawer of the cheques for the amounts for which the cheques are drawn, … it is obligatory on the court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. ‘It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused.’ … Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court ‘may presume’ a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter, all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact.

23. In other words, provided the facts required to form the basis of a presumption of law exist, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary. A fact is said to be proved when, ‘after considering the matters before it, the court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.’ Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'.

The above view has been repeated and reiterated by the Hon’ble Supreme Court in Rangappa vs. Sri Mohan, reported in (2010) 11 SCC 441.

80. In Dashrath Rupsingh Rathod (supra) the Hon’ble Justice Vikramjit Sen observed that the Parliament consciously introduced Chapter XVII by virtue of the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 for the purpose of converting civil liability into criminal content, inter alia, by deeming fiction of culpability in terms of the pandect comprising Sections 138 and succeeding sections. The relevant portion of the above decision is quoted below:-

15.2. We have undertaken this succinct study mindful of the fact that Parliamentary debates have a limited part to play in interpretation of statutes, the presumption being that legislators have the experience, expertise and language skills to draft laws which unambiguously convey their intentions and expectations for the enactments. What is palpably clear is that Parliament was aware that they were converting civil liability into criminal content inter alia by the deeming fiction of culpability in terms of the pandect comprising Section 138 and the succeeding sections, which severely curtail defenses to prosecution. Parliament was also aware that the offence of cheating, etc. already envisaged in IPC, continued to be available.

81. In Pankajbhai Nagjibhai Patel vs. The State of Gujarat & Anr., reported in (2001) 2 SCC 595, the Hon’ble Supreme Court took into considerations the effect of non-obstante clause in Section 142 of the said Act, 1881. According to the Apex Court, the above non-obstante clause is intended to operate only in respect of three following aspects and nothing more. (i) Under the Code a Magistrate can take cognizance of an offence either upon receiving a complaint or upon a police report, or upon receiving information from any person, or upon his own knowledge except in cases differently indicated in Chapter XIV of Cr.P.C. unlike Section 142 of the said Act, 1881 that in so far as the offence under Section 138 of the said Act, 1881 is concerned no Court should take cognizance except upon a complaint made by the payee or the holder in due course of the cheque; (ii) Under Cr.P.C. a complaint could be made at any time subject to the provisions of Chapter XXXVI. However, the offence under Section 138 of the said Act, 1881 should be made within one month of the cause of action; and (iii) Under Article 511 of the First Schedule of Cr.P.C., if the offence is punishable with imprisonment for less than 3 years or with fine only under any enactment (other than Indian Penal Code) such offence could be tried by a Magistrate. Normally, Section 138 of the Negotiable Instrument Act, which is punishable with a maximum sentence of imprisonment for one year would have fallen within the scope of the above Article. But under Section 142 of the said Act, 1881 no Court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the first class should try an offence under Section 138 of the said Act, 1881.

82. It will not be out of context to observe that the non-obstante clause, when it refers to Cr.P.C. only excludes the ‘oral complaint’ of the definition under Section 2 (d) of Cr.P.C. However, the learned Magistrate concerned is required to follow the procedure under Section 200 of the Code once he has taken the complaint of the payee/holder in due course and recorded the statement of the complainant and such other witnesses as present at the said date. Reference may be made to the decision of Indra Kumar Patodia & Anr. (supra) and the relevant portion of the above decision is quoted below:-

18. It is clear that the non obstante clause has to be given restricted meaning and when the section containing the said clause does not refer to any particular provisions which it intends to override but refers to the provisions of the statute generally, it is not permissible to hold that it excludes the whole Act and stands all alone by itself. In other words, there requires to be a determination as to which provisions answers the description and which does not. While interpreting the non obstante clause, the Court is required to find out the extent to which the legislature intended to do so and the context in which the non obstante clause is used. We have already referred to the definition of complaint as stated in Section 2(d) of the Code which provides that the same needs to be in oral or in writing. The non obstante clause, when it refers to the Code only excludes the oral part in such definition.

83. By virtue of the Banking, Public Financial Institutions and Negotiable Instruments (Amendment) Act, 2015 (Act 26 of 2015), sub-section (2) of Section 142 and Section 142A have been inserted in the said Act, 1981 which came into force with effect from June 15, 2015. With regard to insertion of Section 143 in the said Act, 1881 it was observed by the Hon’ble Supreme Court in J.V. Baharuni & Anr. (supra) that the learned Magistrate concerned has the discretion under Section 143 of the said Act, 1881, either to follow a summary trial or summons trial adhering to the guidelines prescribed therein and the relevant portion of the above decision is quoted below:-

60. However, to summarise and answer the issues raised herein, the following directions are issued for the courts seized of with similar cases: 60.1. All the subordinate courts must make an endeavour to expedite the hearing of cases in a time-bound manner which in turn will restore the confidence of the common man in the justice-delivery system. When law expects something to be done within prescribed time-limit, some efforts are required to be made to obey the mandate of law.

60.2. The learned Magistrate has the discretion under Section 143 of the NI Act either to follow a summary trial or summons trial. In case the Magistrate wants to conduct a summons trial, he should record the reasons after hearing the parties and proceed with the trial in the manner provided under the second proviso to Section 143 of the NI Act. Such reasons should necessarily be recorded by the trial court so that further litigation arraigning the mode of trial can be avoided.

60.3. The learned Judicial Magistrate should make all possible attempts to encourage compounding of offence at an early stage of litigation. In a prosecution under the Negotiable Instruments Act, the compensatory aspect of remedy must be given priority over the punitive aspect.

60.4. All the subordinate courts should follow the directives of the Supreme Court issued in several cases scrupulously for effective conduct of trials and speedy disposal of cases.

60.5. Remitting the matter for de novo trial should be exercised as a last resort and should be used sparingly when there is grave miscarriage of justice in the light of illegality, irregularity, incompetence or any other defect which cannot be cured at an appellate stage. The appellate court should be very cautious and exercise the discretion judiciously while remanding the matter for de novo trial.

60.6. While examining the nature of the trial conducted by the trial court for the purpose of determining whether it was summary trial or summons trial, the primary and predominant test to be adopted by the appellate court should be whether it was only the substance of the evidence that was recorded or whether the complete record of the deposition of the witness in their chiefexamination, cross-examination and re-examination in verbatim was faithfully placed on record. The appellate court has to go through each and every minute detail of the trial court record and then examine the same independently and thoroughly to reach at a just and reasonable conclusion.

84. While interpreting the amended provisions of Section 145 of the said Act, 1881 in Radhey Shyam Garg (supra), the Hon’ble Supreme Court was pleased to take into consideration the non-obstante clause to arrive at a finding that the provisions of Code of Criminal Procedure, 1973 are not attracted. Further taking into consideration the term “may” in sub-section (2) of Section 145 and the term “shall” in sub-section (2) thereof using the term “shall”, the Apex Court came to a finding that the terms have been used to point out the discretionary power of the Court conferred upon him by it by reason thereof. However, the Court has no other option but to summon and examine any person who has given evidence on affidavit as to the facts contained therein if an application is filed either by the prosecution or the accused. It has also been observed in the above decision that the words “examine any person giving evidence on affidavit as to the facts contained therein”, in the event, the deponent is summoned by the Court in terms of sub-section (2) of Section 145 of the Act” would mean for the purpose of cross-examination and the relevant portions of the above decision are quoted below:-

“10. Section 145 of the Act reads as under: "145. Evidence on affidavit.- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the evidence of the complainant may be given by him on affidavit and may, subject to all just exceptions be read in evidence in any enquiry, trial or other proceeding under the said Code.

(2) The court may, if it thinks fit, and shall, on the application of the prosecution or the accused, summon and examine any person giving evidence on affidavit as to the facts contained therein." It contains a non-obstante clause. The provisions of the Code of Criminal Procedure, 1973 are, thus, not attracted. The Court, subject to just exceptions, may allow the complainant to give evidence by way of an affidavit. Such an evidence by way of an affidavit had been made admissible in evidence in any enquiry, trial or other proceedings under the Code. Whereas sub-section (1) of Section 145 uses the term “may”, sub-section (2) thereof uses the term “shall”. The first part of the aforementioned provision must be read with subsection (1) of Section 145. It, therefore, merely points out to the discretionary power of the court conferred upon it by reason thereof. The court, however, has no other option but to summon and examine any person who has given evidence on affidavit as to the facts contained therein if an application is filed either by the prosecution or the accused. Section 145 must be read reasonably. Section 296 of the Code of Criminal Procedure although refers to an evidence of a formal character, no doubt contains a pari materia provision.

. . . . . . . . .

19. If an affidavit in terms of the provisions of Section 145 of the Act is to be considered to be an evidence, it is difficult to comprehend as to why the court will ask the deponent of the said affidavit to examine himself with regard to the contents thereof once over again. He may be cross-examined and upon completion of his evidence, he may be re-examined. Thus, the words "examine any person giving evidence on affidavit as to the facts contained therein, in the event, the deponent is summoned by the court in terms of sub-section (2) of Section 145 of the Act”, in our opinion, would mean for the purpose of crossexamination. The provision seeks to attend a salutary purpose. The statements of objects and reasons for enacting the said provision, inter alia, reads as under: 

"4. Keeping in view of the recommendations of the Standing Committee on Finance and other representations, it has been decided to bring out, inter alia, the following amendments in the Negotiable Instruments Act, 1881, namely- (i) to (iii) * * * (iv) to prescribe procedure for dispensing with preliminary evidence of the complainant; (v) * * * (vi) to provide for summary trial of the cases under the Act with a view to speeding up disposal of cases;" 

20. The object of enactment of the said provision is for the purpose of expedition of the trial. A criminal trial even otherwise is required to be expeditiously held. We, therefore, do not find any justification for arriving at a finding that a witness can again be summoned for his examination in chief in the court despite affirming affidavit in that behalf.” Reference may also be made to the decision of Mandvi Cooperative Bank Limited (supra).

85. Under the provisions of Section 146 of the said Act, 1881 the Bank’s slip or memo having thereon the official mark denoting that a cheque has been dishonoured, presumes the fact of dishonoured cheque, unless and until such fact is disproved. Section 147 of the said Act, 1881 contains that every offence punishable under the said Act, 1881 should be compoundable notwithstanding anything contained in Cr.P.C.

86. According to the statutory explanation, for the purpose of Clause (a) where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then the cheque should be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account.

87. While considering the scheme of the prosecution in punishing under Section 138 of the said Act, 1881, the Apex Court observed in the matter of N. Harihara Krishnan (supra) that the above scheme is different from the scheme of the Cr.P.C. No procedure for investigation is contemplated under the scheme. The proceeding is to be initiated only on the basis of a written complaint made by the payee of a cheque containing the factual allegations constituting each of the ingredients of the offence under Section 138 of the said Act, 1881 as follows:-

(i) That a person drew a cheque from an account maintained by him with the banker; (ii) That such a cheque when presented to the bank is returned by the bank is unpaid; (iii) That such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period its validity whichever is earlier; (iv) That the payee demanded in writing from drawer of the cheque the payment of the amount of money due under the cheque; and (v) Such a notice of payment is made within a period of 30 days from the date of receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. According to the Hon’ble Supreme Court, the only other ingredient which is required to be proved to establish the commission of offence under Section 138 is that inspite of the demand notice, the drawer of the cheque failed to make the payment within a period of 15 days from the date of receipt of the demand.

The relevant portion of the above decision is quoted below:-

23. The scheme of the prosecution in punishing under Section 138 of THE ACT is different from the scheme of the CrPC. Section 138 creates an offence and prescribes punishment. No procedure for the investigation of the offence is contemplated. The prosecution is initiated on the basis of a written complaint made by the payee of a cheque. Obviously such complaints must contain the factual allegations constituting each of the ingredients of the offence under Section 138. Those ingredients are: (1) that a person drew a cheque on an account maintained by him with the banker; (2) that such a cheque when presented to the bank is returned by the bank unpaid; (3) that such a cheque was presented to the bank within a period of six months from the date it was drawn or within the period of its validity whichever is earlier; (4) that the payee demanded in writing from the drawer of the cheque the payment of the amount of money due under the cheque to payee; and (5) such a notice of payment is made within a period of 30 days from the date of the receipt of the information by the payee from the bank regarding the return of the cheque as unpaid. It is obvious from the scheme of Section 138 that each one of the ingredients flows from a document which evidences the existence of such an ingredient. The only other ingredient which is required to be proved to establish the commission of an offence under Section 138 is that inspite of the demand notice referred to above, the drawer of the cheque failed to make the payment within a period of 15 days from the date of the receipt of the demand. A fact which the complainant can only assert but not prove, the burden would essentially be on the drawer of the cheque to prove that he had in fact made the payment pursuant to the demand.

24. By the nature of the offence under Section 138 of THE ACT, the first ingredient constituting the offence is the fact that a person drew a cheque. The identity of the drawer of the cheque is necessarily required to be known to the complainant (payee) and needs investigation and would not normally be in dispute unless the person who is alleged to have drawn a cheque disputes that very fact. The other facts required to be proved for securing the punishment of the person who drew a cheque that eventually got dishonoured is that the payee of the cheque did in fact comply with each one of the steps contemplated under Section 138 of THE ACT before initiating prosecution. Because it is already held by this Court that failure to comply with any one of the steps contemplated under Section 138 would not provide “cause of action for prosecution”. Therefore, in the context of a prosecution under Section 138, the concept of taking cognizance of the offence but not the offender is not appropriate. Unless the complaint contains all the necessary factual allegations constituting each of the ingredients of the offence under Section 138, the Court cannot take cognizance of the offence. Disclosure of the name of the person drawing the cheque is one of the factual allegations which a complaint is required to contain. Otherwise in the absence of any authority of law to investigate the offence under Section 138, there would be no person against whom a Court can proceed. There cannot be a prosecution without an accused. The offence under Section 138 is person specific. Therefore, the Parliament declared under Section 142 that the provisions dealing with taking cognizance contained in the CrPC should give way to the procedure prescribed under Section 142.Hence the opening of non-obstante clause under Section 142. It must also be remembered that Section 142 does not either contemplate a report to the police or authorise the Court taking cognizance to direct the police to investigate into the complaint.

88. It is necessary to take into consideration the vicarious liability of person (s) in charge of and responsible for conduct of business of a company in case of commission of offence of that company under Section 138 of the said Act, 1881. In order to find out the answer to the above question the provisions of Section 141 of the said Act, 1881 is required to be taken into consideration and the same is quoted below:-

141. Offences by companies.- (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.- For the purposes of this section,- (a) “company” means anybody corporate and includes a firm or other association of individuals; and (b) “director”, in relation to a firm, means a partner in the firm.

89. In Anil Hada vs. Indian Acrylic Limited, reported in (2000) 1 SCC 1, the above issue was under consideration of the Hon’ble Supreme Court. According to the Apex Court, three categories of persons can be fastened with penal liability through legal fiction envisaged in Sections 138 read with the provisions of Section 141 of the said Act, 1881 as follows:-

(i) The company which committed the offence, 

(ii) Everyone who was in charge of and was responsible for business of the company, 

(iii) Any other person who is a director or a manager or a secretary or officer of the company, with whose connivance or due to whose neglect the company has committed the offence.

The relevant portion of the above decision is quoted below:-

“10. Three categories of persons can be discerned from the said provision who are brought within the purview of the penal liability through the legal fiction envisaged in the section. They are: (1) The company which committed the offence, (2) Everyone who was in charge of and was responsible for the business of the company, (3) any other person who is a director or a manager or a secretary or officer of the company, with whose connivance or due to whose neglect the company has committed the offence.

11. Normally an offence can be committed by human beings who are natural persons. Such offence can be tried according to the procedure established by law. But there are offences which could be attributed to juristic person also. If the drawer of a cheque happens to be a juristic person like a body corporate it can be prosecuted for the offence under Section 138 of the Act. Now there is no scope for doubt regarding that aspect in view of the clear language employed in Section 141 of the Act. In the expanded ambit of the word "company" even firms or any other associations of persons are included and as a necessary adjunct thereof a partner of the firm is treated as director of that company.

12. Thus when the drawer of the cheque who falls within the ambit of Section 138 of the Act is a human being or a body corporate or even firm, prosecution proceedings can be initiated against such drawer. In this context the phrase "as well as" used in Sub-section (1) of Section 141 of the Act has some importance. The said phrase would embroil the persons mentioned in the first category within the tentacles of the offence on a par with the offending company. Similarly the words "shall also" in Sub-section (2) are capable of bringing the third category persons additionally within the dragnet of the offence on an equal par. The effect of reading Section 141 is that when the company is the drawer of the cheque such company is the principal offender under Section 138 of the Act and the remaining persons are made offenders by virtue of the legal fiction created by the legislature as per the section. Hence the actual offence should have been committed by the company, and then alone the other two categories of persons can also become liable for the offence.

90. While dealing with the said Act, 1881, in relation to liability of a person connected with a company, a three Judges Bench of the Hon’ble Supreme Court in the matter of S.M.S. Pharmceuticals Ltd. (supra) arrived at a conclusion that when there is a departure from the rule in criminal law against vicarious liability a clear case should be spelt out in the complaint against the person sought to be made liable. Or in other words, where the respondent falls within the parameters of Section 141, has to be spelt out. According to the finding of the Apex Court in the above decision, a complaint has to be examined by the learned Magistrate and he has to be satisfied that there are averments which bring the case within the purview of Section 141 of the said Act, 1881, only then he would issue the process. On the basis of the above finding the Apex Court further undertook the question of requirement of averments in a complaint which has to be considered on the basis of the provisions contained in Sections 138 and 141 of the said Act, 1881 read in the light of the power of a Magistrate referred to in Sections 200 and 204 of the Code of Criminal Procedure and arrived at a further conclusion that a Magistrate has to consider the complaint before issuing process and he has the power to reject it at the threshold suggests that a complaint should make out a case for issue of process and keeping in mind the guideline as prescribed therein. The necessary portions of the above decision are quoted below:-

5. Section 203 of the Code empowers a Magistrate to dismiss a complaint without even issuing a process. It uses the words "after considering" and "the Magistrate is of opinion that there is no sufficient ground for proceeding". These words suggest that the Magistrate has to apply his mind to a complaint at the initial stage itself and see whether a case is made out against the accused persons before issuing process to them on the basis of the complaint. For applying his mind and forming an opinion as to whether there is sufficient ground for proceeding, a complaint must make out a prima facie case to proceed. This, in other words, means that a complaint must contain material to enable the Magistrate to make up his mind for issuing process. If this were not the requirement, consequences could be far reaching. If a Magistrate had to issue process in every case, the burden of work before the Magistrate as well as the harassment caused to the respondents to whom process is issued would be tremendous. Even Section 204 of the Code starts with the words "if in the opinion of the Magistrate taking cognizance of an offence there is sufficient ground for proceeding". The words "sufficient ground for proceeding" again suggest that ground should be made out in the complaint for proceeding against the respondent. It is settled law that at the time of issuing of the process the Magistrate is required to see only the allegations in the complaint and where allegations in the complaint or the charge-sheet do not constitute an offence against a person, the complaint is liable to be dismissed.

6. As the points of reference will show, the question for consideration is what should be the averments in a complaint under Sections 138 and 141. Process on a complaint under Section 138 starts normally on basis of a written complaint which is placed before a Magistrate.The Magistrate considers the complaint as per provisions of Sections 200 to 204 of the Code of Criminal Procedure. The question of requirement of averments in a complaint has to be considered on the basis of provisions contained in Sections 138 and 141 of the Negotiable Instruments Act read in the light of powers of a Magistrate referred to in Sections 200 to 204 of the Code of Criminal Procedure. The fact that a Magistrate has to consider the complaint before issuing process and he has power to reject it at the threshold, suggests that a complaint should make out a case for issue of process.

. . . . . . .

18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under Section 141 of the Act is sought to be fastened vicariously on a person connected with a company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirements for making a person liable under the said provision. That respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a non-director can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial.

19. In view of the above discussion, our answers to the questions posed in the reference are as under: 

(a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.

(b) The answer to question posed in sub-para (b) has to be in negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases.

(c) The answer to Question (c) has to be in affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141.

91. Subsequently, while the Hon’ble Supreme Court dealing with the above issue in the matter of Standard Chartered Bank (supra) observed that it is the settled law that at the time of issuing process, the learned Magistrate concerned is to see only the allegations in the complaint and where the allegations in the complaint or the charge-sheet do not constitute an offence against the person, the same is liable to be dismissed. The relevant portion of the above decision is quoted below:-

14. The three-Judge Bench in S.M.S. Pharma I case referred to Sections 138 and 141 of the Act, Sections 203 and 204 CrPC and observed (SCC p. 96, para 5) that a complaint must contain material to enable the Magistrate to make up his mind for issuing process and if this were not the requirement, consequences would be far-reaching. If a Magistrate has to issue process in every case, the burden of work before the Magistrate as well as the harassment caused to the respondents to whom process has to be issued would be tremendous. It has been observed therein that Section 204 CrPC commences with the words "if in the opinion of the Magistrate taking cognizance of an offence there is sufficient ground for proceeding" and that apart, the words "sufficient ground for proceeding" again suggest that ground should be made out in the complaint for proceeding against the respondent. The three-Judge Bench has ruled that it is settled law that at the time of issuing of the process, the Magistrate is required to see only the allegations in the complaint and where the allegations in the complaint or the charge-sheet do not constitute an offence against a person, the complaint is liable to be dismissed.

92. The same view was repeated and reiterated once again by the Hon’ble Supreme Court in the matter of Tamil Nadu News Print and Papers Ltd. vs. D. Karunakar & Ors., reported in (2016) 6 SCC 78.

93. Applying the doctrine of pith and substance to the provisions of Section 138 to Section 147 of the said Act, 1881, keeping in mind the interpretations of the aforesaid Sections by the Hon’ble Supreme Court as discussed hereinabove, we find the following salient features in the above provisions: (i) The complaint is filed under Section 138 of the said Act, 1881 furnishing best possible evidence.

(ii) Unimpeachable documents are produced at the initial stage and are marked exhibits.

(iii) Cause of issuance of cheque is backed by presumption under Section 139 of the said Act, 1881.

(iv) On production of original evidence at initial stage, scope of subsequent improvement is minimized at the instance of the complaint.

(v) Since the best set of evidence is available before the learned Magistrate, he is not making initial enquiry or in other words it is not a roving enquiry into the pros and cons of the matter.

(vi) An exhaustive process has already been prescribed for filing a complaint under Section 138 of the said Act, 1881 furnishing adequate information to form a prima facie opinion by the learned Magistrate at the pre-summoning stage.

(vii) For the above purpose the investigation by police is kept outside the area and summons trial is introduced.

94. In a recent judgment dated October 5, 2017, delivered by the Hon’ble Supreme Court in M/S. Meters and Instruments Private Limited & Anr. etc. (in re: Criminal Appeal Nos.1731, 1732, 1733 of 2017), which dealing with the issue of compounding an offence committed under the said Act, 1881, observed as follows:-

18. (V) 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 Cr.P.C. 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.

95. In view of the above and taking into consideration the non-obstante clauses used in Sections 142, 142 (a), 143, 144, 145 and 147 of the said Act, 1881, as also finding that the scheme framed by the legislature in initiating a proceeding under Section 138 is different from that of the Cr.P.C., we arrive at an irresistible conclusion that the legislature has taken care of the interest of the complainant and the accused by exempting the complainant from facing the general rigors of Cr.P.C. at pre-summoning stage under Section 202 Cr.P.C. as amended under Section 19 of the Criminal Procedure (Amendment) Act, 2005 and protecting the accused by insisting upon the complainant to produce best possible stage at the presummon stage.

96. Necessary to point out that in view of the law laid down by the Apex Court in the case of Bhaskar Industries Ltd. –v- Bhiwani Denim & Apparels Ltd. And Others, reported in (2001) 7 SCC 401, the accused in case under Negotiable Instruments is exempted from appearing in person on receipt of the summon.

97. It is profitable to take into consideration Sub-Section (2) of Section 4 of the Cr.P.C. that provides that all offences under any law other than the Cr.P.C. shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.

98. In view of the observations and discussions made hereinabove, the decisions of Indian Bank of Association (supra), Indra Kumar Patodia (supra), Priyanka Srivastava & Anr. (supra), Rangappa (supra) do not help Mr. Ayan Bhattacharya, leaned Counsel appearing in a number of cases for the petitioners and in some other cases for the private opposite parties.

99. In view of the above, we find that in cases falling under Section 138 read with Section 141 of the N.I. Act, the Magistrate is not mandatorily required to comply with the provisions of Section 202 (1) before issuing summons to an accused residing outside the territorial jurisdiction of the learned Magistrate concerned.

100. To sum up, the reference made by the Learned Single Judge on the five issues are answered as follows:-

I. According to the settled principles of law, the amendment of subsection (1) of Section 202 Cr.P.C. by virtue of Section 19 of the Criminal Procedure (Amendment) Act, 2005, is aimed to prevent innocent persons, who are residing outside the territorial jurisdiction of the Learned Magistrate concerned, from harassment by unscrupulous persons from false complaints. The use of expression “shall”, looking to the intention of the legislature to the context, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate.

II. Keeping in mind the object sought to be achieved by way of amendment of sub-section (1) of Section 202 Cr.P.C., the nature of enquiry as indicated in Section 19 of the Criminal Procedure (Amendment) Act, 2005, the Magistrate concerned is to ward of false complaints against such persons who reside at far of places with a view to save them from unnecessary harassment and the Learned Magistrate concerned is under obligation to find out if there is any matter which calls for investigation by Criminal Court in the light of the settled principles of law holding an enquiry by way of examining the witnesses produced by the complainant or direct an investigation made by a police officer as discussed hereinabove.

III. When an order of issuing summon is issued by a learned Magistrate against an accused who is residing at a place beyond the area in which he exercises his jurisdiction without conducting an enquiry under Section 202 Cr.P.C., the matter is required to be remitted to the learned Magistrate concerned for passing fresh orders uninfluenced by the prima facie conclusion reached by the Appellate Court.

IV. Keeping in mind the object underlined in Section 465 Cr.P.C. that if on any technical ground any party to the criminal proceedings is aggrieved he must raise the objection thereof at the earliest stage. In the event of failure on the part of an aggrieved party to raise objection at the earliest stage, he cannot be heard on that aspect after the whole trial is over or even at a later stage after his participation in the trial.

V. In cases falling under Section 138 read with Section 141 of the N.I. Act, the Magistrate is not mandatorily required to comply with the provisions of Section 202 (1) before issuing summons to an accused residing outside the territorial jurisdiction of the learned Magistrate concerned.

101. Before parting with, we acknowledge the assistance rendered by Mr. Kaushik Chanda, learned Additional Solicitor General, Mr. Ayan Bhattacharya, learned Counsel and Mr. Tirthankar Ghosh, learned Counsel for rendering their assistance to us for arriving at the above conclusion.

102. Hence, after dealing with the issues which crop up in terms of the reference, these applications are send back to the appropriate court for deciding the issues involved in the respective applications on its merit in the light of the principles of law discussed hereinabove. .

103. Urgent photostat certified copy of this judgment, if applied for, be given to the parties, on priority basis.