S.200 CrPC/S.227 BNSS | Supreme Court Asks Magistrates To Ascertain Truth Of Complaints Before Summoning Accused

 

The Court stated that the recording of the compainant's statement on oath was not an empty formality; Magistrates must put questions to elicit the truth.

The Supreme Court on Wednesday (March 26) quashed a complaint filed for the offence of cheque dishonour under the Section 138 of the Negotiable Instruments Act (NI Act) after noting that the complainant suppressed material facts and abused the judicial process by withholding loan documents.

The appellant allegedly took loan from the Respondent-Cooperative Society and issued blank cheques as security.

In 2016, the respondent deposited the second security cheque (₹27.27 lakh), which also bounced. A legal notice was sent (11.11.2016), but the appellant denied liability, demanding loan documents to verify the debt.

In her reply to the demand notice, the appellant requested the loan documents, but the respondent did not provide them. Despite this, the respondent filed a complaint in December 2016, suppressing these letters. The Magistrate issued a process (summons) in March 2017.

The Court observed that criminal law cannot be set in motion by suppressing material facts.

“While filing a complaint under Section 200 of Cr.P.C. and recording his statement on oath in support of the complaint, as the complainant suppresses material facts and documents, he cannot be allowed to set criminal law in motion based on the complaint. Setting criminal law in motion by suppressing material facts and documents is nothing but an abuse of the process of law.”

Setting aside the High Court's decision, the judgment authored by Justice Oka emphasized that the law cannot be set into motion by issuing a process on a complaint without satisfying that there were sufficient grounds to proceed against the accused. The Court underscored the Magistrate's duty to apply its mind before setting criminal law into motion.

“Recording the complainant's statement on oath under Section 200 of the CrPC is not an empty formality. The object of recording the complainant's statement and witnesses, if any, is to ascertain the truth. The learned Magistrate is duty-bound to put questions to the complainant to elicit the truth. The examination is necessary to enable the Court to satisfy itself whether there are sufficient grounds to proceed against the accused. After considering the complaint, the documents produced along with the complaint, and the statements of the complainant and witnesses, if any, the learned Magistrate has to apply his mind to ascertain whether there is sufficient ground for proceeding against the accused. If he is satisfied that there is sufficient ground to proceed against the accused, then the learned Magistrate has to issue a process in terms of sub-Section (1) of Section 204 of the CrPC. The corresponding provision under the BNSS is Section 227. Setting criminal law in motion is a serious matter. The accused faces serious consequences in the sense that he has to defend himself in the trial.",

“Thus, this was a case where very material documents in the form of two letters addressed by the appellant were suppressed in the complaint and the statement on oath under Section 200. In the statement on oath, the respondent-complainant vaguely referred to a 'false notice reply', but a copy of the reply was not produced by the respondent along with the complaint.”, the court noted.

It is settled law that a litigant who, while filing proceedings in the court, suppresses material facts or makes a false statement, cannot seek justice from the court. The facts suppressed must be material and relevant to the controversy, which may have a bearing on the decision making. Cases of those litigants who have no regard for the truth and those who indulge in suppressing material facts need to be thrown out of the court.”, the court observed.

Accordingly, the Court allowed the appeal and quashed the pending complaint case against the Appellant.

Case Title: REKHA SHARAD USHIR versus SAPTASHRUNGI MAHILA NAGARI SAHKARI PATSANSTA LTD. 

NI Act Allows Filing Of Cheque Dishonour Complaint At Place Of Payee Bank; Accused Can't Seek Transfer Citing Inconvenience

The Supreme Court today (March 6) ruled that a cheque dishonor complaint under Section 138 of the Negotiable Instruments Act, 1881 (“NI Act”), should be filed in the court having jurisdiction over the branch of the bank where the payee maintains an account i.e., where the cheque is presented for collection.

Taking reference to Section 142(2) introduced via the 2015 amendment to the NI Act, the Court clarified that the jurisdiction to adjudicate upon the cheque dishonor complaint lies with the court where the branch of the bank (where the payee maintains the account) is located. The 2015 amendment was brought in by the Parliament to address the confusion created by the Supreme Court's judgment in Dasrath Rupsingh Rathod v State of Maharashtra (2014) which held that the jurisdiction for cases under Section 138 is determined by the place of the bank where the cheque was drawn.

“A conjoint reading of Section 142(2)(a) along with the explanation thereof, makes the position emphatically clear that, when a cheque is delivered or issued to a person with liberty to present the cheque for collection at any branch of the bank where the payee or holder in due course, as the case may be, maintains the account then, the cheque shall be deemed to have been delivered or issued to the branch of the bank, in which, the payee or holder in due course, as the case may be, maintains the account, and the court of the place where such cheque was presented for collection, will have the jurisdiction to entertain the complaint alleging the commission of offence punishable under Section 138 of the N.I. Act. In that view of the position of law, the word 'delivered' used in Section 142(2)(a) of the N.I. Act has no significance. What is of significance is the expression 'for collection through an account'. That is to say, delivery of the cheque takes place where the cheque was issued and presentation of the cheque will be through the account of the payee or holder in due course, and the said place is decisive to determine the question of jurisdiction.”, 

Dishonour of Cheque—Death of Complainant—Legal heir of a person aggrieved is competent to continue a criminal complaint

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Dishonour of cheque--First notice remained unserved--Second notice after second prosecution, withdrawn as was wrongly addressed--Third notice after third presentation valid--As earlier two notices did not gave any cause of action

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Dishonour of Cheque--Breach of trust--Loan advanced by appellant to respondent--Respondent issued cheques--Loan amount not repaid and cheques presented got bounced--Complaint under Section 138 by appellant against respondent pending--Respondent does not dispute issuance of cheques--Ingredients of section 406 IPC not made out against appellant.

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Dishonor of Cheque--Complaint filed by Govt. Company being represented by public servant--Defacto complainant a public servant--No need to examine complainant under Section 200 Cr.P.C.--Section 200 Proviso (a) will apply.

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Dishonour of cheque--Appeal against acquittal--Complaint dismissed by Trial Court--High Court without assigning reason refused to grant leave--On the plainest consideration of justice, the High Court ought to have set forth its reasons, howsoever brief, in its order indicative of an application of its mind, all the more when its order is amenable to further avenue of challenge

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