In Re: Expeditious Trial Of Cases Under Section 138 Of N.I. Act 1881.

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DATE: April 16, 2021 (Date of pronouncement)
DATE: April 17, 2021 (Date of publication)
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CITATION:
Courts are inundated with complaints filed under Section 138 of the Negotiable Instruments Act, 1881. The cases are not being decided within a reasonable period and remain pending for a number of years. This gargantuan pendency of complaints filed under s. 138 of the Act has had an adverse effect in disposal of other criminal cases. Concerned with the large number of cases pending at various levels, a Larger Bench of the Supreme Court has examined the reasons for the delay in disposal of the cases. The Bench has issued important directions which will expedite the hearing and disposal of the cases

REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL ORIGINAL JURISDICTION
SUO MOTU WRIT PETITION (CRL.) NO.2 OF 2020
In Re: EXPEDITIOUS TRIAL OF CASES UNDER SECTION
138 OF N.I. ACT 1881.
O R D E R
1. Special Leave Petition (Criminal) No. 5464 of 2016
pertains to dishonour of two cheques on 27.01.2005 for an
amount of Rs.1,70,000/-. The dispute has remained pending
for the past 16 years. Concerned with the large number of
cases filed under Section 138 of the Negotiable Instruments
Act, 1881 (hereinafter ‘the Act’) pending at various levels, a
Division Bench of this Court consisting of two of us (the Chief
Justice of India and L. Nageswara Rao, J.) decided to examine
the reasons for the delay in disposal of these cases. The
Registry was directed to register a Suo Motu Writ Petition
(Criminal) captioned as “Expeditious Trial of Cases under
Section 138 of N.I. Act 1881”. Mr. Sidharth Luthra, learned
Senior Counsel was appointed as Amicus Curiae and Mr. K.
Parameshwar, learned Counsel was requested to assist him.
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Notices were issued to the Union of India, Registrar Generals of
the High Courts, Director Generals of Police of the States and
Union Territories, Member Secretary of the National Legal
Services Authority, Reserve Bank of India and Indian Banks’
Association, Mumbai as the representative of banking
institutions.
2. The learned Amici Curiae submitted a preliminary report
on 11.10.2020 which was circulated to all the Respondents. On
19.01.2021, the learned Amici Curiae informed this Court that
only 14 out of 25 High Courts had submitted their responses to
the preliminary report. The Reserve Bank of India had also filed
its suggestions. Seven Directors General of Police had filed
their affidavits putting forward their views to the preliminary
report. The parties who had not filed their responses were
granted further time and the matter was listed on 24.02.2021
for final disposal. During the course of the hearing, it was felt
by a Bench of three Judges, consisting of the Chief Justice of
India, L. Nageswara Rao, J. and S. Ravindra Bhat, J. that the
matter had to be considered by a larger bench in view of the
important issues that arose for determination before this Court.
The reference of the matter to a larger bench was also
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necessitated due to the submission made by the learned Amici
Curiae that certain judicial pronouncements of this Court
needed clarification. We have heard learned Amici Curiae,
Advocates for some States, the learned Solicitor General of
India, Mr. Vikramjit Banerjee, learned Additional Solicitor
General of India, Mr. Ramesh Babu, Advocate for the Reserve
Bank of India and Dr. Lalit Bhasin, Advocate for the Indian
Banks’ Association.
3. Chapter XVII inserted in the Act, containing Sections 138
to 142, came into force on 01.04.1989. Dishonour of cheques
for insufficiency of funds was made punishable with
imprisonment for a term of one year or with fine which may
extend to twice the amount of the cheque as per Section 138.
Section 139 dealt with the presumption in favour of the holder
that the cheque received was for the discharge, in whole or in
part, of any debt or other liability. The defence which may not
be allowed in a prosecution under Section 138 of the Act is
governed by Section 140. Section 141 pertains to offences by
companies. Section 142 lays down conditions under which
cognizance of offences may be taken under Section 138. Over
the years, courts were inundated with complaints filed under
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Section 138 of the Act which could not be decided within a
reasonable period and remained pending for a number of
years.
4. This gargantuan pendency of complaints filed under
Section 138 of the Act has had an adverse effect in disposal of
other criminal cases. There was an imminent need for
remedying the situation which was addressed by the
Negotiable Instruments (Amendment and Miscellaneous
Provisions) Act, 2002. Sections 143 to 147 were inserted in the
Act, which came into force on 06.02.2003. Section 143 of the
Act empowers the court to try complaints filed under Section
138 of the Act summarily, notwithstanding anything contained
in the Code of Criminal Procedure, 1973 (hereinafter, ‘the
Code’). Sub-section (3) of Section 143 stipulates that an
endeavour be made to conclude the trial within six months
from the date of filing of the complaint. Section 144 deals with
the mode of service of summons. Section 145 postulates that
the evidence of the complainant given by him on affidavit may
be read as evidence in any inquiry, trial or other proceeding
under the Code. Bank’s slip or memo denoting that the cheque
has been dishonoured is presumed to be prima facie evidence
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of the fact of dishonour of the cheque, according to Section
146. Section 147 makes offences punishable under the Act
compoundable. The punishment prescribed under the Act was
enhanced from one year to two years, along with other
amendments made to Sections 138 to 142 with which we are
not concerned in this case.
5. The situation has not improved as courts continue to
struggle with the humongous pendency of complaints under
Section 138 of the Act. The preliminary report submitted by
the learned Amici Curiae shows that as on 31.12.2019, the total
number of criminal cases pending was 2.31 crores, out of which
35.16 lakh pertained to Section 138 of the Act. The reasons
for the backlog of cases, according to the learned Amici Curiae,
is that while there is a steady increase in the institution of
complaints every year, the rate of disposal does not match the
rate of institution of complaints. Delay in disposal of the
complaints under Section 138 of the Act has been due to
reasons which we shall deal with in this order.
6. The learned Amici Curiae identified seven major issues
from the responses filed by the State Governments and Union
Territories which are as under:
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a) Service of summons
b) Statutory amendment to Section 219 of the Code
c) Summary trials
d) Attachment of bank accounts
e) Applicability of Section 202 of the Code
f) Mediation
g) Inherent jurisdiction of the Magistrate
7. Service of summons on the accused in a complaint filed
under Section 138 of the Act has been one of the main reasons
for the delay in disposal of the complaints. After examining
the responses of the various State Governments and Union
Territories, several suggestions have been given by the learned
Amici Curiae for speeding up the service of summons. Some of
the suggestions given by him pertain to dishonour slips issued
by the bank under Section 146 of the Act, disclosing the current
mobile number, email address and postal address of the drawer
of the cheque, the details of the drawer being given on the
cheque leaf, creation of a Nodal Agency for electronic service of
summons and generation of a unique number from the
dishonour memo. The Union of India and the Reserve Bank of
India were directed to submit their responses to the
suggestions made by the learned Amici Curiae on these
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aspects. After hearing the learned Solicitor General of India
and Mr. Ramesh Babu, learned counsel for the Reserve Bank of
India, on 10.03.2021, it was considered appropriate by this
Court to form a Committee with Hon’ble Mr. Justice R.C.
Chavan, former Judge of the Bombay High Court, as the
Chairman to consider various suggestions that are made for
arresting the explosion of the judicial docket. The
recommendations made by the learned Amici Curiae relating to
attachment of bank accounts to the extent of the cheque
amount, pre-summons mediation and all other issues which are
part of the preliminary note and the written submissions of the
learned Amici Curiae shall be considered by the
aforementioned Committee, in addition to other related issues
which may arise during such consideration. The Committee is
directed to deliberate on the need for creation of additional
courts to try complaints under Section 138 of the Act.
MECHANICAL CONVERSION OF SUMMARY TRIAL TO
SUMMONS TRIAL
8. The learned Amici Curiae submitted that Section 143 of
the Act provides that Sections 262 to 265 of the Code shall
apply for the trial of all offences under Chapter XVII of the Act.
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The second proviso empowers the Magistrate to convert the
summary trial to summons trial, if he is of the opinion that a
sentence of imprisonment exceeding one year may have to be
passed or that it is undesirable to try the case summarily, after
recording reasons. The learned Amici Curiae has brought to
the notice of this Court that summary trials are routinely
converted to summons trials in a mechanical manner. The
suggestions made by him in his preliminary note that the High
Courts should issue practice directions to the Trial Courts for
recording cogent and sufficient reasons before converting a
summary trial to summons trial have been accepted by the
High Courts.
9. Section 143 of the Act has been introduced in the year
2002 as a step-in aid for quick disposal of complaints filed
under Section 138 of the Act. At this stage, it is necessary to
refer to Chapter XXI of the Code which deals with summary
trials. In a case tried summarily in which the accused does not
plead guilty, it is sufficient for the Magistrate to record the
substance of the evidence and deliver a judgment, containing a
brief statement of reasons for his findings. There is a
restriction that the procedure for summary trials under Section
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262 is not to be applied for any sentence of imprisonment
exceeding three months. However, Sections 262 to 265 of the
Code were made applicable “as far as may be” for trial of an
offence under Chapter XVII of the Act, notwithstanding anything
contained in the Code. It is only in a case where the Magistrate
is of the opinion that it may be necessary to sentence the
accused for a term exceeding one year that the complaint shall
be tried as a summons trial. From the responses of various
High Courts, it is clear that the conversion by the Trial Courts of
complaints under Section 138 from summary trial to summons
trial is being done mechanically without reasons being
recorded. The result of such conversion of complaints under
Section 138 from summary trial to summons trial has been
contributing to the delay in disposal of the cases. Further, the
second proviso to Section 143 mandates that the Magistrate
has to record an order spelling out the reasons for such
conversion. The object of Section 143 of the Act is quick
disposal of the complaints under Section 138 by following the
procedure prescribed for summary trial under the Code, to the
extent possible. The discretion conferred on the Magistrate by
the second proviso to Section 143 is to be exercised with due
care and caution, after recording reasons for converting the
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trial of the complaint from summary trial to summons trial.
Otherwise, the purpose for which Section 143 of the Act has
been introduced would be defeated. We accept the
suggestions made by the learned Amici Curiae in consultation
with the High Courts. The High Courts may issue practice
directions to the Magistrates to record reasons before
converting trial of complaints under Section 138 from summary
trial to summons trial in exercise of power under the second
proviso to Section 143 of the Act.
INQUIRY UNDER SECTION 202 OF THE CODE IN RELATION
TO SECTION 145 OF THE ACT
10. Section 202 of the Code confers jurisdiction on the
Magistrate to conduct an inquiry for the purpose of deciding
whether sufficient grounds justifying the issue of process are
made out. The amendment to Section 202 of the Code with
effect from 23.06.2006, vide Act 25 of 2005, made it
mandatory for the Magistrate to conduct an inquiry before issue
of process, in a case where the accused resides beyond the
area of jurisdiction of the court. (See: Vijay Dhanuka & Ors.
v. Najima Mamtaj & Ors.1, Abhijit Pawar v. Hemant
1 (2014) 14 SCC 638
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Madhukar Nimbalkar and Anr.2 and Birla Corporation
Limited v. Adventz Investments and Holdings Limited &
Ors.3). There has been a divergence of opinion amongst the
High Courts relating to the applicability of Section 202 in
respect of complaints filed under Section 138 of the Act.
Certain cases under Section 138 have been decided by the
High Courts upholding the view that it is mandatory for the
Magistrate to conduct an inquiry, as provided in Section 202 of
the Code, before issuance of process in complaints filed under
Section 138. Contrary views have been expressed in some
other cases. It has been held that merely because the accused
is residing outside the jurisdiction of the court, it is not
necessary for the Magistrate to postpone the issuance of
process in each and every case. Further, it has also been held
that not conducting inquiry under Section 202 of the Code
would not vitiate the issuance of process, if requisite
satisfaction can be obtained from materials available on record.
11. The learned Amici Curiae referred to a judgment of this
Court in K.S. Joseph v. Philips Carbon Black Ltd & Anr.4
where there was a discussion about the requirement of inquiry
2 (2017) 3 SCC 528
3 (2019) 16 SCC 610
4 (2016) 11 SCC 105
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under Section 202 of the Code in relation to complaints filed
under Section 138 but the question of law was left open. In
view of the judgments of this Court in Vijay Dhanuka (supra),
Abhijit Pawar (supra) and Birla Corporation (supra), the
inquiry to be held by the Magistrate before issuance of
summons to the accused residing outside the jurisdiction of the
court cannot be dispensed with. The learned Amici Curiae
recommended that the Magistrate should come to a conclusion
after holding an inquiry that there are sufficient grounds to
proceed against the accused. We are in agreement with the
learned Amici.
12. Another point that has been brought to our notice relates
to the interpretation of Section 202 (2) which stipulates that the
Magistrate shall take evidence of the witness on oath in an
inquiry conducted under Section 202 (1) for the purpose of
issuance of process. Section 145 of the Act provides that the
evidence of the complainant may be given by him on affidavit,
which shall be read in evidence in any inquiry, trial or other
proceeding, notwithstanding anything contained in the Code.
Section 145 (2) of the Act enables the court to summon and
examine any person giving evidence on affidavit as to the facts
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contained therein, on an application of the prosecution or the
accused. It is contended by the learned Amici Curiae that
though there is no specific provision permitting the examination
of witnesses on affidavit, Section 145 permits the complainant
to be examined by way of an affidavit for the purpose of inquiry
under Section 202. He suggested that Section 202 (2) should
be read along with Section 145 and in respect of complaints
under Section 138, the examination of witnesses also should be
permitted on affidavit. Only in exceptional cases, the
Magistrate may examine the witnesses personally. Section 145
of the Act is an exception to Section 202 in respect of
examination of the complainant by way of an affidavit. There
is no specific provision in relation to examination of the
witnesses also on affidavit in Section 145. It becomes clear
that Section 145 had been inserted in the Act, with effect from
the year 2003, with the laudable object of speeding up trials in
complaints filed under Section 138. If the evidence of the
complainant may be given by him on affidavit, there is no
reason for insisting on the evidence of the witnesses to be
taken on oath. On a holistic reading of Section 145 along with
Section 202, we hold that Section 202 (2) of the Code is
inapplicable to complaints under Section 138 in respect of
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examination of witnesses on oath. The evidence of witnesses
on behalf of the complainant shall be permitted on affidavit. If
the Magistrate holds an inquiry himself, it is not compulsory
that he should examine witnesses. In suitable cases, the
Magistrate can examine documents for satisfaction as to the
sufficiency of grounds for proceeding under Section 202.
SECTIONS 219 AND 220 OF THE CODE
13. Section 219 of the Code provides that when a person is
accused of more offences than one, of the same kind,
committed within a space of 12 months, he may be tried at one
trial for a maximum of three such offences. If more than one
offence is committed by the same person in one series of acts
so committed together as to form the same transaction, he
may be charged with and tried at one trial, according to Section
220. In his preliminary report, the learned Amici Curiae
suggested that a legislative amendment is required to Section
219 of the Code to avoid multiplicity of proceedings where
cheques have been issued for one purpose. In so far as
Section 220 of the Code is concerned, the learned Amici Curiae
submitted that same/similar offences as part of the same
transaction in one series of acts may be the subject matter of
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one trial. It was argued by the learned Amici Curiae that
Section 220 (1) of the Code is not controlled by Section 219 and
even if the offences are more than three in respect of the same
transaction, there can be a joint trial. Reliance was placed on
a judgment of this Court in Balbir v. State of Haryana &
Anr.5 to contend that all offences alleged to have been
committed by the accused as a part of the same transaction
can be tried together in one trial, even if those offences may
have been committed as a part of a larger conspiracy.
14. The learned Amici Curiae pointed out that the judgment of
this Court in Vani Agro Enterprises v. State of Gujarat &
Ors.6 needs clarification. In Vani Agro (supra), this Court was
dealing with the dishonour of four cheques which was the
subject matter of four complaints. The question raised therein
related to the consolidation of all the four cases. As only three
cases can be tried together as per Section 219 of the Code, this
Court directed the Trial Court to fix all the four cases on one
date. The course adopted by this Court in Vani Agro (supra) is
appropriate in view of the mandate of Section 219 of the Code.
Hence, there is no need for any clarification, especially in view
5 (2000) 1 SCC 285
6 2019 (10) SCJ 238
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of the submission made by the learned Amici that Section 219
be amended suitably. We find force in the submission of the
learned Amici Curiae that one trial for more than three offences
of the same kind within the space of 12 months in respect of
complaints under Section 138 can only be by an amendment.
To reduce the burden on the docket of the criminal courts, we
recommend that a provision be made in the Act to the effect
that a person can be tried in one trial for offences of the same
kind under Section 138 in the space of 12 months,
notwithstanding the restriction in Section 219 of the Code.
15. Offences that are committed as part of the same
transaction can be tried jointly as per Section 220 of the Code.
What is meant by “same transaction” is not defined anywhere
in the Code. Indeed, it would always be difficult to define
precisely what the expression means. Whether a transaction
can be regarded as the same would necessarily depend upon
the particular facts of each case and it seems to us to be a
difficult task to undertake a definition of that which the
Legislature has deliberately left undefined. We have not come
across a single decision of any court which has embarked upon
the difficult task of defining the expression. But it is generally
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thought that where there is proximity of time or place or unity
of purpose and design or continuity of action in respect of a
series of acts, it may be possible to infer that they form part of
the same transaction. It is, however, not necessary that every
one of these elements should co-exist for a transaction to be
regarded as the same. But if several acts committed by a
person show a unity of purpose or design that would be a
strong circumstance to indicate that those acts form part of the
same transaction7. There is no ambiguity in Section 220 in
accordance with which several cheques issued as a part of the
same transaction can be the subject matter of one trial.
16. The learned Amici Curiae have brought to our notice that
separate complaints are filed under Section 138 of the Act for
dishonour of cheques which are part of the same transaction.
Undue delay in service of summons is the main cause for the
disproportionate accumulation of complaints under Section 138
before the courts. The learned Amici suggested that one way
of reducing the time spent on service of summons is to treat
service of summons served in one complaint pertaining to a
transaction as deemed service for all complaints in relation to
the said transaction. We are in agreement with the suggestion
7 State of Andhra Pradesh v. Cheemalapati Ganeswara Rao & Anr., (1964) 3 SCR 297
17 | P a g e
made by the learned Amici Curiae. Accordingly, the High
Courts are requested to issue practice directions to the Trial
Courts to treat service of summons in one complaint forming
part of a transaction, as deemed service in respect of all the
complaints filed before the same court relating to dishonour of
cheques issued as part of the said transaction.
INHERENT POWERS OF THE MAGISTRATE
17. In K. M. Mathew v. State of Kerala & Anr.8, this Court
dealt with the power of the Magistrate under Chapter XX of the
Code after the accused enters appearance in response to the
summons issued under Section 204 of the Code. It was held
that the accused can plead before the Magistrate that the
process against him ought not to have been issued and the
Magistrate may drop the proceedings if he is satisfied on
reconsideration of the complaint that there is no offence for
which the accused could be tried. This Court was of the opinion
that there is no requirement of a specific provision for the
Magistrate to drop the proceedings and as the order issuing the
process is an interim order and not a judgment, it can be varied
or recalled. The observation in the case of K. M. Mathew
(supra) that no specific provision of law is required for recalling
8 (1992) 1 SCC 217
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an erroneous order of issue of process was held to be contrary
to the scheme of the Code in Adalat Prasad v. Rooplal
Jindal and Others9. It was observed therein that the order
taking cognizance can only be subject matter of a proceeding
under Section 482 of the Code as subordinate criminal courts
have no inherent power. There is also no power of review
conferred on the Trial Courts by the Code. As there is no
specific provision for recalling an erroneous order by the Trial
Court, the judgment in the case of K. M. Mathew (supra) was
held to be not laying down correct law. The question whether a
person can seek discharge in a summons case was considered
by this Court in Subramanium Sethuraman v. State of
Maharashtra & Anr.10. The law laid down in Adalat Prasad
(supra) was reiterated.
18. It was contended by learned Amici Curiae that a holistic
reading of Sections 251 and 258 of the Code, along with
Section 143 of the Act, should be considered to confer a power
of review or recall of the issuance of process by the Trial Court
in relation to complaints filed under Section 138 of the Act. He
referred to a judgment of this Court in Meters and
9 (2004) 7 SCC 338
10 (2004) 13 SCC 324
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Instruments Private Limited and Another v. Kanchan
Mehta11 which reads as follows:
“While it is true that in Subramanium
Sethuraman v. State of Maharashtra this Court
observed that once the plea of the accused is
recorded under Section 252 CrPC, the procedure
contemplated under Chapter XX CrPC has to be
followed to take the trial to its logical conclusion, the
said judgment was rendered as per statutory
provisions prior to the 2002 Amendment. The
statutory scheme post-2002 Amendment as
considered in Mandvi Coop. Bank and J.V.
Baharuni has brought about a change in law and it
needs to be recognised. After the 2002 Amendment,
Section 143 of the Act confers implied power on the
Magistrate to discharge the accused if the
complainant is compensated to the satisfaction of the
court, where the accused tenders the cheque amount
with interest and reasonable cost of litigation as
assessed by the court. Such an interpretation was
consistent with the intention of legislature. The court
has to balance the rights of the complainant and the
accused and also to enhance access to justice. Basic
object of the law is to enhance credibility of the
cheque transactions by providing speedy remedy to
the complainant without intending to punish the
drawer of the cheque whose conduct is reasonable or
where compensation to the complainant meets the
ends of justice. Appropriate order can be passed by
the court in exercise of its inherent power under
Section 143 of the Act which is different from
compounding by consent of parties. Thus, Section
258 CrPC which enables proceedings to be stopped in
a summons case, even though strictly speaking is not
applicable to complaint cases, since the provisions of
CrPC are applicable “so far as may be”, the principle
of the said provision is applicable to a complaint case
covered by Section 143 of the Act which
contemplates applicability of summary trial
provisions, as far as possible i.e. with such deviation
as may be necessary for speedy trial in the context.”
11 (2018) 1 SCC 560
20 | P a g e
19. In Meters and Instruments (supra), this Court was of
the opinion that Section 143 of the Act confers implied power
on the Magistrate to discharge the accused, if the complainant
is compensated to the satisfaction of the court. On that
analogy, it was held that apart from compounding by the
consent of the parties, the Trial Court has the jurisdiction to
pass appropriate orders under Section 143 in exercise of its
inherent power. Reliance was placed by this Court on Section
258 of the Code to empower the Trial Courts to pass suitable
orders.
20. Section 143 of the Act mandates that the provisions of
summary trial of the Code shall apply “as far as may be” to
trials of complaints under Section 138. Section 258 of the Code
empowers the Magistrate to stop the proceedings at any stage
for reasons to be recorded in writing and pronounce a judgment
of acquittal in any summons case instituted otherwise than
upon complaint. Section 258 of the Code is not applicable to a
summons case instituted on a complaint. Therefore, Section
258 cannot come into play in respect of the complaints filed
under Section 138 of the Act. The judgment of this Court in
Meters and Instruments (supra) in so far as it conferred
21 | P a g e
power on the Trial Court to discharge an accused is not good
law. Support taken from the words “as far as may be” in
Section 143 of the Act is inappropriate. The words “as far as
may be” in Section 143 are used only in respect of applicability
of Sections 262 to 265 of the Code and the summary procedure
to be followed for trials under Chapter XVII. Conferring power
on the court by reading certain words into provisions is
impermissible. A judge must not rewrite a statute, neither to
enlarge nor to contract it. Whatever temptations the
statesmanship of policy-making might wisely suggest,
construction must eschew interpolation and evisceration. He
must not read in by way of creation12. The Judge’s duty is to
interpret and apply the law, not to change it to meet the
Judge’s idea of what justice requires13. The court cannot add
words to a statute or read words into it which are not there14.
21. A close scrutiny of the judgments of this Court in Adalat
Prasad (supra) and Subramanium Sethuraman (supra)
would show that they do not warrant any reconsideration. The
Trial Court cannot be conferred with inherent power either to
review or recall the order of issuance of process. As held
12 J. Frankfurter, “Of Law and Men: Papers and Addresses of Felix Frankfurter”.
13 Dupont Steels Ltd. v. Sirs (1980) 1 All ER 529 (HL)
14 Union of India v. Deoki Nandan Aggarwal 1992 Supp (1) SCC 323
22 | P a g e
above, this Court, in its anxiety to cut down delays in the
disposal of complaints under Section 138, has applied Section
258 to hold that the Trial Court has the power to discharge the
accused even for reasons other than payment of compensation.
However, amendment to the Act empowering the Trial Court to
reconsider/recall summons may be considered on the
recommendation of the Committee constituted by this Court
which shall look into this aspect as well.
22. Another submission made by the learned Amici Curiae
relates to the power of the Magistrate under Section 322 of the
Code, to revisit the order of issue of process if he has no
jurisdiction to try the case. We are in agreement with the
learned Amici Curiae that in case the Trial Court is informed
that it lacks jurisdiction to issue process for complaints under
Section 138 of the Act, the proceedings shall be stayed and the
case shall be submitted to the Chief Judicial Magistrate or such
other Magistrate having jurisdiction.
23. Though we have referred all the other issues which are
not decided herein to the Committee appointed by this Court
on 10.03.2021, it is necessary to deal with the complaints
under Section 138 pending in Appellate Courts, High Courts and
23 | P a g e
in this Court. We are informed by the learned Amici Curiae that
cases pending at the appellate stage and before the High
Courts and this Court can be settled through mediation. We
request the High Courts to identify the pending revisions arising
out of complaints filed under Section 138 of the Act and refer
them to mediation at the earliest. The Courts before which
appeals against judgments in complaints under Section 138 of
the Act are pending should be directed to make an effort to
settle the disputes through mediation.
24. The upshot of the above discussion leads us to the
following conclusions:
1) The High Courts are requested to issue practice
directions to the Magistrates to record reasons before
converting trial of complaints under Section 138 of the
Act from summary trial to summons trial.
2) Inquiry shall be conducted on receipt of complaints
under Section 138 of the Act to arrive at sufficient
grounds to proceed against the accused, when such
accused resides beyond the territorial jurisdiction of
the court.
24 | P a g e
3) For the conduct of inquiry under Section 202 of the
Code, evidence of witnesses on behalf of the
complainant shall be permitted to be taken on
affidavit. In suitable cases, the Magistrate can restrict
the inquiry to examination of documents without
insisting for examination of witnesses.
4) We recommend that suitable amendments be made to
the Act for provision of one trial against a person for
multiple offences under Section 138 of the Act
committed within a period of 12 months,
notwithstanding the restriction in Section 219 of the
Code.
5) The High Courts are requested to issue practice
directions to the Trial Courts to treat service of
summons in one complaint under Section 138 forming
part of a transaction, as deemed service in respect of
all the complaints filed before the same court relating
to dishonour of cheques issued as part of the said
transaction.
6) Judgments of this Court in Adalat Prasad (supra) and
Subramanium Sethuraman (supra) have interpreted
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the law correctly and we reiterate that there is no
inherent power of Trial Courts to review or recall the
issue of summons. This does not affect the power of
the Trial Court under Section 322 of the Code to revisit
the order of issue of process in case it is brought to the
court’s notice that it lacks jurisdiction to try the
complaint.
7) Section 258 of the Code is not applicable to complaints
under Section 138 of the Act and findings to the
contrary in Meters and Instruments (supra) do not
lay down correct law. To conclusively deal with this
aspect, amendment to the Act empowering the Trial
Courts to reconsider/recall summons in respect of
complaints under Section 138 shall be considered by
the Committee constituted by an order of this Court
dated 10.03.2021.
8) All other points, which have been raised by the Amici
Curiae in their preliminary report and written
submissions and not considered herein, shall be the
subject matter of deliberation by the aforementioned
Committee. Any other issue relating to expeditious
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disposal of complaints under Section 138 of the Act
shall also be considered by the Committee.
25. List the matter after eight weeks. Further hearing in this
matter will be before 3-Judges Bench.
26. We place on record our appreciation for the valuable
assistance rendered by Mr. Sidharth Luthra, learned Senior
Counsel and Mr. K. Parameshwar, learned Counsel, as Amici
Curiae.
………………….CJI.
[ S. A. BOBDE ]
…………………………….J.
[ L. NAGESWARA RAO ]
……………………J.
[B. R. GAVAI ]
……………………….J.
[ A. S. BOPANNA ]
………………………………J.
[ S. RAVINDRA BHAT ]
New Delhi,
April 16, 2021
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