The Negotiable Instruments Act, 1881

138. Dishonour of cheque for insufficiency, etc., of funds in the account. —Where
any cheque drawn by a person on an account maintained by him with a banker for
payment of any amount of money to another person from out of that account for the
discharge, in whole or in part, of any debt or other liability, is returned by the bank
unpaid, either because of the amount of money standing to the credit of that account
is insufficient to honour the cheque or that it exceeds the amount arranged to be paid
from that account by an agreement made with that bank, such person shall be deemed
to have committed an offence and shall, without prejudice to any other provisions of
this Act, be punished with imprisonment for [a term which may be extended to two
years], or with fine which may extend to twice the amount of the cheque, or with
both: Provided that nothing contained in this section shall apply unless—
(a) the cheque has been presented to the bank within a period of six months from the
date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a
demand for the payment of the said amount of money by giving a notice in writing, to
the drawer of the cheque, 20 [within thirty days] of the receipt of information by him
from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money
to the payee or, as the case may be, to the holder in due course of the cheque, within
fifteen days of the receipt of the said notice.
Explanation.— For the purposes of this section, “debt or other liability” means a
legally enforceable debt or other liability.]

143. Power of Court to try cases summarily.—

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2
of 1974), all offences under this Chapter shall be tried by a Judicial Magistrate of the
first class or by a Metropolitan Magistrate and the provisions of sections 262 to 265
(both inclusive) of the said Code shall, as far as may be, apply to such trials: Provided
that in the case of any conviction in a summary trial under this section, it shall be
lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding
one year and an amount of fine exceeding five thousand rupees: Provided further that
when at the commencement of, or in the course of, a summary trial under this section,
it appears to the Magistrate that the nature of the case is such that a sentence of
imprisonment for a term exceeding one year may have to be passed or that it is, for
any other reason, undesirable to try the case summarily, the Magistrate shall after
hearing the parties, record an order to that effect and thereafter recall any witness
who may have been examined and proceed to hear or rehear the case in the manner
provided by the said Code.
(2) The trial of a case under this section shall, so far as practicable, consistently with
the interests of justice, be continued from day to day until its conclusion, unless the
Court finds the adjournment of the trial beyond the following day to be necessary for
reasons to be recorded in writing.
(3) Every trial under this section shall be conducted as expeditiously as possible and
an endeavour shall be made to conclude the trial within six months from the date of
filing of the complaint

144. Mode of service of summons.—

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2
of 1974), and for the purposes of this Chapter, a Magistrate issuing a summons to an
accused or a witness may direct a copy of summons to be served at the place where
such accused or witness ordinarily resides or carries on business or personally works;
for gain, by speed post or by such courier services as are approved by a Court of
Session.
(2) Where an acknowledgment purporting to be signed by the accused or the witness
or an endorsement purported to be made by any person authorised by the postal
department or the courier services that the accused or the witness refused to take
delivery of summons has been received, the Court issuing the summons may declare
that the summons has been duly served.
Section 145 in The Negotiable Instruments Act, 1881
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.

482.Saving of inherent powers of High Court.-

Nothing in this Code shall be deemed to limit or affect the inherent powers of the
High Court to make such orders as may be necessary to give effect to any order under
this Code, or to prevent abuse of the process of any Court or otherwise to secure the
ends of justice.

207.Supply to the accused of copy of police report and other documents.-

In any case where the proceeding has been instituted on a police report, the
Magistrate shall without delay furnish to the accused, free of cost, a copy of each of
the following:-
(i) the police report;
(ii) the first information report recorded under section 154;
(iii) the statements recorded under sub-section (3) of section 161 of all persons whom
the prosecution proposes to examine as its witnesses, excluding there from any part in
regard to which a request for such exclusion has been made by the police officer
under sub-section (6) of section 173;
(iv) the confessions and statements, if any, recorded under section 164;
(v) any other document or relevant extract thereof forwarded to the Magistrate with
the police report under sub-section (5) of section 173:
Provided that the Magistrate may, after perusing any such part of a statement as is
referred to in clause (iii) and considering the reasons given by the police officer for
the request, direct that a copy of that part of the statement or of such portion thereof
as the Magistrate thinks proper, shall be furnished to the accused:

Provided further that if the Magistrate is satisfied that any document referred to in
clause (v) is voluminous, he shall, instead of furnishing the accused with a copy
thereof, direct that he will only be allowed to inspect it either personally or through
pleader in Court.
High Court is being flooded with petitions under section 482 Cr.P.C. for quashing of
complaints under section 138 N.I. Act on the ground that learned MMs cannot recall
their own orders of summoning and it is the High Court that should consider that the
complaint under section 138 of N.I.Act was not maintainable against the petitioners

Adalat Prasad vs. Rooplal Jindal and Others; (2004) 7 SCC 338 to press the point that
the petitioners have no other alternative but to approach the High Court, if a
Magistrate takes cognizance of an offence and issues process, without there being any
allegations against the accused or any material implicating the accused, the order of
Magistrate may be vitiated, but the relief, an aggrieved accused can obtain at that
stage is not by invoking Section 207 of Cr.P.C.. The remedy lies in invoking section
482 Cr.P.C. Section 482 of Cr. P.C. can be resorted to only where the High Court is
called upon to examine the complaint and material available before the Trial Court at
the time of summoning per se to arrive at a conclusion that no case was made out
against the petitioner/accused.

Section 143 of N.I. Act, as amended by Legislature in 2002, specifically provides that
all offences under this chapter of N.I. Act are to be tried by Judicial Magistrate of
First Class or MM in accordance with summary trial provisions of Sections 262 to
265 Cr. P.C. (both inclusive).An issue arises where there are many accused persons in
a case and some of them are not appearing, should the court proceed against those
who are appearing or should wait for the completion of service of all the accused? I
consider that summary trial leaves no option to the court. The whole purpose of
summary trial shall stand defeated if the court of MM tells the accused persons, who
have been served, to come to the court repeatedly till the other accused are served.
The plea of the accused is to be recorded on the day of his appearance under the
summary trial and if that accused gets his plea recorded, he is at liberty to lead
evidence in support of his plea and the court cannot tell him to keep coming
repeatedly either in person or through counsel due to non appearance of other accused
persons. The court, in such a case, asks him to disclose his defence and to prove his
defence. In case court feels that the case should not be tried summarily and all the
accused persons must necessary be tried together, then alone the court should ask the
accused to wait but if the accused / respondent has a valid defence to show that he
need not face trial because of a specific defence and he was prepared to lead evidence
to this effect, he should be directed to lead evidence in support of his plea.

In order to ensure that the cases u/s 138 N.I. Act are tried before the Court of MM/JM
in an expeditious manner, Legislature provided for summary trial. Section 145 of N.I.
Act provides that evidence of complainant may be given by him by way of affidavit
and such affidavit shall be read in evidence in any inquiry, trial or other proceedings
in the court. This also makes clear that a complainant is not required to examine
himself twice i.e. one after filing the complaint and one after summoning of the
accused. The affidavit and the documents filed by the complainant along with
complaint for taking cognizance of the offence are good enough to be read in
evidence at both the stages i.e. pre-summoning stage and the post summoning stage.
The complainant is not required to be recalled and re-examined after summoning of
accused unless the MM passes a specific order as to why the complainant is to be
recalled. Such an order is to be passed on an application made by the accused or
under section 145(2) of N.I. Act suo moto by the Court.

Summary trial procedure is given under sections 260 to 265 of Cr. P.C. As per this
procedure also when during the course of summary trial, it appears to the Magistrate
that nature of case was such that it was desirable to try it as a summon trial, he has
power to recall any witness who has been examined and proceed to re-hear the case
in the manner provided in the Code.

The difference between summary trial and summon trial is thus obvious. In summary
trial after the accused is summoned, his plea is to be recorded under section 262 (g)
of Cr.P.C. and his examination if any can be done by MM and a finding can be given
by the court under section 263(h) of his examination. The same procedure is to be
followed by the MMs for offence of dishonour of cheque. If proviso a, b & c to
Section 138 N.I. Act are shown to have been complied with, technically the
commission of offence stands completed. It is for the accused to show that no offence
could have been deemed to be committed by him for some specific reasons &
defences. He cannot simply say "I am innocent" or "I plead not guilty”

The procedure as prescribed under law is that along with complaint under section 138
of N.I. Act, the complainant should file affidavit of his evidence and all necessary
documents like dishonour memo, returned cheque, notice of demand and then learned
MM should scrutinize the complaint & document & if he finds that the affidavit and
the documents disclose dishonour of cheque issued by the accused, issuance of a
demand notice by the complainant, nonpayment of the cheque amount by the accused
despite notice, cheque return memo of the bank etc. and if the court finds that the
complaint was filed within the period of limitation, cognizance is to be taken and
notice of appearance of accused should be sent to the accused. In case the accused
appears before the court of MM, the Court should ask him as to what was his plea of
defence.Normally the first date is wasted by the courts of MM just by taking bail
bond of the accused and passing a bail order, while section 251 & 263(g) of Cr. P.C.
provide that when the accused appears before MM in a summary trial proceedings,
the particulars of the offence, to which he is accused, shall be stated to him & he
should be asked whether he pleads guilty or he has any defence to make. This is the
mandate of section 143 of N.I. Act, which provides summary trial of offence in terms
of Cr. P.C. Under Section 263(g) of Cr.P.C., the court has to record the plea of the
accused and his examination. It is thus obvious that in a trial of an offence under
section 138 N.I. Act the accused cannot simplicitor say "I plead not guilty" and wants
to face trial. Since offence under section 138 of N.I. Act is a document based
technical offence, deemed to have been committed because of dishonour of cheque
issued by the accused or his company or his firm, the accused must disclose to the
Court as to what is his defence on the very first hearing when the accused appears
before the Court. If the accused does not appear before the Court of MM on
summoning and rather approaches High Court, the High Court has to refuse to
entertain him and ask him to appear before the Court of MM as the High Court
cannot usurp the powers of MM and entertain a plea of accused why he should not be
tried under section 138. This plea as to why he should not be tried under section 138
is to be raised by the accused before the Court of MM under section 251 & under
section 263 (g) of Cr. P.C. Along with his plea he can file necessary documents and
also make an application, if he is so advised, under Section 145(2) of N.I. Act to
recall the complainant to cross-examine him on his plea of defence. However, only
after disclosing his plea of defence he can make an application that the case should
not be tried summarily but as a summon trial case. This application must disclose the
defence of the accused and the reasons why he wants the case to be tried as a
summon trial.

An argument is raised that the accused, under Article 21 of Constitution of India, has
a right of silence in a criminal trial and therefore he cannot be forced to disclose his
defence. This argument is misconceived in view of Section 106 of Indian Evidence
Act. Since an offence under section 138 of Negotiable Instrument Act is technical in
nature and defence which an accused can take are inbuilt, like the cheque was given
without consideration, the accused was not Director at that time, accused was a
sleeping partner or a sleeping Director, cheque was given as a security etc. etc., the
onus of proving these defences is on the accused alone, in view of section 106 of
Evidence Act. Since the mandate of Legislature is trial of such cases in a summary
manner, the evidence already given by the complainant by way of affidavit is
sufficient proof of the offence and this evidence is not required to be given again in
terms of section 145(1) of N.I. Act and has to be read during the trial. The witnesses
i.e. the complainant or other witnesses can be recalled only when accused makes an
application and this application must disclose the reason why accused wants to recall
the witnesses and on what point witness is to be cross examined. One must not forget
that the offence under section 138 of N.I. Act is not of the kind of offence as in IPC
where the State prosecutes a person for offence against the society. The offence under
section 138 of N.I. Act is an offence in the personal nature of the complainant and it
is an offence made under N.I. Act so that the trust in commercial transactions is not
destroyed because of the dishonour of cheques. When it is within the special
knowledge of the accused as to why he is not to face trial under section 138 N.I. Act,
he alone has to take the plea of defence and burden cannot be shifted to complainant.
There is no presumption that even if an accused fails to bring out his defence, he is
still to be considered innocent. If an accused has a defence against dishonour of the
cheque in question, it is he alone who knows the defence and responsibility of
spelling out this defence to the court and then proving this defences is on the accused.
I, therefore, consider that the proper procedure to be followed by MM is that soon
after summoning, the accused must be asked to disclose his defence & his plea should
be recorded. Where an accused takes no defence and simply says "I am innocent",
there is no reason for the MM to recall the complainant or witnesses during summary
trial and the evidence already given by the complainant has to be considered
sufficient and the trial court can ask the accused to lead his evidence in defence on
the plea of innocence as the evidence of the complainant is already there. In a
summary trial, a complainant or his witness cannot be recalled in the court for cross
examination only for the sake of pleasure. Once the complainant has brought forward
his case by giving his affidavit about the issuance of cheque, dishonour of cheque,
issuance of demand notice etc., he can be cross examined only if the accused makes
an application to the court as to on what point he wants to cross examine the witness
(es) and then only the court shall recall the witness by recording reasons thereto.

The trial under section 138 of NI Act cannot be carried like any other summons trial
under IPC offences. The documents placed on record of the Court about the
dishonour of cheque are the documents from banks and unless the accused says that
these documents are forged, or he had not issued the cheque at all, he did not have
any account in the bank, the cheque was not signed by him, the cheque book was
forged by the complainant or other similar claim, the evidence of the complainant
about dishonour of cheque cannot be questioned, nor the complainant can be asked to
depose before the court again. If the case u/s 138 N.I. Act, which is document based,
is not tried in summary manner, the sole purpose of making this offence summary
trial stands defeated. Thus in all cases under section 138 of N.I. Act, once evidence is
given by way of affidavit, at the stage of pre-summoning, the same evidence is to be
read by the court at post summoning stage and the witness need not be recalled at
post summoning stage unless court of MM, for reasons, considers it necessary.

In Harish Chandra Biyani Vs. Stock Holding Corporation of India Ltd., I (2007) BC
417, Bombay High Court had occasion to deal with the issue & observed as under
Sub-section (1) of Section 145 gives complete freedom to the complainant either to
give his evidence by way of affidavit or by way of oral evidence. If this- is made on
affidavit, the same has to be accepted and such affidavit is required to be kept on
record by the Court. The second part of Sub-section (1) provides that the complainant
may give his evidence on affidavit and may, subject to all just exceptions, be read in
evidence in any enquiry, trial or other proceeding. Thus, it is clear that once the
evidence of the complainant is given on affidavit, it may be read in evidence in any
enquiry, trial or other proceeding, and it may be subject to all just exceptions.

An issue arises where there are many accused persons in a case and some of them are
not appearing, should the court proceed against those who are appearing or should
wait for the completion of service of all the accused? I consider that summary trial
leaves no option to the court. The whole purpose of summary trial shall stand
defeated if the court of MM tells the accused persons, who have been served, to come
to the court repeatedly till the other accused are served. The plea of the accused is to
be recorded on the day of his appearance under the summary trial and if that accused
gets his plea recorded, he is at liberty to lead evidence in support of his plea and the
court cannot tell him to keep coming repeatedly either in person or through counsel
due to non appearance of other accused persons. The court, in such a case, asks him
to disclose his defence and to prove his defence. In case court feels that the case
should not be tried summarily and all the accused persons must necessary be tried
together, then alone the court should ask the accused to wait but if the accused /
respondent has a valid defence to show that he need not face trial because of a
specific defence and he was prepared to lead evidence to this effect, he should be
directed to lead evidence in support of his plea.
In most of the cases, the court of MM may not feel necessary that a sentence of
imprisonment of more than one year should be inflicted. Unless the court, for reasons
to be given, considers that the punishment in a case should be more than one year, the
court cannot deviate from the procedure of summary trial and cannot ask the accused
to appear again and again and defeat the very purpose of summary trial. Section 143
and 145 of N.I. Act were enacted by the parliament with the aim of expediting trial in
such cases. The provisions of summary trial enable the respondent to lead defence
evidence by way of affidavit and documents. Thus an accused who considers that he
has a tenable defence and the case against him was not maintainable, he can enter his
plea on the very first day of his appearance and file an affidavit in his defence
evidence and if he is so advised, he can also file an application for recalling any of
the witnesses for cross examination on the defence taken by him.

Damodar S. Prabhu vs. Sayed Babalal H., decided, the court of MM should also
inform the accused that in case he wants to make the payment of the cheque amount,
he should either in person or through his counsel or representative sent the cheque
amount, either in cash or through draft so that the same can be paid to the
complainant and the case would thus come to an end. The accused also has liberty to
make application on the very first day that he wants to compromise and in terms of
the judgment given by SC in Damodar S. Prabhu (Supra) the court should dispose of
the case by asking the accused to pay the cheque amount to complainant. The court
should also bring to the notice of accused that incase he does not compromise at that
stage, and if he enters compromise at subsequent stages then he will have to pay costs
in terms of judgment of Supreme Court.