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Supreme Court Holds That Section 138 Of The Nia Act Mandates Inquiry Upon Receiving Complaints To Determine The Grounds For Proceeding Against The Accused Residing Outside The Court's Territorial Jurisdiction

Shivani Negi ,
  12 September 2023       Share Bookmark

Court :
Supreme Court of India
Brief :

Citation :
WRIT PETITION (CRL.) NO.2 OF 2020

Case title:

EXPEDITIOUS TRIAL OF CASES UNDER SECTION 138 OF N.I. ACT 1881.

Date of Order:

April 16th, 2021

Bench:

(Then) Chief Justice of India – S A Bobde

Justice L Nageshwar Rao

Justice B R Gavai

SUBJECT

  • Special Leave Petition No. 5464 of 2016 involves dishonour of two cheques for Rs.1,70,000/-. Due to numerous cases under Section 138 of the Negotiable Instruments Act, 1881, a Division Bench decided to investigate the delay and registered a Suo Motu Writ Petition for expedited trial.
  • The court ruled that Section 138 of the Act requires inquiry upon complaints to determine grounds for proceeding against accused outside the court’s jurisdiction. Amendments allow one trial for multiple offences within 12 months and witness evidence.

IMPORTANT PROVISIONS

Negotiable Instruments Act, 1881

  • Section 138
  • Section 143
  • Section 258

OVERVIEW

  • Sidharth Luthra was appointed as Amicus Curiae, with K. Parameshwar as his assistant. Notices were issued to Union of India, High Courts, Police, National Legal Services Authority, Reserve Bank of India, and Indian Banks' Association.
  • The Amici Curiae submitted a preliminary report on 11.10.2020, which was circulated to all respondents. Only 14 out of 25 High Courts responded, and the Reserve Bank of India and seven Directors General of Police filed affidavits. The matter was listed for final disposal on 24.02.2021, with a Bench of three Judges considering a larger bench for important issues.
  • The pendency of complaints filed under Section 138 of the Act has negatively impacted the disposal of other criminal cases. The Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 addressed this issue by introducing Sections 143 to 147, enabling courts to try complaints summarily, and addressing summons service mode.

ISSUES RAISED

  • Whether service of summons on the accused in a complaint filed under Section 138 were valid?

Analysis of the ASG’s Statements

  • The Union of India and the Reserve Bank of India were tasked with responding to Amici Curiae’s suggestions. After hearing the Solicitor General and Reserve Bank counsel, a committee was formed with former Bombay High Court Judge R.C. Chavan as Chairman.
  • The Committee will consider Amici Curiae's recommendations on bank account attachment, pre-summons mediation, and related issues. They will also discuss the need for additional courts to handle complaints under Section 138 of the Act.

JUDGEMENT ANALYSIS

  • In Meters and Instruments, the Court ruled that Section 143 of the Act grants the Magistrate implied power to discharge the accused if the complainant is compensated to court satisfaction. The Trial Court also has jurisdiction to pass appropriate orders under Section 143, relying on Section 258 of the Code to empower Trial Courts.
  • The Court’s judgments in Adalat Prasad and Subramanium Sethuraman do not warrant reconsideration, as the Trial Court cannot review or recall process orders. The Court applied Section 258 to reduce complaints disposal delays, but an amendment to empower the Trial Court to reconsider summons could be considered.
  • High Courts are requested to identify pending revisions from Section 138 complaints and refer them to mediation, and to resolve disputes before appeals against judgments.

CONCLUSION

  • The court finally concluded that-
  • Section 138 of the Act mandates inquiry upon receiving complaints to determine the grounds for proceeding against the accused residing outside the court's territorial jurisdiction.
  • Allowing amending the Act to allow for one trial for multiple offences committed within 12 months, despite the restriction in Section 219 of the Code, and to allow evidence of witnesses on behalf of the complainant.
  • Section 258 of the Code doesn’t apply to complaints under Section 138 of the Act, and the Committee will consider an amendment allowing Trial Courts to reconsider/recall summons.

 

 
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