Court’s decision
The Bombay High Court quashed a revisional court order that had set aside the issuance of process in a cheque dishonour case under Section 138 of the Negotiable Instruments Act. The High Court held that the Magistrate had applied his mind to the complaint, verification affidavit, and supporting documents, and had conducted an inquiry under Section 202 of the Code of Criminal Procedure as the accused resided outside jurisdiction.
Finding that the revisional court mechanically interfered without appreciating settled Supreme Court law, the High Court restored the Magistrate’s order and remanded the matter for expeditious trial within one year.
Facts
The petitioner had filed a complaint under Section 138 of the Negotiable Instruments Act alleging dishonour of a cheque issued by the respondent. The complaint was supported by the original cheque, cheque return memo, statutory demand notice, postal acknowledgment evidencing service, and a power of attorney in favour of the complainant.
On 3 March 2022, the Judicial Magistrate First Class issued process against the accused after examining the complaint, verification affidavit, and conducting an inquiry under Section 202 of the Code of Criminal Procedure, since the accused resided beyond territorial jurisdiction.
The accused challenged the issuance of process before the Additional Sessions Judge in revision. The revisional court allowed the revision on 17 May 2023, holding that there was no proper inquiry under Section 202 and that the Magistrate had not sufficiently recorded application of mind. This order was challenged before the High Court.
Issues
The High Court considered whether the revisional court was justified in setting aside the issuance of process under Section 138 of the Negotiable Instruments Act on the ground of alleged non-compliance with Section 202 of the Code of Criminal Procedure.
The key question was whether a detailed speaking order is mandatory at the stage of issuance of process and whether the Magistrate’s order reflected sufficient application of mind.
Petitioner’s arguments
The petitioner contended that the Magistrate’s order clearly demonstrated application of mind. It was argued that the Magistrate had expressly recorded that he had read the complaint, examined the verification affidavit, and perused all supporting documents including the original cheque, return memo, demand notice, postal acknowledgment, and power of attorney.
Further, the Magistrate had specifically noted that since the accused resided outside territorial jurisdiction, an inquiry under Section 202 of the Code of Criminal Procedure was conducted. The petitioner relied upon Supreme Court precedent to argue that Section 202 does not mandate a detailed or elaborate order, and that sufficient indication of satisfaction is adequate for issuance of process.
Respondent’s arguments
The respondent-accused contended that the Magistrate had not conducted a meaningful inquiry under Section 202 of the Code of Criminal Procedure and had mechanically issued process. It was argued that the revisional court rightly interfered because the order lacked detailed reasoning and did not reflect proper scrutiny.
The respondent also submitted that substantial payment had already been made and that the cheque was handed over due to family relations, implying misuse of the instrument. According to the respondent, the Magistrate’s order failed to demonstrate adequate judicial application of mind.
Analysis of the law
The High Court examined the scope of Sections 202 and 204 of the Code of Criminal Procedure in the context of complaints under Section 138 of the Negotiable Instruments Act. It relied upon the Supreme Court’s ruling in Sunil Todi v. State of Gujarat, where it was held that a formal or elaborate speaking order is not mandatory at the stage of issuance of process.
The Supreme Court clarified that the Magistrate must be satisfied that there is sufficient ground for proceeding, not that there is sufficient ground for conviction. The adequacy of evidence for conviction is a matter for trial.
The High Court also referred to the Constitution Bench decision in In Re: Expeditious Trial of Cases under Section 138 of the Negotiable Instruments Act, which emphasized that procedural requirements under Section 202 should not frustrate the objective of speedy trial in cheque dishonour cases.
Precedent analysis
In Sunil Todi v. State of Gujarat, the Supreme Court held that Section 145 of the Negotiable Instruments Act permits evidence by affidavit and that strict compliance with oral examination under Section 202 is not mandatory in every case. The Magistrate may rely on documents and affidavit evidence to determine whether there are sufficient grounds to proceed.
The Constitution Bench in In Re: Expeditious Trial of Cases under Section 138 of the Negotiable Instruments Act reiterated that the object of the statute is to ensure expeditious disposal of cheque dishonour cases and that technical procedural objections should not derail proceedings when sufficient material exists.
The High Court found that the revisional court failed to appreciate these binding precedents and wrongly relied on a decision distinguishable on facts.
Court’s reasoning
The High Court observed that the Magistrate had expressly recorded that he had examined the complaint, verification affidavit, and supporting documents. The order specifically mentioned that inquiry under Section 202 of the Code of Criminal Procedure was conducted as the accused resided beyond jurisdiction.
The Magistrate had verified that the cheque was presented within time, dishonoured for “exceed arrangement,” and that statutory notice was issued and served within the prescribed period under Section 138 of the Negotiable Instruments Act.
The revisional court, according to the High Court, failed to examine the actual contents of the Magistrate’s order and mechanically concluded non-application of mind. The High Court emphasized that at the stage of issuance of process, the Magistrate is only required to ascertain whether sufficient grounds exist for proceeding, not to conduct a detailed evaluation akin to trial.
Thus, the revisional order was found to be unsustainable.
Conclusion
The Bombay High Court allowed the writ petition and quashed the revisional court’s order dated 17 May 2023. The Magistrate’s order issuing process was effectively restored, and the matter was remanded for expeditious trial. The High Court requested that the trial be completed within one year, noting that proceedings had been stayed earlier.
Implications
This judgment reinforces the principle that issuance of process in cheque dishonour cases does not require elaborate reasoning, provided the Magistrate’s order reflects application of mind. It strengthens the jurisprudence favouring expeditious trial under Section 138 of the Negotiable Instruments Act.
The ruling also clarifies that revisional courts must exercise caution before interfering with well-reasoned orders of Magistrates, especially in commercial and cheque bounce litigation where delay defeats statutory objectives.
For practitioners, the decision underscores the importance of ensuring that complaint documentation is complete and compliant, as documentary scrutiny at the pre-process stage is often sufficient.
Case law references
- Sunil Todi v. State of Gujarat (2021 SCC OnLine SC 1174)
Held that a formal or elaborate speaking order is not mandatory at the stage of issuing process; the Magistrate must be satisfied of sufficient grounds for proceeding, not conviction. - In Re: Expeditious Trial of Cases under Section 138 of the Negotiable Instruments Act (Suo Motu Writ Petition (Criminal) No. 2 of 2020)
Constitution Bench emphasized speedy disposal of cheque dishonour cases and clarified procedural aspects of Section 202 CrPC in such complaints. - Sayed Mohammed Omair Sayed Ibrahim v. State of Maharashtra (2022 (3) Bom.C.R. (Cri.) 245)
Distinguished by the High Court as involving total non-application of mind, unlike the present case where inquiry and document scrutiny were evident.
FAQs
1. Is a detailed speaking order required before issuing process in a cheque bounce case?
No. The Magistrate must show application of mind and satisfaction that sufficient grounds exist. A lengthy or elaborate order is not mandatory.
2. Is inquiry under Section 202 CrPC mandatory if the accused lives outside jurisdiction?
Yes, but the inquiry can be based on affidavit and documents. Oral examination of witnesses is not compulsory in Section 138 cases.
3. Can a revisional court set aside issuance of process for lack of detailed reasoning?
Not if the Magistrate’s order reflects application of mind and compliance with statutory requirements.
