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Clubbing of cheque dishonour cases

What is the conundrum:

Multiple cheques get dishonoured as between same parties. Separate notices would be issued. Separate complaints would be filed u/s 138 of N I Act.

When these cases come up for trial can all such cases be clubbed together?

This is a matter which engages trial courts umpteen times. Higher Courts have given rulings by applying the principles of clubbing of charges. However there is unresolved controversy in this area. There is no specific provision of law regulating this aspect. Hence, the examination of this conundrum.

Questions examined:
If there is mutual consent to club the cases can the Court hold joint trial between same parties? If there is no consent whether the Magistrate can order joinder of cases for ease of disposal? These are the aspects examined in this article.

What is the nature of offence?

Mode of trial depends upon the nature of offence as per provisions of the Code of Criminal Procedure [for short Cr P C].

When the law was initially enacted, N I Act provided for one year's imprisonment as per sec.138. It was Amended in 2002 and punishment was enhanced to two years imprisonment w e f 06-02-2003. This is apart from fine.

In the Cr P C, the offences are classified as cognizable and non-cognizable. Cases are classified as Summons case and Warrant case[1]. Mode of trial depends upon this classification. If punishment is less than two years duration, such cases would not fall within the definition of warrant case.

Hence it would be summons case. Under sec.2[c] and [l] of Cr P C, define what is cognizable and non- cognizable. Cognizable offence means an offence for which, and cognizable case means a case in which, a police officer may, in accordance with the First Schedule or under any other law for the time being in force, arrest without warrant. Depending upon quantum of punishment, the offence is categorized as cognizable or not, as borne out from the said I Schedule of Cr P C. As a rule of thumb one can observe that if the punishment is less than three years of imprisonment it would be not a cognizable offence.

Thus, be it as originally enacted or after the Amendment of 2002, the offence of dishonour of cheque is a non-cognizable offence as per provision of Cr P C. Hence Police cannot entertain complaint for dishonor of cheque. The complaints would fall within the category of summons case' under Cr P C, because it would not fall within the category of warrant case', as the maximum punishment is for two years' duration and does not exceed two years'.

How complaint u/s 138 is tried?

When sec.142 was first introduced by legislature it did not provide for the mode of trial of complaints.[2] The initial confusion about tenability or otherwise of complaint to police and the charge sheet being filed by Police was cleared by various High Courts by pointing out the non-obstante clause and the mode of taking cognizance by private complaint only as per sec.142[a].

It was held thus:
It is clear from the language employed in sec.142 of the Act that no Court shall take cognizance of any offence punishable under S. 138 except upon a written complaint made by the payee. It means that the payee has to file a private complaint under S. 200, Cr.P.C. before the competent Magistrate and the Police are not empowered to act upon a private complaint filed for an offence under S. 138 of the Act.

I do not find any force in the argument of the learned High Court Government Pleader that Sections 4 and 5, Cr.P.C. empower the Police to entertain the complaint filed in respect of an offence under S. 138 of the Act as the said provisions are not attracted in view of the above extracted provisions of S. 142 of the Act.[3]

High Courts also ruled that in view of the wordings of the sec.142 it would not be permissible for Magistrate to refer the private complaint for police investigation under sec.156(3) of Cr P C.[4] Initially, there was also no provision to decide the local jurisdiction of the Court for taking cognizance.

By the Amendment of 2002, Legislature made good the short fall in the legislation regarding mode of trial and other incidental matters relating to quick disposal of these cases of cheque dishonour.

This is what is found mentioned in the objects and reasons:

The existing provisions in the Negotiable Instruments Act, 1881, namely, sections 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques. Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the Courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act.

As regards the mode of trial, sec.143, added by way of insertion by the Amendment of 2002, reads thus:

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.

    Section 262 of Cr P C reads thus:

    262.Procedure for summary trials. (1) In trials under this Chapter, the procedure specified in this Code for the trial of summons-case shall be followed except as hereinafter mentioned. (2) No sentence of imprisonment for a term exceeding three months shall be passed in the case of any conviction under this Chapter. The first proviso to sub-section (1) of sec.143 enables the Magistrate to exceed the limit mentioned in Sec.262(2) of Cr P C.

From the above it is now clear that the complaints under sec.138 are normally triable as summons cases. Of course, discretion is given to the Magistrate to try it as warrant cases, if he so decides, vide Second Proviso of subsection (1) of sec.143. Rehear the case in the manner provided by the said Code means converting summons case as warrant case, vide sec. 259 of Cr P C. Under this section the Magistrate may convert a Summons case to a Warrant case, if he finds that there are reasons to do so.

The ordinary mode of trial is summary trial which means that it is by adopting summons case procedure. Hence there is no question of framing a charge, unlike in warrant case.

In Summons case what the Magistrate is expected to do is laid down thus by sec.251 of Cr P C: 251. Substance of accusation to be stated:
When in a summons-case the accused appears or is brought before the Magistrate, the particulars of the offence of which he is accused shall be stated to him, and he shall be asked whether he pleads guilty or has any defence to make, but it shall not be necessary to frame a formal charge.

The next step is taking evidence.

It is laid down thus in sec.254 of Cr P C:

254.Procedure when not convicted- (1) If the Magistrate does not convict the accused under section 252 or section 253, the Magistrate shall proceed to hear the prosecution and take all such evidence as may be produced in support of the prosecution, and also to hear the accused and take all such evidence as he produces in his defence.

The end of trial results in acquittal or conviction. In this regard this is what Cr P C lays down: 255.Acquittal or conviction:

  1. If the Magistrate, upon taking the evidence referred to in section 254 and such further evidence, if any, as he may, of his own motion, cause to be produced, finds the accused not guilty, he shall record an order of acquittal.
  2. Where the Magistrate does not proceed in accordance with the provisions of section 325 or section 360, he shall, if he finds the accused guilty, pass sentence upon him according to law.
  3. A Magistrate may, under section 252 or section 255, convict the accused of any offence triable under this Chapter, which from the facts admitted or proved he appears to have committed, whatever may be the nature of the complaint or summons, if the Magistrate is satisfied that the accused would not be prejudiced thereby.
Sub-section (3) of sec.255 clearly indicates that unlike in Warrant case, the Magistrate can convict the accused for a proved offence irrespective of the complaint or the issue of summons. In other words, the rigorous procedure of Warrant case, where charge is framed, is not applicable in Summons case.

From the above provisions what can be inferred is that the provisions of law would not debar joinder of complaints between same parties, for dishonor of multiple cheques issued for same or similar transaction between them. Example, cheques issued for instalments of hire-purchase or housing-loan, rent for same premises, repayment of loan part by part and so on.
In a summons case the Magistrate records the plea' once the accused appears pursuant to summons. Charge is not framed. Then the case goes for trial.

Why not club the cases?

It is trite that where the court has the jurisdiction/power to adjudicate, it will necessarily have the incidental power therefor.[5] Even earlier the Supreme Court had applied the rule of incidental power of courts for situation which did not provide for specific provision of law.

By quoting from observations of yore, the Supreme Court held thus:

-- Justice Mookerjee observed at page 941 of the report as follows:
It may be added that the exercise by Courts, of what are called their inherent powers or incidental powers is familiar in other systems of law, and such exercise is justified on the ground that it is necessary to make its ordinary exercise of jurisdiction effectual, because, when jurisdiction has once attached, it continues necessarily and all the powers requisite to give it full and complete effect can be exercised, until the end of law shall be attained (See Works on Courts and their Jurisdiction section 27 and Wells on Jurisdiction of Courts, Chapter XVII).
---If there was jurisdiction to do certain matter then all powers to make that jurisdiction effective must be implied to the authority unless expressly prohibited.[6]

Specifically under criminal law this principle was applied by Supreme Court with reference to the power of Magistrate u/s 156(3) of Cr P C to order fresh investigation and to supervise investigation. It is laid down thus:
18. It is well-settled that when a power is given to an authority to do something it includes such incidental or implied powers which would ensure the proper doing of that thing. In other words, when any power is expressly granted by the statute, there is impliedly included in the grant, even without special mention, every power and every control the denial of which would render the grant itself ineffective. Thus where an Act confers jurisdiction it impliedly also grants the power of doing all such acts or employ such means as are essentially necessary to its execution.[7]

Thus there is ample legal authority to conclude that a Magistrate has got implied powers for the purpose of exercise of jurisdiction.

There is limit for joining the charges in warrant cases because usually I P C cases are tried as warrant cases. The reason is obvious. Each of the offence has separate ingredient. Hence if cases are clubbed the proof ingredients would lead to confusion, both for prosecution and for the defence. But in sec.138 complaints, the ingredients are common and as such there is no scope for confusion at the trial as regards leading the evidence.

Therefore, to perpetuate the legislative object of quick disposal, the Magistrate can exercise the incidental power of a law court and club the cases of complaints for dishonor of cheques between same parties and arising out of a common transaction, leading to issue of multiple cheques and its dishonor. Such clubbing will not cause any disadvantage to accused or to the complainant. On the other hand even accused will have advantage of less number of visits to the court. Instead of suffering multiple convictions, once the cases are clubbed there will be single conviction.

In the light of the above principle of law, if both sides give consent, the law relating to trial of summons case does not prohibit joinder of cases for the purpose of trial, contrasted with joinder of charges which is regulated by law.

Even without consent, the incidental power of court to hold trial enables it to club the cases, as that is advantageous for quick disposal, saving time of the court in conducting trial and convenient to the parties also. The cause of justice will not suffer, unlike in IPC cases.

Clubbing of charges under warrant case procedure is not totally prohibited by law, though there are restrictions as to how many charges can be clubbed, against which accused it is permissible and so on. Thus one cannot raise eyebrows if in summons case the Magistrate orders clubbing the complaints as mentioned above.

Decided cases:
Supreme Court of India had occasion to hold that the cheque dishonour cases cannot be joined for the purpose of trial. Of course in this ruling the Court did not examine the question in depth to come to the said conclusion.

The relevant observations are quoted thus:
 3. The main ground raised is that in terms of section 219 of the Code of Criminal Procedure, 1973 since the offences took place during the period of one year, the cases should be dealt together. Even if section 219 of the Code of Criminal Procedure, 1973 was to apply, there have to be two trials because not more than three cases can be tried together even if they occurred in one year.

4. The only other contention is that since one notice has been issued, four separate trials should not take place and one trial should take place. There is no provision of consolidation of cases in the Code of Criminal Procedure.[8]

The question of clubbing the complaints for dishonour of 10 cheques given for purchase of eggs and dishonoured was considered by Division Bench of Punjab High Court and the clubbing was allowed by the Bench. The Bench found that there is really only one offence, though multiple cheques were dishonoured.

The reason is quoted for convenient reference:
Though, it is explicitly clear under the provisions of Section 218 (1) Cr.P.C., which provides that for every distinct offence of which any person is accused, there shall be a separate charge and every such charge shall be tried separately.

Section 220(1) Cr.P.C. states that if in one series of acts so connected together as to form the same transaction, more offences than one are committed by the same person, he may be charged with and tried at one trial for every such offence. Section 220(1) and Section 223(d) Cr.P.C. constitute an exception to Section 218 as well as Section 219 (2) Cr.P.C. Since Section 220 Cr.P.C. is an enabling provision, therefore separate trials in respect of the offence charged are not barred. However, where series of acts are so connected together forming same transaction, accused can be tried in one case by the Court.

In the light of the fact that in the present situation all the ten cheques have been simultaneously presented to the banker on the same day and dishonour so effected on the same very day for all the cheques, regarding which a consolidated notice has been issued calling upon the drawer to make good the payment of these cheques, does not suffer from the vice of joinder of many offences in one trial.

It is after the expiry of the period of the receipt of the notice, Verma Neenu 2013.11.29 10:08 I attest to the accuracy and integrity of this document Chandigarh prescribed under Section 138 (c) of the Act, offence under Section 138 of the Act is deemed to have been committed. Thus by all means, the facts disclose as constituting only one offence and it cannot be said that ten offences have been committed by the accused and therefore, Section 219 Cr.P.C, does not come into play.[9]

In another case, the High Court of Punjab & Haryana allowed clubbing of 8 cases of cheque dishonour between same parties by holding that the Offence under Section 138 of the Act in respect of eight cheques can be held to be offences committed in the course of same transaction. Section 219 (1) of the Code refers to identical offences committed on different dates during a span of twelve months. It permits joinder of those charges provided they are offences of the same kind.[10]

The Delhi High Court has also taken similar view in respect of multiple cheques between same parties.[11]

Even before the introduction of sec.143 of N I Act, in a case where 16 cheques were involved between same parties, the Madras High Court had allowed single prosecution on the reasoning that the same constituted single transaction and hence permissible under sec.219 of Cr P C.[12]

In the decided cases the question was not examined from the point of view of sec.143 of N I Act as enacted and mentioned above. The distinction of trial of warrant cases and summons cases as per Cr P C was also not noticed. Arguments assumed that framing of charge is essential for the case. On that basis the question whether cases of dishonor of multiple cheques between same parties would be same transaction or not was considered and decided.

It is submitted that if correct provision of law is applied, the Magistrate can club the common cases and conduct trial without any legal hurdle. Before introduction of sec. 143, under the regime of Cr P C, the cheque dishonor cases would be triable as Summons Case, as already noticed at the beginning of this article. Now in view of sec.143 of the N I Act, the summary trial would be by following the procedure of summons cases as already examined previously.

As incidental power of the Court, and there being no prejudice to both parties, the Magistrate can order clubbing the cases of cheque dishnour between same parties and dispose of the same. This would contribute for the cause of quick disposal of these cases, as expected by legislative provision contained in sec.143(3) of N I Act.[13]

  1. Sec.2-(w) summons-case means a case relating to an offence, and not being a warrant-case ; (x) warrant-case means a case relating to an offence punishable with death, imprisonment for life or imprisonment for a term exceeding two years;
  2. Section 142 of Negotiable Instruments Act 1881: Cognizance of offences:Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),-(a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138:Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period;(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.
  3. H.Mohan v.State of Karnataka(1992)73 Comp.Cas 560 Kar.
  4. K.Mahadevan v.Y.Venkatesh, (1992) 3 A.L.T. 634. Jagarlamudi Durga Prasad v. State of A.P.(1993)76 Com Cas 339[AP].
  5. Dabur India Ltd v. K R Industries, AIR 2008 SC 3123, at page 3129.
  6. Commissioner of Income Tax v. Bansi Dhar, AIR 1986 S C 421 at p.424.
  7. Sakiri Vasu v. State of U P, A I R 2008 SC 907, at page 909.
  8. Vani Agro Enterprises vs. State of Gujarat, CRIMINAL APPEAL NO(S).587-590 OF 2010 decided on 05-09-2019
  9. Charashmi Kumar Talwani vs. Malhotra Poultries, Cr Mis C No.M27622/12 decided on 22-10-2013.
  10. Ashutosh Humnabadkar v. Continental Device India Ltd, Cr M C 1184/2014 decided on 28-01-2015.
  11. Ambica Plastopack P Ltd v. State, Crl MC 2698/11 etc decided on 01-11-2013. Unique Infoways P Ltd v. MPS Telecom P Ltd, Crl M C 4672/15 etc decided on 14-03-2019.
  12. Manjula v. Colgate Palmolive India Ltd, Crl OP 21432/2002 decided on 12-10-2006.[DB].
  13. (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.
Written By: M.V.Shanker Bhat, B.A.B.L., Advocate, Mangaluru

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