The Allahabad High Court while dismissing an application held that discharge application under Section 258 Cr.P.C is also not maintainable as that section applies where summons are instituted otherwise than upon complaint, but proceeding under Section 138 N.I Act instituted on the basis of complaint.

A Single Bench of Justice Arun Kumar Singh Deshwal passed this order while hearing an application under section 482 filed by Jai Prakash Goyal.

The application under Section 482 Cr.P.C has been filed for quashing the order dated 16.12.2023 passed by Presiding Officer, Additional Court, Agra as well as entire proceeding of Complaint Case under Section 138 N.I Act, Police Station Hari Parwat, District Agra pending in the court of Additional Court, District Agra.

The facts giving rise to the case is that on issuance of summon order against the applicant under Section 138 N.I Act, the applicant filed an Application u/s 482 CrPC challenging the entire proceedings of Complaint Case. That case was disposed of by the Court vide order dated 18.02.2019 permitting the applicant to raise all the dispute regarding the complaint before the trial court.

Thereafter, the applicant filed a discharge application before the trial court on 05.03.2019. In that discharge application, the applicant has raised a number of issues including the issue of premature complaint as well as cheque in question was given as security, therefore no liability under Section 138 N.I Act is made out and also that complaint was filed by stranger, hence not maintainable.

The trial court vide order dated 16.12.2023 rejected the aforesaid discharge application vide order dated 16.01.2023 on the ground that discharge application is not maintainable as per judgement of the Apex Court in Adalat Prasad vs Rooplal Jindal and others; 2004 (7) SCC 338 wherein it is observed that the summoning order cannot be recalled by the court which had issued the same.

The contention of counsel for the applicant is that the order dated 16.12.2023 is bad in law; firstly because the court has not considered the issue raised in its discharge application. Secondly, the court has erroneously held that the discharge application is not maintainable after passing the summoning order.

Counsel for the applicant further submitted that as per proviso of Section 143 N.I Act, in the proceeding under Section 138 N.I Act, Section 262 to 265 Crpc will be followed and Section 262 Cr.P.C specifically mentioned that during summary trial of case, proceeding of summon case has to be followed and proceeding of summon case has been mentioned in Chapter 20 of Cr.P.C which cover Sections 251 to 259 and Section 259 specifically provides that the trial court may convert summons case into warrant case in appropriate case, therefore the provisions of the warrant case mentioned in Chapter 19 of Cr.P.C will also applicable in proceeding under N.I Act. Therefore, discharge application under Section 244 Cr.P.C. in the proceeding under Section 138 N.I Act is very well maintainable.

Per contra, AGA submitted that application for discharge is not applicable in the proceeding under N.I Act unless the court pass specific order converting from the proceeding of summon case to warrant case as required under Section 259 Cr.P.C and in the case, the court has not passed any order for converting for summary trial to warrant trial.

The Court observed that,

After considering the submissions of the counsel for the parties and perusal of record, it appears that in the case, the applicant has challenged the order dated 16.12.2023 by which discharge application of the applicant was rejected. Therefore, other contention, at this stage, cannot be looked into or consider unless discharge application itself is maintainable, even otherwise, the applicant has already challenged the impugned complaint proceeding in earlier application u/s 482 Cr.P.C, wherein court was not inclined to interfere in the impugned proceeding of complaint case.

From the above analysis as well as law laid down by the Apex Court, it is clear that unless proceeding of complaint case under Section 138 N.I Act specifically converted into summon case or into trial case then the provision of summon case or warrant case cannot be strictly applied in the proceeding under Section 138 N.I Act.

In the case, the Magistrate has not passed any order for converting the trial of impugned proceeding from summary trial into warrant case. Once it is established that provisions of warrant case are not applicable then the question of applicability under Section 245 Cr.P.C regarding discharge of accused does not arise.

In view of above, the Court does not have any good ground to quash the impugned order by which the discharge application of the applicant was rejected, on the ground of maintainability.

Accordingly, the Court dismissed the application.

The Court provided that in case, the applicant appears before the court below within 15 days from today and applies for bail, his bail application shall be considered and decided in view of law laid down by the Apex Court in the case of Satender Kumar Antil vs Central Bureau of Investigation and another, 2021 SCC Online SC 922.

Cheques are often used in various transactions in business life. It is a negotiable instrument which is widely used for making payments in business. With the aim of developing confidence in the efficacy of banking operations and giving credibility to such instruments, penal provisions were introduced under Sections 138 to 142 of the Negotiable Ins­truments (NI) Act, 1881.

But with the fourth phase of the nationwide lockdown in place, lawyers and litigants are facing severe difficulties in following procedural aspects under several pieces of legislation, especially limitation. Cheque bounce cases are among those where there are fixed timelines for taking action.

Cheque bouncing or dishonouring of a cheque is a criminal offence in India and is covered under Section 138 of the NI Act. It is punishable with imprisonment up to two years, monetary penalty or with both. Covid-19 has thrown the world into disarray and has also hit commerce and business.

Under the NI Act, the provision of limitation for giving a legal notice in a case of dishonour of cheques and filing complaints thereafter has been prescribed. Under Section 138 [Proviso (b)], the limitation period to send a legal notice demanding payment when a cheque is dishonoured is 30 days from the date of receiving of information regarding dishonour from the bank. Further, under Section 138 [Proviso (c)], the drawer of such a cheque is given 15 days to make the payment from the date of receipt of notice of demand.

However, if the drawer fails to pay within this time, the payee or holder can file a complaint within a month of the date on which the cause of action arises as provided under Section 142 (1)(b) of the Act.

But under the present circumstances where the Supreme Court, various High Courts, subordinate courts and all other tribunals have suspended normal functioning, litigants and lawyers are facing several issues. One is the issue of timeline as they are unable to file the cases within the prescribed period. Courts have taken serious note of this and passed several measures to curb these difficulties and protect the rights of the litigants.

The Supreme Court had taken suo motu cognisance for extension of limitation. In an order on March 23, 2020, the Court by invoking its power under Article 142 read with Article 141 of the Constitution, extended the limitation period in filing all proceedings with effect from March 15, 2020 till further orders on account of Covid-19.

The top court also passed another order dated May 6, 2020 in the same writ petition which specifically deals with the limitation of “cheque bounce cases” under Section 138 of the NI Act and for arbitration-related proceedings prescribed under the Arbitration & Conciliation Act.

The Court said: “It is hereby ordered that all periods of limitation prescribed under the Arbitration & Conciliation Act, 1996 and under Section 138 of the Negotiable Instruments Act, 1881 shall be extended with effect from 15.03.2020 till further orders to be passed by this court in the present proceedings.”

It added: “In case the limitation has expired after 15.03.2020, then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown.”

It is observed that the said order clearly says that “all periods of limitation prescribed under 138 of the Negotiable Instruments Act, 1881 shall be extended….” Therefore, “all periods” denotes all the timelines given under this Section, including the timeline of 30 days to serve the notice after a cheque bounce under Section 138 [Proviso (b)], or a period of one month to file the complaint as provided under Section 142 (1)(b), shall stand extended.

The said order can be illustrated as follows:

A issued a cheque to B which he presented to his banker in Delhi. It was dishonoured. The concerned bank informed B about this. B sent a legal notice to A which was delivered to him on February 4, 2020. As per the provisions of the NI Act, a period of 15 days from the delivery of the notice is given to A to clear the payment which expired on February 18, 2020. However, A failed to pay the amount even then. As per the provision of the Act, B was required to file a complaint against A under Section 138 of the Act within a month from February 18, 2020. This expired on March 19, 2020. However, due to the prevailing situation and lockdown, B was not able to file a complaint.

Now in light of the order dated May 6, 2020, passed by the apex court, the limitation to file a complaint by B will be extended. As the limitation to file the criminal complaint had expired on March 19, B will be covered under the benefit of extension. The period from March 15, 2020 till the date on which the lockdown is lifted in Delhi shall be extended for a further 15 days. Therefore, B will get a period of 15 days to file a complaint against A.

It is observed that the said order will not only apply in cases where the filing of complaints expired after March 15, 2020, but also where the period of notice demanding the payment was not served due to the pandemic. This will come as a relief to all parties in a cheque bounce case.

In addition to this relief, to maintain the credibility of such instruments, there is a need of some mechanism for expeditious disposal of these cases. A recent study shows that there are more than 35 lakh cheque bounce cases pending which constitute more than 15 percent of total criminal cases pending in district courts in India.

—The writer is an advocate in the Delhi High Court and subordinate courts in Delhi