1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPLICATION NO.1344 OF 2010 Shri Bansilal S. Kabra ..... Applicant. V/s Global Trade Finance Ltd & Anr. ..... Respondents. ---- Mr. Shirish Gupte, Senior Counsel with Mr. Arun H. Mehta & Ms Sonali Patil, Mr. Mubin Solkar i/b Akshar Law for the applicant. Mr. Yashpal Thakur i/b Paras Kuhad & Associates for Respondent No.1. Mrs R. V. Newton, APP for the State. --- 2 CORAM: V. M. KANADE, J. DATE : 9th July, 2010 P.C.:- 1. Applicant has filed this application under section 482 of the Criminal Procedure Code for quashing the issuance of process by the learned Magistrate, 12th Court, Bandra, Mumbai in a complaint filed by Respondent No.1 under section 138 of the Negotiable Instruments Act, 1881. 2. The learned Counsel appearing on behalf of the applicant has challenged the order of issuance of process on various grounds. It is inter alia urged by the learned Counsel appearing on behalf of the applicant that the applicant is residing out of the jurisdiction of the the Court of Metropolitan Magistrate, 12th Court, Bandra, Mumbai and, as such, the learned Magistrate was duty bound to follow the procedure laid down under section 202 sub-clause (1) of the Criminal Procedure Code as amended by the Code of Criminal Procedure (Amended) Act 2005 (25 of 2005) which came into force with effect from 23/06/2006. He submitted that by virtue of the said amendment, the Magistrate in cases where accused is residing outside the jurisdiction of the Court, has a statutory obligation to postpone the issuance of process and to hold an inquiry before issuing 3 process. In support of the said submission, he has relied upon the judgment of the learned Single Judge of this Court (Brother S.C. Dharmadhikari, J.) in the matter of Capt. S.C. Mathur & Anr. vs. M/s Elektronik Lab & Ors.1. 3. Since in large number of cases a similar ground was urged by the learned Counsel appearing on behalf of the applicants therein, all these matters were kept for the purpose of considering this issue more particularly in the context of cases under section 138 of the Negotiable Instruments Act and, accordingly, I have heard the learned Senior Counsel on either side on this point. 4. Mr. Gupte, the learned Senior Counsel appearing on behalf of one of the applicants has invited my attention to the judgment of the learned Single Judge of this Court in Capt. S.C. Mathur’s case (supra) wherein the learned Single Judge of this court has held that the provision is mandatory. He also relied upon the judgment of the Apex Court in K.T. Joseph vs State of Kerala & Anr2 It is, therefore, urged that the process which was issued without holding an inquiry as contemplated under the said section is liable to be quashed and the matter should be remanded to the Magistrate for holding fresh inquiry. The learned Senior Counsel took me through the judgment and order in the case of Capt. S.C. Mathur’s case (supra). He reiterated the contentions raised by him in Capt. S.C. Mathur’s case and urged that in view of the decision given by the learned Single Judge of this Court, 1 Judgment in Criminal Application No.2640 of 2009 with companion matters decided on 8th January, 2010 2 Criminal Appeal No.984 of 2009 (arising out of S.L.P. (Crl.) No.5734 of 2008) 4 the impugned order of issuance of process should be set aside. 5. Mr. Amit Desai, the learned Senior Counsel appearing on behalf of the Respondents in one of the cases, on the other hand, urged that taking into consideration the provisions of section 138 of the Negotiable Instruments Act, the said provision could not be said to be mandatory. He invited my attention to section 4 of the Criminal Procedure Code and submitted that sections 138 to 142 of the Negotiable Instruments Act is a self contained Code and if the said provisions are taken into consideration, this provision would fall within the exception to section 4 sub- clause (2). He urged that, therefore, so far as criminal cases under section 138 are concerned, it is not necessary to postpone the issuance of process and hold an inquiry again. He submitted that in a case under section 138, the Magistrate, before issuance of process, has to examine the ingredients of offence and for that purpose, it is always necessary to hold an inquiry again after examination of the complainant and his witnesses under section 200. It is submitted that while interpreting the said provision, it is necessary to refer to the doctrine of purposive interpretation and, for that purpose, objects and reasons of the amendment plus judgments of the Apex Court have to be taken into consideration. He invited my attention to the observations made by the Apex Court in respect of the amendment in which purposive interpretation was resorted 5 to by referring to certain paragraphs of the Judgment in Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. & Anr.1 He submitted that the provisions of section 4(2) of the Criminal Procedure Code were not considered by the learned Single Judge in Cat. S.C. Mathur’s case (supra). In this context, he also referred to the judgment of the learned Single Judge (Brother D.B. Bhosale, J.) in Peacock Industries Ltd. & Ors vs. Budhrani2, more particularly para 17. 6. Mr. Subhash Zha, the learned Counsel appearing on behalf of one of the complainants, has submitted that the learned Single Judge of the Kerala High Court has held that the provisions of section 202 sub-clause (1) are directory and not mandatory. He relied upon the judgment of the Kerala High Court in Muhammed Basheer and etc. vs. The state of Kerala & Anr.3 He also relied upon the judgment of the Madras High Court in Prof. D. Kannammal vs. Tmt. Renuga Palanisamy4. He further relied upon the judgment of Patna High Court in Rakesh Singh & Anr. vs. State of Bihar & Ors.5 He also relied upon the judgment of the Calcutta High Court in Rameshwara Jute Mills Limited v. Sushil Kumar Daga & Ors.6 and the judgment of the Apex Court in Rosy and another vs. State of Kerala and others.7 He then submitted that while interpreting the words used in the provision the court is required to take into consideration the entire statute 1 (2007) 6 SCC 528 2 2006(2) Bom.C.R. (Cri) 368 3 2009 CRI.L.J. 246 4 MANU/TN/9866/2007 5 2009 CRI. L.J.668 6 2009 CRI.L.J.2727 7 (2000) 2 SCCC 230 6 as also the objects and reasons of the amendment and has also to resort to the external aids for the purpose of interpretation and merely because the word “shall” is used in the provision the same could not be treated as a mandatory provision. In support of the said submission, he relied upon the following judgments. Sr. No. Name of parties Citation 1. Shashikant Sing v/s. Tarkeshwar Sing & Anr (2000) 5 SCC 783 2 Ravi Vimal Krishna v/s. State of Bihar & Ors (2003) 6 SCC 401 3 Modern School v/s. Shashi Pal Sharma & Ors (2007) 8 SCC 489 4 Prakash Chand Maheshwari & Anr. v/s. The Zila Parishad, Muzaffarnagar & Ors. (1971) 2 SCC 489 5. Narayan Rao v/s State of Andhra Pradesh AIR 1957 SC 737 6. Central Bureau of Investigation v/s R.S. Pai & Anr. (2002) 5 SCC 82 7. On the other hand, one another Counsel Ms. Kanani for the applicant, appearing in one of the cases, relied upon the judgment of the learned Single Judge of this Court (Nagpur Bench) in Satish @ Rajendra s/o Harbans tiwari & Ors vs. 7 State of Maharashtra & anr1 wherein the learned Single Judge also had taken the view that the said provision is mandatory. My attention was also invited to the judgment of the learned Single Judge of this Court (Coram: Vishnu Sahai, J.) in Ramesh Damodar Nagare vs. Ashok Damodar Nagare2. 8. I have heard the learned Counsel appearing on behalf of the applicants and the respondents at length. In order to consider the rival contentions raised by both parties, it would be necessary to take into consideration the relevant provisions of the Criminal Procedure Code. Though the relevant provision is the amended provision of section 202 sub-clause (1) of the Criminal Procedure Code and the question before this Court is whether the said provision is mandatory or directory, it would also be necessary to examine other provisions of the Criminal Procedure Code since the issue raised before this Court is pertaining to the interpretation of the said provision. Before, I refer to the provisions of Criminal Procedure Code, very briefly, the settled position in law in respect of interpretation of statute will have to be taken into consideration. 9 It is quite well settled that, normally, courts are supposed to give effect to the plain meaning to the words appearing in sections and provisions of the Act. However, in case of ambiguity and if a doubt arises in the mind of the court as to whether the provision is mandatory or directory, 1 Judgment in Criminal Writ Petition No.431 of 2009 decided on 7th June, 2010 2 Judgment in Criminal Revision Application No.147 of 1991 decided on 1/7/1997 8 the Apex Court has laid down various guidelines for the purpose of determination of the said question. It is, however, well settled that there is no universal rule or strait jacket formula for the purpose of coming to the conclusion whether the word or wording of the provisions has to be construed as mandatory or directory and, for that purpose, the court has to take into consideration the relevant word or wording of the said provision as also the other provisions of the Act as also various judgments of the Apex Court and High Courts, the objects and reasons of the Act or amendment and also assistance has to be taken of other external aids of construction. There are various judgments on either side which have construed the imperative language used in the provision as directory and not mandatory. Therefore, in my view, merely referring to some of the judgments of the Supreme Court on this issue regarding interpretation of the word “shall” alone may not be sufficient for the purpose of deciding whether the word is mandatory or directory. The Apex Court right from the judgment in State of Uttar Pradesh and others vs. Babu Ram Upadhya1 has accepted this proposition. SUBBA RAO J. has also observed as under:- “For ascertaining the real intention of the Legislature”,............”the court may consider inter alia, the nature and design of the statute, and the consequences which would follow from 1 AIR 1961 SC 751 9 construing it the one way or the other; the impact of other provisions whereby the necessity of complying with the provisions in question is avoided; the circumstances, namely, that the statute provides for a contingency of the non- compliance with the provisions; the fact that the non-compliance with the provisions is or is not visited by some penalty; the serious or the trivial consequences, that flow therefrom; and above all, whether the object of the legislation will be defeated or furthered”. Similarly, CRAWFORD in his book “Statutory Construction” at page 516 has observed as under:- “The question as to whether a statute is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. The meaning and intention of the Legislature must govern, and these are to be ascertained not only from the phraseology of the provision, but also by considering its nature, its design, 10 and the consequences which would follow from construing it the one way or the other”. Now the said proposition is quite well settled. Keeping in view the aforesaid guidelines laid down by the Apex Court, it will now be necessary to examine the various provisions of the Act and the amendment to Section 202 of the Cr.P.C. 10. So far as complaint under section 138 of the Negotiable Instruments Act is concerned, the same has to be filed before the Magistrate as a private complaint and the Magistrate can take cognizance of the complaint laid down in section 190 of the Criminal Procedure Code. After the complaint is filed, the Magistrate has to examine the complainant and his witnesses. Section 200 of the Criminal Procedure Code lays down the procedure of examination of the complainant and his witnesses. Section 200 of the Cr.P.C reads as under:- “200. Examination of complainant.- A Magistrate taking cognizance of an offence on complaint shall examine upon oath the complainant and the witnesses present, if any, and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate: Provided that, when the complaint is made in writing, the Magistrate need not examine the complainant and the witnesses- (a) if a public servant acting or purporting to act in the discharge of his official duties or a Court has made the complaint; or 11 (b) if the Magistrate makes over the case for inquiry or trial to another Magistrate under section 192: Provided further that if the Magistrate makes over the case to another Magistrate under section 192 after examining the complainant and the witnesses, the latter Magistrate need not re- examine them.” The Magistrate, however, has an option which he can exercise before recording the statement of the complainant on oath and can direct investigation under section 156 of the Cr.P.C. In cases which are filed under section 138 of the Negotiable Instruments Act, however, the Magistrate does not have discretion to exercise this option since the question of investigation by the police in a complaint under section 138 does not arise. Therefore, after the complaint is filed, he has to record the statement of the complainant on oath or any of his witnesses if he finds it necessary to do so. In the event, he is not satisfied, he may postpone the issuance of process and the said procedure is laid down in section 202 of Cr.P.C. Section 202(1) of Cr.P.C before it was amended, was couched in the following words:- “202. Postponement of issue of process.- (1) Any Magistrate, on receipt of a complaint of an offence which he is authorised to take cognizance or which has been made over to him under section 192, may, if he thinks fit, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding: 12 Provided that no such direction for investigation shall be made, - (a) Where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Sessions; or (b) Where the complaint has not been made by a court, unless the complainant and the witnesses present (if any) have been examined on oath under section 200.” Section 202(1) of the Cr.P.C., however, was amended by Criminal Procedure Code (Amendment) Act, 2005 (25 of 2005) which came into force with effect from 23/06/2006 and after amendment the second 202(1) reads as under:- “202. Postponement of issue of process.- (1) Any Magistrate, on receipt of a complaint of an offence which he is authorised to take cognizance or which has been made over to him under section 192, may, if he thinks fit, [and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction,] postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by, a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding: Provided that no such direction for investigation shall be made, - (a) Where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Sessions; or (b) Where the complaint has not been made by a court, unless the complainant and the witnesses present (if any) have been examined on oath under section 200.” 13 The said amendment was pursuant to the recommendation made by the Law Commission in its 41st report. The amendment with which we are now concerned pertains to insertion of following words viz. “and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction”. It would be relevant to consider the objects and reasons of this amendment and, in a nutshell, the said amendment was made since it was felt that false complaints were filed against the persons residing at far of places only for the purpose of harassing them and in order to see that these persons are not harassed the said words were added to make it obligatory upon the Magistrate to inquire into the case himself or direct investigation to be made by the police officer or any such person as he thinks fit. In a case under section 138 of the Negotiable Instruments Act, the question of directing investigation to be made by the police officer or any other person does not arise and, therefore, in respect of the complaint under section 138, the question is whether the said provision is a mandate given by the legislature to the Magistrate to again hold the second inquiry. In my view, taking into consideration the said provision of Cr.P.C with particular reference to sections 138 to 142 of the Negotiable Instruments Act, it cannot be said that the said provision is mandatory for the following reasons. 11. It will be necessary to briefly consider the provisions of sections 138 to 142 of the Negotiable Instruments Act. The 14 Negotiable Instruments Act was amended and the said provisions have been incorporated and the dishonour of cheque is now made a punishable offence subject to fulfillment of conditions laid down under the said provision. Section 138 of the Negotiable Instruments Act lays down as to when the dishonour of cheque becomes an offence. For the purpose of initiating complaint under section 138, certain conditions have to be fulfilled viz (i) drawer of the cheque should issue the cheque in favour of the payee, (ii) the said cheque has to be deposited by payee or holder in due course and, thereafter, if the said cheque is dishonoured then the payee or holder in due course has to give a statutory notice to the drawer asking him to make payment within stipulated time, (iii) if no such payment is made within the stipulated period after service of notice, the offence is said to have been committed by the said drawer and, after the prescribed period is over, a complaint can be filed before the Magistrate. In a case of vicarious liability, conditions mentioned in section 141 have to be complied with and, thereafter, cognizance can be taken by the Magistrate under section 142 of the Negotiable Instruments Act. The offence has to be tried as a summary case. The nature and scope of the entire trial is, therefore, very limited. Two provisions of the Negotiable Instruments Act raise presumption regarding issuance of cheque by the drawer; one is section 118 and other is section 139. Both these presumptions, however, are rebutable and the accused can rebut these presumptions either by leading evidence or by cross-examining the 15 complainant and his witnesses. In view of the initial presumption under sections 118 and 139 of the Negotiable Instruments Act, task of the complainant in proving the prima facie case becomes very easy. He has to make necessary averments in the complaint for the purpose of establishing ingredients of the offence. Secondly, if he wants the person other than the drawer of the cheque to be made as an accused in the complaint he has to make necessary averments, annex the relevant documents such as bank memo of dishonour, the cheque in question, demand notice, acknowledgment receipt showing proof of service of demand notice. If necessary averments are made in the complaint coupled with the said documents, the Magistrate then can examine the complainant on oath for the purpose of ascertaining truthfulness or otherwise of the averments in the complaint. This procedure can be completed by the Magistrate while following the procedure under section 200 of the Criminal Procedure Code. This being the position, the question which remains to be seen is whether, again, a second inquiry is contemplated under section 202 and whether the Magistrate has any discretion to hold the inquiry or not to hold the inquiry. 12. In my view, though the word “shall” has been used in the amended provision of section 202(1) and it is followed after the word “may” which is used, that would not be the only criteria for the purpose of determining that the said provision as mandatory or directory. The purpose behind 16 incorporating the said provision in the amended section was to ensure that the learned Magistrate does not mechanically issue the process but applies his mind to the facts of the case to the averments made in the complaint to the statement made by the complainant and his witnesses under section 202 and, thereafter, if a doubt still remains in his mind, he can himself consider this by holding an inquiry in order to ascertain whether a prima facie case is made out or not against the accused who are residing beyond the jurisdiction of the Magistrate. The intention of the legislature appears to be to ensure that if the Magistrate feels it necessary some further home work should be done by him since the consequences of issuance of process in the mechanical manner can entail disastrous consequences upon the accused who is residing at far a of place. The inquiry, therefore, in my view, which has to be made in a complaint which is filed under section 138 itself is very limited to certain documents and averments in the complaint. It cannot be said that in each and every case, the Magistrate after recording the statement of the complainant and his witnesses should again postpone the issuance of process and again hold a fresh inquiry by asking the complainant to adduce further evidence. If such an interpretation is made, it would defeat the very purpose for which the provisions of section 138 have been incorporated in the Negotiable Instruments Act. 13. Section 143 of the Negotiable Instruments Ac itself lays 17 down that the trial has to be completed within a period of six months. Subsequent amendment which has been made to the provisions of section 138 and the objects and reasons of the said amendment are seen, it would reveal that idea for amending the said provision is to curtail the time taken in completing the trial. Therefore, if it is held that the said provision is mandatory requiring inquiry by the Magistrate himself since there is no question of inquiry by the police or any other person, would lead to duplication of work and consequently it would prolong and protract the disposal of the case. In a given case, however, the Magistrate, if he finds that necessary material which is to be produced by the complainant has not been brought on record, he may exercise his discretion and postpone the issuance of process and examine legal as well as factual issue and then after holding a further inquiry and after further application of mind may decide whether complaint has to be dismissed under section 203 of the Criminal Procedure Code. In my view, this appears to be the intention of the legislature, particularly because no corresponding amendments have been made by the legislature to other provisions