Case: Nitinbhai Saevantilal Shah  Vs. Manubhai Manjibhai Panchal

The respondent No.1 herein is original complainant. He was doing business in the name of Navkar Steel Pvt. Ltd. The Complainant is known to the appellant No.1. The appellant No.1 is the Director of appellant No.2 which is a private limited company. It is the case of the complainant that the appellant No.1 had borrowed hand loan from him and in order to pay the legal dues, the appellant No.1 had given a cheque dated October 13, 1998 for the sum of Rs.11,23,000/- drawn on the State Bank of India. The cheque was signed by the appellant No.1 on behalf of the appellant No.2. The complainant presented the cheque for realization in the Central Bank of India. The cheque was dishonoured and sent back to the complainant with a memorandum dated October 15, 1998 mentioning that the cheque was dishonoured because of insufficiency of funds. Thereupon, the complainant served a demand notice dated October 28, 1998 which was returned unserved as unclaimed on November 5, 1998. Therefore another notice was served by post under Postal Certificate. The appellants failed to pay the amount mentioned in the notice within 15 days from the date of receipt of notice. Therefore, the complainant filed complaint in the Court of learned Metropolitan Magistrate, Court No.2, Ahmedabad on December 15, 1998 and prayed to convict the appellants under Section 138 of the Act. On the basis of the complaint, Summary Case No. 2785 of 1998 was registered and after recording verification, the learned Magistrate had issued process.4. The complainant examined himself and his witnesses and also produced documentary evidence in support of his case set up in the complaint. The appellants did not lead any defence evidence. However, the appellant No.1 in his statement recorded under Section 313 of the Code stated that his signature was obtained on the blank paper by kidnapping him and writing was written on it and that false complaint was lodged by misusing the signed blank cheque.5. After the evidence was recorded by the learned Metropolitan Magistrate as stated above, he came to be transferred and therefore, ceased to exercise jurisdiction in the case. He was succeeded by another learned Metropolitan Magistrate who had and who exercised such jurisdiction. On August 03, 2001, a pursis was filed before the learned Metropolitan Magistrate by the appellants as well as the original complainant i.e. the respondent No.1 herein, declaring that the parties had no objection to proceed with the matter on the basis of evidence recorded by predecessor in office of the learned Metropolitan Magistrate in terms of Section 326 of the Code. On the basis of said pursis the learned Metropolitan Magistrate considered the evidence led by the complainant and heard the learned counsel for the parties.6. The learned Metropolitan Magistrate by judgment dated February 13, 2003, delivered in Summary Case No. 2785 of 1998, convicted both the appellants under Section 138 of the Act and sentenced each of them to suffer simple imprisonment for three months with fine of Rs.3,000/- i/d simple imprisonment for 15 days.7. Feeling aggrieved, the appellants preferred Criminal Appeal No.19 of 2003 in the Court of the learned Additional City Sessions Judge at Ahmedabad. The learned Judge found that conviction of the appellants recorded under Section 138 of the Act was perfectly just but noticed that the appellant No. 2 is a private limited company and therefore, could not have been sentenced to simple imprisonment for three months. Therefore, the learned Additional City Sessions Judge, Court No.13, Ahmedabad by judgment dated October 16, 2003 dismissed the appeal but set aside sentence of simple imprisonment of three months imposed upon the appellant No.2 and maintained the full sentence imposed upon appellant No.1 as well as sentence of fine of Rs.3,000/- imposed upon the appellant No.2.8. Dissatisfied with the judgment of the First Appellate Court, the appellants preferred Criminal Revision Application No.529 of 2003 in the High Court of Gujarat at Ahmedabad. The learned Single Judge by judgment dated August 09, 2010, maintained conviction of the appellants under Section 138 of Negotiable Instrument Act, but set aside final order of sentence imposed upon the appellants and remanded the matter to the learned Magistrate for passing appropriate order of sentence and compensation, if any payable under Section 357 of the Code, within three months, after giving to the parties reasonable opportunity of being heard, which has given rise to the instant appeal.

Court's reasoning:
The manner in which record in summary trials is to be maintained is provided in Section 263 of the Code. Section 264 mentions that in every case tried summarily in which the accused does not plead guilty, the Magistrate shall record the substance of evidence and a judgment containing a brief statement of the reasons for the finding. Thus the Magistrate is not expected to record full evidence which he would have been, otherwise required to record in a regular trial and his judgment should also contain a brief statement of the reasons for the finding and not elaborate reasons which otherwise he would have been required to record in regularmandatory language in which Section 326 (3) is couched, leaves no manner of doubt that when a case is tried as a summary case a Magistrate, who succeeds the Magistrate who had recorded the part or whole of the evidence, cannot act on the evidence so recorded by his predecessor. In summary proceedings, the successor Judge or Magistrate has no authority to proceed with the trial from a stage at which his predecessor has left it. The reason why the provisions of sub-Section (1) and (2) of Section 326 of the Code have not been made applicable to summary trials is that in summary trials only substance of evidence has to be recorded. The Court does not record the entire statement of witness. Therefore, the Judge or the Magistrate who has recorded such substance of evidence is in a position to appreciate the evidence led before him and the successor Judge or Magistrate cannot appreciate the evidence only on the basis of evidence recorded by his predecessor. Section 326 (3) of the Code does not permit the Magistrate to act upon the substance of the evidence recorded by his predecessor, the obvious reason being that if succeeding Judge is permitted to rely upon the substance of the evidence recorded by his predecessor, there will be a serious prejudice to the accused and indeed, it would be difficult for a succeeding Magistrate himself to decide the matter effectively and to do substantialHigh Court by the impugned judgment rejected the contention regarding proceedings having been vitiated under Section 461 of the Code, on the ground that parties had submitted pursis dated August 3, 2001 and in view of the provisions of Section 465 of the Code, the alleged irregularity cannot be regarded as having occasioned failure of justice and thus can be cured. The reliance placed by the High Court, on the pursis submitted by the appellants before the learned Metropolitan Magistrate declaring that they had no objection if matter was decided after taking into consideration the evidence recorded by his predecessor- in-office is misconceived. It is well settled that no amount of consent by the parties can confer jurisdiction where there exists none, on a Court of law nor can they divest a Court of jurisdiction which it possesses under thethe language of Section 326(3) of the Code, it is plain that the provisions of Section 326(1) and 326(2) of the new Code are not applicable to summary trial. Therefore, except in regard to those cases which fall within the ambit of Section 326 of the Code, the Magistrate cannot proceed with the trial placing reliance on the evidence recorded by his predecessor. He has got to try the case de novo. In this view of the matter, the High Court should have ordered de novothe foregoing reasons the appeal succeeds. The judgment dated August 09, 2010 rendered by the learned Single Judge of the High Court of Gujarat at Ahmedabad in Criminal Revision Application No. 529 of 2003 upholding conviction of the appellants for the offence under Section 138 of the Act is hereby set aside.