NI Act| Cognizance Taken Without Affidavit On Record In Lieu Of Inquiry Illegal: Kerala HC

The Petitioners, by way of the Petition under Section 482 Cr. P.C. challenged the summons and consequential warrants issued to them by the Magistrate in a complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).

The Bench of Justice Bechu Kurian Thomas observed “In the instant case, the learned Magistrate issued summons without having any affidavit on record. Having regard to the above circumstances, I am of the view that since the materials on record do not indicate any affidavit having been filed in lieu of enquiry under section 202 Cr. P.C, cognizance taken by the Magistrate is wrong in law… Hence the summons issued to the petitioners in C.C. No.996/2021 are hereby quashed and consequently, the warrants issued against the petitioners are also set aside.”

Advocate Arun Samuel appeared for the Petitioners while Advocate M. Sreekumar appeared for the Respondents.

The Court relied on the landmark judgment in Sunil Todi and Others v. State of Gujarat and Another in which the Supreme Court observed that it is not necessary for the Magistrate to postpone the issuance of process in each and every case. Further, it has also been held that not conducting an inquiry under Section 202 of CrPC would not vitiate the issuance of the process if requisite satisfaction can be obtained from the materials available on record.

The Court further held, “In cases arising under the N.I. Act, even if an inquiry under section 202 Cr. P.C. has not been conducted, the same cannot vitiate the issuance of process. The requisite satisfaction need only be available from the materials on record. If the materials on record are not sufficient to arrive at such a satisfaction, then the accused will be justified in stating that the absence of reference to any affidavit would vitiate the proceedings.”

The Court also referred to In Re: Expeditious Trial of Cases under Section 138 of the N.I. Act 1881, the Supreme Court had held that Section 145 of the NI Act had been brought in as an exception to Section 202 Cr. P.C. and evidence by way of an affidavit was permitted to be given in any inquiry or trial which provision was inserted with the laudable object of speeding up the trial of complaints filed under Section 138 of the N.I. Act. It was further observed that if the evidence of the Complainant can be given on the affidavit, there was no reason to insist on the evidence of the witnesses to be taken on oath.

Accordingly, the Court allowed the Petition, directed the Magistrate to proceed from the stage of inquiry under Section 202 Cr.P.C. and gave liberty to the Complainant to file an affidavit in lieu of such inquiry.

Cause Title: Carnival Films Pvt. Ltd. v. State of Kerala (Neutral Citation: 2024:KER:25626)

Appearances:

Petitioners: Advocates Arun Samuel and Jithin Babu A

Respondents: Advocate M. Sreekumar, PP Sreeja V.

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