While Issuing Summons Magistrate Is Only Required To Examine Whether Basic Ingredients Of Section 138 Of NI Act Are Prima Facie Made Out: Delhi High Court

The Delhi High Court while dealing with a criminal appeal has observed that the Metropolitan Magistrate is not required to delve into the evidence while conducting an inquiry under Section 202 of the CrPC in conjunction with Section 145 of the NI Act and that the Magistrate is only obligated to assess whether the complainant has prima facie established the fundamental elements of an offence under Section 138 of the NI Act.

The Single Judge Bench of Justice Amit Bansal in its order stated, "At the stage of issuance of summons, for the purpose of Section 202 of the CrPC read with section 145 of the NI Act, the learned MM is only required to examine whether the basic ingredients of an offence under Section 138 of the NI Act have been prima facie made out by the complainant and supported by the pre-summoning evidence led on behalf of the complainant."

The petitioner/complainant, Northern India Paint Colour and Varnish Co. LLP, had filed a petition challenging the order passed by the Additional Sessions Judge (ASJ), Tis Hazari Courts, Delhi which set aside the summoning order passed by the Metropolitan Magistrate (MM), Central, Tis Hazari Courts, Delhi, in a complaint case under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The ASJ remanded the matter back to the MM for fresh consideration. Also, the ASJ had directed the Trial Court to conduct the mandatory inquiry under Section 202 CrPC to ascertain whether all the elements of the offence punishable under Section 138 NI Act, including the issuance of the cheque in question by the petitioner in discharge of his lawful liability, are satisfied.

The Complainant before the Court argued that the mandatory inquiry in terms of Section 202 of the CrPC was duly conducted by the learned MM in both the complaint cases. They submitted that for the purpose of the said inquiry, it is not necessary for the MM to examine witnesses and the said inquiry can be conducted on the basis of pre-summoning evidence and the documents on record.

On the other hand, the accused argued that the MM has failed to conduct the mandatory inquiry under Section 202 of the CrPC and the summoning orders have been passed mechanically without ascertaining whether any legally enforceable debt exists or not.

Considering the submissions of both sides, the Court stated that it is clear that in cases under Section 138 of the NI Act, the mandatory inquiry as contemplated by Section 202 of the CrPC can be conducted by taking evidence of the complainant on affidavit and connected inquiry need not be necessarily conducted by taking evidence on oath.

The Court also held that documents may be examined by the Trial Court for satisfaction as to the sufficiency of grounds for proceeding under Section 202 of the CrPC. "It cannot be accepted that just because the summoning order of the MM does not make specific reference to Section 202 of the CrPC, that an inquiry as contemplated in the aforesaid provision has not been conducted by the learned MM", stated the Court in its order.

The Court accordingly disposed of the application and held, "In view of the discussion above, I am of the considered view that in both the complaint cases, the learned MM has duly conducted the necessary inquiry under Section 202 of the CrPC before issuance of summons to the accused".

Cause Title: Northern India Paint Colour and Varnish Co. LLP v. Sushil Chaudhary [CRL.M.C. 2480/2023] & connected matter

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