Before Issuing Summons U/S 138 NI Act, Only Prima Facie View On Presence Of Basic Ingredients Of The Offence Necessary: Delhi High Court

Justice Amit Bansal of the Delhi High Court recently upheld summoning orders passed in a complaint case u/s 138 Negotiable Instruments Act, observing that evidence need not be gone into by the MM while conducting inquiry u/s 202 Cr.P.C. read with Section 145 of NI Act.

“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 court recapitulated the guidelines laid down in Re: Expeditious Trial of Cases Under Section 138 of NI Act 1881, in furtherance of which practice directions were issued by the Delhi High Court on the aspect of conducting inquiry u/s 202 Cr.P.C.

Perusing the same, it observed that the mandatory inquiry contemplated u/s 202 Cr.P.C. can be conducted by taking evidence of the complainant on affidavit.

“Further, documents may be examined by the Trial Court for satisfaction as to the sufficiency of grounds for proceeding under Section 202 of the CrPC”, the court said.

Sr. Adv. Viraj Datar had appeared for the accused and argued that an MM must conduct an inquiry by appreciating terms and conditions of the agreement entered between parties to ascertain if a legally enforceable debt has arisen.

The court, however, did not find merit in the contention, as there was dispute between the parties on whether the conditions of the agreement stood satisfied.

It said that accepting the accused's contention would result in a full trial being conducted even before the issuance of summons and would be in teeth of the directions passed by the Supreme Court in Re: Expeditious Trial.

Referring to the rebuttable presumption u/s 139 NI Act and the decision in Shiv Kumar v. Ramavtar Agarwal, Justice Bansal said, “…contention of the Accused that a legally enforceable debt has not accrued in favour of the Complainant on account of non-fulfilment of the conditions in the Agreement would have to be proved by leading evidence at the time of trial”.

Further, the court refused to accept that because the summoning order did not make specific reference to Section 202 Cr.P.C., the inquiry contemplated had not been duly conducted by the MM.

Mr. Kotla Harshavardhan, Ms. Mansi Sood, Ms. Rishbha Arora and Mr. Divyank Yadav, Advocates appeared for Northern India Paint Colour and Thriving Farm Builders

Mr. Viraj Datar, Senior Advocate with Mr. Atul T.N. and Ms. K. Pallavi, Advocates appeared for accused-Sushil Chaudhary

Case Title: Northern India Paint Colour and Varnish Co. LLP v. Sushil Chaudhary

Citation: 2023 LiveLaw (Del) 1116

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