F.I.R
u/s 138 Negotiable Instruments act: liable to be quashed
It
is necessary to discuss the issue, if F.I.R u/s 138 of Negotiable Instruments
Act (In short “NI Act” ) could be registered in the wake of increasing
instances of F.I.R u/s 138 of Negotiable Instruments Act, on account of
bouncing of cheques are being reported. In the teeth of section 142 of the
Negotiable Instruments Act, it is clearly impermissible and barred, yet, it is
perplexing that F.I.R u/s 138 of Negotiable Instruments Act are being
registered with impunity. It is contrary to the very enactment itself. As if,
it is not enough, there are instances of filing of charge sheet and even
cognisance is also being taken by the Judicial Magistrates on the basis of the police
report. When section 142 of NI Act entail that cognisance could be taken u/s
138 of NI Act on the basis of a written complaint by payee of the cheque, before
a competent Judicial Magistrate and no police report in this regard is
contemplated and therefore, registration of F.I.R under section 138 of NI Act
and any subsequent action based on police report is liable to be quashed at the
threshold. It is indeed amusing as to how the F.I.R is registered for the
offence emanating u/s 138 of Negotiable Instruments Act, and as if, this was
not enough, even the further proceedings are often set in motion based on
police report. To deprecate the practice, merely, as being illegal, shall be
understatement, hence, it is imperative that the principle and procedure relating
to complaints u/s 138 of NI Act percolates in the system, in a way it is
required.
It
in the above backdrop, that, hon’ble Allahabad High Court recently in a matter
reported as Sudhir Kumar Goyal & Anr Vs State of UP & 2 Ors
Neutral Citation: 2025:AHC:136716 has expressed anguish and immediate
remedial measures were recommended. Before dealing with the matter, further,
the bare provision of section 142 may be referred to and reproduced for ready
reference:
Section 142 in The
Negotiable Instruments Act, 1881
142.
Cognizance of offences.—
(1)
Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2
of 1974)—
(a)
no court shall take cognizance of any
offence punishable under section 138 except upon a complaint, in writing, made
by the payee or, as the case may be, the holder in due course of the cheque;
(b)
such complaint is made within one month of the date on which the cause of
action arises under clause (c) of the proviso to section 138:
Provided
that the cognizance of a complaint may be taken by the Court after the
prescribed period, if the complainant satisfies the Court that he had
sufficient cause for not making a complaint within such period.
(c)
no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate
of the first class shall try any offence punishable under section 138.
(2) The offence under section 138 shall be
inquired into and tried only by a court within whose local jurisdiction—
(a)
if the cheque is delivered for collection through an account, the branch of the
bank where the payee or holder in due course, as the case may be, maintains the
account, is situated; or
(b)
if the cheque is presented for payment by the payee or holder in due course,
otherwise through an account, the branch of the drawee bank where the drawer
maintains the account, is situated.
Explanation.—
For the purposes of clause (a), where a cheque is delivered for collection at
any branch of the bank of the payee or holder in due course, then, the cheque
shall be deemed to have been delivered to the branch of the bank in which the
payee or holder in due course, as the case may be, maintains the account.
It
is categorically reflected from above as to in what manner, the complaint u/s
138 of Negotiable Instruments Act could be preferred. It is therefore to be
preferred in a manner provided for in the statute only and not otherwise.
The
Allahabad High Court in Sudhir Kumar Goyal (Supra) had referred
to a Supreme Court judgment reported as N Harihara Krishnan J Thomas,
AIR 2017 Supreme Court 4125 and an excerpt from the said judgment,
contextually relevant herein is reproduced below for ready reference:
*****
"By the nature of the offence under Section 138 of the Act, the first
ingredient constituting the offence is the fact that a person drew a cheque.
The identity of the drawer of the cheque is necessarily required to be known to
the complainant (payee) and needs investigation and would not normally be in
dispute, unless, the person who is alleged to have drawn a cheque disputes that
very fact. The other facts required to be proved for securing the punishment of
the person who drew a cheque that eventually got dishonoured is that the payee
of the cheque did in fact comply with each one of the steps contemplated
under Section 138 of the Act, before initiating prosecution. Because
it is already held by this Court that failure to comply with any one of the
steps contemplated under Section 138 would not provide "cause of
action for prosecution". Therefore, in the context of a prosecution
under Section 138, the concept of taking cognizance of the offence but not
the offender is not appropriate. Unless the complaint contains all the
necessary factual allegations constituting each of the ingredients of the
offence under Section 138, the Court cannot take cognizance of the
offence. Disclosure of the name of the person drawing the cheque is one of the
factual allegations which a complaint is required to contain. Otherwise in the
absence of any authority of law to investigate the offence under Section
138, there would be no person against whom a Court can proceed. There cannot be
a prosecution without an accused. The offence under Section 138 is person
specific. Therefore, the Parliament declared under Section 142 that
the provisions dealing with taking cognizance contained in the CrPC should
give way to the procedure prescribed under Section 142. Hence the opening
of non-obstante clause under Section 142. It must also be remembered that
under Section 142 does not either contemplate a report to the police
or authorise the Court taking cognizance to direct the police to investigate
into the complaint."
In
Sudhir Kumar Goyal (Supra) it is further held as under:
8.
As the registration of FIR by the police under Section 138 of N.I. Act is
impermissible in law and some other Special Acts, which this Court comes across
routinely, therefore, this court with the idea to sensitize the police officers
about the basics of criminal law with respect to registration of FIR in cognizable
offences, vide order dated 06.02.2025, directed the SSP, Bulandshahr, to
prepare a detailed and comprehensive report- in consultation with the
Additional Director General of Police (Prosecution), Uttar Pradesh, Lucknow,
and other concerned stakeholders- of such Special Acts in which registration of
FIR by police has been made impermissible and there is a bar on taking
cognizance by the Magistrates on the police report under such Special Acts. The
report aimed to identify and prepare a list of Acts under which the power of
police of registration of FIRs is either statutorily barred or procedurally
impermissible, and to provide suggestions for ensuring compliance with the
legal framework, thus preventing the use of unwarranted power of police under
such Special Acts”.
It
is in the perspective set out as above that Allahabad High Court was pleased to
refer to certain Special Acts , offences under which, registration of F.I.R is
not envisaged, whereas there are other special Acts under which F.I.R can be
registered.
What
emerges, therefore, from the above description is that the registration of FIR
by the police under Section 138 of N.I. Act is impermissible in law, apart
from under the provisions of some other
Special Acts as encapsulated above, and hence, it was felt by Allahabad high
Court to sensitize the police officers, about the basics of criminal law, with
respect to registration of FIR in cognizable offences and the police officers
are to be made aware that under such Special Acts under which registration of
FIR by police has been made impermissible, no F.I.R should be registered. There
is a bar on taking cognizance by the Magistrates on the basis of police report
under such Special Acts, thus, it is necessary to prevent the use of
unwarranted power of police under such Special Acts.
Wherever
the special law provides that the complaints can be lodged or the prosecution
can be initiated only by the specified persons under such special law, the
police officers cannot register F.I.R as they are debarred from registering the
FIR and investigating the matter under such special laws. The power to
investigate under the Special Acts has been given to the specified officers
under such special laws. Thus, where ever, in view of the bar contained
in the Special Acts, for any offence under such Acts, no person is authorized
to register the FIR.
Based
on the discussion as per above, the Allahabad High Court in Sudhir Kumar
Goyal (Supra) has held as under:
“19.2
…..in relation to the offence under Section 138 of the Negotiable
Instruments Act, the Court finds legal merit in the contention. Accordingly,
based on the above deliberations and the legal position discussed, the impugned
cognizance and order on charge dated 3.6.2024 & 18.7.2024 respectively,
passed by the learned Chief Judicial Magistrate, Bulandshahr, is hereby quashed
with the direction to the trial court to hear the applicant afresh again at the
point of charge with respect to the offences under Section 420 and 406 IPC,
it shall remain open for the applicant to raise all permissible contentions at
the stage of framing of charge, whereupon the trial court shall proceed in
accordance with law after considering the same. The observations made herein
regarding the offences under Sections 420 and 406IPC shall have no bearing
on the proceedings before the trial court. The trial court may issue a fresh
cognizance order after due application of judicial mind”.
REMARK
If
F.I.R is registered for the offence u/s 138 of Negotiable Instruments Act, such
F.I.R, being without mandate of law is liable to be quashed at the very
threshold. If charge sheet, is filed by way of police report, before a
Magistrate, entailing charges u/s 138 of the NI Act, no cognisance could be
taken by the Magistrate, based on police report as the same shall be contrary
to the prescription of the NI Act and therefore, the charge sheet and
consequent summoning order to the accused shall also be liable to be quashed.
The Special Act such as the Negotiable Instruments Act and other Special Acts
as described in the table above, clearly prescribes the mode and manner of
lodging a complaint and when F.I.R is not contemplated, the same cannot be
registered. In other words what is prohibited by the statute cannot be invoked
and the legal recourse shall only be permitted in a way known in law and as
prescribed under such Special Acts. Clearly, the mechanism is laid down as to
in what manner the complaint could be lodged in such Special Acts and as far as
section 138-148 of Negotiable Instruments Act is concerned, the Act is a
complete code in itself and dehors that any action taken shall be ex
facie illegal. The obvious corollary to the above is thus, that since, the
registration of F.I.R is not envisaged as per the Negotiable Instruments Act,
hence, that cannot be permitted and if F.I.R is registered, it is mandated to
be quashed.
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