Thursday, August 21, 2025

Advocate acting on wrong instruction of client: No misconduct

 

Advocate acting on wrong instruction of client: No misconduct

 

Whether a lawyer representing a client based on the instructions of client is required to ascertain the veracity of the averments in a petition/complaint duly sworn by a client, and if allegedly the veracity of the averments is not ascertained by the Advocate, whether that shall amount to misconduct has come to be deliberated by the Division Bench of Delhi High Court recently in a matter captioned as Chand Mehra Vs Union of India & Ors LPA 431/2025.

As a prelude, it is imperative to note that a Letters Patent Appeal (LPA) was instituted under Clause X of Letters Patent against the judgment and order dated 15.04.2025 passed by the learned Single Judge of Delhi High Court in W.P.(C.) No. 4425/2025, whereby, the writ petition challenging the orders dated 06.10.2023 and 11.11.2024 passed by the Bar Council of Delhi (in short “BCD”) and Bar Council of India (in short “BCI”) respectively had been dismissed.

The facts of the case are rather peculiar. The BCD vide order dated 06.10.2023 had dismissed the complaint filed by the appellant against several respondents- who are practicing lawyers, on the premise that ground that the complainant in the complaint had failed to establish any professional relationship between himself and the respondents. The BCD had also rejected the contentions of appellant that the respondents ought to have ascertained the facts with due diligence and only after verification could have contested the matter on behalf of their respective clients. It was noted that the allegations in the complaint in the matter filed against the appellant under Section 138 of the Negotiable Instruments Act, 1881, are false or correct, is to be decided only by the Court, and, hence, no misconduct was made out against respondents Advocates. The Revision Petition preferred by the appellant against the order dated 06.10.2023 passed by the BCD before the BCI under Section 48A of the Advocates Act, 1961, was also dismissed vide order dated 11.11.2024. It was held that no case of any “professional misconduct‟ is made out against respondent Advcoates  It has further been held by the BCI in its order dated 11.11.2024 that under the Bar Council of India Rules, it is the duty of the Advocate to act on the instructions of their clients and that an Advocate cannot sit and make an investigation of their client‟s case, before representing such client in the Court of law. The other finding returned by the BCI is that an Advocate cannot be prosecuted for the reason that his client‟s case was false, and further that the appellant and the respondents’ lawyers did not have any fiduciary relationship of lawyer and client. The BCI had placed reliance upon a judgment of the Madras High Court in R.Swaminathan v. Bar Council of Tamil Nadu, (2014) SCC Online Mad 12777.

As far as alleged violation of Rule 4 of Section 1, Chapter 1, Part VI of the Bar Council of India Rules are concerned, the contention was also rejected, stating the reason that though, the Rule 4 restricts an Advocate, not to be a mere mouthpiece of his client, however, it does not mean that an Advocate has to first ascertain the veracity or genuineness of his client’s case before representing them.

The orders, namely the order dated 06.10.2023 and 11.11.2024, passed by BCD and BCI, respectively, became the subject matter of challenge before the ld Single Judge in the writ petition, filed by the appellant, namely W.P.(C.) No. 4425/2025,and that was also dismissed vide judgment and order dated 15.04.2025, and the said order passed by the ld Single Judge was under challenge in LPA before the Division bench.

                        Findings of ld Single Judge

(i) The Court is in agreement with the reasoning contained in the order passed by the BCI. It was further observed by the learned Single Judge that Advocates of the adversary of the appellant do not owe any fiduciary duty to the appellant, nor is there any professional relationship between them.

(ii) As per provisions of Section 35 of the Advocates Act, 1961, that the allegations/ complaint made by the appellant against respondent Advocates do not fall within the purview of “professional misconduct‟, as contemplated under Section 35 of the Advocates Act, 1961.

(iii) that alleged perjury/ fabrication of the documents during the course of the legal proceedings under Section 340 Cr.P.C. have already been initiated by the appellant and are pending and, therefore, in the said proceedings the Court concerned will not take a view as to whether any perjury/ fabrication is committed or not.

That as referred to above, the order of single judge was impugned before the hon’ble Division Bench and it was held by the Division bench that the reasoning given by the learned Single Judge to arrive at his conclusions, cannot be faulted with. On the basis of the contents of the complaint lodged by the appellant against the respondent Advocates (respondent no. 3 to 5) no case of professional misconduct is made out. It was further held that Advocates owed duty towards their client and it cannot be undermined by acting upon such a complaint. It is further held as under:

“7. We may also record that an Advocate is bound by the instructions given to him by his client and it does not form part of his duty to verify the truthfulness or veracity of such instructions especially for the reason that the assertions made by the parties before the Court in the form of pleadings or setting up a case are to be decided by the learned Court concerned in the proceedings and not by the lawyers representing the respective parties”.

 

The appeal was accordingly dismissed.

 

It may be appropriate to deal with the matter further in order to holistically deal with the issue. In R.Swaminathan vs Bar Council Of Tamil Nadu (Supra). The following paragraphs is reproduced:

6. At the outset, it should be pointed out that the second respondent, who was the complainant before the Bar Council, was not the client of the writ petitioners. Even according to his complaint, he was only one of the several shareholders of a Company, whose property was purchased by another Company, on the basis of the legal opinion tendered by the writ petitioners. In other words, the petitioners were not the complainant's Lawyers. The petitioners and the second respondent never had any jural or contractual relationship of lawyers and litigant. Therefore, I do not know how the second respondent could make a complaint of professional misconduct of giving a wrong opinion against the petitioners herein, when the clients of the petitioners were satisfied with such an opinion and have not raised an issue so far. This is an aspect which the Bar Council appears to have completely overlooked before passing a Resolution to refer the matter to the Disciplinary Committee”.

 

“7. As and when a complaint is made against any Advocate, by a litigant alleging professional misconduct, the Bar Council is obliged to consider at least, prima facie, whether the allegations constitute a professional or other misconduct. Section 35 of the Advocates Act, 1961, enables the Bar Council to inquire into (i) complaints of professional misconduct and (ii) complaints of other misconduct. In the case on hand, the second respondent has not alleged against the petitioners, any "other misconduct". He has alleged professional misconduct against the petitioners. But he did not have any relationship with the petitioners”.

 

 

The expression “ Misconduct” is not defined in the Advcoates Act. The Supreme Court has held in R.D Saxena Vs Balram Prasad Sharma [2000 (7) SCC 264] that the word "misconduct" is a relative term and that it had to be considered with reference to the subject matter and the context in which it appears. Similarly, in D.P Chadha Vs Triyugi Narain Mishra [2001 (2) SCC 221], the Supreme Court held the expression "misconduct" to have a wide connotation. It need not necessarily involve moral turpitude, but, it has to be understood with reference to the subject matter and the context in which it is employed.

 

In Noratanmal Chouraria Vs M R Murli [2004 (5) SCC 689], it was held that an Advocate was a party litigant in a Rent Control Proceeding. The opposite party made a complaint to the Bar Council that as a party appearing in the Rent Control Proceedings, the Advocate entered into an altercation with him. The Bar Council refused to entertain the complaint, as the conduct complained of, was not against any act of omission or commission by the Advocate in his professional capacity. The opposite party appealed. The Supreme Court dismissed the appeal, pointing out that to constitute misconduct, there must be improper behaviour or intentional wrong doing or deliberate violation of a rule or a standard of behaviour.

 

What is clearly emerging from the aforesaid discussion, more particularly, in R.Swaminathan vs Bar Council Of Tamil Nadu (Supra) and also based upon the judgments rendered in the context is that a party raising issue against advocate hired by the opposite party is anomalous. If any action is initiated in such a manner shall on a complaint made by the opposite party against lawyers of other party, no advocate can carry out his professional duties and responsibilities without fear. It is no gainsaying that a professional is obliged to render services to his client. It is not out of place to mention here that the services rendered by an Advocate to his client, would naturally invite the displeasure and wrath of such client's opposite party. Therefore, if parties to a litigation are allowed to take up the battle to the door steps of the counsel for the opposite party, the profession itself will be in jeopardy.

It is held in R.Swaminathan vs Bar Council Of Tamil Nadu (Supra) as under:

 

12. Moreover, it is highly doubtful if a legal opinion given by an Advocate could constitute misconduct at all. An opinion is always an opinion and even if that opinion turns out to be wrong, in the course of a judicial proceeding, an allegation of professional misconduct cannot be made against an Advocate. If at all, anyone could make such an allegation against an Advocate for a wrong or improper legal opinion tendered by him, it would be his own client and certainly not the party against whom the litigation is fought”.

 

In this context it is relevant to point out that disciplinary proceedings initiated against an Advocate, in N.S Varadachari Vs Bar Council of Tamil Nadu [2011 (3) MLJ 80] as in that case, also, the Advocate concerned gave a legal opinion to his client for the purchase of a property and some third parties entered into agreements with that person. A complaint was raised subsequently, on the ground that the legal opinion given by the counsel to his client was defective. The complaint was quashed. The learned Judge referred to the decision of the Full Bench of Madras High Court reported as U. Dakshinamoorthy Vs  Commisison of Inquiry [1980 (1) MLJ 121] and the decision of the Supreme Court in Pandurang Dattatraya Khandekar Vs Bar Council of Maharashtra , Bombay,   [AIR 1984 SC 110].

 

In order to further amplify the discussions, it may be pertinent to refer to some other judgements rendered in the context. In A.K Subbaiah Vs Karnataka Stated Bar Council [AIR 2002 Kar. 410], the Supreme Court was concerned with a complaint given by a person, whose father was the client of the lawyer concerned. The complainant's father died, but no steps were taken to bring on record the legal representatives of the deceased person. Therefore, the writ petition filed by him was dismissed as abated. Hence a complaint was made by the client's son against the counsel. It is in these circumstances, that the Karnataka High Court refused to uphold the challenge to the initiation of proceedings by the Bar Council, as that was a clear case of a dispute between the lawyer and his client's son.

Yet again, in the Supreme Court Bar Association Vs Union of India  [AIR 1998 SC 1895], the Supreme Court was concerned only with the question whether the Court can debar an advocate from practice for a specific period, as a measure of punishment for established contempt of Court or not. The Constitution Bench held that it was within the exclusive domain of the Bar Council to deal with the professional misconduct of a lawyer and not for the Court to suspend the licence, as a measure of punishment.

In R.Swaminathan vs Bar Council Of Tamil Nadu (Supra) it is further held:

 

23. As a matter of fact, no advocate can be found fault, for a wrong legal advise. In Pandurang Dattartraya Khandekar Vs Bar Council of Maharashtra [AIR 1984 SC 110], the Supreme Court pointed out that "there is world of difference between the giving of improper legal advise and the giving of wrong legal advise." In the same decision, the Supreme Court pointed out that when an advocate is entrusted with a brief, he is expected to follow the norms of professional ethics and try to protect the interests of his client in relation to whom he occupies a position of trust and that "the Counsel's paramount duty is to the client". The Supreme Court pointed out that for an advocate to act towards his client otherwise than with utmost good faith is unprofessional. Therefore, what the petitioners have done to their clients, is only in the due discharge of their professional duties. A person who is in the opposite camp cannot take exception to this”.

 

The aforesaid discussion shall clearly reflect the broad canvas of the misconduct by Advocate and the circumstances, if the issue of misconduct could be raised. Firstly, the opposite party cannot raise issue of indiscretion or misconduct against Advocate of other party, for, there shall not be a fiduciary duty between them. The client and Advocate relationship has certain privileges and even as per Advcoates Act, a client is bound by the instructions received from his client and Advocate shall not be responsible for wrong or false averments. The pleadings are drafted on the basis of instructions from the client and an Advocate cannot be expected to ascertain the veracity of the averments. To elucidate it further, in the context of rendering opinion also, even if it appears that a wrong opinion was given by a lawyer, per se that may not be actionable, for, decision on a lis is a domain of court. Moreover, if three is allegation of misconduct against Advocate, the Bar Council shall be competent to deal with the matter, and if merely as per whims and caprice flimsy allegations, is raised against Advocate that may not pass muster.

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                                Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sunday, August 17, 2025

Quashing of 138 NI proceedings in the light of IBC proceedings

 

Quashing of 138 NI proceedings in the light of IBC proceedings

The ratio of P. Mohan Raj Vs M/S Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258Vishnoo Mittal Vs M/s Shakti Trading Company 2025 INSC 346 are distinguishable     

                                       PART II

The quashing of complaint/summons arising out of summon cases such as u/s 138 of Negotiable Instruments act or quashing of F.I.R or charge sheet filed in F.I.R cases could be exercised by the High Courts under section 482 of Cr.PC (corresponding to section 528 of Bharitya Nyay Suraksha Sanhita in short “BNSS”). In order to secure ends of justice and to prevent abuse of process of courts the power is bestowed in high courts. It is the duty cast on Magistrate to apply their mind before issuing summons in a complaint case. As regards F.I.R case, after filing of charge sheet pursuant to registration of F.I.R and examining the witnesses by the police charge sheet is submitted and cognisance based on the materials are taken after perusal of record. In the complaints u/s 138 of Negotiable Instruments Act the complainant are examined prior to taking cognisance and then summons in apt cases are issued. However, in summon cases, other than Section 138 Negotiable Instruments Act, the complainant shall have to examine himself/herself comprehensively in a complaint lodged u/s 200 CrPC (correspond to Section 223 BNSS) along with other witnesses and after recording satisfaction by the Magistrate order of summoning under the appropriate sections to the accused could be issued. It is no gainsaying that complaints u/s 138 of Negotiable Instruments Act are summary in nature and only after filing of application under Section 145(2) CrPC the case could be termed as summon case, in the event the Magistrate permits that and allows the application field by the accused for seeking cross examination of the complainant witnesses, the complainant witnesses therefore could be cross examined post summoning, as often is the case. The summoning to the accused or the complaint u/s 138 of Negotiable Instruments act or in other summon case, could be challenged before the High Court for seeking its quashing, provided the case for quashing is made out.

In a broad canvas, as set out above, some judicial precedents as regards criteria for quashing may be deliberated before delineating it further in the context of Insolvency cases and summoning u/s 138 of Negotiable Instruments Act.

                             Milestone/Judicial precedents

In Madhavrao Jiwaji Rao Scindia Vs SambhajiRao ChandrojiRao Angre and Ors 1988 1 SCC 692 had held that

“Court cannot be utilized for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and therefore no useful purpose is likely to be served by allowing a criminal proceedings to continue, the court while taking into consideration the special facts of the case also quash the proceedings even though it may be at a preliminary stage”.

The law as regards quashing has evolved over the years and a reference in this regard could be made of celebrated judgment reported as State of Haryana Vs Bhajan Lal & Ors AIR 1992 Supreme Court 604.

The criteria for quashing were laid down in Bhajan Lal (Supra) and the same is as under:

(i)       If the allegation in F.I.R or a complaint, if taken on face value does not disclose commission of         any offence;

(ii)   If the allegation in F.I.R or complaint along with materials available on record does not disclose commission of cognisable offence and thus not justifying any investigation by police u/s 156(1) of Cr.PC;

(iii) If the uncontroverted allegation in the F.I.R and complaint along with evidence on record does not disclose any offence or make out any case against the accused;

(iv) If the allegation in the F.I.R does not disclose any cognisable offence and at the best only non- cognisable offence could be disclosed, then, the investigation by police is not warranted, unless, ordered by a competent Magistrate in sync with section 155(20 of Cr.PC;

(v)   If the allegation in F.I.R and/or in the complaint is so absurd and inherently improbable so that no prudent person can reach to a conclusion about sufficient grounds for proceeding against the accused;

(vi)  If there is express legal bar against institution of case and prosecution or if there is other express provision in the Code or law for efficacious redressal of the matter;

(vii) If the proceedings instituted is manifestly replete with mala fide and the act is malicious and actuated with ulterior motive with a view to wreak vengeance on the accused and to spite him due to personal grudge.

M/s Pepsi Foods Limited & Anr Vs Special Judicial Magistrate & Ors AIR 1998 Supreme Court 128 it is held as under:

“summoning an accused in a criminal case is a serious matter. Criminal law cannot be set in motion in a matter of course. It is not that the complainant has to bring only two witness to support his allegations in the complaint to have the criminal complaint set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law   applicable thereto. He has to examine the nature of allegations made in the complaint and evidence both oral and documentary in support thereof and would that be sufficient for the complaint to succeed in bringing charge home to accused It is not that Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused”

  

The outline as above shall reflect as to the circumstances when the complaint and/or F.I.R could be quashed by High Courts under its inherent powers. The discussion herein, in the above backdrop, relates to criteria for quashing complaint u/s 138 of Negotiable Instruments Act , in case a parallel proceeding under Insolvency & bankruptcy (in short “IBC”) 2016 is pending against the company and/or its Directors who are also roped in as accused in a complaint u/s 138 of the Negotiable Instruments Act.

The judgments/precedents as regards quashing of F.I.R and complaints are settled. However, for the present we are concerned about quashing of complaints u/s 138 of Negotiable Instruments Act and that too, in the backdrop of ongoing insolvency proceedings. What is to be analysed in the context is as to whether during the pendency of Insolvency & Bankruptcy Code (IBC) 2016, proceedings, whether complaints under Section 138 of Negotiable Instruments Act against the accused /director of corporate debtor company when proceedings under National Company Law Tribunal (NCLT) is underway could be continued or not? If, it could be continued what are the parameter and if there are prohibitions what are the criteria laid down.    

In a matter captioned as Vishnoo Mittal Vs M/s Shakti Trading Company 2025 INSC 346 the Supreme Court has further clarified its earlier judgment reported as P. Mohan Raj Vs  M/S Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258

                             FACTUAL MATRIX OF VISHNU MITTAL (Supra)

(i)       In order to appreciate the law laid down in P. Mohan Raj (Supra), it is deemed necessary herein to cull out the facts of Vishnoo Mittal (Supra) case).  The appellant (Vishnoo Mittal) had challenged the order dated 21.12.2021 of the learned Single Judge of the Punjab and Haryana High Court by which the appellant’s petition under section 482 of Criminal Procedure Code, 1973 seeking quashing of proceedings initiated under Section 138 of Negotiable Instruments Act, 1881 (‘NI Act’) against the appellant, was dismissed.

(ii)      The appellant was the director of M/s Xalta Food and Beverages Private Limited (hereinafter ‘corporate debtor’). There was a contract between the corporate debtor and the Respondent M/s Shakti Trading Company where the respondent was to function as a super stockist of the corporate debtor. Consequent to above, and business relationship between the two companies, the appellant, in his capacity as director of the corporate debtor, had drawn eleven cheques in favour of the respondent of varying amounts.

(iii)    These cheques were dishonoured on 07.07.2018. A legal notice under Section 138 of the Negotiable Instruments Act was issued to the appellant by the respondent as the cheque amounts were not furnished to the respondent by the bank. As the amount was not paid, in September 2018, a complaint was filed before the appropriate Court by the respondent against the appellant for offences under Section 138 of NI Act.

(iv)     In the meanwhile, on 25.07.2018, insolvency proceedings against the corporate debtor, of which the appellant was the director, commenced and a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (hereafter ‘IBC’) was imposed. The interim resolution professional (hereinafter ‘IRP’) was appointed on the same day i.e. 25.07.2018 in relation to the corporate debtor.

(v)      In the midst of above, vide order dated 07.09.2018, the Court had issued summons to the appellant in the proceedings u/s 138 of Negotiable Instruments Act initiated by the respondent against the appellant.

         Being aggrieved, the appellant approached the High Court under section 482 of CrPC challenging the summoning order u/s 138 of Negotiable Instruments Act and prayed for the quashing of the section 138 Negotiable Instruments act complaint, since, it was contended that moratorium was issued under Section 14 of the IBC. The Punjab & Haryana High Court, however, vide the impugned order dated 21.12.2021, was pleased to dismiss the appellant’s petition and declined to quash the complaint against him.

          The appellant was therefore before Supreme Court.

It was the case of the appellant that the corporate debtor is presently facing insolvency proceedings before the National Company Law Tribunal (NCLT) and a moratorium order was issued on 25.07.2018 under Section 14 of the IBC.

                             MORATORIUM under IBC 2016

The relevant portion of Section 14 of the IBC reads as under:

“14. Moratorium.

(1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:--

(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;

(b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;

(c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

(d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor…”

 

Placing reliance on the aforesaid provisions, it was the case of the appellant that since the moratorium order was imposed on 25.07.2018 and was in operation, therefore, the proceedings under section 138 of the Negotiable Instruments Act could not have been initiated against the appellant. It was further argued that although the cheques were drawn and dishonoured prior to the above date i.e., 25.07.2018, however, the notice under Section 138 of the NI Act was given on 06.08.2018 i.e., post 25.07.2018. Therefore, the cause of action for the offence under Section 138 of the Negotiable Instruments Act would commence after a period of 15 days calculated from 06.08.2018 and it would be 21.08.2018, however, by this time moratorium had already been imposed on 25.07.2018.

The submission of the appellant was, however, not accepted by the High Court on the premise that the judgment of Supreme Court in a precedent reported as P. Mohan Raj v. M/S Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258 it was held that the immunity granted by the moratorium order issued under Section 14 of the IBC can only be  obtained by a Corporate Debtor and not by a natural person such as the present appellant, who was the Director of the Corporate Debtor.

In para 102 of the P.Mohan Raj (Supra) the Supreme Court had noted:

“… for the period of moratorium, since no Sections 138/141 proceeding can continue or be initiated against the corporate debtor because of a statutory bar, such proceedings can be initiated or continued against the persons mentioned in Sections 141(1) and (2) of the Negotiable Instruments Act. This being the case, it is clear that the moratorium provision contained in Section 14 IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act.”

The High Court was swayed by the aforesaid. The Supreme Court however has held that the high court erred in dismissing the petition u/s 482 for seeking quashing of complaint.  According to Supreme Court, the facts in P. Mohan Raj (Supra) was vastly different and the case Vishnoo Mittal  (supra) is thus distinguishable from it.

According to Supreme Court, in P.Mohan Raj (Supra), certain cheques drawn by the appellants therein were dishonoured on 03.03.2017 and 28.04.2017. Thereafter, demand notices dated 31.03.2017 and 05.05.2017 were issued by the complainant. The moratorium was imposed on 06.06.2017, which is clearly after the lapse of 15 days from the date of demand notices. In other words, in that case, the cause of action under section 138 NI Act arose before the imposition of the moratorium and on these facts, the Supreme Court had held that section 14 of IBC bars or stays proceedings only against the corporate debtor and  proceedings can be continued or initiated against the natural persons. Therefore, the case of Vishnoo Mittal (Supra) is different from P.Mohan Raj (Supra), since, the cause of action in Vishnoo Mittal (Supra) arose, after the commencement of the insolvency process only.

It was held by Supreme Court in para no, 9 of Vishnoo Mittal (Supra) that:

9.that the return of the cheques dishonoured simpliciter does not create an offence under section 138 Negotiable Instruments Act, which reads as under:

“138. Dishonour of cheque for insufficiency, etc., of funds in the account.—

Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless—

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, within thirty days of the receipt of information by 6 him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation.—For the purposes of this section, “debt of other liability” means a legally enforceable debt or other liability.” Clause (c) of the proviso to Section 138 of NI Act makes it clear that cause of action arises only when demand notice is served and payment is not made pursuant to such demand notice within the stipulated fifteen-day period.

The Supreme Court in Jugesh Sehgal v. Shamsher Singh Gogi (2009) 14 SCC 683 has explained the ingredients of Section 138 of NI Act offence as follows:

“13. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:

(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;

(ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;

(iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;

(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;

(v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;

(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.

Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.” In other words, the cause of action arises only when the amount remains unpaid even after the expiry of fifteen days from the date of receipt of the demand notice”.

It was further noted that in Vishnoo Mittal (Supra)  on 25.07.2018, the moratorium was imposed and management of the corporate debtor was taken over by the interim resolution professional as per section 17 of the IBC. For ready referenced section 17 of the IBC reads as under:

“17. Management of affairs of corporate debtor by interim resolution professional.-

(1) From the date of appointment of the interim resolution professional,— 

(a) the management of the affairs of the corporate debtor shall vest in the interim resolution professional;

(b) the powers of the board of directors or the partners of the corporate debtor, as the case may be, shall stand suspended and be exercised by the interim resolution professional;

(c) ……………

(d) the financial institutions maintaining accounts of the corporate debtor shall act on the instructions of the interim resolution professional in relation to such accounts and furnish all information relating to the corporate debtor available with them to the interim resolution professional…”

From the bare perusal of above, it will be evident that the appellant did not have the capacity to fulfil the demand raised by the respondent by way of the notice issued under clause (c) of the proviso to Section 138 of Negotiable Instruments Act. It was so, because, when the notice was issued to the appellant, he was not in charge of the corporate debtor as he was suspended from his position as the director of the corporate debtor as soon as Insolvency Resolution Professional (IRP) was appointed on 25.07.2018. Therefore, the powers vested with the board of directors were to be exercised by the IRP in accordance with the provisions of IBC. All the bank accounts of the corporate debtor were operating under the instructions of the IRP, hence, it was not possible for the appellant to repay the amount in light of section 17 of the IBC. It was also informed on behalf of the appellant that, after the imposition of the moratorium, the IRP had made a public announcement inviting the claims from the creditors of the Corporate Debtor and the respondent has filed a claim with the IRP.

P. Mohan Raj (Supra) & Vishnoo Mittal (Supra) are distinguishable

The judgments as referred to above are clearly distinguishable as narrated above and shall further be culled out as under:

S.N

P.Mohan Raj (Supra)

Vishnu Mittal (Supra)

1.

The cause of action u/s 138 of Negotiable Instruments Act shall arise only after statutory demand legal notice was issued and after expiry of fifteen (15) days the amount so demanded was not paid. The cause of action will arise only then.

The fifteen (15) days period after issuing legal notice had already expired and the amount was not paid and only thereafter moratorium was imposed. Hence, at the time of cause of action the Directors were in command of the corporate debtor company, hence liable.

The cause of action u/s 138 of Negotiable Instruments Act shall arise only after statutory demand legal notice was issued and after expiry of fifteen (15) days the amount so demanded was not paid. The cause of action will arise only then.

However, before expiry of Fifteen (15) days period, the moratorium was imposed and Insolvency Resolution Professional (IRP) was appointed.

2.

The Directors remained in command of the corporate debtor company at the stage of cause of action and hence liable.

All the bank accounts of the corporate debtor were operating under the instructions of the IRP, hence, it was not possible for the appellant to repay the amount in light of section 17 of the IBC.

3.

All aspects such as imposition of moratorium or inviting claims from creditor by IRP were the events unveiled much after cause of action and hence, Directors were held to be liable.

IRP had made public announcement for submission of claim and even the complainant had submitted claim before IRP.

4.

Jugesh Sehgal v. Shamsher Singh Gogi (2009) 14 SCC 683 remained applicable and on the date of cause of action, there being no moratorium Directors were held to be liable.

The distinction is made by relying upon Jugesh Sehgal v. Shamsher Singh Gogi (2009) 14 SCC 683 in respect of cause of action.

5.

The accused had capacity to pay on the date of cause of action, since management was yet to be taken over by IRP and the capacity of accused on the date of cause of action remained unaltered.

The accused had no capacity to pay on the date of cause of action, since management was taken over by IRP and the capacity of accused was that of a suspended director and hence not capable of making payment from the accounts of corporate debtor /accused company

 

In the face of above, more particularly, what emanates from Section 17 of Insolvency & Bankruptcy Code (IBC) 2016 and also in the light of the dicta of Supreme Court as laid down in Jugesh Sehgal v. Shamsher Singh Gogi (2009) 14 SCC 683, the cause of action shall arise only when the legal demand notice is served and fifteen (15) days period under the notice is elapsed and remittance not made. A complaint u/s 138 of Negotiable Instruments Act could be filed only when the bundle of cause of action culminates, i.e when the demand notice is served on the accused and after expiry of fifteen (15) days as stipulated u/s 138 of Negotiable Instruments Act, for making payment, yet no payment is made. It is also settled now that mere issuance of cheque and its dishonour in itself shall not give rise to cause of action. In fact, even issuance of demand notice in itself shall not give rise to cause of action and only expiry of fifteen (15) days notice period after receipt of notice coupled with no payment made even as on that date and despite remaining in command of corporate debtor/accused company and yet payment is not made shall make directors liable. However, in case moratorium is imposed before expiry of notice period as narrated above shall incapacitate the accused company from making payment in view of the fact that the management of corporate debtor company no longer remains with its directors as the same is vested in IRP after the moratorium. Therefore, P Mohan Raj (Supra) was clearly distinguishable and hence, the complaint against Vishnoo Mittal (Supra) was quashed.

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                             Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com


 

Thursday, August 14, 2025

 

Section 138 NI Act: death of complainnat- Effect ON COMPLAINT

It is necessary to deal with yet another aspect in respect of prosecuting the complaint u/s 138 of Negotiable Instruments Act i.e in case of death of the complainant what will be the effect on such complaint-whether the same could still be prosecuted or the complaint shall abate. It is no res integra that in case of death of accused the complaint shall abate, but what will be the situation in case of death of the complainant. The answer to the aforesaid aspect shall be found herein2004 SCC OnLine Gau 130 and captioned as Kushal Kumar Talukdar Versus Chandra Pd. Goenka 2005 CRILJ599 may be referred to.

The moot point is that in a case under Section 138 of the Negotiable Instruments Act, 1881, if the complainant dies after taking of congnisance by the Magistrate, whether the proceedings abate or trial has to be taken to its logical end, following due process and the procedure laid down in Criminal Procedure Code. It is worthwhile to mention that there is no provision in the Code of Criminal Procedure or the Negotiable Instruments Act laying down that on account of death of payee, the trial must abate. Therefore, it is to be ascertained, if the legal heirs of the original complainant are entitled to come forward and ask for allowing them to represent the complainant, so as to enable the Court to proceed further with the trial.

There is no provision for substitution of a deceased complainant under the Cr. P.C. either, but a Magistrate has the power under Section 302 of Cr. P.C., to permit any one to conduct prosecution. In Kushal Kumar Talukdar (Supra), Son of the deceased complainant, came forward to continue to proceed with the complaint and after finding that there was no impediment on the part of the Court, in allowing the Son of the deceased complainant to represent the complainant, the substitution application was allowed. A challenge was made to the substitution order and it was prayed that the complaint u/s 138 of Negotiable Instruments Act stood abated.

The question, in this context as often been raised by the accused-petitioner is this:

Whether the impugned order substituting the opposite party herein, who is the son of the said deceased, as complainant, in the complaint case aforementioned, which arose out of a complaint lodged for prosecution of the accused-petitioner under Section 138, read with Section 142 of the N.I. Act, is legally sustainable under Section 256 of the Code of Criminal Procedure?

As divergent views were being expressed by the High Courts on the question as to whether a complainant's death brings a complete end to the proceedings in a summons procedure case, the Law Commission, in its 41st Report, had recommended as follows:

“A question has arisen whether the complainant's death ends the proceedings in a summons case and we find that different views have been expressed on this question. As a matter of policy, we think the answer should depend on the nature of the case and the stage of the proceedings at which death occurs. It is impracticable

However, notwithstanding the above recommendations, Section 256, which finally emerged under the Code of Criminal Procedure, 1973, reads as follows: “256. Non-appearance or death of complainant. —

(1) If the summons has been issued on complaint, and on the day appointed for the appearance of the accused, or any day subsequent thereto to which the hearing may be adjourned, the complainant does not appear, the Magistrate shall, notwithstanding anything hereinbefore contained, acquit the accused, unless for some reason he thinks it proper to adjourn the hearing of the case to some other day: Provided that where the complainant is represented by a pleader or by the officer conducting the prosecution or where the Magistrate is of opinion that the personal attendance of the complainant is not necessary, the Magistrate may dispense with his attendance and proceed with the case.

(2) The provisions of sub-section (1) shall, so far as may be, apply also to cases where the non-appearance of the complainant is due to his death.”

From a bare reading of Section 256, it clearly transpires that Section 256, same as Section 247, comes into play after cognizance has been taken by the Magistrate and summons has already been issued to the accused. Hence, Section 256 does not apply to a case in which the complainant dies before cognizance is taken and the summons is issued.

A careful reading of Section 256, as it stands in the Code of Criminal Procedure, 1973, makes it clear that this Section deals with the consequences of the absence of the complainant on account of his death as well as on account of any other reason. However, before answering the question as to whether the death of the complainant will bring a complete end to the trial of an accused in a summons case and force the Magistrate to acquit; him and/or the question as to whether the Magistrate has the power to allow the deceased complainant to be substituted or represented by anyone it is of immense importance to not that it is sub-section (2) of Section 256, which makes provisions for application of the provisions of sub-section (1) of Section 256 to the cases of none-appearance of the complainant on account of his death. Hence, before entering into the discussion of the scope of sub-section (2) of Section 256 and as to what it really lays down it is imperative, for the purpose of better appreciation of the scope and ambit of Section 256, to consider as to what sub-section (1) of Section 256 and the proviso that Sub-section (1) of Section 256 has undergone in the Code of Criminal Procedure, 1973, from what Section 247 of the Code of Criminal Procedure, 1809 had envisaged.

What is to be ascertained is as to whether the death of the complainant will bring end to the trial of an accused in a summons case and force the Magistrate to acquit; him and/or the Magistrate indeed has the power to allow the deceased complainant to be substituted or represented by anyone? Section 256 (2), makes provisions for application of the provisions of sub-section (1) of Section 256 to the cases of none-appearance of the complainant on account of his death. In order to appreciate the scope and ambit of Section 256, it is to be noted that what changes sub-section (1) of Section 256 and the proviso that Sub-section (1) of Section 256 has undergone in the Code of Criminal Procedure, 1973, from what Section 247 of the Code of Criminal Procedure, 1809 had envisaged.

A composite reading of the provisions of Section 247 vis-a-vis Section 256, reveals that if the summons had been issued on complaint, and upon the day appointed for the appearance of the accused, or any day subsequent thereto, to which the hearing might have been adjourned, accused could be acquitted, unless, for some reason, he thought proper to adjourn the hearing of the case some other day.

However, while the provision to Section 247, as the same stood after the Amendment Act 26 of 1955, vested a discretion in the Magistrate to dispense with personal attendance of the complainant and proceed with the case if the Magistrate was of the opinion that the personal attendance of the complainant was not necessary the proviso to Section 250(1) has further widened the scope of the exercise of the proviso to Section 256(1) has now made possible for the Magistrate to dispense with the personal attendance of the complainant and proceed with the trial not only when, in the opinion of the Magistrate, the personal attendance of the complainant is not necessary, but also when the complainant is represented by a pleader or by an officer conducting the prosecution.

What emerges, therefore, is that initially, the proviso to Section 247, as it stood in Code of Criminal Procedure, 1809, vested in the Magistrate the discretion to dispense with the personal attendance of the complainant only when the complainant was a public servant and the Magistrate was of the opinion that the personal attendance of the public servant was not required. The proviso to Section 247, as amended in the year 1955, widened the, scope of this discretion of the Magistrate to dispense with the personal attendance of the complainant by laying down to the effect that the Magistrate can dispense with the personal attendance of the complainant irrespective of the fact as to whether the complainant was a public servant or not, the only limitation, however, being that the Magistrate had to form an opinion, before exercising such discretion, that in the facts and circumstances of the case, personal attendance of the complainant was not necessary. The proviso to Section 256(1) has further widened the discretion so vested in the Magistrate by making it clear that the Magistrate can dispense with the personal attendance of the complainant and proceed with the trial not only when the Magistrate is of the opinion that the personal attendance of the complainant is not necessary, but also when the complainant is represented by a pleader or by an officer conducting the prosecution.

Another question that may arise is this:    

Is there any difference between the summons triable case, wherein the complainant is represented by a pleader, and a summons triable case, wherein the complainant is represented by an officer conducting the prosecution?

Section 2(q) Cr. P.C. defines the word “pleader” when used with reference to any proceeding in any Court, means a person authorised by or under any law, for the time being in force, to practise in such     Court, and includes, any other person appointed with the permission of the Court to act in such proceeding.

A close reading of Section 2(q) Cr. P.C. shall reflect that the pleader means a person, who is authorised, by or under any law, to practise as an advocate and includes a person appointed with the permission of the Court to act in such proceeding. Section 24 read with Section 25 Cr. P.C. relates to appointment of Public Prosecutors, Addl. Public Prosecutors and Asstt. Public Prosecutors. Section 24 (1) makes it clear that the appointment of Public Prosecutors and Addl. Public Prosecutors is for conducting prosecution, appeal, etc. Section 25(1) makes it clear that the appointment of Assistant Public Prosecutors is “for conducting prosecution in the Court of Magistrates”. This apart, Section 301 Cr. P.C. shows that though any private person may instruct a pleader to prosecute any person in any Court, yet it is the Public Prosecutor or Assistant Public Prosecutor, who remains in charge of the case and responsible for conducting the prosecution, and the pleader, so instructed, by a private person, acts under the directions of the Prosecutor. Coupled with this, Section 301 Cr. P.C. shows that the Public Prosecutor or Assistant Public Prosecutor, in charge of a case, may appear and plead without any authority before the Court in which the trial or appeal is pending. Though, Section 302 Cr. P.C. empowers Magistrates to permit any person to conduct prosecution, the fact remains that if a person comes forward to conduct prosecution as a pleader appointed by the complainant, his appointment as a pleader must subsist on the day, when he is to be permitted to appear as a pleader of the complainant.

Thus, as per the scheme of the Code of Criminal Procedure, there is a difference between a pleader, appointed by a private person, and a person, who is appointed, in terms of Section 24 /25 Cr. P.C., as a Prosecutor by the State or the Central Government for conducting the prosecution in a given case. Keeping in mind that, if proviso to Section 256(1), is reverted to, it becomes abundantly clear that this proviso relates to both the contingencies, namely, when a complainant is represented by a pleader and also when a complainant is represented by an officer conducting the prosecution. The former indicates that the complainant, who lodged the complaint, is a private individual and is represented by his own advocate, the latter shows that the complaint has been lodged in terms of Section 190(1)(a) read with Clause (a) of the first proviso, to Section 200 of the Cr. P.C. and is conducted by an officer conducting prosecution.

What emanates from the above discussion, as a whole, is that initially, the proviso to Section 247, as it stood in Code of Criminal Procedure, 1809, vested in the Magistrate the discretion to dispense with the personal attendance of the complainant only when the complainant was a public servant and the Magistrate was of the opinion that the personal attendance of the public servant was not required. The proviso to Section 247, as amended in the year 1955, widened the, scope of this discretion of the Magistrate to dispense with the personal attendance of the complainant by laying down to the effect that the Magistrate can dispense with the personal attendance of the complainant irrespective of the fact as to whether the complainant was a public servant or not, the only limitation, however, being that the Magistrate had to form an opinion, before exercising such discretion, that in the facts and circumstances of the case, personal attendance of the complainant was not necessary. The proviso to Section 256(1) has further widened the discretion so vested in the Magistrate by making it clear that the Magistrate can dispense with the personal attendance of the complainant and proceed with the trial not only when the Magistrate is of the opinion that the personal attendance of the complainant is not necessary, but also when the complainant is represented by a pleader or by an officer conducting the prosecution.

Section 190 Cr. P.C. a Magistrate may take cognizance of any offence –

(a) upon receiving a complaint of facts, which constitute such offence,

(b) upon a police report of such facts,

(c) upon information received from any person other than a police officer or, upon his own knowledge, that such offence has been committed.

However, when the complaint has been lodged by a public servant acting or purporting to act in the discharge of his official duty, the Magistrate, taking cognizance of the offence on such a complaint, need not, in terms of Clause (a) of the first proviso to Section 200 Cr. P.C., examine the complainant and the witnesses, nor is there any necessity of holding, in terms of Section 202 Cr. P.C., an enquiry for the purpose of taking a decision as to whether process can be issued to the accused, provided, of course, that the Magistrate is, otherwise, satisfied that the contents of the complaint disclose commission of offence.

As per Sub-section (2) of Section 256, it merely states that the provisions of sub-section (1) of Section 256 shall, so far as may be, apply also to the case, where the non-appearance of the complainant is due to his death. The question, therefore, is as to how far the provisions of sub-section (1) of Section 256 and the proviso thereto can be applied to a case, where the complainant is absent on account of his death and how far sub-section (2) of Section 256 differ, in this regard from sub-section (1) of Section 256?

It is worth noticing that the expression “so far as may be”, occurring in sub-section (2) of Section 256, is of immense significance as the provisions of sub-section (1) of Section 256 including the proviso thereto, lay down the various conditions in which the absence of the complainant, on account of reasons other than his death, may not ipso facto result into acquittal of the accused, shall be applied, to the extent possible, even when the complainant's absence is on account of his death. In other words, the provisions of Section 256(1) and the proviso thereto do not apply, in their entirety, to a case, where the complainant, in a summons case, dies after the summons has been issued to the accused.

While considering the question as to how far sub-section (2) of Section 256 differs from Sub-section (1) of section 256, it is of utmost importance to note that one of the powers, which the proviso to sub-section (1) of Section 256 gives to the Magistrate is the power to dispense with the personal attendance of the complainant and proceed with the case if the complainant is represented by a pleader or by an officer conducting the prosecution?

The question, therefore, which, now, arises is this: If the absence of the complainant is on account of his death, can the Magistrate allow the summons case to proceed merely on the ground that the deceased complainant is represented by his pleader or by an officer conducting the prosecution? In order to correctly appreciate the question as to whether a pleader appointed by a complainant, in a summons triable case, can continue to represent the deceased complainant as the deceased complainant's pleader, one has to understand the nature of the relationship between a party and his pleader.

While considering the above aspect of the matter, it is of paramount importance to note that the appointment of a pleader by a person is contractual in nature. The appointment of a pleader by a party is essentially appointment of an attorney and the vakalatnama is nothing, but a power of attorney or an authority to represent the party concerned, who may even be a complainant in a criminal case whether the appointment of the pleader is in a criminal case or in a civil case is immaterial. Reference in this regard may be have to the decision in Ramdeo Trilokchand Agarwal v. Lalu Natha, 502 AIR 1937 Nagpur 65, wherein Mysore High Court, while dealing with vakalatnama, observed and held as follows:

“In Stroud's Judicial Dictionary, “power of attorney” is defined as: An authority, whereby one “is set in: the tune, stead or place of another” to act for him. In India, under the Stamp Act S. 2(21), a power of attorney, for the purposes of the Stamp Act, is defined in a way that excludes a vakalatnama, because it excludes a document, which carries a court-fee stamp, but that definition, for the purposes of the Stamp Act, in my opinion, makes it quite clear that if it were not for that definition, a vakalatnama being a power of attorney, would require not only a court fee stamp under the Court fees Act, but also a stamp under the Stamp Act and to avoid that double stamp, it was necessary in the Stamp Act to exclude the vakalatnama.”

The fact remains that the appointment of a pleader by a person is contractual in nature, and the fact that it is so recognised by Legislature is evident from a bare reading of Order 22, Rule 10A of the CPC, which lays down as follows:

“10A. Duty of a pleader to communicate to Court death of a party. —

Whenever a pleader appearing for a party to the suit comes to know of the death of that party, he shall inform the Court about it, and the Court shall thereupon give notice of such death to the other party, and for this purpose, the contract between a pleader and the deceased party shall be deemed to subsist.”

Thus, in a civil case, a pleader's appointment ends on the death of the person, who appointed him except to the extent as Order 22, Rule 10A of the Code of Civil Procedure specifically permits. Therefore, when the appellant dies during pendency of even a civil appeal, the power given by him to his pleader comes to an end and ceases to be in force. The only exception, however, is what Order 22, Rule 10A of the CPC provides for, namely, that the contract between the pleader and the deceased party “shall be deemed to subsist” only for the purpose of informing the Court that the party represented by him has died. Thus, the appointment of a pleader by a private person is nothing, but a kind of contract and this contract ends with the death of the ‘person’, who had appointed the pleader.

In criminal cases too, same as in the civil cases, the relationship of the complainant with his pleader as the client of the latter comes to an end on the death of the complainant. Hence, when the complainant dies, his pleader retains no authority and cannot, therefore, be allowed to continue to proceed with the complaint in the capacity of the pleader of the deceased complainant.

In Kushal Kumar Talukdar (Supra) it is held as under:

40. In short, a careful reading of sub-section (2) of Section 256 shows that when the complainant dies, the pleader, appointed by-the complainant, ceases to be pleader of the complainant and cannot be allowed to represent the complainant, whereas an officer conducting the prosecution of the case based on the complaint lodged by a public servant, continues as an officer conducting the prosecution, notwithstanding the death of the public servant as complainant can, therefore, be allowed to continue to conduct the prosecution.

41. In other words, after the summons in a complaint case has been issued, then, on the day appointed for the appearance of the accused or on any day subsequent thereto to which hearing may be adjourned, the complainant does not appear, on account of his death, the Magistrate cannot proceed with the case merely on the ground that the pleader appointed by the complainant is present to represent the complainant. However, if the complainant is represented by an officer conducting the prosecution or if the nature of the complaint is such that the personal appearance of the complainant is not necessary, the Magistrate may proceed with the case subject to what have been mentioned hereinabove.

42. Hence, when sub-section (2) of Section 256 is read, in the light of the proviso to Section 256(1), it becomes abundantly clear that even when the absence of the, complainant is due to his death, the Magistrate may still proceed with the case if the Magistrate is of the opinion that the personal attendance of the complainant is not necessary or when the complainant is represented by an officer conducting the prosecution. If the Magistrate dispenses with personal attendance of the deceased complainant on the ground that his presence is not necessary, the Magistrate may permit ‘any person’ to conduct the prosecution. I am guided to adopt this view from the decision in Ashwin Nanu Bhai Vyas v. State of Maharashtra, 1967 Cri. LJ 943 (SC).

The following inference in Kushal Kumar Talukdar (Supra) is worth noting:

“44. From what has been pointed out by the Apex Court in Ashwin Nanu Bhai Vyas (supra), it is clear that though there is no provision for substitution, Section 302(1), which has, now, replaced Section 495 Cr. P.C., empowers the Court to authorise the conduct of prosecution by any person and the word “any person” would include the son of the complainant in a case of present nature. The accused-opposite party herein, being the son of the complainant stands on the footing of “any person” as envisaged by Section 302(1) Cr. P.C. As correctly observed in Raviselvam v. Nilini Vijaya Kumar, reported in 1999 (4) Crimes 209, the endeavour must be to do justice and not to take advantage or technicalities. The urge to resort to easy way out must give way to judicial justness.

45. On an examination of all the relevant provisions of the Criminal Procedure Code, the proposition that criminal proceedings abate on the death of the complainant appears to be legally unfounded and unacceptable. Criminal proceedings, legally instituted, do not terminate or abate merely on the death of the complainant. The cause of action for civil action bears no analogy to complaints of crime. The object of Section 256 Cr. P.C. is succinctly explained by the Apex Court in Associated Cement Co. Ltd. v. Keshvanand, reported in 1998 Cri. LJ 856 (SC), in the following words:

“17. What was the purpose of including a provision like Section 247 in the old Code (or S. 256 in the new Code). It affords some deterrence against dilatory tactics on the part of a complainant who set the law in motion through his complaint. An accused who is per force to attend the Court on all posting days can be put to much harassment by a complainant if he does not turn up to the Court on occasions when his presence is necessary. The Section, therefore, affords a protection to an accused against such tactics of the complainant. But that does not mean if the complainant is absent. Court has a duty to acquit the accused in invitum.

18. Reading the Section in its entirety would reveal that two constraints are imposed on the Court for exercising the power under the Section. First is, if the Court thinks that in a situation it is proper to adjourn the hearing then the Magistrate shall not acquit the accused. Second is, when the Magistrate considers that personal attendance of the complainant is not necessary on that day, the Magistrate has the power to dispense with his attendance and proceed with the case. When the Court notices that the complainant is absent on a particular day, the Court must consider whether personal attendance of the complainant is essential on that day for the progress of the case and also whether the situation does not justify the case being adjourned to another date due to any other reason. If the situation does not justify the case being adjourned, the Court is free to dismiss the complaint and acquit, the accused. But if the presence of the complainant on that day was quite unnecessary, then, resorting to the step of axing down the complaint may not be a proper exercise of the power envisaged in the section. The discretion must, therefore, be exercised judicially and fairly without impairing the cause of administration of criminal justice.”

The Delhi High Court in Om Saran v. Mrs. Satya Dhawan, reported in 1990 Cri. L.J. 1619, has laid down that the Legislature has vested a discretion in the Magistrate to decide, keeping in view the facts of each case, as to whether, on non-appearance of the complainant or on the death of the complainant in a summons case, the accused, should be acquitted or not and if he, for good reasons, thinks it proper, the Magistrate can proceed with the complaint, and adjourn the matter in the absence of the complainant or when the complainant has died.

The Gauhati High Court in Kushal Kumar Talukdar (Supra) has noted that it was glaring to the eyes that the complaint relates to the prosecution of the accused-petitioner for the offence allegedly committed by the accused-petitioner under Section 138 read with Section 142 of the N.I. Act. 51. The allegation is that the cheque issued by the accused, when presented for encashment, was returned with an endorsement “Payment stopped by the drawer”. The complainant, then, sent a notice to the accused-petitioner demanding payment of the amount for which the cheque in question, was drawn but despite receiving the notice/no payment was made by the accused-petitioner. The allegations so made, which may or may not be true, disclose commission of offence by the accused-petitioner under Section 138 read with Section 142 of the N.I. Act. In fact, the fact that the contents of the complainant disclose commission of the offence aforementioned is not, at this stage, in dispute. The important and necessary ingredients to be proved are the issuance of cheque, dishonour of the cheque, issuance of legal notice by the complainant demanding payment to the accused after the cheques had bounced. These are facts, which can be considered and proved in the absence of the complainant. Whether stopping of payment of cheque by a drawer amounts to dishonour of cheque or not within the meaning of Section 138 of the N.I. Act is a question as to whether the contents of the complaint, in question, when, read as a whole, amount to commission of offences under Section 138 of the NI Act. The complainant, who was dead, is, now, represented by the applicant and the applicant is the son of the deceased. In such a situation, there is no reason why the complaint case, in question, cannot be allowed to proceed. Viewed from this angle, the exercise of the discretion by the learned Magistrate to allow the opposite party therein (who is the son of the deceased complainant) to represent the complainant is based on sound judicial principles and is unimpeachable in law.

The Gujarat High Court in Anil G. Shah v. J. Chattaranjan Co., 1998 GLJ 3870 (Guj.) has laid down that in a case under Section 138 of the N.I. Act, where the complainant dies after taking of cognizance, the proceedings do not abate and trial has to be taken to its logical end following due process and the procedure laid down in Criminal Procedure Code. It has also been held that there is no provision in the Code of Criminal Procedure or the N.I. Act laying down that on account of death of payee, the trial must abate and as such, the proceedings cannot abate on the death of the complainant payee. Therefore, the legal heirs of the original complainant are entitled to come forward and ask for allowing them to represent the complainant so as to enable the Court to proceed further with the trial.

The Kerala High Court has held so in T.N. Jayarajan  Vs Jayarajan 1993 (1) ALT(CRI)147 (supra), The Jammu and Kashmir High Court in Ashok Kumar v. Abdul Latif, 1989 Cri. LJ 1856 (J & K). and Andhra Pradesh High Court in Maddipatta Govindiah Naidu v. Yelaklauri Kamalamma, 1984 Cri. LJ 1326 (AP) has also held in similar line.

The aforesaid discussion clearly reflects that in case of a complainant dies after cognisance of the complaint u/s 138 of Negotiable Instruments Act and if the legal heirs of deceased come forward to prosecute ethe complaint, there is no embargo in prosecuting the complaint. It is worthwhile to state that offence under section 138 of Negotiable Instruments Act is documentary in nature and after cognisance is taken and as section 139 of Negotiable Instruments Act entails presumption in favour of the complainant and still further, the complaint could still be prosecuted in absence of the complainant, in the above backdrop, hence, substitution of the complainant could be allowed as is held in Kushal Kumar Talukdar (Supra).    It may be noted that the complaint u/s 138 of NI Act is not in the nature of assault etc that only the complainant will be privy of and probably for want of direct evidence, the conclusion cannot be arrived at, in case the complainant is deceased. What therefore follows is that there is no prohibition in continuing with the prosecution on behalf of the deceased complainant by their legal heirs and a Magistrate can substitute the complainant in the perspective as referred to above. No doubt, the discretion vested in the Magistrate has to be exercised on the facts and circumstances of the case of each case.

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                                      Anil K Khaware

                                      Founder & Senior Associate

Societylawandjustoice.com

                  

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