Delhi High Court issues instructions to magistrates in accordance with Supreme Court order suggesting changes to the article. 138 Negotiable Instruments Act

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The Delhi High Court has issued Practice Directions to Magistrates and Courts of First Instance having jurisdiction to try offenses under the Tradable Instruments Act in accordance with directions issued by the Supreme Court (In Re Expeditious Trial Of Cases Under Section 138 of NI Act) regarding the Trial of Check Bounce Cases

Practice directions of June 21, 2021, which came into force immediately, stated that magistrates with jurisdiction to try offenses under the Negotiable Instruments Act, 1881 “Registers convincing and sufficient reasons” before converting a complaint under sec. 138 of the NI Act from summary trial to trial by summons in the exercise of power under the second provision of s. 143 of the NIAct.

“The necessary prudence and prudence must be exercised in this regard and the conversion of the summary trial to a subpoena trial must not be done mechanically.” It said.

A bench of the Constitution of the Supreme Court issued in April this year a series of instructions to expedite the trial of cases of refusal to honor checks under section 138 of the Negotiable Instruments Act. The Court had asked the High Courts to give practical instructions to the magistrates so that they record the reasons before converting the trial of the complaints under article 138 of the law of the summary trial to the trial on summons.

In addition, it was ordered that upon receipt of such a complaint under Sec. 138 of the NI law, each time it is found that an accused resides in the area beyond the territorial jurisdiction of the magistrate concerned, an investigation is carried out by the magistrate “To arrive at sufficient grounds to prosecute the accused in accordance with article 202Cr.PC”

In addition he said:

“When conducting such an investigation under Article 202 Cr.PC, the testimony of witnesses on behalf of the complainant shall be taken on affidavit. In appropriate cases, the magistrate may restrict the investigation to the examination of documents to the satisfaction of the sufficiency of the grounds for prosecution under said provision.

The other instructions issued are as follows:

– The court of first instance will treat the service of a summons in a complaint under section 138 of the NI Act that is part of a settlement, as deemed service with respect to all

complaints were lodged with the same court for refusal to honor checks issued in the same transaction.

– Courts of first instance have no inherent power to review or recall the issuance of a subpoena in connection with a complaint filed under section 138 of the NI Act. However, this will not affect the power of the court of first instance under Article 322 of the Cr.PC to review the order of issuance of the process in the event that it is brought to the attention of the court that it is not was not competent to adjudicate the complaint.

– Article 258 of the Cr.PC is not applicable to complaints under article 138 of the NIAct. The words “to the extent possible” in section 143 are used only with regard to the applicability of sections 262 to 265 of the Code and the summary procedure to be followed for trials under said Code.

– The courts of appeal to which appeals against judgments complained of under section 138 of the NI Act are pending are bound to endeavor to settle the dispute through mediation.

Click here to read practice instructions


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