A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint -- Account closed – Payment stopped – Referred to drawer -- Signature do not match – Image is not found -- Expression “amount of money …………. is insufficient” appearing in Section 138 of the Act is a genus and dishonour for reasons such “as account closed”, “payment stopped”, “referred to the drawer” are only species of that genus – Dishonour on the ground that the “signatures do not match” or that the “image is not found”, which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act.

-- Question whether or not there was a lawfully recoverable debt or liability for discharge whereof the cheque was issued would be a matter that the trial Court will examine having regard to the evidence adduced before it and keeping in view the statutory presumption that unless rebutted the cheque is presumed to have been issued for a valid consideration.

(Para 15)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint – Payment Stopped -- Dishonour on the ground that the payment has been stopped, regardless whether such stoppage is with or without notice to the drawer, and regardless whether the stoppage of payment is on the ground that the amount lying in the account was not sufficient to meet the requirement of the cheque, would attract the provisions of Section 138.

(Para 16)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque bounce complaint -- Fraud – Allegations of fraud and the like are matters that cannot be investigated by a Court under Section 482 Cr.P.C. and shall have to be left to be determined at the trial after the evidence is adduced by the parties.

(Para 17)

A. Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Inherent power of High Court – Nature of – quando lex aliquid alicui concedit, conceditur et id sine qua res ipsa esse non potest -- Ex debito justitiae -- Power is not to be resorted to if there is specific provision in the Code for the redress of the grievance of an aggrieved party -- It should be exercised very sparingly and it should not be exercised as against the express bar of law engrafted in any other provision of the Code -- In the very nature of its constitution, it is the judicial obligation of the High Court to undo a wrong in course of administration of justice or to prevent continuation of unnecessary judicial process -- This is founded on the legal maxim quando lex aliquid alicui concedit, conceditur et id sine qua res ipsa esse non potest -- Full import of which is whenever anything is authorised, and especially if, as a matter of duty, required to be done by law, it is found impossible to do that thing unless something else not authorised in express terms be also done, may also be done, then that something else will be supplied by necessary intendment -- Ex debito justitiae is inbuilt in such exercise; the whole idea is to do real, complete and substantial justice for which it exists -- Power possessed by the High Court u/s 482 of the Code is of wide amplitude but requires exercise with great caution and circumspection.

(Para 49-51)

B. Code of Criminal Procedure, 1973 (2 of 1974), Section 320, 482 -- Compounding of offence -- Compromise quashing of FIR / Complaint – Inherent jurisdiction of High Court -- Power of the High Court in quashing a criminal proceeding or FIR or complaint in exercise of its inherent jurisdiction is distinct and different from the power given to a criminal court for compounding the offences under Section 320 of the Code -- Inherent power is of wide plenitude with no statutory limitation but it has to be exercised in accord with the guideline engrafted in such power viz;

(i)      to secure the ends of justice or

(ii)     to prevent abuse of the process of any Court.

High Court must consider whether it would be unfair or contrary to the interest of justice to continue with the criminal proceeding or continuation of the criminal proceeding would tantamount to abuse of process of law despite settlement and compromise between the victim and wrongdoer and whether to secure the ends of justice, it is appropriate that criminal case is put to an end and if the answer to the above question(s) is in affirmative, the High Court shall be well within its jurisdiction to quash the criminal proceeding.

(Para 57)

C. Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Prevention of Corruption Act, 1988 (49 of 1988) -- Corruption matters -- Compromise quashing of FIR/ Complaint – Inherent jurisdiction of High Court -- Compromise between the victim and offender in relation to the offences under special statutes like Prevention of Corruption Act or the offences committed by public servants while working in that capacity etc; cannot provide for any basis for quashing criminal proceedings involving such offences.

(Para 57)

D. Code of Criminal Procedure, 1973 (2 of 1974), Section 320, 482 -- Indian Penal Code, 1860 (45 of 1860), Section 302, 376, 395, 406, 420, 498-A, 506 etc. -- Compromise quashing of FIR /Complaint – Inherent jurisdiction of High Court -- Power to quash the criminal proceeding or complaint or F.I.R may be exercised where the offender and victim have settled their dispute would depend on the facts and circumstances of each case and no category can be prescribed -- High Court must have due regard to the nature and gravity of the crime

--      Heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc. cannot be fittingly quashed even though the victim or victim’s family and the offender have settled the dispute. Such offences are not private in nature and have serious impact on society.

--      Offences arising from commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc. or the family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire dispute. In this category of cases, High Court may quash criminal proceedings if in its view, because of the compromise between the offender and victim, the possibility of conviction is remote and bleak and continuation of criminal case would put accused to great oppression and prejudice and extreme injustice would be caused to him by not quashing the criminal case despite full and complete settlement and compromise with the victim.

(Para 57)

A. Indian Penal Code, 1860 (45 of 1860), Section 107, 306 – Abetment to suicide – mens rea -- Abetment involves a mental process of instigating a person or intentionally aiding a person in doing of a thing -- Without a positive act on the part of the accused to instigate or aid in committing suicide, conviction cannot be sustained -- In order to convict a person u/s 306 IPC there has to be a clear mens rea to commit the offence -- It also requires an active act or direct act which led the deceased to commit suicide seeing no option and this act must have been intended to push the deceased into such a position that he/she committed suicide.

(Para 45, 46)

B. Indian Penal Code, 1860 (45 of 1860), Section 107, 306 – Code of Criminal Procedure, 1973 (2 of 1974), Section 482 – Quashing of criminal proceedings -- Inherent jurisdiction of High Court -- Abetment to suicide – What to talk of instances of instigation, there are even no allegations against the appellants -- No proximate link between the incident of 14.1.2005 when the deceased was denied permission to use the Qualis car with the factum of suicide which had taken place on 18.1.2005 – Deceased was hyper-sensitive to ordinary petulance, discord and differences which happen in our day-to-day life – In a joint family, instances of this kind are not very uncommon -- Different people behave differently in the same situation -- High Court was not justified in rejecting the petition filed by the appellants u/s 482 of the Cr.P.C. for quashing the charges u/s 306 I.P.C. against them -- High Court ought to have quashed the proceedings so that the appellants who were not remotely connected with the offence u/s 306 I.P.C. should not have been compelled to face the rigmaroles of a criminal trial -- As a result, the charges u/s 306 I.P.C. against the appellants quashed.

(Para 47-72)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Indian Penal Code, 1860 (45 of 1860), Section 420 -- Constitution of India, Article 20(1) -- Code of Criminal Procedure, 1973 (2 of 1974), Section 300(1) -- Double jeopardy – Conviction u/s 138 of NI Act – Trial and punishment under Section 420 IPC – Permissibility of – Section 300(1) of Cr.P.C. is wider than Article 20(2) of the Constitution -- While, Article 20(2) of the Constitution only states that 'no one can be prosecuted and punished for the same offence more than once' -- Section 300(1) of Cr.P.C. states that no one can be tried and convicted for the same offence or even for a different offence but on the same facts – Held in the case although the offences are different but the facts are the same -- Hence, Section 300(1) of Cr.P.C. applies -- Consequently, the prosecution u/s 420, IPC was barred by Section 300(1) of Cr.P.C.

(Para 7, 8)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 145 – Code of Criminal Procedure, 1973 (2 of 1974), Section 200 -- Cheque bounce complaint – Cognizance by Magistrate – Evidence of complainant – Affidavit of complainant in evidence -- For the purpose of issuing process u/s 200 of the Cr. P.C., it is open to the Magistrate to rely upon the verification in the form of affidavit filed by the complainant in support of the complaint u/s 138 of the NI Act, 1881 and the Magistrate is not obliged to call upon the complainant to remain present before the Court, nor to examine the complainant or his witnesses upon oath for taking the decision whether or not to issue process on the complaint under Section 138 of the Negotiable Instruments Act, 1881.

-- It is only if and where the Magistrate, after considering the complaint under Section 138 of the Negotiable Instruments Act, 1881 and the documents produced in support thereof and the verification in the form of affidavit of the complainant, is of the view that examination of the complainant or his witness is required, that the Magistrate may call upon the complainant to remain present before the Court and examine the complainant and/or his witness upon oath for taking decision whether or not to issue process on the complaint under Section 138 of the Negotiable Instruments Act, 1881.

(Para 59)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 145 – Code of Criminal Procedure, 1973 (2 of 1974), Section 200 -- Cheque bounce complaint – Cognizance by Magistrate – Evidence of complainant -- Affidavit of complainant in evidence -- Nothing wrong with filing the affidavit in support of the complaint in a format indicating all the essential facts satisfying the ingredients of Section 138 of the NI Act, 1881 for the purpose of enabling the Magistrate to decide whether or not to issue process on the complaint u/s 138 of the NI Act, 1881.

(Para 59)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 143, 145 -- Affidavit of complainant in evidence – Absence of accused -- Section 145 allows for the evidence of the complainant to be given on affidavit, that is, in the absence of the accused -- Accused, however, is fully protected, as under sub-section (2) of section 145 he has the absolute and unqualified right to have the complainant and any or all of his witnesses summoned for cross-examination.

(Para 16)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 143, 144, 145, 146, 147 – Object of Amendment Act, 2002 -- Sections 143 to 147 were inserted in the Act by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 to do away with all the stages and processes in a regular criminal trial that normally cause inordinate delay in its conclusion and to make the trial procedure as expeditious as possible without in any way compromising on the right of the accused for a fair trial.

(Para 17)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 143, 145, 147 -- Indian Evidence Act, 1872 (1 of 1872), Section 137 – Affidavit of complainant in evidence – Examination-in-chief – Requirement of -- Whether it is also open to the accused to insist that before cross-examining him as to the facts stated in the affidavit he must first depose in examination-in-chief and be required to verbally state what is already said in the affidavit ? – Nothing in section 145(2) to suggest that -- Deponent of the affidavit (the complainant or any of his witnesses) can only be subjected to cross-examination as to the facts stated in the affidavit -- Prosecution may also have to summon a witness whose evidence is given on affidavit in case objection is raised by the defence regarding the validity and/or sufficiency of proof of some document(s) submitted along with the affidavit.

(Para 21, 22)

D. Negotiable Instruments Act, 1881 (26 of 1881). Section 143, 145(1) -- Affidavit of accused in evidence – Permissibility of -- High Court held that subject to the provisions of sections 315 and 316 of the Code of Criminal Procedure the accused can also give his evidence on affidavit – Held, High Court overreached itself and took a course that amounts to taking over the legislative functions.

-- On a bare reading of section 143 it is clear that the legislature provided for the complainant to give his evidence on affidavit and did not provide for the accused to similarly do so. But the High Court thought that not mentioning the accused along with the complainant in sub-section (1) of section 145 was merely an omission by the legislature that it could fill up without difficulty. Even though the legislature in their wisdom did not deem it proper to incorporate the word ‘accused’ with the word ‘complainant’ in section 145(1), it did not mean that the Magistrate could not allow the accused to give his evidence on affidavit by applying the same analogy unless there was a just and reasonable ground to refuse such permission.

High Court was in error in taking the view, that on a request made by the accused the magistrate may allow him to tender his evidence on affidavit.

(Para 30-32)

A. Indian Evidence Act, 1872 (1 of 1872), Section 4 -- May presume – Shall Presume – Section 4 of Evidence Act inter-alia defines the words ‘may presume’ and ‘shall presume as follows:-

“(a) ‘may presume’ – Whenever it is provided by this Act that the Court may presume a fact, it may either regard such fact as proved, unless and until it is disproved or may call for proof of it.

(b) ‘shall presume’ – Whenever it is directed by this Act that the Court shall presume a fact, it shall regard such fact as proved, unless and until it is disproved.”

In the former case the Court has an option to raise the presumption or not, but in the latter case, the Court must necessarily raise the presumption. If in a case the Court has an option to raise the presumption and raises the presumption, the distinction between the two categories of presumptions ceases and the fact is presumed, unless and until it is disproved.

(Para 9)

B. Negotiable Instruments Act (26 of 1881), Section 118, 139 – Indian Evidence Act, 1872 (1 of 1872), Section 3 – Cheque against consideration -- Legally enforceable debt or liability – Presumption -- Rebuttal – In a trial u/s 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted -- As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused -- Presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability -- A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.

(Para 10)

C. Negotiable Instruments Act (26 of 1881), Section 118, 138, 139 – Indian Evidence Act, 1872 (1 of 1872), Section 4 – Cheque against consideration -- Legally enforceable debt or liability – Presumption -- Rebuttal – Phrase “until the contrary is proved” read with definitions of “may presume” and “shall presume” as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable.

(Para 11)

D. Negotiable Instruments Act (26 of 1881), Section 118, 138, 139 – Indian Evidence Act, 1872 (1 of 1872), Section 4, 114 – Rebuttal of presumption – Accused in a trial u/s 138 of the Act has two options – He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed – To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial – Court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated – At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused – Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant.

-- To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist.

-- Accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant – Accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act.

-- Accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial.

Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant’s rescue.

(Para 11)

E. Negotiable Instruments Act (26 of 1881), Section 138 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 378(4), 386 -- Acquittal by trial court – Conviction in appeal by High Court – Sentence to accused -- High Court, after convicting the appellant u/s 138 of the Act, remitted the matter to the learned Magistrate for passing appropriate order of sentence – Held, this course, is unknown to law -- Powers of the Appellate Court, in an appeal from an order of acquittal, are enumerated in Section 386(a) of the Code of Criminal Procedure, 1973 -- Powers do not contemplate that an Appellate Court, after recording conviction, can remit the matter to the trial court for passing appropriate order of sentence -- Judicial function of imposing appropriate sentence can be performed only by the Appellate Court when it reverses the order of acquittal and not by any other court -- Procedure adopted by the High Court not approved.

(Para 13)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce complaint -- Cause of action – Third demand notice -- First notice having not been served and the second notice having been withdrawn in terms of the reply of appellants/ accused, the complainant cannot be said to have committed any illegality in presenting the cheque for the third time and issuing the third notice upon the defaulter -- Issuance of a valid notice calling upon the drawer of the cheque to pay the amount in question and the appellants' failure to pay to the complainant the amount in question within a period of 15 days from the date of receipt of a copy of the said notice upon them, a cause of action arose for filing a complaint petition – Held, cause of action for filing a complaint arose only once and not more than once.

(Para 33)

Indian Penal Code, 1860 (45 of 1860), Section 379,406,409,418,506,34 –  Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Business related disputes – Compromise quashing of FIR – Dispute arose out of extensive business dealings between the parties -- Absolutely no public policy involved in the nature of the allegations made – Held, where the question involved is of a purely personal nature, the Court should ordinarily accept the terms of the compromise even in criminal proceedings – Keeping the matter alive with no possibility of a result in favour of the prosecution is a luxury which the Courts, grossly overburdened as they are, cannot afford and that the time so saved can be utilized in deciding more effective and meaningful litigation – FIR u/s 379,406,409,418,506/34 IPC and all proceedings therewith quashed.

(Para 2-5)

A. Code of Criminal Procedure, 1973 (2 of 1974), Section 320, 482 – Non-compoundable offence -- Compromise between parties – Inherent power of High Court -- There can never be any hard and fast category which can be prescribed to enable the Court to exercise its power u/s 482 of the Cr.P.C. -- Only principle that can be laid down is the one which has been incorporated in the Section itself, i.e., "to prevent abuse of the process of any Court" or "to secure the ends of justice". Further held:

-- Power to do complete justice is the very essence of every judicial justice dispensation system.

-- No embargo, be in the shape of Section 320(9) of the Cr.P.C., or any other such curtailment, can whittle down the power under Section 482 of the Cr.P.C.

-- Compromise, in a modern society, is the sine qua non of harmony and orderly behaviour. It is the soul of justice and if the power u/s 482 of the Cr.P.C. is used to enhance such a compromise which, in turn, enhances the social amity and reduces friction, then it truly is "finest hour of justice".

-- Disputes which have their genesis in a matrimonial discord, landlord-tenant matters, commercial transactions and other such matters can safely be dealt with by the Court by exercising its powers under Section 482 of the Cr.P.C. in the event of a compromise, but this is not to say that the power is limited to such cases.

-- There can never be any such rigid rule to prescribe the exercise of such power, especially in the absence of any premonitions to forecast and predict eventualities which the cause of justice may throw up during the course of a litigation.

Only inevitable conclusion is that there is no statutory bar under the Cr.P.C. which can affect the inherent power of this Court u/s 482. Further, the same cannot be limited to matrimonial cases alone and the Court has the wide power to quash the proceedings even in non-compoundable offences notwithstanding the bar under Section 320 of the Cr.P.C., in order to prevent the abuse of law and to secure the ends of justice.

(Para 28-33)

B. Code of Criminal Procedure, 1973 (2 of 1974), Section 320, 482 – Section 482 – Ex-Debitia Justitia -- Non-compoundable offence -- Compromise between parties – Inherent power of High Court -- Power u/s 482 of the Cr.P.C. is to be exercised Ex-Debitia Justitia to prevent an abuse of process of Court:

-- There can neither be an exhaustive list nor the defined para-meters to enable a High Court to invoke or exercise its inherent powers. It will always depend upon the facts and circumstances of each case.

-- Power u/s 482 of the Cr.P.C. has no limits. However, the High Court will exercise it sparingly and with utmost care and caution. Exercise of power has to be with circumspection and restraint.

-- Court is a vital and an extra-ordinary effective instrument to maintain and control social order. Courts play role of paramount importance in achieving peace, harmony and ever-lasting congeniality in society. Resolution of a dispute by way of a compromise between two warring groups, therefore, should attract the immediate and prompt attention of a Court which should endeavour to give full effect to the same unless such compromise is abhorrent to lawful composition of the society or would promote savagery.

(Para 34)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- Demand Notice for payment – Mandatory in nature -- Object of – Object of the proviso is to avoid unnecessary hardship to an honest drawer -- Giving a notice to the drawer before filing complaint u/s 138 of the Act is a mandatory requirement.

(Para 6)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Indian Evidence Act, 1872 (1 of 1872), Section 114 -- Demand Notice for payment – Serviced of notice -- Presumption of – Cause of action -- Where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the G.C. Act would be attracted -- Requirement of Clause (b) of proviso to Section 138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in Clause (c) of the said proviso for payment by the drawer of the cheque -- Nevertheless, it would be without prejudice to the right of the drawer to show that he had no knowledge that the notice was brought to his address.

(Para 10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Indian Evidence Act, 1872 (1 of 1872), Section 114 – Demand Notice for payment – Service of notice – Presumption of -- Pleadings – Requirement of -- Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post – It is not necessary to aver in the complaint u/s 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved -- Complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque.

(Para 14, 15)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Indian Evidence Act, 1872 (1 of 1872), Section 114 -- Demand Notice for payment – Service of notice – Presumption of – Rebuttal of -- At the time of taking cognizance of the complaint u/s 138 of the Act, the Court is required to be prima facie satisfied that a case under the said Section is made out and the mandatory statutory procedural requirements have been complied with -- It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect.

(Para 15)

E. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 -- General Clauses Act, 1897 (10 of 1897), Section 27 -- Indian Evidence Act, 1872 (1 of 1872), Section 114 -- Demand Notice for payment – Service of notice – Presumption of – Rebuttal of – Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint u/s 138 of the Act, make payment of the cheque amount and submit to the Court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected -- A person who does not pay within 15 days of receipt of the summons from the Court along with the copy of the complaint u/s 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the G.C. Act and Section 114 of the Evidence Act.

(Para 17)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 – Cheque by company -- Incharge and responsible for conduct of business company – Pleadings as to role -- It is necessary to specifically aver in a complaint u/s 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company -- This averment is an essential requirement, without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.

(Para 1(a), 16(a))

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Cheque by company -- Director of company – Merely being a director of a company is not sufficient to make the person liable u/s 141 of the Act -- The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time -- This has to be averred as a fact as there is no deemed liability of a director in such cases.

(Para 1(b), 16(b))

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Cheque by company -- Managing Director of company -- Joint Managing Director of company – Signatory of cheque -- By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company -- Therefore, they get covered u/s 141 -- So far as signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141.

(Para 1(c), 16(c))

A. Indian Penal Code, 1860 (45 of 1860), Section 304-A – Negligence – Tort – Medical Negligence -- Criminal liability -- Negligence is the breach of a duty caused by omission to do something which a reasonable man guided by those considerations which ordinarily regulate the conduct of human affairs would do, or doing something which a prudent and reasonable man would not do – Negligence becomes actionable on account of injury resulting from the act or omission amounting to negligence attributable to the person sued – Essential components of negligence are three: ’duty’, ’breach’ and ’resulting damage’.

--       Negligence in the context of medical profession necessarily calls for a treatment with a difference. To infer rashness or negligence on the part of a professional, in particular a doctor, additional considerations apply. A case of occupational negligence is different from one of professional negligence.

--       A simple lack of care, an error of judgment or an accident, is not proof of negligence on the part of a medical professional.

--       So long as a doctor follows a practice acceptable to the medical profession of that day, he cannot be held liable for negligence merely because a better alternative course or method of treatment was also available or simply because a more skilled doctor would not have chosen to follow or resort to that practice or procedure which the accused followed.

--       When it comes to the failure of taking precautions what has to be seen is whether those precautions were taken which the ordinary experience of men has found to be sufficient; a failure to use special or extraordinary precautions which might have prevented the particular happening cannot be the standard for judging the alleged negligence.

--       Standard of care, while assessing the practice as adopted, is judged in the light of knowledge available at the time of the incident, and not at the date of trial.

--       When the charge of negligence arises out of failure to use some particular equipment, the charge would fail if the equipment was not generally available at that particular time (that is, the time of the incident) at which it is suggested it should have been used.

(Para 51 (1)(2))

B. Indian Penal Code, 1860 (45 of 1860), Section 304-A – Medical negligence – Tort – Criminal liability -- A professional may be held liable for negligence on one of the two findings: either he was not possessed of the requisite skill which he professed to have possessed, or, he did not exercise, with reasonable competence in the given case, the skill which he did possess -- Standard to be applied for judging, whether the person charged has been negligent or not, would be that of an ordinary competent person exercising ordinary skill in that profession -- It is not possible for every professional to possess the highest level of expertise or skills in that branch which he practices -- A highly skilled professional may be possessed of better qualities, but that cannot be made the basis or the yardstick for judging the performance of the professional proceeded against on indictment of negligence -- Test for determining medical negligence as laid down in Bolam’s case [1957] 1 W.L.R. 582, 586 holds good in its applicability in India.

(Para 51 (3)(4))

C. Indian Penal Code, 1860 (45 of 1860), Section 304-A – Medical negligence – Tort – Criminal liability – Mens-rea -- Res ipsa loquitur  -- Jurisprudential concept of negligence differs in civil and criminal law -- What may be negligence in civil law may not necessarily be negligence in criminal law -- For negligence to amount to an offence, the element of mens rea must be shown to exist -- For an act to amount to criminal negligence, the degree of negligence should be much higher i.e. gross or of a very high degree -- Negligence which is neither gross nor of a higher degree may provide a ground for action in civil law but cannot form the basis for prosecution.

--       The word ’gross’ has not been used in Section 304A of IPC, yet it is settled that in criminal law negligence or recklessness, to be so held, must be of such a high degree as to be ’gross’. The expression ’rash or negligent act’ as occurring in Section 304A of the IPC has to be read as qualified by the word ’grossly’.

--       To prosecute a medical professional for negligence under criminal law it must be shown that the accused did something or failed to do something which in the given facts and circumstances no medical professional in his ordinary senses and prudence would have done or failed to do. The hazard taken by the accused doctor should be of such a nature that the injury which resulted was most likely imminent.

--       Res ipsa loquitur is only a rule of evidence and operates in the domain of civil law specially in cases of torts and helps in determining the onus of proof in actions relating to negligence. It cannot be pressed in service for determining per se the liability for negligence within the domain of criminal law. Res ipsa loquitur has, if at all, a limited application in trial on a charge of criminal negligence.

(Para 51 (5-8))

D. Indian Penal Code, 1860 (45 of 1860), Section 304-A – Code of Criminal Procedure, 1973 (2 of 1974), Section 154,156,190 -- Medical negligence – Tort – Criminal liability -- Guidelines - re: prosecuting medical professionals -- Statutory Rules or Executive Instructions incorporating certain guidelines need to be framed and issued by the Government of India and/or the State Governments in consultation with the Medical Council of India -- So long as it is not done, Court propose to lay down certain Guidelines for the future which should govern the prosecution of doctors for offences of which criminal rashness or criminal negligence is an ingredient :

--       A private complaint may not be entertained unless the complainant has produced prima facie evidence before the Court in the form of a credible opinion given by another competent doctor to support the charge of rashness or negligence on the part of the accused doctor.

--       Investigating officer should, before proceeding against the doctor accused of rash or negligent act or omission, obtain an independent and competent medical opinion preferably from a doctor in government service qualified in that branch of medical practice who can normally be expected to give an impartial and unbiased opinion applying Bolam’s test to the facts collected in the investigation.

--       A doctor accused of rashness or negligence, may not be arrested in a routine manner (simply because a charge has been levelled against him). Unless his arrest is necessary for furthering the investigation or for collecting evidence or unless the investigation officer feels satisfied that the doctor proceeded against would not make himself available to face the prosecution unless arrested, the arrest may be withheld.

(Para 55)

E. Indian Penal Code, 1860 (45 of 1860), Section 304-A, 34 – Medical negligence – Tort – Criminal liability -- Criminal rashness or negligence -- It is not the case of the complainant that the accused-appellant was not a doctor qualified to treat the patient whom he agreed to treat -- It is a case of non-availability of oxygen cylinder either because of the hospital having failed to keep available a gas cylinder or because of the gas cylinder being found empty -- Then, probably the hospital may be liable in civil law but the accused appellant cannot be proceeded against under Section 304A IPC on the parameters of Bolam’s test -- Prosecution of the accused appellant under Section 304A/34 IPC is quashed.

(Para 56, 57)

Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 204, 239, 252, 482 -- Cheque bounce case – Cognizance by Magistrate -- Summoning of acused – Interlocutory order – Discharge/ Recalling application – Remedy of -- Once the plea of the accused is recorded u/s 252 of the Code the procedure contemplated under Chapter XX (Cr.P.C.) has to be followed which is to take the trial to its logical conclusion -- Only remedy available to an aggrieved accused to challenge an order in an interlocutory stage is the extraordinary remedy u/s 482 of the Code and not by way of an application to recall the summons or to seek discharge which is not contemplated in the trial of a summons case.

(Para 16, 17)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 6, 8, 9, 17, 85A, 138 -- Pay Order – Holder in due course -- Dishonour of pay order – Maintainability of cheque bounce complaint -- Complainant-bank was well within its right to possess the cheque and to receive or recover the amount covered by the instrument -- High Court quashed the complaint on the ground that Pay order is not cheque -- Supreme Court dissented – Appeal allowed, impugned judgment, set aside -- Trial to proceed.

(Para 2, 18, 21)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 6, 85A, 131A – Draft – Pay order – Cheque -- Section 85A deals with drafts drawn by one branch of a bank on another branch of the same bank -- Such draft is a negotiable instrument -- Section 131A makes all the provisions for crossing of cheques applicable to the drafts also.

(Para 9, 10)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 8, 9, 50, 85A, 118(g) -- Pay order – Holder in due course – Endorsement – Presumption – High Court took the view that complainant was not a holder in due course in the absence of an endorsement made on the instrument in the manner prescribed under section 50 of the Act – Held, this ground was adopted by the High Court without regard to certain relevant provisions of the Act – Complainant-company is the holder of the instrument on its own right and could be a holder in due course also until the concerned party adduces evidence to rebut the presumption -- It is open to the respondents to rebut the presumption in the trial but till then the High Court could not say that the complainant is not a holder in due course..

(Para 20-23)

Negotiable Instruments Act, 1881 (26 of 1881), Section 118, 138, 139 – Cheque bounce complaint – Presumption – Rebuttal -- Provided the facts required to form the basis of a presumption of law exists, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary -- Rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the ’prudent man’.

(Para 19)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 1 -- Object and purpose of NI Act -- The negotiable instruments are, in fact, the instruments of credit being convertible on account of the legality of being negotiated and thus easily passable from one hand to another. The source of Indian law relating to such instruments is admittedly the English Common Law. The main object of the Act is to legalise the system by which instruments contemplated by it could pass from hand to hand by negotiation like any other goods. The purpose of the Act was to present an orderly and authoritative statement of the leading rules of law relating to the negotiable instruments. The Act intends to legalise the system under which claims upon mercantile instruments could be equated with ordinary goods passing from hand to hand. To achieve the objective of the Act, the Legislature in its wisdom thought it proper to make provision in the Act for conferring such privileges to the mercantile instruments contemplated under it and provide special procedure in case the obligation under the instrument was not discharged.

(Para 5)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Interpretation -- It has, always to be kept in mind that Section 138 of The Act creates an offence and the law relating to the penal provisions has to be interpreted strictly so that non-one can ingeniously or insidiously or guilefully or strategically be prosecuted.

(Para 5)

C. Negotiable Instruments Act, 1881 (26 of 1881), Section 5, 6 – Post dated cheque -- Bill of Exchange – Cheque -- When a post-dated cheque is written or drawn, it is only a bill of exchange -- Post-dated cheque become a cheque under the Act on the date which is written on the said cheque.

(Para 6)

D. Negotiable Instruments Act, 1881 (26 of 1881), Section 72, 138 -- Presentation of cheque -- Bank, where to present – Drawer Bank – Cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable -- Such presentation is necessarily to be made within six months at the bank on which the cheque is drawn, whether presented personally or through another bank, namely, the collecting bank of the payee.

(Para 9)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Cheque by Company -- Demand notice to Director of Company – Validity of – Demand notice to Director of Company, who signed the cheque -- High Court committed error in recording a finding that there was no notice to the drawer of the cheque, as required u/s 138 of the NI Act – Held, Impugned order of the High Court is liable to be quashed.

(Para 1, 7)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 141 -- Code of Criminal Procedure, 1973 (2 of 1974), Section 482 -- Cheque by Company -- Offence by Company – Deposit of money in court – Quashing of proceedings – Permissibly of -- Once the offence is committed, any payment made subsequent thereto will not absolve the accused of the liability of criminal offence, though in the matter of awarding of sentence, it may have some effect on the Courts trying the offence -- But by no stretch of imagination, a criminal proceeding could be quashed on account of deposit of money in the Court.

(Para 8)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Cause of action -- Pre-mature filing of complaint – Cognizance by Magistrate -- "Taking cognizance of an offence" by the Court has to be distinguished from the filing of the complaint by the complainant -- Taking cognizance would mean the action taken by the Court for initiating judicial proceedings against the offender in respect of the offence regarding which the complaint is filed – Mere presentation of the complaint in the Court cannot be held to mean that its cognizance had been taken by the Magistrate -- If the complaint is found to be pre-mature, it can await maturity or be returned to the complainant for filing later and its mere presentation at an earlier date need not necessarily render the complaint liable to be dismissed or confer any right upon the accused to absolve himself from the criminal liability for the offence committed.

(Para 8-10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 142 – Presentation of complaint – Cognizance by Magistrate -- Complaint was returned to the complainant/ appellant on the ground that the verification was not signed by the counsel, could not be termed to be an action of the Magistrate taking cognizance within the meaning of Section 142 of the Act.

(Para 11)

A. Negotiable Instruments Act, 1881 (26 of 1881), Section 138 – Cheque bounce case -- Demand notice for payment – Additional claim in demand notice -- Effect of – If in a notice any other sum is indicated in addition to the cheque amount the notice cannot be faulted.

(Para 10)

B. Negotiable Instruments Act, 1881 (26 of 1881), Section 138, 139 – Cheque bounce case – Presumption -- Additional claim in demand notice -- Presumption u/s 139 of NI Act would arise only in respect of the cheque amount -- Regarding other claims, a civil suit would be necessary.

(Para 10-13)