A complete walk through of the Procedure for filing of a Complaint under section 138 of Negotiable Instruments Act, 1881.
As we all know, theoretical knowledge is always different from the actual practical knowledge in life. Similarly, when it comes to filing of a complaint in the court of law, the procedure from a practical point of view totally differs. In this article, I share the actual and step by step guide for you to understand various stages from its inception till the last step, while prosecuting or defending in the complaint filed u/s 138 of Negotiable Instruments Act.
Anybody who wants to file a case u/s 138 of Negotiable Instruments Act 1881, must know the following procedure of law:-
The following are the Main Ingredients required in order to Prosecute the drawer of cheque for an offence of dishonour of cheque:
a) cheque is drawn by the accused on an account maintained by him with a banker;
b) the cheque amount is in discharge of a debt or liability, issued for whole or in part;
c) the cheque has been presented to the bank within a period of 3 months from the date on which it is drawn or within the period of its validity, whichever is earlier;
d) the cheque is returned by the bank unpaid for insufficiency of funds or that the amount exceeds the arrangement made with the bank;
e) the payee makes a demand for the payment of the said amount by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
f) the drawer of such cheque fails to make the payment of the said amount to the payee within 15 days of the receipt of the said notice.
Following is the step by step process of commission of offence u/s 138 of Negotiable Instruments Act and the description of stages faced during the entire trial in the Court:
1) According to section 138, when the drawer of the cheque fails to make the payment and the cheque returns unpaid, then a Legal Demand Notice is issued on behalf of the Complainant to the drawer of the cheque, whose cheque is dishonoured, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. The said Notice should include all the facts such as the nature of the transaction, amount of outstanding amount or loan amount or any other legally enforceable debt or liability, as the case may be, for which the said cheque was issued. Also, mention the date of deposit in the bank as well as the date of dishonour of cheque so as to give rise to cause of action. It should be sent across by the authorised means such as registered post.
2) The said Demand Notice directs the drawer of cheque to make payment of the amount of dishonoured cheque within 15 days of the receipt of the said notice thereof. If the payment is made, the cause itself gets eliminated thereby ending the dispute.
3) But in case, where the drawer of the cheque fails to make payment within 15 days of the receipt of the notice, or does not even reply to the said notice, then the Complainant can execute his legal right and file a Criminal Case before the court within one month from the expiry of the said notice period of 15 days.
4) After filing of the Complaint u/s 138 before the Metropolitan Magistrate or a Judicial Magistrate of the First Class, the Court will hear arguments on behalf of the complainant and then ‘Issue Process’ against the Accused i.e. the drawer of the cheque whose cheque got dishonoured. Thereafter the Summons are sent by the registered post, directing the Accused to remain present before the Court on the stipulated date and time as mentioned in the Summons. If the Accused fails to remain present then a Bailable Warrant and thereafter a Non-Bailable Warrant is issued against the Accused which is sent and served through police station where the Accused is residing, in order to produce the accused before the court.
5) On receiving summons from the court or after the Warrant is received, when the accused remains present before the court, he needs to submit ‘Surety’ with all surety documents such as ownership documents of house or land owned by surety, his address proof including ration card, election identity card, photo and address proof of the accused as well as that of the surety. Thereafter the Court may accept the surety and on signing the bonds by both, the Accused and the Surety, the Bail may be granted and the Accused will be released thereby.
6) After this, the Complainant needs to file his ‘Evidence’ with all the original documents pertaining to the transaction mentioned in the said Complaint. He also has to file his supporting Affidavit. This stage is called ‘Examination-of-Chief’ of the Complainant. Thereby the advocate for the Accused will conduct Complainant’s Cross or called as ‘Cross Examination of the Complainant’. The Complainant can also submit additional witnesses in support of his complaint.
7) Thereafter when the witnesses of the Complainant are over, then the advocate will conduct ‘Cross Examination of the Accused’ which is also called as ‘Recording of the statement of the Accused u/s 313 of CrPC’. At this stage, the Accused is bound to give reply to the questions and allegations claimed against him.
8) The witnesses of accused will be produced before the Court in order to prove his innocence and the evidence will be recorded by the court.
9) After the Cross examination of both the parties are done with, the trial proceeds further to the ‘Arguments’ to be presented by advocates of the Complainant as well as that of the Accused respectively, before the Court.
10) After hearing the arguments of both the parties, the court will pass the judgement.
11) In the case, where the accused is acquitted, then the matter ends.
12) In the case, where the accused is convicted, then immediately accused should submit his bail application and give surety and pray for ‘Time to Appeal’ before the Sessions Court. The Court will direct him to deposit fine in the court immediately, as per judgement and he then will be released. The limitation for the Appeal before the Sessions Court is one month from the date of judgement of lower court.
13) The criminal appeal with application for suspension of sentence and for bail will be given hearing by the Sessions Court and on furnishing of surety as per directions of the Court including deposit of some amount towards compensation ordered as per judgement, the Accused will be released on bail.
14) Also note that the hierarchy for the dispute may go from Sessions Court to High Court and then to Supreme Court.
So these are the practical step by step pointers that one should remember or follow when dealing with Complaint filed u/s 138 of the Negotiable Instruments Act. It may kindly be noted that the abovementioned details are mere general guidelines for knowledge and reference purpose for all those who are concerned. These shall not be treated as a substitute for any legal advice or suggestions.
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