138 NEGOTIABLE INSTRUMENT ACT UPDATE | PRESENCE OF ACCUSED NOT TO BE MANDATORY IN CHEQUE BOUNCE CASES

The Rajasthan High Court, in a recent case of Amit Kumar Dave v. State of Rajasthan & Anr, has held that since cheque bounce proceedings initiated under the Negotiable Instruments Act, 1881 (“NI Act”) are civil or semi-criminal in nature, the presence of the accused should ordinarily not be insisted upon.

Brief Facts:

The Petitioner/accused had approached the Rajasthan High Court, wherein he was seeking quashing of an order dated 11 September 2024 (“Impugned Order”) passed by the Additional Chief Judicial Magistrate No 2, Jalore, in Criminal Case No.4985/2014, pending under Section 138 of NI Act, for dishonour of a cheque for an amount of Rs 26.40 lacs. The trial court in the Impugned Order had forfeited his bail bonds and issued an arrest warrant against him and proceedings under Section 446 of the Code of Criminal Procedure, 1973 (“CrPC”) were directed .

The Impugned Order was passed because of the default caused by the Petitioner in his personal presence in September 2024, as the Petitioner had to attend to his ailing wife who not well. Under these circumstances, he had requested his counsel to take appropriate steps by filing an application to seek his exemption from personal appearance. However, the trial court took a harsh view of the matter, under the impression that the reasons stated by the Petitioner in the application were not genuine.

Contention of the Parties:

The Petitioner contended that he had no intention at any stage of causing a delay in the proceedings and that it was under these circumstances, which were beyond his control, that he could not appear on the fateful day, as there was no one else in the family to look after his wife. The Petitioner’s inability to appear was due to unforeseen circumstances beyond his control.

The trial court has observed in the Impugned Order challenged before the Rajasthan High Court that in the past hearings also, the Petitioner had moved applications to seek exemption of personal presence which inter alia was the basis of rejecting his application, stating that the reasons assigned for his absence did not seem to be genuine.

Held:

After considering rival submissions, the Rajasthan High Court held that the presence of an accused, particularly in a matter of the kind in hand, where proceedings are semi-criminal/civil, should ordinarily not be insisted upon if an application is moved for a particular hearing, unless the trial court needs to either examine the under-trial or his statement is to be otherwise recorded for proceeding further in the matter. Accordingly, the Impugned Order was set aside. The original bail bonds of the Petitioner accused and bonds of his sureties were restored subject to payment of Rs.7,500/-, as cost, to be paid to the Complainant.

MHCO Comment:

The view of taken by the Rajasthan High Court will ensure that the accused persons are not unnecessarily made to visit the court, unless their presence is necessary for furtherance of the trial. It will also come as a relief to directors and executives of corporations whose presence was earlier insisted upon in the cheque-bouncing cases. At the same time, it must be noted that if the liberal approach is adopted the Courts in cheque bouncing cases, and presence of the accused is not insisted upon, the same is likely to take away the seriousness of the criminal trial and, the same carries the risk of bringing criminal proceedings under section 138 of the NI Act at par with an ordinary civil suit. It is often seen that insistence on regular presence of the accused acts as a deterrent from continuing the default and incentivises amicable settlement of disputes. The Courts should also consider this practical utility of insistence on physical presence of the accused.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us for any assistance.