Cheque Bounce case- Accused Entitled to Lead his Evidence on Affidavit

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January 31, 2019

Case name: Rakesh Bhai Magan Bhai Barot v. State of Gujarat

The, the seminal issue that fell for consideration before the High Court of Gujarat in this recent case was whether the accused of a complaint under Section 138 of the Negotiable Instruments Act is entitled to lead his evidence on affidavit?

The relevant law involved in the case is statutory provision under Section 145 of the Negotiable Instrument Act, 1881 which provides for the evidence on affidavit and confers discretion on the Court on application of the accused to summon and examine any person giving evidence on affidavit.

Bench’s Verdict

The High Court in view of the prevailing law allowed the Application of the accused and made the following observations in the case:

That Section 145 of the Act is an enabling provision, introduced presumably for the reason that a complaint of this nature is based on documentary evidence viz. the cheque, the dishonour memo, the notice and its acknowledgment. This exception is also structured to cut out the time that may be spent in recording the statement of the complainant if he is obliged to appear in person and make his statement before the court.

That the purpose behind enacting Section 145 of the Act appears to be to expedite the disposal of complaints made under Section 138 of the Act, and to save the time of the court and the witness(s), and to save costs and inconvenience being caused to one or the other party.

In view of the aforesaid, the High Court opined that having regard to the Scheme of the Cr.P.C., the Legislature in its wisdom has left it open to the accused to exercise the option of examining himself as a witness for an offence punishable under Section 138 of the NI Act, in deliberately omitting any reference to the evidence of the accused by way of affidavit.

Dishonor of Cheque and Penalty- That it is now well-recognized that Chapter XVII was introduced in the Act with a view to provide greater efficacy to the transactions undertaken on the basis of cheques and to instill confidence in the minds of the people in the commercial world with regard to the workability of the system of payments made by cheques. That the transactions, wherein consideration passes through cheques cannot be lightly taken any longer by the drawers of the cheques, as the breach of such transactions as a result of the dishonour of the cheques issued by one of the parties, would result in penal consequences in certain situations.

In view of the above, the High Court allowed the accused’s application and directed the Trial Court to permit the applicant – accused to tender his evidence including the evidence of his witnesses, if any, by way of affidavit.