Summary
A complaint under Section 138 of the Negotiable Instruments Act was quashed because the complainant credit society suppressed, in the complaint and in its statement on oath under Section 200 CrPC, two letters by which the accused had replied to the demand notice and sought the documents relied upon in it; setting criminal law in motion by suppressing material facts and documents is an abuse of the process of law.
Issues
- Whether a complaint under Section 138 of the NI Act and the order issuing process are liable to be quashed where the complainant suppressed the accused's reply to the statutory demand notice and her subsequent letter seeking the documents relied upon in the notice.
- Whether a payee who relies on loan documents in the demand notice is obliged to supply or permit inspection of those documents when the drawer asks for them in order to reply to the notice.
- Whether the respondent's belated claim, raised by additional affidavit, that loan account statements had been furnished to the appellant could cure the suppression.
Provisions considered
- Section 138, Negotiable Instruments Act, 1881The section, with the three conditions in clauses (a) to (c) of its proviso (presentation within validity, written demand within 30 days of dishonour, failure to pay within 15 days of notice), was set out; the demand notice of 11.11.2016 relied on loan documents allegedly executed by the appellant, and her right to reply meaningfully depended on seeing them. (¶¶ 8, 12, 13, 16, 19)
- Section 200, Code of Criminal Procedure, 1973Examination of the complainant on oath is not an empty formality; its object is to ascertain the truth and let the Magistrate satisfy himself that there is sufficient ground to proceed. The complainant suppressed the two letters in the complaint and in the statement on oath, depriving the Magistrate of the chance to question it about the supply of documents. (¶¶ 9, 10, 18, 19, 20, 21)
- Sections 203 and 204(1), Code of Criminal Procedure, 1973Process issues under Section 204(1) only if, after applying his mind to the complaint, documents and statements, the Magistrate finds sufficient ground; had the letters been disclosed, the Magistrate could have dismissed the complaint under Section 203 since the accused could not reply to the notice without the documents relied upon. (¶¶ 10, 19)
- Sections 223 and 227, Bharatiya Nagarik Suraksha Sanhita, 2023Noted as the provisions corresponding to Sections 200 and 204 of the CrPC respectively. (¶¶ 9, 10)
Held
- Recording the complainant's statement on oath under Section 200 CrPC is not an empty formality. The Magistrate must question the complainant to elicit the truth and, after considering the complaint, the documents filed with it and the statements, apply his mind to whether there is sufficient ground to proceed before issuing process under Section 204(1). Setting criminal law in motion is a serious matter because the accused must then defend himself at trial. (¶¶ 9, 10)
- A litigant who suppresses material facts or makes a false statement while filing proceedings cannot seek justice from the court; the facts suppressed must be material and relevant to the controversy with a bearing on the decision (S.P. Chengalvaraya Naidu v. Jagannath applied). (¶ 11)
- Where the demand notice specifically relied on documents executed by the drawer and her acknowledgment of the loan, and she replied within days asking for those documents and reserving her right to reply after receiving them, it was the payee's duty to supply the documents, or at least allow their inspection, to enable a proper reply to the statutory notice. (¶¶ 13, 14, 16, 19)
- The complaint and the statement on oath referred only to the service of the demand notice and made out a false case that the accused had not replied, while suppressing her reply dated 28.11.2016 and letter dated 13.12.2016, the receipt of which the complainant never denied and never answered before filing the complaint. The complainant's case, first raised by additional affidavit in January 2025, that account statements had been supplied on 29.11.2016 was an afterthought, not pleaded in the complaint or the counter and resting on undated signatures. (¶¶ 15, 16, 17, 18, 20)
- Had the two letters been disclosed, the Magistrate could have questioned the complainant on the supply of documents and could have dismissed the complaint under Section 203 CrPC, since the accused could not have replied to the statutory notice without seeing the documents relied upon. (¶ 19)
- A complainant who, while filing a complaint under Section 200 CrPC and recording his statement on oath, suppresses material facts and documents cannot be allowed to set criminal law in motion on that complaint; doing so is an abuse of the process of law, and the High Court ought to have quashed the complaint. (¶¶ 21, 22)
Result
Appeal allowed; High Court order dated 18.12.2023 set aside; Criminal Case No. 648 of 2016 before the JMFC, Kalwan and the order of cognizance dated 02.03.2017 quashed; respondent's other remedies for recovery of the amount allegedly due left open.