Delhi District Court
M/S Radhika Steel Enterprises vs Raj Buildcon Construction Ltd. Cc ... on 16 April, 2014
IN THE COURT OF METROPOLITAN MAGISTRATE (NI ACT)-01,
CENTRAL: ROOM NO.-275, TIS HAZARI COURT COMPLEX, DELHI
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1,
6483/A/1 & 6490/A/1
16.04.2014
ORDER
The present order shall dispose off the application of accused moved u/s-145(2) NI Act.
2. Both the sides have already been heard on the issue. I have also perused the record and the precedents cited. After having carefully given my due consideration, I am of the view that the present application can not be allowed.
Preface:
3. On the factual score, it is to be noted that plea of different accused persons were recorded on different dates and no application u/s-145(2) NI Act was filed by the accused at the time of recording of their plea despite the fact that Hon'ble High Court of Delhi in categorical terms had laid down the guidelines indicating that such application should be filed at the time of recording of plea of the accused. (see Rajesh Aggarwal & Anr. vs State 171(2010) DLT 51). Ultimately, the matters were adjourned for defence evidence in terms of step-III of the guidelines of aforesaid judgment (see order dated 05.11.2012 of these cases).
3.1. Then on the adjourned date i.e. 05.01.2013 (which was fixed for defence evidence), the present application was filed. But then, at request of both the sides, matters were sent to mediation cell where ultimately settlement was arrived at. Matters were adjourned for payment of first installment on request of the parties. Subsequently, defence side taken further time to pay certain amount acceptable to the complainant which was granted subject to costs. However, instead of paying any amount, accused persons started absenting themselves.
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 1 3.2. With the change of counsel, accused persons chosen to become more wise in their game of playing with the law and informed their desire of contesting the case. (see order dated 01.07.2013 in these cases). However, the court found it appropriate to ask both the sides to advance arguments on the nature and effect of mediation. Ultimately, this court vide a detailed order dated 17.12.2013 held that mediation settlement was binding on the parties and that accused persons could not defy or nullify the mediation and could not claim trial.
3.3. If the accused persons can not defy or nullify the mediation and can not claim trial, it would be futile to say that they can contest the case on merits now. Contest means trial. In terms of order dated 17.12.2013, the accused persons can not claim trial. Though it will be a repeatition, I am again reiterating that allowing any person to defy any mediation settlement will lead to a dark future for system itself where mediation institution will not have any credibility to survive.
Present Application:
4. Now, coming to the application in hand. Section-145 (2) NI Act was enacted with a purpose that if in the course of trial, accused requires some of his probabilities to be established through the cross-examination of complainant or his witness giving evidence on affidavit. (Naturally, in a trial of criminal case, an accused is not obliged to show his innocence by leading defence evidence or by examining himself as a witness). The other purpose of the said provision is to allow the complainant to recall himself or his witnesses to clarify certain aspects for removal of doubts. In both the situation, however, the complainant/witnesses have to be recalled as affidavit is treated as evidence for the purpose of trial in a case instituted for offence u/s-138 NI Act. The Parliament enacted the provision in following manner:
"145(2) The court may, if it thinks fit, and shall, on the application of the prosecution or the accused, summon and examine any person giving evidence on affidavit as to the facts contained therein."
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 2 Contention based upon interpretation of provision:
5. It is the use of expressions "may" and "shall" in the same provision which gives an opportunity to the legal fraternity to argue that while the expression "may" denotes a discretionary power in the court, the expression "shall" does not leave any discretion with the court and makes it mandatory for the court to exercise the power available therein to recall the complainant/witnesses. The arguments proceed like this: in the absence of anything but if the court so consider fit, it may recall the complainant/witnesses to depose in the court about the contents of affidavit and if the court does not deem it required to recall such person, it may treat the affidavit of such person as evidence. On the other hand, however, if any application is moved, the expression "shall" will play its role and the court will not have any discretion in the matter but to recall such person. The prime basis of such contention is very simple i.e. when the Parliament has used both the expressions in one provision, the same clearly shows the legislative "may" is discretionary but "shall" is mandatory.
5.1. I found the contention always attractive but ultimately devoid of merit. Legislature can never take away the right of interpretation form the court and that right will definitely include the right to gather the legislative intent through judicial reasoning to arrive at a proper interpretation of a given statutory provision.
Law on use of expressions "may" and "shall":
5.2. Hon'ble Supreme Court in Bachahan Devi & Anr. V. Nagar Nigtam, Gorakhpur & Anr. (2008) 12 SCC 372 has held that:
"The delicate question that remains to be examined is what is the position in law when both the expression "shall" and "may" are used in the same provision.
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 3 Mere use of word 'may' or 'shall' is not conclusive. The question whether a particular provision of a statute is directory or mandatory cannot be resolved by laying down any general rule of universal application. Such controversy has to be decided by ascertaining the intention of the Legislature and not by looking at the language in which the provision is clothed. And for finding out the legislative intent, the Court must examine the scheme of the Act, purpose and object underlying the provision, consequences likely to ensue or inconvenience likely to result if the provision is read one way or the other and many more considerations relevant to the issue."
******** "Obviously where the legislature uses two words may and shall in two different parts of the same provision prima facie it would appear that the legislature manifested its intention to make one part directory and another mandatory. But that by itself is not decisive. The power of court to find out whether the provision is directory or mandatory remains unimpaired."
5.3. Hon'ble Supreme Court in Ganesh Prasad v. Lakshmi Narayan, AIR 1985 SC 964 has held that:
"Mrs. Gyan Sudha Misra, learned counsel however contended that where the expression 'may' and 'shall' both are used in the same provision the legislative intendment is unmistakable that the provision where the word 'shall' is used must be held to be mandatory because the previous use of the expression 'may' shows that the legislature was conscious, which part of the provision is to be directly and which other part to be mandatory.
****** Obviously where the legislature uses two words 'may' and 'shall' in two different parts of the same provision prima facie it would appear that the legislature manifested its intention to make one part directory and another mandatory. But that by itself is not decisive. The power of the court still to ascertain the real intention of the Legislature by care fully examining the scope of the statute to find out whether the provision is directory or mandatory remains unimpaired even where both the words are used in the same provision."
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 4 5.4. Clearly, the court has still the duty to ascertain the real intention of the legislature despite the use of both the expressions "may" and "shall" in the same provision. Therefore, the contention based upon this situation is liable to be rejected. We will ascertain the real legislative intent in later part of this order.
Contention based upon judicial observation:
6. Then, reliance is always placed upon a judgment of Hon'ble Supreme Court in M/s Mandvi Co-op Bank Ltd vs Nimesh B thakore (2010) 3 SCC 83 to contend that once application is moved under Section-145(2) NI Act, the court is duty bound to allow the same without having any discretion in the matter.
6.1. Obviously, if the Hon'ble Supreme Court has decided so, we have to follow the command without any exception. The crucial point, however, is as to whether the Hon'ble Supreme Court has decided any such issue in the above said judgment or not. The observations relied upon (and being regularly relied upon by different counsels in several cases) are following:
"21. Nevertheless, the submissions made on behalf of the parties must be taken note of and properly dealt with. Mr Ranjit Kumar, learned Senior Advocate, appearing for the appellant in appeal arising from SLP (Crl.) No. 4760/2006 pointed out that sub-section (2) of section 145 uses both the words, "may" (with reference to the court) and "shall" (with reference to the prosecution or the accused). It was, therefore, beyond doubt that in the event an application is made by the accused, the court would be obliged to summon the person giving evidence on affidavit in terms of section 145(1) without having any discretion in the matter. There can be no disagreement with this part of the submission but the question is when the person who has given his evidence on affidavit appears in court, 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..."
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 5 6.2. It is the above observation which give a playing hand to the counsels of accused in a given case. In my considered view, however, the above can not be treated as a ratio of the said judgment so as to be followed as a precedent. Why? We will discuss the same after quoting authorities as to what is to be treated as ratio of a given judgment.
Law on Precedents:
7. Needless to emphasize that a judgment is an authority for what it decides and not for what logically can be deduced therefrom. It would be a futile exercise to quote several pronouncements on the scope of binding precedents and ratio decidendi.
7.1. In the case of Commissioner of Customs (Fort) vs. Toyota Kirloskar Motor (P) Ltd., (2007) 5 SCC 371, the Supreme Court stated the law relating to precedents and held that a decision, as is well known, is an authority for what it decides and not what can logically be deduced therefrom. The ratio of a decision must be culled out from the facts involved in a given case and need not be an authority in generality without reference to the reasons, discussions and facts of the case.
7.2. Furthermore, ratio decidendi of a judgment has to be found out only on reading the entire judgment. The ratio of the judgment is what is set out in the judgment itself. Answer to the question necessarily would have to be read in the context what is set out in the judgment and not in isolation. In case of any doubt as regards any observations, reasons or principles, the other part of the judgment must be looked into. By reading a line here and there from the judgment, one cannot find out the entire ratio decidendi of the judgment. The reasoning could be deciphered upon reading the judgment in its entirety and then applying these principles to the subsequent cases. (Reference : (i) Union of India vs . Godfrey Philips India Ltd., AIR 1996 SC 806, (ii) Union of India vs. Dhanwanti Devi, (1996) 6 SCC 44, (iii) State of Tripura vs. Tripura Bar Association, AIR 1999 SC 1494 and (iv) Islamic Academy of Education vs. State of Karnatake, (2003) 6 SCC 697).
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 6 7.3. In Bharat Petroleum Corporation Ltd. And another v. N.R.Vairamani and Another, AIR 2004 SC 4778, it was held that:
"Judgments, even of summit court, are not scriptural absolutes but relative reasoning. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and, that too, torn out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for Judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper."
7.4. The frequently quoted opinion of the House of Lords in Quinn v. Leathem 1901 AC 495 :
(1900-3) All ER Rep 1 is that of Lord Halsbury, namely, that "every judgment must be read as applicable to the particular facts proved or assumed to be proved.... The other is that a case is only an authority for what it actually decides". These quotations have been reiterated in Goodyear India Ltd. v. State of Haryana and State of Orissa v. Sudhansu Sekhar Misra . In the latter case, the Court explicitly opined that "a decision on a question which has not been argued cannot be treated as a precedent".
Analysis of Mandvi Co-op Bank Ltd (supra):
8. Paragraph-8 of the said judgment proposes three issues for consideration, namely, whether examination-in-chief is necessary, applicability of provisions to pending cases and right of accused to give evidence on affidavit.
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 7 8.1. Clearly, last two issues are not relevant to the present situation. So far as first issue is concerned, it talks about a situation where the complainant/witness giving evidence on affidavit is has been recalled and in such circumstances, the issue to be decided was as to whether the right of accused will be limited to cross-examination or will extend to requiring such person to again depose in examination-in-chief.
8.2. Only three issues were there before the Hon'ble Supreme Court for consideration and the same were decided therein. While deciding the above said issues, the Hon'ble Court made discussions about several things but same can not be treated as ration or binding precedent in view of the settled law on this score as indicated above.
8.3. Mandatory nature of provision of Section-145(2) NI Act was never an issue before the Hon'ble Supreme Court in the above said judgment and therefore observation in Paragraph-21 thereof can not be treated as a decision on this count.
8.4. After discussing the law of precedents in detail, it would be needles to insist that several observations made in Mandavi (supra) can not be taken as a ratio of the judgment and must be treated as observations made during the course of reasoning to arrive at certain conclusions about three issues in question in the said judgment.
8.5. Needless to say that the another judgment of Hon'ble Supreme Court in Radhey Shyam Garg vs Naresh Kumar Gupta 2009 Cr.L.R. (SC)546 can also be of no help as even in the said case, issue of mandatory nature of Section-145(2) NI Act was not in issue. Rather, the said judgment upheld the dismissal of an application u/s-145(2) NI Act which clearly affirm my inclination that in certain circumstances, such application can be dismissed. I have been therefore of the view that it is the factual circumstances of each and every case which will govern the fate of application moved u/s-145(2) NI Act.
Ascertainment of Legislative Intent:
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 8
9. We can now make discussion about legislative intent. We may propose a question as to at what stage an application u/s-145(2) can be made?
9.1. Stages of the proceeding when accused is present can be enlisted as under:
Explaining the particulars of offence to accused and recording his plea (section-251 Cr.PC);
Admission denial of the documents of the complainant (Section-294 Cr.PC);
Complainant's evidence (Section-145(1) NI Act);
Examination of the accused(if any) (Section-263(g) Cr.PC);
Documents being filed by the accused;
Admission denial of the documents of the accused (section-294 CrPC);
Defence evidence (section-254 CrPC);
Arguments (section-314 CrPC);
Judgment (section-264 CrPC).
9.2. No doubt when the accused makes an application, the Court has normally to summon the witness. However, it does not stand to reason that there can not be any restriction in respect of making of such application. Reason is obvious. If accused makes an application at the stage when the judgment is to be pronounced, will the Court be powerless to dismiss such application? No one will answer the question in the negative.
9.3. The second question is can such application be made at the time of arguments? No. 9.4. The third question is can such application be made at the stage when the accused is required to lead defence evidence? I am afraid that such application if allowed would defeat the very purpose for which Section-145 has been enacted. Such application has to be dismissed.
9.5. Here it is worthy to note that Affidavit made u/s-145(1) NI Act is a complete evidence not requiring any cross-examination. Such affidavit in my considered view has to be equated with a M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 9 situation wherein after the examination in chief, cross examination is recorded as 'nil'. Even in Rajesh Aggarwal (supra), the guidelines conveys that if no such application is filed at the stage of recording of plea, the matter has to be listed for defence evidence. What does it show? Clearly, it shows that without even cross-examination, the affidavit of the complainant has to be read as evidence.
9.6. It may be noted that the term "evidence" as defined in Section 3 of the Indian Evidence Act 1872 means and includes (i) all statements which the Court permits or requires to be made before it by witnesses, in relation to matters of fact under inquiry and (ii) all documents produced for the inspection of the Court, The former is called "oral evidence" and the later, "documentary evidence". The essential characteristics of a statement of a person to be considered as evidence as per the definition of the term is that (i) it must have been permitted or required to be made before it by a Court legally competent to so permit or require it to be made before it and (ii) such statement must have been made in relation to matters of fact under enquiry i.e., in other words, in the course of judicial proceedings. It therefore, necessarily follows that once the statement of a witness has been permitted or required to be made before it by a Court having jurisdiction to so permit or require the statement to be made in the course of a judicial proceeding pending before it, the statement made shall not lose its character of being "evidence" in such judicial proceedings and may be used for the adjudication of the rights and liabilities of the parties to and determination of the dispute in such judicial proceedings, unless mandated otherwise by the order of the Court or by the words of the statute.
9.7. The view can further be fortified by making a reference to Rule-4, Order-18 CPC.
Rule-4 of Order-18, CPC reads as under:
"4. Recording of evidence.-(1) In every case, the examination-in-chief of a witness shall be on affidavit and copies thereof shall be supplied to the opposite party by the party who calls him for evidence: Provided that where documents are filed and the parties rely upon the documents, the proof and admissibility of such documents which are filed along with affidavit shall be subject to the orders of the M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 10 Court.
(2) The evidence (cross-examination and re-examination) of the witness in attendance, whose evidence (examination-in-chief) by affidavit has been furnished to the Court, shall be taken either by the Court or by the Commissioner appointed by it: Provided that the Court may, while appointing a commission under this sub-
rule, consider taking into account such relevant factors as it thinks fit."
9.8. The term used for affidavit is examination in chief. The cross examination has to follow as a matter of course. Whereas, u/s-145 NI Act, the expression used is 'evidence' and cross examination does not follow as a matter of course. Incidentally, it may be noted that both the provisions has given the way to evidence by way of affidavit, one in a civil case and the other in a certain category of criminal case.
9.9. If the Parliament has used two different phrases for the similar matters in two different enactments, the differential intention must be recognized.
9.10. If by making merely an application, accused can cross examine the witness, the question to be asked is what was the necessity to introduce a different mode? A person giving evidence on affidavit in a civil suit has to be cross examined as a matter of course, what prohibited the Parliament from employing the same course to a person giving evidence on affidavit in a criminal trial that too when a person requires more protection in a criminal trial than in the civil trial?
9.11. The controversy may be discussed from another angle. Section-145(2) does not make any mention of the number of applications which an accused can make. Can the accused claim a right to make 'N' number of applications? Will the Court be powerless to reject such claim? I consider that the Court is not powerless. Accused can not make any such claim. Such applications if made have to be dismissed.
9.12. Above discussion can show that though the Court normally has to summon the witness if an application is made u/s-145(2), the Court is not powerless to dismiss such applications in M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 11 certain circumstances.
9.13. If the Court has power to dismiss an application made u/s-145(2), a fortiori, the Court has to have the power to decide the genuineness and necessity of such application.
9.14. Above analysis clearly shows the legislative intent that there is no mandate in Section-145(2) NI Act and therefore the expression "shall" employed therein can not be treated as mandatory.
9.15. One thing may also be noted. Hon'ble High Court of Delhi in Rajesh Aggarwal (supra) has already held that complainant can not be recalled merely for pleasure. Further in Boby Kapoor Vs. M/s City Finance decided on 02.02.2011, it has held that right of cross examination is given only if the Court considers that in order to meet the defence, cross-examination of witness was necessary.
9.16. It is clear from the above discussion and the judgments of the Hon'ble High Court of Delhi (cited above) that accused can not claim an indefeasible right to cross examine a witness who has given his evidence by way of affidavit (only for the offence punishable under Section-138 NI Act and not in general criminal trial). Such witness can only be summoned when the accused shows sufficient justification for the cross examination of the witness. If contention of the ld. Counsel for the accused is accepted, the purpose for which section-143 & 145 NI Act have been enacted would be defeated.
Present case:
10. It has already been decided by this court (vide detailed order dated 17.12.2013) that in the present cases accused can not claim trial in defiance of their mediation settlement as the same would be gross misuse of law and would ultimately cause great loss to the institution of mediation.
M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 12 10.2. By the same order, effect of mediation settlement and defiance thereof has already been clarified.
10.3. If we allow such accused to maintain an application u/s-145(2) NI Act even when he made a promise through mediation settlement to pay the complainant his dues but deliberately defied the same, following consequences will ensue:
Concept of speedy justice would be rendered futile;
Accused can always delay the proceedings on the pretext of settlement;
Accused can always defy any settlement with impunity;
Institution of Mediation will collapse;
No complainant will prefer to go for mediation;
Every complainant will be at great loss;
Judicial system will suffer a huge pendency.
10.4. In such circumstances, accused can not maintain an application u/s-145(2) NI Act as such application only leads to cross-examination of complainant/witness which is a procedure required to be applied to a trial which is not the present position.
10.5. On the legal issue of mandatory nature of Section-145(2) NI Act, in view of the discussion made in the present order, I am of the opinion that the said section is not mandatory and that each and every application of accused moved under that section is not required to be allowed.
10.6. Even though the accused persons cannot maintain the application, on hypothetical basis I am deciding the merits of application also. In the application, accused are claiming that complainant has misused the blank cheques. The said ground is clearly frivolous as the Krishan Bansal has accepted that the bills of complainant company are correct. In such circumstances, it M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 13 would be hard to believe that there was no liability on the part of accused persons. Even it would further be hard to believe that no action has been taken by the accused persons against this complainant in respect of so called misuse of their cheques. The averments in the application are clearly an afterthought to somehow avoid the prosecution. Even further if the accused persons were not having any liability, there was nothing for them in settlement in Mediation. But it is clear that the Mediation Settlement was arrived at between the parties. In such circumstances, even on merits, the application is liable to be rejected.
Result:
11. In the ultimate analysis, I dismiss the application of accused moved u/s-145(2) NI Act.
12. A copy of this order be placed on the official website of the district courts.
(RAKESH KUMAR SINGH) MM-(NI Act)-Central-01/THC/Delhi 16.04.2014 M/s Radhika Steel Enterprises Vs Raj Buildcon Construction Ltd. CC No.6480/A/1, 6481/1, 6483/A/1 & 6490/A/1 14