Mumbai: The Bombay High Court has held that a Magistrate is justified in proceeding with a trial for cheque bouncing offences under Section 138 of the Negotiable Instruments Act (NI Act) if the accused or their advocate fails to appear during the trial.
The HC upheld the conviction and sentence of two directors, Navneet Singh Gogia and Simran Kaur Gogia, in a cheque bounce case. The duo had issued two cheques of Rs 50 lakh each to complainant Sushma Chandak on October 29, 2015, toward repayment of a hand loan. Both cheques were dishonoured upon presentation, prompting Chandak to file two private complaints under the NI Act.
Despite repeated summons, the Gogias and their advocate failed to appear before the Magistrate. Consequently, the Magistrate proceeded with the trial in their absence, convicted them under Section 138 read with Section 141 of the NI Act, and sentenced them to one year of simple imprisonment along with a fine of Rs 2 crore. This order was confirmed by the Sessions Court on February 28, 2023.
Challenging the orders, the directors approached the High Court, arguing that the Magistrate had failed to record their statements under Section 313 of the Criminal Procedure Code (CrPC), thereby denying them an opportunity to explain the evidence against them.
Justice SM Modak, however, dismissed their plea, noting that in cases under Section 138 of the NI Act, which are quasi-criminal in nature, the absence of the accused does not prevent the Magistrate from proceeding with the trial. The Court observed that the primary objective of the NI Act is to enforce a civil remedy. Referring to the Supreme Court’s ruling in P. Mohanraj & Ors. vs. Shah Brothers ISPAT Pvt. Ltd. (2021), the High Court reiterated that Section 138 is “a civil sheep in a criminal wolf’s clothing.”
“In a nutshell, if proceedings under Section 138 of the NI Act are quasi-criminal in nature, there is reason to believe that one of the attributes of a criminal trial—mandatory recording of statements under Section 313 of the CrPC—is not applicable,” the HC noted.
The High Court also emphasised that the Magistrate must consider factors such as the number of times the accused remained absent, steps taken to secure their presence, and whether all legal avenues were exhausted.
In the present case, the Magistrate’s and Sessions Court’s decisions were deemed lawful. The HC confirmed the conviction and sentence while directing that Rs 1.20 crore, deposited in the Sessions Court along with interest, be returned to the complainant.
