Is ‘Joint Trial’ Permissible under ‘The Negotiable Instruments Act, 1881’ ? – A Critical Analysis – By Rajat Mathur

April 15, 2021

There has been a long-standing need felt for joinder of multiple cases arising out of same transaction under the Negotiable Instruments Act, 1881 (“NI Act”), which has flooded our Magistrate Courts all over the country, which has literally chocked our criminal courts, especially at the Magisterial level.

In order to appreciate, whether cases under Section 138 NI Act can be clubbed together based on the criteria of ‘same transaction’ under Section 220 CrPC, notwithstanding the bar of Section 219(1) CrPC, which restricts clubbing of cases of same kind beyond three (3) committed within one year, it would be apposite to first peruse the relevant provisions on this aspect:

Section 218. Separate charges for distinct offences.

(1) For every distinct offence of which any person is accused there shall be a separate charge and every such charge shall be tried separately:

Provided that where the accused person, by an application in writing, so desires and the Magistrate is of opinion that such person is not likely to be prejudiced thereby the Magistrate may try together all or any number of the charges framed against such person.

(2)  Nothing in sub-section (1) shall affect the operation of the provisions of Sections 219, 220, 221 and 223.

Section 219. Three offences of same kind within a year may be charged together.

(1) When a person is accused of more offences than one of the same kinds committed within the space of twelve months from the first to the last of such offences, whether in respect of the same person or not, he may be charged with, and tried at one trial for, any number of them not exceeding three.

(2) Offences are of the same kind when they are punishable with the same amount of punishment under the same section of the Indian Penal Code (45 of 1860) or of any special or local laws:

Provided that, for the purposes of this Section, an offence punishable under section 379 of the Indian Penal Code (45 of 1 860) shall be deemed to be an offence of the same kind as an offence punishable under section 380 of the said Code, and that an offence punishable under any section of the said Code, or of any special or local law, shall be deemed to be an offence of the same kind as an attempt to commit such offence, when such an attempt is an offence.

Section 220. Trial for more than one offence.

(1) If, in one series of acts so connected together as to form the same transaction, more offences than one is committed by the same person, he may be charged with, and tried at one trial for, every such offence.

(2) When a person charged with one or more offences of criminal breach of trust or dishonest misappropriation of property as provided in sub-section 212 or in sub-section (I) of section 219, is accused of committing, for the purpose of facilitating or concealing the commission of that offence or those offences, one or more offences of falsification of accounts, he may be charged with, and tried at one trial for, every such offence.

(3) If the acts alleged constitute an offence failing within two or more separate definitions of any law in force for the time being by which offences are defined or punished, the person accused of them may be charged with, and tried at one trial for, each of such offences.

(4) Several acts, of which one or more than one would by itself or themselves constitute an offence, constitute when combined a different offence, the person accused of them may be charged with, and tried at one trial for the offence constituted by such acts when combined, and for any offence constituted by any one, or more, or such acts.

(5) Nothing contained in this Section shall affect Section 71 of the Indian Penal Code (45 of 1860).

Section 223. What persons may be charged jointly –

The following persons may be charged and tried together, namely:-

(a) Persons accused of the same offence committed in the course of the same transaction;

(b) Persons accused of an offence and persons accused of abetment of, or attempt to commit, such offence;

(c) Persons accused of more than one offence of the same kind, within the meaning of Section 219 committed by them jointly within the period of twelve months;

(d) Persons accused of different offences committed in the course of the same transaction;

(e) Persons accused of an offence which includes theft, extortion, cheating, or criminal misappropriation, and persons accused of receiving or retaining, or assisting in the disposal or concealment of, property possession of which is alleged to have been transferred by any such offence committed by the first-named persons, or of abetment of or attempting to commit any such last-named offence;

(f) Persons accused of offences under Sections 411 and 414 of the Indian Penal Code (45 of 1860) or either of those sections in respect of stolen property the possession of which has been transferred by one offence;

(g) Persons accused of any offence under Chapter XII of the Indian Penal Code (45 of1860) relating to counterfeit coin and persons accused of any other offence under the said Chapter relating to the same coin, or of abetment of or attempting to commit any such offence; and the provisions contained in the former part of this Chapter shall, so far as may be, apply to all such charges:

Provided that where a number of persons are charged with separate offences and such persons do not fall within any of the categories specified in this section, the Magistrate may, if such persons by an application in writing, so desire, and if he is satisfied that such persons would not be prejudicially affected thereby, and it is expedient so to do, try all such persons together.

Section 143. Power of Court to try cases summarily.

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Chapter shall be tried by a Judicial Magistrate of the first class or by a Metropolitan Magistrate and the provisions of Sections 262 to 265 (both inclusive) of the said Code shall, as far as may be, apply to such trials:

……

……                                                                            (Emphasis supplied by me)

Further, after going through the above provisions, ibid, now it would be profitable to appreciate the relevant case law which supports joint trial of offences which are of same kind and/or part of same transaction.

One of the earliest authoritative prouncements on this subject is the case of ‘Swaminathan versus Union of India’[1]. Brief facts: Appellant Abu Bucker contended that there was misjoinder of charges on the ground that several conspiracies, distinct from each other, had been lumped together and tried at one trial. The Advocate for Swaminathan, however, did not put forward this submission. Court examined the charge carefully and found no ground to accept the contention as raised. Court said: the charge as framed, discloses one single conspiracy, although spread over several years. There was only one object of the conspiracy and that was to client members of the public. The fact that in the course of years others joined the conspiracy or that several incidents of cheating took place in pursuance of the conspiracy did not change the conspiracy & did not spilt up a single conspiracy into several conspiracies.

In another case of ‘Chandi Prasad Singh versus State of U.P’[2], facts were like this: Petitioner therein who was the Secretary of a housing society and was charged at the same trial with three different offences under Section 409 and was also charged under Section 477-A of the Penal Code. The prosecution case was that he had misappropriated three different sums of money received by him at three different dates from three different persons and had also falsified the minute book. An objection was raised that there was a violation of Section 234 of the Code of Criminal Procedure, as the Appellant had been charged with three offences under Section 409 and one under Section 477-A. Court held that it to be a case governed under Section 235 of CrPC, as the several offences under Sections 409 and 477-A, are out of same acts and form part of the same transaction.

In yet another case in ‘Emperor versus Jagdeo’[3], it was held by the then Court that the trial in respect of two facts of theft committed in the course of the same night from two different fields belonging to different persons was not bad in law. It was further stated that the offences of the same kind can be against different persons.

Further, in ‘Srichand K. Khetwaji versus State of Maharashtra’[4], the Court observed and held thatthe conspiracy was a general conspiracy to keep on issuing licences in the names of fictitious firms and to share the benefits arising out of those licences when no real independent person was the licensee. The various members of the conspiracy other than the two public servants must have joined with the full knowledge of the modus operandi of the conspiracy and with the intention and object of sharing the profits arising out of the acts of the conspirators. Court noted that it does not therefore see that mere fact that licences were issued in the names of eight different companies make out the case against the Appellant and the other conspirators to be a case of eight different conspiracies each with respect to the licences issued to one particular fictitious company.

A careful reading of the above provisions, ibid, in the light of case laws as cited above, following points can be culled out, namely; firstly, if a person has committed offences of same kind not exceeding three, then he can be tried under one trial in terms of Section 219 of CrPC. Secondly, if a person has committed same/similar offences as part of the same transaction in one series of acts so connected, then in terms of Section 220 of CrPC, after satisfying the test of expression same transaction, ibid, then he may be charged with, and tried at one trial for, every such offence. Thirdly, Section 220(1) of CrPC is not controlled by Section 219 CrPC and it does not matter that if the number of offences exceeds three^[5]. Fourthly, on a conjoint reading ofSection 220(1) along with Section 223(c) read with Section 219 of CrPC, implies that more than one offence/(s) committed by person/(s) as part of same transaction offences and/or same kind, then they can be tried together notwithstanding bar of Section 219(1) CrPC of ‘not exceeding three offences of same kind’.

Further, when a person has committed offences as part of same transaction, then all such offences alleged to have been committed by the Accused, can be tried together under one trial under Section 220(1) CrPC, even though, the offences may have been committed as part of a larger conspiracy, notwithstanding the bar of Section 219(1) CrPC.Pertinently, said offences cannot be distinct offences as provided under Section 218 CrPC, which is an exception to Section 219(1) and Section 220 of CrPC.

Extending this interpretation in the light of Section 143(1) of NI Act, which starts with non-obstante clause vis-à-vis CrPC, 1973, implying that cases can be tried/clubbed together filed by a Complainant against the Accused provided, Complainant has pleaded/ averred in his complaint case backed by documents enclosed under NI Act that Accused has committed offences (i.e., dishonour of cheque/s) part of same transaction or pursuant to a single or even a larger conspiracy but not separate. Axiomatically, if the act/omission(s) committed is not under same transaction then statutory notice under NI Act cannot be given jointly by Complainant for multiple dishonour of cheques, but in vice-versa case it can be given. Relevant case laws in this regard of different High Courts are extracted below for ready reference:

I. Karnataka High Court[6] held that the cause of action for filing a complaint under Section 138 of the Negotiable Instruments Act is the service of notice contemplated under Section 138(b) of NIA and not the dishonour of cheques. Where one single notice of dishonour is issued in respect of number of dishonoured cheques, Section 219 CrPC would not be applicable. It was further held that filing of one complaint in such a case is to the advantage of the Accused.

II. Division Bench of Madras High Court[7], after referring to several judgments of various High Courts, held that dishonour of sixteen cheques (16) drawn on different dates when presented together for payment and the issuance of a single lawyer’s notice demanding payment of the amount towards all the dishonoured cheques be covered by Section 220(1) CrPC; and hence is saved from the mischief of Section 219 CrPC.

III. Bombay High Court[8] held that the dishonour of each cheque would constitute a separate cause of action if separate notices are issued in respect of each of the cheques. The payee is not prevented from combining the cause of action by covering all the instances in a single notice. In such a case, all the transactions covered by the notice would be regarded as a single transaction, permitting a single trial. However, Section 219 CrPC would be attracted only if separate notices are issued in respect of each cheque.

IV. Sharma Contracts (India) Pvt. Ltd. v. State[9], of Delhi High Court, followed the view of Bombay High Court in aforesaid case of Rajendra B.Choudhari case (supra).

V. Further, Bombay High Court[10] held that separate statutory notices in respect of each default filed, then transaction cannot be construed as a single transaction attracting provisions of Section 219 of CrPC.

VI. In another Madras High Court judgment[11] in Popular Dyes & Chemicals Pvt. Ltd. v. Aishwarya Chemicals, it held that Section 219 CrPC relates to joinder of charges. It is only at the stage of framing of charges, that Section 219 CrPC has to be considered. It further held that the inclusion of four dishonoured cheques in one complaint cannot be a ground to quash the same by invoking inherent jurisdiction under Section 482 CrPC as the very object of Section 219 is to prevent miscarriage of justice by clubbing together a number of offences and making it impossible for the Accused to defend them.

VII. However, this judgment of Madras High Court is directly in the teeth of ruling of the Hon’ble Supreme Court in Vani Agro Enterprises[12] (2019 / SC), wherein, it was noted by the Hon’ble Supreme Court that more than three cases cannot be clubbed together if they occurred within one year as per Section 219 CrPC.

Further, Delhi high Court[13] in Unique Infoways (P) Ltd vs. MPS Telecom (P) Ltd, held that expression ‘same transaction’ under Section 220 CrPC, is incapable of an exact definition, as it is not intended to be interpreted in any artificial term. Therefore, in a series of act/s whether they are connected together to form the same transaction or not, is a question of fact. However, the offences connected arising out of same transaction can be tried together, as it will save the State’s machinery as well as the judicial time as the statutory amendment to Section 220 CrPC may be used for clubbing cases of multiple cheque bounces pertaining to the same transaction.

Further, experience has shown that a single financial transaction may lead to the dishonour of multiple cheques. However, under Section 219, CrPC, only three (3) offences and therefore, dishonour of only three (3) cheques could be tried together. Hence, a legislative amendment may be required to address this issue of multiplicity of proceedings where cheques have been issued for one purpose but multiple complaints, summons and trials have to be undertaken.

Therefore, until the statutory amendments are in place, the Hon’ble Supreme Court of India in this regard may issue directions under Article 142 of the Constitution (as it may deem fit) to High Courts to amend their Criminal Rules of Practice to ensure that complaints arising out of the same transaction, but resulting in dishonour of multiple cheques be clubbed together & common process evolved for service of summons and joint trial.

Looking it from another angle, Legislative Amendments of 2002, 2015 & in 2018 read in the light of the fact that NI Act is a special legislation emphasizing on speedy disposal by adopting Summary Trial Procedure (Section 143, ibid), having an overriding effect over CrPC, 1973 to the extent as provided under Sections 143-148 (except Section 146) and dealing with an offence i.e. document based technical offence which is ‘deemed’ (deeming clause) to have been committed on satisfaction of check-list as envisaged under proviso (a), (b) & (c) to Section 138 r/w 142(1)(a),(b) NI Act.

The scheme and inter-play of provisions (supra) is that trial for an offence under Section 138 NI Act cannot be carried like any other summons trial under IPC offences, but strictly on the lines of Summary Trial, especially in terms of Section 143 of NIA which starts with non-obstante clause read with the expression “as far as may be”, which can be interpreted (Pls see: Meters and Instruments case, ibid) to mean that CrPC, 1973 can be applied to the extent it is harmoniously construed with NIA, 1881, and as such, the rigor of Section 219 CrPC can be relaxed, as permissible, to mean that cases under NI Act being Special Act, can be clubbed and tried together beyond three (3) cases, provided that the averments and documents annexed with the Complaint filed under Section 138 NI Act fulfills the test of ‘same transaction’. In this manner, the effect of aforesaid judgment of this Court in Vani Agro Enterprises, ibid can be water down, or else an authoritative ruling needs to be rendered by the Hon’ble Supreme Court of India to clear and clarify the cloud over this issue.

Undoubtedly, joinder of trial or clubbing of cases under NI Act will go to great lengths in cutting multiplicity of trials for same cause of action/ same transaction and in turn will greatly help in clearing the backlog of these cases, and moreover, lesson the workload especially, on the Magisterial Courts throughout the country.

Lastly, this issue of joint trial, ibid, is also being considered, inter-alia, by the Hon’ble Supreme Court of India in a Constitution Bench case titled as “Makwana Mangaldas Tulsidas vs. The State of Gujarat & Anr.”, [SLP (Crl.) No.5464 / 2016, now converted into Suo Moto W.P. (Crl.) No. 02 of 2020], which is pending consideration at the moment.              

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Views are personal of the author.

Rajat Mathur [B.Com (H) SRCC, DU] [LLB, Law Faculty, DU]  is a practicing lawyer in Delhi. Despite gaining experience in Civil and Tax Law, he has worked extensively on the criminal side and has represented bureaucrats and Government Servants in matters related to the ‘Coal Block Allocation Scam case’. At 33 years of age, in 2019 Mr. Mathur got the controversial acquittal of former Coal Secretary, Mr. H. C. Gupta, a decorated IAS office (now retired) in the high-profile case.

In writing this article, he was assisted by Anmol Kheta (ILS Law College, Pune) a practicing lawyer in Delhi.

[1] Reported in AIR 1957 SC 340 (P.7)

[2] Reported in AIR 1956 SC 149

[3] Reported in AIR 1917 All 369

[4] Reported in AIR 1967 SC 450

[5] Reported in AIR 1961 SC 1241

[6] Reported in 2001 (1) KARLJ 360

[7] Reported in 2006 (5) CTC 303

[8] Reported in 2007 CRILJ 844

[9] Reported in (2012) SCC OnLine Del 310 [(Delhi High Court)]

[10] Reported in AIR 2012 BOM 9

[11] Reported in LQ 1993 HC 5167 (Madras High Court)

[12] Reported in 2019 (4) CIVILCC 502 (P.1-5)(Supreme Court)

[13] Reported in 2019 (4) RCR (Criminal) 5 (Delhi High Court)

Disclaimer: The views or opinions expressed are solely of the author.