Safiya Malik

The High Court of Karnataka Single Bench of Justice Shivashankar Amarannavar dismissed a petition seeking to quash proceedings under Section 138 of the Negotiable Instruments Act, 1881. The petitioner had challenged the cognizance taken by the Magistrate without affording an opportunity of hearing to the accused at the pre-process stage, invoking the first proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). The Court held that complaints under Section 138 of the NI Act are governed by a special procedure and are exempt from the hearing requirement under BNSS. The petition was accordingly dismissed.

The petitioner was arrayed as an accused in CC No.12253/2024 pending before the I Additional Civil Judge and JMFC Court, Hubballi, for an alleged offence under Section 138 of the Negotiable Instruments Act, 1881. He filed a petition under Section 482 of the Code of Criminal Procedure, 1973 (Section 528 of the BNSS), contending that the Magistrate took cognizance of the complaint without affording him an opportunity of being heard, thereby violating the procedure prescribed under the newly enacted BNSS.

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The petitioner relied on the first proviso to Section 223(1) of the BNSS, which mandates that no cognizance of an offence shall be taken by a Magistrate without giving the accused an opportunity to be heard. He argued that this requirement was mandatory and applicable to all categories of criminal complaints, including those under Section 138 of the NI Act.

In support of his contention, the petitioner cited the decision of a Coordinate Bench of the High Court in Basanagouda R. Patil (Yatnal) v. Shivananda S. Patil, which held that an opportunity of hearing must be granted to the accused before the Magistrate takes cognizance of a complaint under Section 223 of the BNSS. He also relied on another decision in Hanumesh v. M/s. Karanagi Brothers Enterprise, which restated that compliance with the first proviso to Section 223(1) of BNSS was essential before proceeding in a complaint under Section 138 NI Act.

The respondent, represented through counsel, argued that the Negotiable Instruments Act, 1881 is a special statute with a self-contained procedure for dealing with dishonour of cheques. It was submitted that Section 143 of the NI Act prescribes a summary trial procedure, and Section 142 provides that the cognizance of complaints under Section 138 shall be governed by a procedure distinct from the general criminal procedure code.

The respondent further relied on the judgment of the Madurai Bench of the Madras High Court in M/s. Ultimate Computer Care v. M/s. S.M.K. Systems, which held that the proviso requiring pre-cognizance hearing under Section 223 of BNSS does not apply to Section 138 NI Act proceedings, given that the NI Act is a special law.

The Court formulated the central issue as whether the procedure of hearing the accused at the stage of taking cognizance under the first proviso to Section 223(1) of the BNSS applies to complaints under Section 138 of the NI Act.

It noted that Section 223 of BNSS corresponds to Section 200 of the repealed CrPC, 1973, but with an important departure: “The Magistrate cannot take cognizance of an offence without giving the accused an opportunity of being heard.”

However, the Court observed that “the Negotiable Instruments Act has prescribed a special procedure” and that the “procedure of hearing the accused at the stage of taking cognizance as prescribed in the proviso to Section 223 BNSS shall not apply to complaints under Section 138 of the N.I. Act, 1881.”

It cited the decision of the Madurai Bench of the Madras High Court which recorded: “Having regard to the fact that the N.I. Act has prescribed a special procedure, it is a Special Law within the meaning of Section 5 of the BNSS, 2023.”

The Court stated that Section 5 of the BNSS (corresponding to Section 5 of CrPC, 1973) preserved the applicability of special laws: “Nothing contained in BNSS shall, in the absence of a specific provision to the contrary, affect any special or local law.”

Referring to the special provisions under Chapter XVII of the NI Act, the Court recorded that Section 143 provides for summary trials, Section 144 for special service of summons, and Section 145 for affidavit-based evidence. It observed: “Before issuing process, the Magistrate is not bound to call upon the complainant to remain present before the Court and to examine him on oath.”

The Court further stated: “As a rule, the Magistrate may rely upon affidavit filed by the complainant in support of complaint, which shall be treated as a sworn statement, to issue process.” It added: “While following the summary trial procedure, where the accused does not plead guilty, the Court is required to record the substance of evidence followed by judgment containing a brief statement of reasons for the finding.”

Addressing the decisions in Basanagouda R. Patil and Hanumesh, the Court held that: “In the said case, the offences alleged are under IPC, tried not by summary procedure as provided for offence punishable under Section 138 of NI Act. Therefore, the said decision cannot be applied to the present case on hand.”

It referred to the Supreme Court's observations in Kaushalya Devi Massand v. Roopkishore Khore, noting: “The gravity of a complaint under the NI Act cannot be equated with an offence under the provisions of IPC or other Criminal offences.” It quoted: “An offence under Section 138 of NI Act is almost in the nature of civil wrong which has been given criminal overtones.”

It also recorded the ruling in P. Mohan Raj v. M/s. Shah Brothers Ispat Pvt. Ltd., which described NI Act proceedings as a hybrid provision that protects the victim’s interest more than the State’s interest.

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The Court concluded: “Since Negotiable Instruments Act, 1881 is special enactment and in view of Section 5 of BNSS r/w Section 143 of NI Act, as far as the cases tried by the learned Magistrates under Section 138 of NI Act, there is no need for the Magistrate to give an opportunity of being heard to the accused before taking cognizance.”

The Court held that since the Negotiable Instruments Act, 1881 is a special enactment, and in view of Section 5 of the BNSS read with Section 143 of the NI Act, there is no need for the Magistrate to give an opportunity of being heard to the accused before taking cognizance on the complaint of the payee or holder in due course of the cheque for an offence punishable under Section 138 of the NI Act. It further held that in the case on hand, the learned Magistrate had not committed any error in not issuing notice to the accused prior to taking cognizance.

Advocates Representing the Parties
For the Petitioners: Sri. Saiyad D. Mulla, Advocate
For the Respondents: Sri. G.V. Bharamagoudar and Smt. Bhagyshree N. Bikkannavar, Advocates

Case Title: Ashok v. Fayaz Aahmad
Neutral Citation: 2025:KHC-D:6966
Case Number: Criminal Petition No. 101514 of 2025
Bench: Justice Shivashankar Amarannavar

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