When a cheque, which was given in discharge / satisfaction / payment of a legally enforceable debt, is dishonoured on presentation, a criminal complaint u/s 138 of Negotiable Instruments Act, 1881, may be filed before the competent Magistrates Court. A statutory Notice is required to be given to the drawer of the cheque before initiating criminal proceedings. Further, the law prescribes a time limit within which the statutory notice should be given, and further prescribes the time limit within which the complaint should be filed
When a cheque, which was given in discharge / satisfaction / payment of a legally enforceable debt, is dishonoured on presentation, a criminal complaint u/s 138 of Negotiable Instruments Act, 1881, may be filed before the competent Magistrates Court. A statutory Notice is required to be given to the drawer of the cheque before initiating criminal proceedings. Further, the law prescribes a time limit within which the statutory notice should be given, and further prescribes the time limit within which the complaint should be filed.
1. The legal process in the Court of law is initiated by the presentation / institution of a Case, whether in the form of a Suit, Petition, Complaint / Application etc, in the competent court of jurisdiction.
2. Every litigation presupposes the accrual of “cause of action”, that is to say, reason for initiating legal action in the Court of law.
3. Accrual of cause of action implies and presupposes infringement of litigant’s some statutory right / fundamental right / equitable right / contractual right / or any other right recognized under the statutes or customs.
4. In order to commence a legal action, the person must have some real grievance, which is the foundation of any legal action. For having right to move the court of law, the right sought to be enforced should have already come into existence, and there should be an infringement of it.
5. Ordinarily, in Criminal law, there are two ways by which the machinery of law is set into motion against any person –
(a) By registering FIR (First Information Report) before Police u/s 154 or by making Application u/s 156(3) to the Magistrate, thereby Magistrate directing the Police to register the FIR, investigate the offence and file Police Report in a time bound manner;
(b) By making Complaint before the concerned Magistrates Court u/s 200.
6. The Parliament of India, in the year 1988, with a view to deal with the menace of unabated dishonouring of Cheques; and thus to fasten criminal liability upon dishonest drawers of the Cheques, amended the Negotiable Instruments Act, 1881, and by virtue of these Amendments, the causing of dishonour of a Cheque was made a criminal offence, wherein Sections 138 to 142 were inserted. In the said Amendments, the Section 139 of Negotiable Instruments Act raised a presumption of law that the cheque so delivered / issued, was delivered / issued for valuable consideration / in discharge of whole or in part, of any debt or other liability; and the burden to prove the contrary would lie upon the drawer of the Cheque. Section 143 inter alia mandates that every trial under this law shall be conducted as expeditiously as possible and an endeavour shall be made to conclude the trial within six months from the date of filing of the complaint.
7. Whereas the aforesaid Amendments failed to produce the desired results, further Amendments were made so as to fill the gaps found in the earlier Amendments, whereby Sections 143 to 147 were added.
8. Again, there have been recent Amendments in the Negotiable Instruments Act, 1881, whereby, among other things, Section 143A is inserted, which empowers the trial Courts, trying the offence u/s 138 of the Negotiable Instruments Act, 1881, to Order the drawer of the Cheque, to pay Interim Compensation to the Complainant, to the extent 20% of the Cheque Amount, in cases where the offence is tried as Summary trial or a Summons trial case, and where the drawer of the Cheque has pleaded not guilty to the accusation made in the complaint.
9. The Hon’ble Kerala High Court in the case of Johnson Scaria Versus State Of Kerala [2006 (134) Comp Cas 370] have beautifully laid down the nature of 138 proceedings. It says, among other things, that the complainant is not obliged to prove the original transaction or original consideration as he is expected in a suit for recovery of money. The crux of the liability u/s 138 of the N.I. Act is the issuance / delivery of the Cheque by the drawer, to / in the hands of the Payee Complainant.
10. Therefore, in a Complaint to be filed u/s 138, the body of the Complaint may contain brief details as to original transaction, in discharge of which, the relevant Cheque was issued, followed by (a) dishonour of Cheque, (b) Bank Memo, evidencing the dishonour of the Cheque, and (c) the factum of issuance / delivery of relevant Cheque to / in the hands of the Payee, (d) issuance of statutory Notice, (e) receipt of reply, if any, to the said Notice, (f) averments to the effect that Accused neglected to make payment within 15 days from the date of receipt of statutory Notice,
11. Once this is prima facie proved to the satisfaction of the trial Court, the presumption of law contained in Section 139 of the said Act raises its head in favour of the Complainant; and the burden shifts upon the Accused to prove that either (a) the said Cheque was never issued / delivered to the Complainant, and / or (b) the said Cheque was not issued in discharge of any liability. There is a landmark ruling of the Hon’ble Apex Court in the case of Indian Bank Association versus Union of India [AIR 2014 SC 2528], which is spelled out in the end.
12. Proceedings initiated u/s 138 provides different procedures for dealing with such complaints, so as to secure speedy disposal of cases, although Criminal procedure Code, 1973 and the Evidence Act, 1872, are fully applicable to the proceedings. The procedure prescribed under the proceeding is summary in nature, wherein the complainant may file his evidence in the form of Affidavit instead of conventional oral examination-in-chief which is time consuming. Even the examination of complainant contemplated u/s 200 of CrPC, 1973 is done by way of verification affidavit instead of oral examination. Summons are sought to be served by complainant through speed post; the presumption of law runs in favour of the complainant that the cheque was given in due discharge of a liability, and the burden to prove otherwise is shifted upon the accused to show that there exist no enforceable liability towards the complainant; the Return Memo issued by Bank is considered as a proof of dishonourment of the cheque.
13. In our system of laws, every Accused person is considered innocent unless his guilt is proved beyond reasonable doubt. Our Constitution further protects, and rightly so, Accused persons, wherein it is provided that an accused cannot be compelled to answer any question which may incriminate him; and accused are not obliged to lead any evidence in support of their innocence, except in certain situations and circumstances, the burden does shift upon the accused to prove their innocence; like for example when the accused takes the plea of self defense, or plea of alibi, or plea of insanity; and also in cases where the particular fact is especially within the exclusive knowledge of the accused, as contemplated in section 106 of Evidence Act, 1872. In cases of dishonour of cheque, the presumption of law runs in favour of the complainant that the cheque was given in due discharge of a liability, and the burden to prove otherwise is shifted upon the accused to show that there exist no enforceable liability towards the complainant.
14. It may further be noted that mere signing of Cheque by the drawer is not sufficient, and the delivery of the Cheque, is essential to complete the drawing of the Cheque for the benefit of the Payee (Section 46 of the N. I. Act). It may further be noted that, to qualify for a valid Cheque, it is sufficient, if the said Cheque bears the Signature of the drawer, and the said Cheque is duly issued / delivered / handed-over, to the Payee. Under the law, the drawer of the Cheque gives an implied authority to the Payee to fill up the rest of the details. In this respect, although Section 20 of the Negotiable Instruments Act, 1881, talks about implied authority to fill up the details in respect of inchoate stamped Instruments only, there are consistent rulings of our High Courts and Apex Court that the Cheques are duly covered, more particularly, having regard to definition of Bill of Exchange and Cheque contained in Sections 5 and 6 of the said Act.
15. Section 67 of Evidence Act, mandates that if a document is alleged to be signed or to have been written wholly or in part by any person, the signature or the handwriting of so much of the document as is alleged to be in that person's handwriting, must be proved to be in his handwriting. And therefore, the burden lies upon the Payee Complainant to prove that the relevant Cheque was signed by the Accused; and presumption of law available u/s 139 would be of no help, as the said presumption of law is not available as to the execution and delivery of the concerned negotiable instrument / Cheque. Nevertheless, the said burden may be discharged with the aid of Section 114 of the Evidence Act, 1872; and of course with classic Apex Court rulings.
Section 114 of Evidence Act, 1872: This burden the Payee Complainant can well discharge with the aid of section 114 of the Evidence Act. The said Section inter alia states that the Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. By aid of this Section appropriate inferences can be drawn in each case on the question of execution and issue of the Cheque.
Possession of the Cheque: Possession of the Cheque in the hands of the Complainant goes a long way to prove issuance of the Cheque. The said Section 114 by way of illustration further states that the Court may presume that when a document creating an obligation is in the hands of the obligor, the obligation has been discharged, with the rider that the Court may not presume in the circumstances where although the bond is in possession of the obligor, but the circumstances of the case are such that he may have stolen it. The necessary corollary of the aforesaid proposition is that where the instrument is in the hands of payee, it may be presumed that the obligation has not been discharged, with the rider that the Court may not presume, in the circumstances that he may have stolen it.
Endorsement on the Bank Memo: The execution of the Cheque by the accused may be inferred when the Cheque was not dishonoured for the reason “Signature mismatch”. The Apex Court in the case of L.C.Goyal Versus Suresh Joshi have dealt with the case wherein the accused has raised the contention that he has not signed the cheque. The Hon’ble Court rejected the said contention. The Court Held the said cheque was dishonoured due to insufficient funds. The appellant (Accused) denied his signature on the relevant Cheque and contended that his signature was forged by the complainant. It is in this context that it was urged before the Bar Council of India that some hand-writing expert be examined in order to find out the genuineness of the signature on the relevant Cheque. As stated above, the Cheque bounced not on account of the fact that the signature on Cheque was not tallying with the specimen signature of the appellant kept with the Bank, but on account of insufficient funds. Had the signature on Cheque been different, the bank would have returned the same with the remark that the signature on Cheque was not tallying with the Accused’s specimen signature kept with the bank. The Bank Memos issued by the bank clearly show that signature of the Accused over the relevant Cheque was not objected to by the bank, but the same was returned with the remark "insufficient fund". This circumstance shows that the signature on relevant Cheque was that of the Accused.
Registration of FIR for theft of Cheque: Whenever the accused takes the stand that he has not signed the Cheque, he invariably suggests that the concerned Cheque has been stolen from his custody and his Signature has been forged by the Payee Complainant. And therefore, in the eyes of law, being a prudent person he is expected to take suitable steps, act diligently to safeguard his interest. The Apex Court in the case of L.C.Goyal Versus Suresh Joshi, said No FIR lodged with regard to theft of the cheque book. The case set up by the Accused before the Bar Council was that, in fact, the complainant somehow managed to get his cheque book and she after forging his signature on one of the leaf presented the same to the bank for payment. If it was true, why did the appellant not lodge any FIR with the Tilak Marg Police Station regarding theft of the cheque book.
The further submission is – The accused cannot merely say that he has not signed the Cheque and would ask for opinion of handwriting expert, so as to ascertain the authenticity of the signature appearing in the Cheque. In case he claims he has not signed the Cheque, he has to first lead evidence to show that the concerned Cheque was stolen from his custody, the date when he came to know of such theft, the steps he took to avoid possible misuse of stolen Cheque, for, any man of ordinary prudence would take requisite steps in case he comes to know that his valuable security is stolen, and it may be misused.
There is yet another serious fallacy in merely allowing the Applications of Accused u/s 243(2) of CrPC, 1973, and to send Cheque to handwriting expert, inter alia, to determine the signature on the Cheque. Assumingly, the hand writing expert gives the opinion that signature on the Cheque does not match with the signature occurring in Bank records. Then the accused would claim acquittal on the basis of this finding, although he might have played mischief by deliberately signing incorrectly.
Assume a case wherein the Cheque was returned due to mismatch of signature. Whereas the complainant / payee are not aware of the signature of the drawer / accused, the drawer of the Cheque may play mischief by giving such Cheque to the payee bearing their false or deliberately made distorted signature, causing the return of the Cheque by the drawee Bank, and then would cry “theft” having not delivered / signed the Cheque.
It may be appreciated that the fact which the accused agitating is “my said Cheque was stolen”; and the evidence which is to be led by accused in these situations is to demonstrate the “factum of actual theft” of concerned Cheque and not the mere matching or mismatching of signature, for, the mismatching of signature does not establish the theft of Cheque; and only inference which can be drawn from the proved mismatch of signature is that “Cheque issued by drawer bears different signature when compared to bank records.
16. Therefore, in 138 proceedings, the accused should be barred from merely contending that he has not delivered or signed the Cheque; and before he makes an Application, asking for opinion of handwriting expert, it is imperative that he must say in his evidence – (a) that the concerned Cheque was stolen from his custody; (b) the date when he came to know of such theft, and if it is claimed that he came to know of such theft on receipt of statutory Notice, then, (c) the steps he took to avoid possible misuse of stolen Cheque; for, any man of ordinary prudence would take requisite steps in case he comes to know that his valuable security is stolen and may be misused; and (d) he must also establish that despite due diligence and attending circumstances of his day to day affairs, he could not have known such theft; If the trial court is reasonably satisfied that the Cheque under consideration might have stolen from the custody of accused, he may then send the Cheque for opinion of handwriting expert.
17. The failure of accused to reply the statutory Notice: The failure of accused to reply the statutory Notice would also go a long way in safely invoking the presumption u/s 114 of the Evidence Act. The Apex Court in the case of L.C.Goyal Versus Suresh [AIR 1999 SC 2222], observed to say that The complainant sent two notices to the Accused, wherein she inter alia alleged, that a sum of Rs.25,102.00 was misappropriated by the appellant under the pretext of payment of the Court-fee. These notices admittedly received, but were not replied to by the Accused, which is a material circumstances against the Accused.
Observations made in Kerala High Court judgment Johnson Scaria Versus State Of Kerala worth mentioning here. The version of the complainant gets further support and assurance from the fact that the notice of demand issued under Section 138 threatening criminal prosecution though duly received and acknowledged, did not evoke any response. It of course is not the law that the mere omission to send a reply to a notice of demand shall ipso facto entail a verdict of guilty and conviction. But a prudent man whose standards the court is bound to adopt and import in the adjudication of a criminal case also, must always consider all the relevant inputs. Section 114 of the Evidence Act mandates that a Court must be cognizant of the common course of natural things, human conduct and public and private business in their relationship to the facts of the particular case. So reckoned it is only an unreasonable and puerile mind which will not attribute to the unexplained conduct of not sending a reply to the notice, the importance and significance which it deserves.
Para 16: Any ordinarily prudent human mind placed in such circumstances which the petitioner says he was, is certainly unlikely to remain inactive, silent dumb and mute. If as a matter of fact, Ext.P1 cheque was one which was misutilised by the complainant having obtained the same from the said Jose Paul, the accused as an ordinary prudent person was unlikely to have not responded. Nay it was impossible that he could have remained idle ordinarily unless he had any compelling reason. No such reason is revealed. Conduct offers indications about the truth or otherwise of the contentions and existence or otherwise of facts. I am unable to accept the argument that the courts should have accepted the very convenient excuse advanced by the accused that he had gone to the complainant, met him and discussed the claim in the notice after it was received and that is why he did not issue any reply to the notice.
It may further be observed that the Accused gets the “Notice” of dishonour of the Cheque from his Banker about the return of the Cheque, well before the receipt of Statutory Notice sent by the Complainant. So there are in fact two Notices, on which the Accused has remained silent.
18. The defense of Accused that he had issued blank cheque to the Complainant and the Complainant misused those cheques: In this respect, I would again take the assistance of observations made in Kerala High Court judgment Johnson Scaria Versus State Of Kerala [2006 (134) Comp Cas 370] The convenient and specious plea that a blank signed cheque was handed over as security in a loan transaction cannot readily and naively be accepted and swallowed by courts. In doing so, the indictee is attributing to himself an improbable, artificial and indifferent conduct to claim exculpation from liability. The laudable commercial morality which the legislature seeks to usher in by introduction of Section 138 into the statute book will be frustrated and stultified if courts were to readily and meekly accept and swallow such an explanation. If such a laudable commercial morality were to prevail, account holders will also have to deal with their Cheques carefully, cautiously and reasonably and not without diligence, indifferently unreasonably and irrationally. Even today such a defence may not be impossible or impermissible in a prosecution under Section 138 of the NI Act. But the burden must rest squarely and heavily on the person who wants to attribute to himself such an irresponsible and indifferent conduct - that he handed over a signed blank cheque, to claim exculpation from liability. In this aforesaid discussion it is equally important to know the attributes of an prudent and reasonable man, for, it would have a huge bearing on raising a presumption and placing a burden of proof.
19. Who is a Prudent Man: A prudent man is a wise man, may not be a genius. A prudent man is not in a hurry. He is not influence by his emotions and act after weighing the occasion. He deliberates. He pauses. He rethinks and willing to learn. He agonizes. He is willing to see the point of view, which was never in his mind. He may not be learned but has robust common sense and has basic instincts that move man and woman; are those who think and reason intelligently; is a person having the power of self control to be expected of an ordinary person of the age; a person exercising those qualities of attention, knowledge and intelligence and judgment, which requires of its members for the protection of their own interests and the interests of others.
20. The Hon’ble Apex Court in the case of [Indian Bank Association Versus Union Of India (AIR 2014 SC 2528) have issued directions for the procedure to be followed by Criminal courts whilst dealing with Section 138 / dishonoured cheque complaints.
21. The Hon’ble Apex Court in Para 16 of the above ruling have held that the complainant can give his evidence by way of an affidavit and such affidavit shall be read in evidence in any inquiry, trial or other proceedings in the Court, which makes it clear that a complainant is not required to examine himself twice i.e. one after filing the complaint and one after summoning of the accused. Affidavit and the documents filed by the complainant along with complaint for taking cognizance of the offence are good enough to be read in evidence at both the stages i.e. pre-summoning stage and the post summoning stage. In other words, there is no necessity to recall and re- examine the complaint after summoning of accused, unless the Magistrate passes a specific order as to why the complainant is to be recalled. Such an order is to be passed on an application made by the accused or under Section 145(2) of the Act suo moto by the Court. In summary trial, after the accused is summoned, his plea is to be recorded under Section 263(g) Cr.P.C. and his examination, if any, can be done by a Magistrate and a finding can be given by the Court under Section 263(h) Cr.P.C. and the same procedure can be followed by a Magistrate for offence of dishonour of cheque since offence under Section 138 of the Act is a document based offence. We make it clear that if the proviso (a), (b) & (c) to Section 138 of the Act are shown to have been complied with, technically the commission of the offence stands completed and it is for the accused to show that no offence could have been committed by him for specific reasons and defences. 22. In Para 21 of the aforesaid ruling, the Hon’ble Apex Court have laid down specific directions, to be followed by all Criminal Courts trying Section 138 cases. The Paras 21 and 22 are reproduced hereinbelow:
Para 21: Many of the directions given by the various High Courts, in our view, are worthy of emulation by the Criminal Courts all over the country dealing with cases under Section 138 of the Negotiable Instruments Act, for which the following directions are being given :- DIRECTIONS: (1) Metropolitan Magistrate/Judicial Magistrate (MM/JM), on the day when the complaint under Section 138 of the Act is presented, shall scrutinize the complaint and, if the complaint is accompanied by the affidavit, and the affidavit and the documents, if any, are found to be in order, take cognizance and direct issuance of summons. (2) MM/JM should adopt a pragmatic and realistic approach while issuing summons. Summons must be properly addressed and sent by post as well as by e-mail address got from the complainant. Court, in appropriate cases, may take the assistance of the police or the nearby Court to serve notice to the accused. For notice of appearance, a short date be fixed. If the summons is received back un-served, immediate follow up action be taken. (3) Court may indicate in the summon that if the accused makes an application for compounding of offences at the first hearing of the case and, if such an application is made, Court may pass appropriate orders at the earliest. (4) Court should direct the accused, when he appears to furnish a bail bond, to ensure his appearance during trial and ask him to take notice under Section 251 Cr.P.C. to enable him to enter his plea of defence and fix the case for defence evidence, unless an application is made by the accused under Section 145(2) for re- calling a witness for cross-examination. (5) The Court concerned must ensure that examination-in-chief, cross- examination and re-examination of the complainant must be conducted within three months of assigning the case. The Court has option of accepting affidavits of the witnesses, instead of examining them in Court. Witnesses to the complaint and accused must be available for cross-examination as and when there is direction to this effect by the Court. Para 22: We, therefore, direct all the Criminal Courts in the country dealing with Section 138 cases to follow the above-mentioned procedures for speedy and expeditious disposal of cases falling under Section 138 of the Negotiable Instruments Act. 23. CONCLUSION: The law would fail to serve the purposes and suppress the mischief for which they were invented if the presumption of law is not correctly applied; and moreover, the whole body of law is thrown into the ocean by an unscrupulous accused so easily; and the victim complainant would be left further wounded and bleeding.
24. Coming to deliverance and dispensation of justice, the Courts / Tribunals, in the exercise of adjudicating and declaring rights and obligation of respective parties which are before it, formulate its decision by employing laws of the land, the principle of equity, and customs & usages.
25. The principles of natural justice forms the corner stone of every judicial procedure and decision and it postulate that both the litigating parties must have equal and sufficient opportunity to deal with the allegations made against them.
26. A Judicial decision must be a self contained document from which it should appear as to what the facts of the case were and what was the controversy, which was tried to be settled by the Court / Tribunal.
27. The process of reasoning by which Court came to a particular conclusion and decreed or dismissed the case, should clearly be reflected in the decision. 28. The decision should be on the basis of evidence on record and in accordance with law.
29. The fate of Justice is tied to the thread of reason: Reasoned decisions are inescapable in the entire scheme of administration of Justice, as explained decision breathes life into court order. Reasons disclose how the mind was applied to the subject matter and reveals a rational nexus between the facts considered and conclusions reached.
Recording of reasons is also an assurance that the judicial authority has applied its mind to the facts on record. The reasons employed not only be logical / conceivable but which will also deal with the substantial points which have been raised.
An unreasoned Order presupposes the non consideration of evidences and submissions on record made by the Party therein and the opportunity of affording due hearing would be rendered meaningless and empty formality and thus in essence occasion the frustration of principles of natural justice for the prejudiced party.
The giving of satisfactory reasons is required by the ordinary man’s sense of justice. Reasoned decisions are vital for the purpose of showing that one is receiving justice.
30. Having said all this, and to say that reasons must be given for decisions, what we really expect from the judicial authority.
Reasons are appreciation of such facts and evidences which are on record, and from which the judicial authorities are entitled to draw inferences and results.
Then comes the question, what is appreciation of facts and evidences.
Appreciation of facts and evidences is, drawing natural and logical inferences, drawing natural and logical results, which necessarily flow from those facts and evidences [the facts would mean those facts which are self evident or are admitted, or facts which are reasonably proved, disproved or not proved].
Appreciation of facts and evidence is an exercise wherein the proved existence of certain facts, provokes or persuades the decision maker to reach a certain conclusion.
And to put it further straight, Reasons are those statements, whereby the decision maker will tell you, WHY your submissions to claim certain reliefs, or WHY your submissions to deny reliefs claimed, are meritorious or if are meritless; or to say, the decision maker will tell you, WHY you are entitled to the reliefs or WHY you are not entitled to the reliefs, claimed or prayed for.
31. I am hasten to add here the valuable observations of the Apex court in the case of State Of Uttaranchal Versus Sunil Kumar Vaish .
Para 18: Judicial determination has to be seen as an outcome of a reasoned process of adjudication initiated and documented by a party based, on mainly events which happened in the past. Courts' clear reasoning and analysis are basic requirements in a judicial determination when parties demand it so that they can administer justice justly and correctly, in relation to the findings on law and facts. Judicial decision must be perceived by the parties and by the society at large, as being the result of a correct and proper application of legal rules, proper evaluation of the evidence adduced and application of legal procedure. The parties should be convinced that their case has been properly considered and decided.
Para 19: Judicial decisions must in principle be reasoned and the quality of a judicial decision depends principally on the quality of its reasoning. Proper reasoning is an imperative necessity which should not be sacrificed for expediency. The statement of reasons not only makes the decision easier for the parties to understand and many a times such decisions would be accepted with respect. The requirement of providing reasons obliges the judge to respond to the parties’ submissions and to specify the points that justify the decision and make it lawful and it enables the society to understand the functioning of the judicial system and it also enhances the faith and confidence of the people in the judicial system.
No adverse Order if No adverse findings
1. It is typical for Courts and Judges, whilst passing Orders and decisions, (to commit basic and elementary mistakes, and most of the times consciously) outright overlooking some of the very material facts and evidences / submissions / Judgments cited, by the losing Party; and drive themselves to irrelevant consideration of facts.
2. Before discussing the aforesaid expression “No adverse Order if No adverse findings”, let us first broadly look at the decision making process.
3. Broadly, the decision making is a process wherein, having regard to the Reliefs claimed, the presiding Judge – (a) examine the (legality) of facts alleged, (b) examine the (legality) of stand of the adversary, (c) examine the materials and the evidences which are placed before him in support of the facts alleged by both the sides; (d) would record his reasoned finding (prima facie or conclusive) as to the existence or the non existence of the facts alleged.
4. The process of recording finding of facts is, having regard to the applicable laws and precedents, testing of facts and evidences, and drawing natural, logical and legal inferences and outcomes, which necessarily flows from those facts and evidences [the facts would mean those facts which are self evident or are admitted, or facts which are reasonably proved, disproved or not proved]. Appreciation of facts and evidence is also an exercise wherein the existence of certain facts and evidence, provokes or persuades the decision maker to reach a certain conclusion.
5. Once findings as to facts are arrived at, the decision follows, either granting the reliefs claimed for, or the denial of.
6. However, what is witnessed in many Orders of the Courts is – either (a) In the process of finding of facts, findings on significant material fact are not recorded at all, by overlooking all the materials and evidences and submissions of the losing party, which are placed on record; the evidences and submissions, which had a direct bearing on the decision of the Court; or (b) whilst recording finding as to material fact, some of the material facts agitated / evidences / submissions / Judgments cited are not dealt with. The situation (a) mainly occurs in discretionary jurisdiction Orders/ Interim /Ad-Interim Orders / and Orders passed at Appellate stage; and situation (b) occurs in Orders passed in original proceedings. [Material facts would mean such facts which naturally arises in the nature of legal proceeding and nature of reliefs claimed]
7. In wealth of judgments, the Apex Court and High Courts have insisted upon recording of reasons whilst arriving at findings of facts and law. In a case (AIR 2011 SCW 5486) before it, the Apex Court have observed to say that Judicial decisions must in principle be reasoned and the quality of a judicial decision depends principally on the quality of its reasoning, on law and facts.
8. Therefore, IF it is contempt of the Court, if reasoned findings are not recorded, then it is regressive and aggravated contempt, to not to record findings at all.
9. Can we really compel the Courts to record finding of fact in their decisions? At least the Apex Court in a case before it [(2006) 9 SCC 222], have said Yes. The Apex Court have held that before subjecting a party to the adverse decision, adverse findings must be recorded against it.
The Apex Court in the aforesaid case, have set aside the Order of the High Court on the grounds that, the High Court, before directing the Defendants to “clear the encroachment”, should have recorded the findings that “Defendants had entered upon the suit land and put up construction subsequent to the undertaking given to the trial court”.
It was a case where the Defendant in a Suit gave undertaking to the trial Court that Defendants will not interfere with the possession of the Plaintiff’s land. The Suit was disposed of on the basis of above undertaking. Thereafter, the Plaintiff moved Execution Application under O.21 R.32 before the trial Court alleging that Defendants have constructed some structure on the Suit land. The trial Court dismissed said Execution Application. The Plaintiff challenged trial Court’s Order before High Court. The High Court directed the Defendants to clear the encroachment effected by them on the suit land. In this backdrop, the Apex Court set aside the Order of the High Court on the grounds that, the High Court, before directing the Defendants to “clear the encroachment”, should have recorded the findings that “Defendants had entered upon the suit land and put up construction subsequent to the undertaking given to the trial court”.
10. The Illustration: To illustrate the proposition of “Findings”, agitated hereinabove, therefore, in a Writ Petition, the High Court, before refusing to exercise its writ jurisdiction on the grounds of availability of alternate remedy, and depending upon the nature of facts alleged, must record a prima facie finding that, having regard to the facts on record, (a) fundamental rights of the Petitioners are not infringed; and / or (b) principles of natural justice have not been infringed; or (c) the Authority / Subordinate court / Tribunals have acted within their respective jurisdiction. This is because, there are ample judgments of Apex Court, wherein it is held that, on the existence of any of the aforesaid grounds in the case, notwithstanding availability of alternative remedy, the High Courts must exercise their Writ Jurisdiction under Article 226 of the Constitution of India. [AIR 1970 SC 645; AIR 2010 SCW 7184; AIR 1999 SC 22; AIR 2012 SCW 616; AIR 2003 SC 2120; AIR 2005 SC 3936; AIR 1958 SC 86 (Constitution Bench Judg); (2011) 5 SCC 697; AIR 1969 SC 556; (2015) 6 All MR 35 (BHC)]
Similarly, in an Application for Anticipatory Bail, the Session Judge / High Court, before rejecting Anticipatory Bail must record a prima facie finding that, having regard to the facts on record, (a) the Applicant is not cooperating in the investigation; (b) custodial interrogation of the Accused is essential; or (c) There is a apprehension of tampering of the witness by the Applicant; or (d) There is a possibility of the Applicant to flee from justice; or that there is a possibility of the Accused's likelihood to repeat similar or the other offences.
11. The necessity of recording of finding on material facts, would take away the arbitrary and whimsical discretion of the Courts, for, they have to record findings, based on facts and evidences which are explicitly placed on record. And when the facts / evidence are seen large, the Courts may abstain from recording illogical findings, which are contrary to facts / evidence placed on record, and seen large.
This is how the captioned proposition should come into play, that is, “No adverse Order if No adverse findings”.
The concentrated view which emerges runs to the effect that every decision / Order of the court, be interim or final, must be based on findings of facts recorded by it, whether prima facie or conclusive, on such facts which naturally arises in the nature of legal proceeding and nature of reliefs claimed.
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