Action for the offence under Section 138 of the Negotiable Instruments Act starts with the bouncing or dishonour of the cheque by the bank.
If the cheque is returned unpaid by the bank because of the insufficient funds, the process under Section 138 of NI Act starts.
The Payee has then to make a demand for the payment by giving a notice in writing, to the drawer of the cheque, within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.
If the drawer of such cheque fails to make the payment within 15 days of the receipt of the said notice, then a criminal complaint under Section 138 can be filed in the competent court for cheque dishonour. Such complaint is required to be made within 1 month of the expiry of the period of 15 days within which the drawer was required to make the payment after receipt of above notice.
As laid down in Section 143 of the NI Act, after filing of the complaint, the trial of such case is to be conducted summarily, i.e., the provisions relating to summary trial of cases as laid down in Chapter 21 of the Cr.P.C. (mainly, sections 262 to 265) have to be followed.
Recently, in the case of Meters and Instruments (P) Ltd. v. Kachan Mehta, (2018) 1 SCC 560, the Supreme Court has held that the offence under Section 138 is primarily in nature of civil wrong and proceedings primarily compensatory in nature. Summary procedure should normally be followed except where exercise of power under second proviso to Section 143 considered necessary. Court has jurisdiction under Section 357(3) Cr.P.C. to award suitable compensation with default sentence under Section 64 IPC with further powers of recovery under Section 431 Cr.P.C. Court may close proceedings if accused deposits amount as assessed by it having regard to cheque amount, interest/costs, etc. within stipulated period. Compounding at initial stage and even at later stage is acceptable. Certain proceedings can be conducted online. Affidavit evidence can be received as evidence at all stages of trial or proceedings.
For the summary trial, the procedure to be followed is basically the same as in the case of a summons-case as laid down in Chapter 20 of the Cr.P.C. (Section 251 to 259) with some minor changes.
This procedure in brief is as under:
- When accused appears before the court after he has been summoned, the particulars of the offence of which he is accused shall be stated to him, and he shall be asked whether he pleads guilty or has any defence to make. However, it is not necessary to frame a formal charge.
- If the accused pleads guilty, the Magistrate records the plea and may, in his discretion, convict him thereon.
- Otherwise, the Magistrate proceeds to hear the prosecution and records all prosecution evidence. Affidavit evidence can be received as evidence of the witnesses. The accused has the right to cross-examine witnesses of the prosecution.
- Thereafter, the court hears the accused and takes all such evidence as he produces in his defence.
- After this, after hearing final arguments, the court will pronounce its judgment.
If you want to amend the list of prosecution witnesses, you can make an application before the court for doing so, giving whatever relevant reasons are there.
Your third question is too wide to cover here. You can take guidance from some local lawyer if you are new and do not know much about the procedure.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.
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