Karnataka High Court Clarifies Legal Procedure in Cheque-Bounce Cases
In a significant legal ruling, the Karnataka High Court has established that courts are not obligated to issue notice to the accused or conduct a hearing before taking cognisance of offences under cheque-bounce cases. This decision reinforces the supremacy of the Negotiable Instruments (NI) Act over the newly implemented Bharatiya Nagarik Suraksha Sanhita (BNSS) provisions in such matters.
Court Rejects Developer's Challenge
Justice M Nagaprasanna delivered this judgment while dismissing a petition filed by Mangaluru-based Mudra Developers. The company had challenged a December 4, 2023 order from a district and sessions court, which had upheld a magistrate court's decision to take cognisance of a cheque-bounce complaint. The complaint was filed by Ashirvad Infra Developers against Mudra Developers and its two partners concerning a dishonoured cheque worth Rs 10 lakh.
Legal Argument and Exception Clause
Mudra Developers contended that with BNSS coming into effect on July 1, 2024, the magistrate's September 26, 2024 order should have followed Section 223 of BNSS. This section mandates issuing notice to the accused, providing an opportunity for hearing, and only then taking cognisance of the offence.
However, Justice Nagaprasanna highlighted that BNSS Section 5 contains a crucial exception clause. This provision states that nothing in BNSS shall affect any special or local law currently in force, unless there is a specific contrary provision. The court determined that the Negotiable Instruments Act qualifies as a special law, thereby taking precedence over BNSS in cheque-bounce proceedings.
Implications for Legal Proceedings
This ruling clarifies the procedural hierarchy in financial dispute cases, emphasizing that the specific provisions of the NI Act override general criminal procedure requirements. Legal experts suggest this decision could streamline cheque-bounce cases by reducing preliminary procedural steps, potentially expediting justice in commercial disputes across Karnataka.
The judgment underscores the importance of specialized legislation in handling specific types of offences, maintaining that established special laws retain their authority even when new general procedural codes are implemented.
