Section 138 — Procedure on Complaint, Summons Trial vs Summary Trial

A Section 138 prosecution begins life as a private written complaint — not a police report, not an FIR, not a charge-sheet. From the moment that complaint is presented to the magistrate, a tightly choreographed criminal-procedural machine takes over. Cognizance under Section 142(a) of the Negotiable Instruments Act, 1881; the pre-summoning enquiry under Sections 200 and 202 of the Code of Criminal Procedure, 1973 (now Sections 223 and 225 of the Bharatiya Nagarik Suraksha Sanhita, 2023); a summoning order; service of process under Section 144 NI Act; the magistrate's election between a summary trial under Section 143 and a summons-trial under Chapter XX CrPC; the recording of plea, evidence on affidavit under Section 145, judgment, and sentence. Each step has its own statutory anchor and its own pitfalls. This chapter walks the procedural choreography end-to-end.

The substantive ingredients of the offence are the subject of Bouncing of Cheques — Section 138 Essentials; the calendar discipline governing the thirty-day notice and the one-month complaint clock is treated in Section 138 — Statutory Notice and Limitation. This chapter assumes the offence is otherwise made out and the limitation regime satisfied; it concentrates on what happens between the filing of the complaint and the conclusion of trial. The register throughout is criminal-procedural, in keeping with the rest of the cluster of Negotiable Instruments Act notes dealing with Sections 138 to 147.

The complaint as the originating instrument

Section 142(a) opens the procedural chapter by stipulating that no court shall take cognizance of an offence punishable under Section 138 except upon a written complaint made by the payee or, as the case may be, the holder in due course of the cheque. Three propositions follow. First, the proceeding is purely private; a police report under Section 173 CrPC (Section 193 BNSS) is not the gateway. Second, the complainant must be the person whose right has been wronged — the payee or holder in due course — and a stranger to the cheque cannot prosecute. Third, the complaint must be in writing and signed; an oral complaint is jurisdictionally void.

Where the payee is a corporate body, the Supreme Court in M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd. AIR 2002 SC 182 confirmed that the complaint may be filed by an authorised person on behalf of the company. The earlier ruling in Associated Cement Co. Ltd. v. Keshvanand (1998) 1 SCC 687 had insisted that the complainant must be a corporeal person capable of physically appearing in court; M.M.T.C. harmonised that requirement with corporate practice by holding that the company is the de jure complainant, and a duly authorised officer is the de facto representative who can be substituted across the proceedings.

What the complaint must contain

A workable Section 138 complaint must plead, with documentary annexures: the issue of the cheque (with date, payee, drawer's bank); the presentation within the period of validity under proviso (a); the bank's return memo evidencing dishonour; the statutory notice under proviso (b) along with proof of dispatch; the failure of the drawer to pay within fifteen days of receipt under proviso (c); and the date on which the cause of action accrued for the purpose of Section 142(b). The accompanying list of witnesses must include the complainant and the bank witness who can prove the return memo. Without these averments the magistrate cannot reach the satisfaction required to take cognizance.

Cognizance under Section 142(a)

Cognizance is the first judicial act in the proceeding. It is not the same as taking the case on file, and not the same as issuing process; cognizance is the magistrate's mental act of applying his mind to the offence alleged. The Supreme Court in N. Harihara Krishnan v. J. Thomas (2018) 13 SCC 663 stressed the unusual statutory architecture of Section 138 — the cause of action is computed from a private notice, the limitation runs from the cause of action, and cognizance must be taken within the one-month window unless condonation under the proviso to Section 142(b) is sought.

Practical consequences flow from this. A complaint filed beyond the one-month period without a contemporaneous condonation application is liable to be dismissed at the threshold. Where the complainant pleads sufficient cause, the magistrate must decide condonation as a preliminary issue before proceeding to record the complainant's statement; the discretion is judicial and tracks the standard of sufficient cause familiar from Section 5 of the Limitation Act, 1963.

The pre-summoning enquiry — Sections 200 and 202 CrPC

The general criminal procedure for private complaints applies to Section 138 cases, subject to the changes worked by Sections 143 to 147 NI Act. The two sections that govern the pre-summoning stage are Section 200 CrPC (now Section 223 BNSS) and Section 202 CrPC (now Section 225 BNSS).

Section 200 CrPC requires the magistrate, on receipt of a complaint, to examine the complainant and the witnesses present on oath, and to reduce the substance of the examination to writing signed by the complainant, the witnesses, and the magistrate. The examination is the magistrate's first source of judicial satisfaction that the ingredients of the offence are made out. In Section 138 proceedings the examination is typically read with the complaint and its annexures — the cheque, the return memo, the notice, and proof of service. Where the complainant has filed an affidavit in lieu of personal examination, the affidavit serves the same function, the practice having been validated by the Supreme Court in Indian Bank Association v. Union of India (2014) 5 SCC 590 to accelerate disposal.

Section 202 CrPC empowers the magistrate, before issuing process, to either inquire into the case himself or direct an investigation. In Section 138 cases the inquiry is generally conducted by the magistrate himself, on the documentary record together with the complainant's sworn statement; an investigation by the police is rarely apposite for what is, after all, a paper-trail offence.

The Supreme Court in Vijay Dhanuka v. Najima Mamtaj (2014) 14 SCC 638 held that where the accused resides outside the magistrate's territorial jurisdiction, the inquiry under Section 202 is mandatory. The 2005 amendment to Section 202 CrPC, which made such inquiry obligatory in extra-territorial cases, applies to Section 138 prosecutions as it does to other private complaints. Failure to conduct the inquiry where the accused is outside the jurisdiction renders the issuance of process bad and exposes the order to challenge under Section 482 CrPC.

The summoning order

If, on completion of the Section 200/202 enquiry, the magistrate is satisfied that there is sufficient ground to proceed, he issues process — a summons under Section 204(1)(a) CrPC, since Section 138 is bailable, non-cognizable and triable by a magistrate. The summoning order is not a routine ministerial act. It must reflect application of judicial mind, however briefly, to the existence of a prima facie case on every ingredient of Section 138. The Supreme Court in Pepsi Foods Ltd. v. Special Judicial Magistrate (1998) 5 SCC 749 cautioned that summoning an accused in a criminal case is a serious matter; the magistrate must be conscious of the consequences and not act mechanically.

The order should record the identity of the accused, the offence alleged, the date for appearance, and the directions for service. Where there are multiple accused — the company together with its directors and signatories under Section 141 NI Act — the order must identify each, and the underlying complaint must specifically aver the role of each director or person in charge of and responsible to the company for the conduct of its business.

Service of summons — Section 144 NI Act

Section 144 of the Negotiable Instruments Act, inserted by the 2002 amendment, simplifies service of summons by permitting service by speed post or by an approved courier service in addition to the modes recognised under the Code. A summons sent by speed post or courier and refused or returned with a postal endorsement to that effect is deemed duly served. The rule mirrors the deemed-service architecture under Section 27 of the General Clauses Act, 1897, and is intended to deny the absconding drawer the cheap dilatory tactic of dodging the postman. The mode-of-service mechanics are further drilled in Section 144 — Service of Summons; Section 145 — Affidavit Evidence.

Choosing the trial mode — summary or summons

Once the accused appears in obedience to summons, the magistrate must decide the mode of trial. There are two competent procedures: a summary trial under Section 143 NI Act read with Sections 262 to 265 CrPC (now Sections 283 to 286 BNSS); and a summons trial under Chapter XX CrPC (Chapter XXI BNSS, Sections 274 to 282 CrPC). The default election is summary, by force of the non-obstante opening of Section 143(1).

Section 143(1) reads, in substance, that notwithstanding anything contained in the Code of Criminal Procedure, all offences under Chapter XVII of the NI Act shall be tried by a Judicial Magistrate of the First Class or a Metropolitan Magistrate, and the provisions of Sections 262 to 265 of the Code (so far as may be) shall apply to such trials. The intent of the 2002 amendment was speed: a summary trial dispenses with much of the formality of a regular summons trial, records evidence in summary form, and is suited to a paper offence with limited factual disputes.

The summary regime is exhaustively examined in the dedicated Section 143 — Power to Try Cases Summarily chapter. For the present procedural map two points suffice. First, the sentence cap in a summary trial is one year of imprisonment plus a fine of up to five thousand rupees; a sentence beyond that ceiling cannot be passed in summary mode. Second, the magistrate retains the power, under the second proviso to Section 143(1), to convert the case into a summons trial whenever, in the course of summary trial, it appears that the nature of the case requires a sentence exceeding one year, or that for any other reason it is undesirable to proceed summarily. The conversion power is judicial and must be exercised by recorded order; once converted, the trial is governed by the regular summons-trial procedure, and any evidence already recorded summarily is reheard or, with the consent of the parties, treated as recorded under the summons-trial regime.

When summons trial is the right election

The magistrate would ordinarily elect summons trial — or convert mid-stream — where the cheque amount is large enough that the cap of five thousand rupees as fine cannot do justice and a sentence beyond one year is in contemplation; where the factual matrix is materially disputed and oral examination of multiple witnesses is anticipated; where the accused is a corporate body with multiple directors arrayed under Section 141 and the role of each requires individual consideration; or where issues of forgery, alteration, or material misdescription of the cheque arise that demand a fuller record. In each of those situations the summary register is too cramped, and a summons-trial format under Sections 251 to 259 CrPC offers room for the sort of detailed examination the case deserves.

The trial sequence

Whether the trial proceeds summarily or as a summons trial, the broad sequence is the same: framing of the substance of the accusation; recording of plea; recording of complainant's evidence; recording of defence evidence (if any); arguments; and judgment.

Substance of accusation and plea. Under Section 251 CrPC (Section 274 BNSS) in a summons trial, or under Section 263 CrPC (Section 284 BNSS) in summary mode, the magistrate states the substance of the accusation to the accused and asks whether he pleads guilty. There is no formal charge in either mode. A plea of guilty allows the magistrate to convict on the spot and pass sentence; a plea of not guilty requires the case to proceed to evidence.

Complainant's evidence. Section 145(1) NI Act, read with the second proviso, permits the complainant to lead his evidence by affidavit. The affidavit may be read in evidence, and the deponent may be cross-examined. The Supreme Court in Indian Bank Association v. Union of India (2014) 5 SCC 590 directed that wherever possible the entire trial be conducted on affidavit evidence to give effect to the six-month disposal target in Section 143(3) NI Act. The bank witness who proves the return memo is presumed competent under Section 146 NI Act, which raises a presumption of dishonour from the bank's slip or memo bearing the official mark.

Statement of accused under Section 313 CrPC. After the complainant closes his evidence, the accused is examined under Section 313 CrPC (Section 351 BNSS) on the circumstances appearing in the evidence against him. The examination is mandatory; the magistrate must put the incriminating evidence to the accused so that he has an opportunity to explain. Failure to put a material circumstance vitiates the trial.

Defence evidence and arguments. The accused may, but is not bound to, lead defence evidence. He may rebut the presumptions under Sections 118 and 139 NI Act on a standard of preponderance of probabilities, the rebuttal standard discussed in detail in Sections 139 to 142 — Presumptions, Cognizance, Jurisdiction. After defence evidence the parties address arguments and the magistrate proceeds to judgment.

Judgment and sentence

Section 138 prescribes a maximum sentence of two years' imprisonment, or fine which may extend to twice the amount of the cheque, or both. The 2002 amendment raised the imprisonment cap from one year to two. In summary mode the cap is one year plus a fine of five thousand rupees, by reason of Section 143(1) and Section 262(2) CrPC. The Supreme Court in Suganthi Suresh Kumar v. Jagadeeshan AIR 2002 SC 681 emphasised that magistrates should make liberal use of Section 357(3) CrPC (Section 395(3) BNSS) to award compensation to the complainant out of the fine, especially where the cheque amount exceeds the fine cap. The compensation question is treated separately in Compensation in Cheque Bounce Cases.

Plea-bargaining, compounding, settlement

Section 147 NI Act, again inserted by the 2002 amendment, makes every offence under the Act compoundable, notwithstanding anything in the CrPC. The compounding may be at any stage — before plea, mid-trial, or even at the appellate stage — and the Supreme Court in Damodar S. Prabhu v. Sayed Babalal H. (2010) 5 SCC 663 prescribed graduated cost-scales to discourage late compounding without barring it. The compounding regime is the subject of Section 147 — Compoundability of Offences; for procedural purposes it is sufficient to note that the magistrate must record the compromise and acquit on payment of the agreed amount.

Where the complainant fails to appear on a hearing date in a summons or summary trial, Section 256 CrPC (Section 279 BNSS) empowers the magistrate to acquit the accused; where neither side appears, Section 249 (in summons cases instituted otherwise than on police report) and the magistrate's general inherent power may be invoked. The risk of an acquittal under Section 256 means that complainants must remain diligent throughout the proceeding, not merely at the inception.

Quashing under Section 482 CrPC

The High Court's inherent jurisdiction under Section 482 CrPC (Section 528 BNSS) is occasionally invoked at two points in the Section 138 procedure. First, immediately after issuance of process, where the accused contends that the complaint does not disclose an offence — for example, that the cheque was admittedly issued only as security and not for a debt. The Supreme Court in M.M.T.C. cautioned against a mini-trial at the quashing stage; the High Court is not justified in entering an enquiry as to the reliability of the complaint at the threshold. Second, post-trial or pending appeal, where settlement has occurred and the parties wish to quash on consent — a pathway recognised by Damodar S. Prabhu.

The narrow band of legitimate Section 482 quashing in Section 138 cases is well-defined: the complaint is barred by limitation and condonation has not been sought; the complaint is filed by a person other than the payee or holder in due course; the cheque is not for a legally enforceable debt or liability and the defence is incontestable on admitted facts; or, classically, settlement has been reached and the parties pray for quashing as a settlement instrument. Outside that band, the High Court declines to interfere and leaves the parties to trial.

Death of complainant or accused; abatement

Two continuity questions complete the procedural map. Where the original complainant dies after the complaint has been filed, his legal heirs may be added on application and proceedings continue without abatement; the offence is one against the payee's interest, and the heir's right to prosecute is recognised. Where the accused dies, the proceedings abate; the legal heirs of the drawer cannot be substituted as accused, because criminal liability under Section 138 is personal and not transmissible. Both rules track the broader scheme of compoundable criminal proceedings and the quasi-criminal character of the Section 138 cluster.

Three procedural traps to avoid

Three recurring procedural mistakes deserve their own warning. One, treating the Section 142(b) one-month period as the only limitation clock — the calendar discipline of three nested clocks must be respected at the complaint stage, not at trial. Two, omitting the role-pleading averments under Section 141 NI Act when the accused is a director — the complaint must specifically aver who was in charge of and responsible for the conduct of the company's business; a generic averment will not survive scrutiny under S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89. Three, treating the summary trial as automatic — the magistrate must consciously elect summary mode under Section 143(1), and must consciously convert under the second proviso when the case outgrows the summary regime.

The procedural choreography in one line

Complaint in writing under Section 142(a) → cognizance, with condonation if needed under the proviso to Section 142(b) → enquiry under Section 200/202 CrPC → summoning order under Section 204 CrPC → service under Section 144 NI Act → appearance → election of summary or summons trial under Section 143 → substance of accusation, plea, complainant's evidence on affidavit under Section 145, statement under Section 313 CrPC, defence evidence, arguments → judgment, sentence, compensation under Section 357(3) CrPC, or compounding under Section 147. The aspirant who has internalised this sequence will not lose marks on a procedural fact-pattern.

Frequently asked questions

Why is a Section 138 case prosecuted only on a written complaint and not on a police report?

Section 142(a) of the Negotiable Instruments Act expressly bars cognizance on anything other than a written complaint by the payee or holder in due course. The legislative architecture treats the offence as a private wrong with quasi-criminal consequences, not as a public-order offence requiring police investigation. The cheque, the return memo, and the statutory notice are paper records that the complainant can prove without a police charge-sheet, which is why the complaint route was the natural design.

Is the Section 202 CrPC enquiry mandatory before summoning the accused?

Where the accused resides outside the territorial jurisdiction of the magistrate, the enquiry under Section 202 CrPC (Section 225 BNSS) is mandatory after the 2005 amendment, as held by the Supreme Court in Vijay Dhanuka v. Najima Mamtaj (2014) 14 SCC 638. Within the magistrate's jurisdiction, the enquiry is discretionary; the magistrate may proceed on the complainant's sworn statement and the documentary record. Failure to conduct the enquiry where it is mandatory makes the summoning order vulnerable to quashing under Section 482 CrPC.

When does a magistrate convert a Section 138 trial from summary to summons?

The second proviso to Section 143(1) NI Act empowers the magistrate, mid-trial, to convert to a summons trial when it appears that a sentence exceeding one year may be warranted, or that for any other reason it is undesirable to try the case summarily. Conversion is by recorded order. Common triggers are a large cheque amount where the five-thousand-rupee fine cap is inadequate, materially disputed factual issues that need detailed oral evidence, and corporate accused where the role of each director under Section 141 needs separate consideration.

Can the complainant lead his entire evidence by affidavit under Section 145 NI Act?

Yes. Section 145(1) NI Act permits the complainant's evidence to be given on affidavit, and the affidavit may be read in evidence. The Supreme Court in Indian Bank Association v. Union of India (2014) 5 SCC 590 directed the trial courts to use this facility extensively to give effect to the six-month disposal target in Section 143(3). The deponent remains available for cross-examination, and the bank witness who proves the return memo enjoys the presumption under Section 146 NI Act.

What happens if the complainant fails to appear on a hearing date?

Section 256 CrPC (Section 279 BNSS) empowers the magistrate to acquit the accused on the complainant's non-appearance, unless personal attendance has been dispensed with and the case is one in which the prosecution can be conducted by an authorised person. The risk of acquittal under Section 256 is the principal procedural reason complainants must remain diligent throughout the proceeding, not merely at the inception.

On what grounds can a Section 138 proceeding be quashed under Section 482 CrPC?

The narrow legitimate band is: the complaint is barred by limitation and no condonation has been sought; the complainant is not the payee or holder in due course; the cheque is admittedly not issued for a legally enforceable debt or liability; or settlement has been reached between the parties under Section 147 NI Act. The Supreme Court in M.M.T.C. Ltd. v. Medchl Chemicals (2002) cautioned against a mini-trial at the quashing stage. Outside the narrow band, the High Court declines to interfere.