M/S Sri Om Sales vs Abhay Kumar @ Abhay Patel

REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 5588 OF 2025 (Arising out of SLP (Crl.) No. 8703/2019)

M/S SRI OM SALES …Appellant(S)

VERSUS

ABHAY KUMAR @ ABHAY PATEL & ANR. …Respondent(S

JUDGMENT

MANOJ MISRA, J.

1. Leave granted.

2. This appeal impugns judgment and order of the High Court

of Judicature at Patna1 dated 20.06.2019 in Criminal

Miscellaneous No. 3744 of 2015 whereby, while exercising powers Signature Not Verified Digitally signed by CHETAN ARORA Date: 2025.12.19 16:05:21 IST Reason:

1 The High Court

Page 1 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019 under Section 482 of the Code of Criminal Procedure, 19732, High

Court quashed the entire criminal proceedings arising out of

Complaint Case No. 1563(C) of 2013.

3. Briefly stated, the facts giving rise to the appeal are that the

appellant lodged a complaint under Section 138 of the Negotiable

Instruments Act, 18813 against the first respondent by alleging,

inter alia, that the first respondent took delivery of goods from the

complainant and in lieu thereof issued cheque, dated 04.03.2013,

of Rs. 20,00,000. On 04.03.2013 itself, the complainant presented

the said cheque with its banker for collection. However, the same

was returned unpaid on 11.03.2013 with a remark of insufficient

funds in the drawer’s account. The complainant thereafter met the

first respondent on 12.03.2013 who assured that if the cheque is

presented after a week, it will be honored. In consequence, cheque

was re-presented on 17.03.2013 but it was again returned unpaid

on 18.03.2013, with same remark. As a result, on 02.04.2013 a

legal notice of demand was sent to the first respondent. In its reply

dated 08.04.2013, the first respondent denied having issued the

2 The Code 3 N.I. Act Page 2 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019 cheque and refused to make payment. Since payment was not

made within the stipulated period, the complaint was filed.

4. The learned Magistrate took cognizance on the complaint and

vide order dated 27.09.2013 summoned the first respondent under

Section 138 of N.I. Act. Aggrieved by the summoning order dated

27.09.2013, the first respondent filed an application (i.e., Criminal

Miscellaneous No. 3744 of 2015), under Section 482 of the Code,

before the High Court.

5. By the impugned order dated 20.06.2019, the High Court

quashed the complaint proceedings, inter alia, on the ground that

the cheque was not issued for the discharge, in whole or in part,

of any debt or other liability.

6. Aggrieved by the impugned order, the complainant has filed

this appeal.

7. We have heard learned counsel for the parties and have

perused the materials available on record.

8. In short, the submission on behalf of the appellant is that the

High Court exceeded its jurisdiction under Section 482 of the Code

by holding an enquiry as to whether the cheque in question was

for the discharge, in whole or in part, of any debt or other liability

Page 3 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019 inasmuch as under Section 139 of the N.I. Act a presumption is

raised, unless the contrary is proved, that the holder of a cheque

received the cheque of the nature referred to in Section 138 for the

discharge, in whole or in part, of any debt or other liability. Though

this presumption is rebuttable, such presumption can only be

rebutted in trial and therefore, the complaint which encapsulates

all the essential ingredients of an offence punishable under Section

138 of N.I. Act could not have been quashed at the threshold by

examining whether the cheque concerned was received by the

holder of the cheque for the discharge, in whole or in part, of any

debt or other liability.

9. Per contra, the learned counsel for the first respondent

submitted that the complaint was mala fide and therefore, the

High Court was well within its jurisdiction to consider whether the

cheque had been issued for the discharge, in whole or in part, of

any debt or other liability. It was argued that once the High Court

has recorded a finding that the cheque was not issued for the

discharge, in whole or in part, of any debt or other liability, no

interference with the order of the High Court is called for.

10. We have considered the rival submissions and have perused

the materials on record.

Page 4 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019

11. The law is well settled that while considering a prayer to

quash the criminal complaint and the consequential proceedings

at the threshold, the Court is required to examine whether the

allegations made in the complaint along with materials in support

thereof make out a prima facie case to proceed against the accused

or not. If upon reading the complaint allegations and perusing the

materials filed in support thereof, a prima facie case is made out

to proceed against the accused, the complaint cannot be quashed,

particularly, by appreciating the evidence/ materials on record

because the stage for such appreciation is at the trial. No doubt,

in exceptional circumstances, the Court may take notice of

attending circumstances to conclude that continuance of the

proceedings would amount to an abuse of the process of the Court,

or where quashing of the proceedings is necessary to secure the

ends of justice.

12. In the instant case, the complaint clearly spells out the

necessary ingredients for commission of an offence punishable

under Section 138 of the N.I. Act. It is also alleged in the complaint

that the cheque was issued in the discharge of liability qua goods

supplied by the complainant. The cheque was brought on record

along with the dishonor memo of the bank concerned which

Page 5 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019 indicated that it was returned unpaid for insufficient funds in the

drawer’s account. The complaint also indicated that complainant

had served notice of demand within the specified period and

despite service of notice of demand, no payment was made. In such

circumstances, the necessary ingredients of an offence punishable

under Section 138 of N.I. Act were disclosed by the complaint

warranting issuance of process to the accused (i.e., the first

respondent).

13. However, the High Court, in its jurisdiction under Section

482, proceeded to test whether the cheque was issued for the

discharge, in whole or in part, of any debt or other liability. In our

view, such an exercise was unwarranted because, under Section

139 of the N.I. Act, there is a presumption that the holder of a

cheque received the cheque of the nature referred to in Section 138

for the discharge, in whole or in part, of any debt or other liability.

This presumption can be rebutted by evidence led in trial. A fortiori,

the said issue can appropriately be decided either at the trial, or

later, upon conclusion of trial, by the appellate/ revisional court.

Page 6 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019

14. In Maruti Udyog Ltd. v. Narender and others4, this Court

held that a presumption must be drawn that the holder of the

cheque received the cheque of the nature referred to in Section

138, for the discharge of any debt or other liability unless the

contrary is proved and, therefore, the High Court was not justified

in entertaining and accepting the plea of the accused at the initial

stage of the proceedings and quash the complaint.

15. Likewise, in Rangappa v. Sri Mohan5, it was held that the

presumption mandated by Section 139 of the N.I. Act includes the

existence of a legally enforceable debt or liability. It was observed

that such a presumption is rebuttable, and the accused must raise

its defense in the trial.

16. In Rajeshbhai Muljibhai Patel v. State of Gujarat6, it was

held that the High Court should not quash the criminal complaint

under Section 138 of N.I. Act by going into disputed questions of

fact regarding the cheque in question being issued for the

discharge of debt or liability. Moreso, when Section 139 of the N.I.

Act raises a statutory presumption as regards the cheque being

issued for discharge of debt or liability.

4 (1999) 1 SCC 113 5 (2010) 11 SCC 441 6 (2020) 3 SCC 794

Page 7 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019

17. In Rathish Babu Unnikrishnan v. State (NCT of Delhi)7,

this Court held that when there is a legal presumption under

Section 139 of N.I. Act, it would not be judicious to carry out a

detailed enquiry on a disputed question of fact at a pre-trial stage

to quash the complaint. The relevant observations in the judgment

are extracted below:

“17. The proposition of law as set out above makes it abundantly clear that the court should be slow to grant the relief of quashing a complaint at a pre-trial stage, when the factual controversy is in the realm of possibility particularly because of the legal presumption, as in this matter. What is also of note is that the factual defense without having to adduce any evidence need to be of an unimpeachable quality, so as to altogether disprove the allegations made in the complaint.

18. The consequences of scuttling the criminal process at a pretrial stage can be grave and irreparable. Quashing proceedings at preliminary stages will result in finality without the parties having had an opportunity to adduce evidence and the consequence then is that the proper forum i.e., the trial court is ousted from weighing the material evidence. If this is allowed, the accused may be given an unmerited advantage in the criminal process. Also, because of the legal presumption, when the cheque and the signature are not disputed by the appellant, the balance of convenience at this stage is in favor of the complainant / prosecution, as the accused will have the opportunity to adduce defense evidence during the trial, to rebut the presumption.

19. Situated thus, to non-suit the complainant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled

7 (2022) 20 SCC 661

Page 8 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019 out here subject to the determination by the trial court.

Therefore, when the proceedings are at a nascent stage, scuttling of the criminal process is not merited.”

18. Having regard to the aforesaid decisions of this Court as also

the provisions of Section 139 of the N.I. Act, we are of the

considered view that the High Court committed an error by

conducting a roving enquiry, at the pre-trial stage, as regards the

cheque being issued for the discharge of debt or liability. Such an

exercise, in our view, was not merited in exercise of power under

Section 482 of the Code more so when the complaint allegations

disclosed that the cheque was issued for discharge of liability. As

fulfillment of the necessary ingredients of Section 138 N.I. Act are

prima facie made out from the complaint allegations, in our view,

neither the summoning order nor the complaint could have been

quashed by the High Court at the pre-trial stage.

19. For the aforesaid reasons, this appeal is allowed. The order

of the High Court is set aside. The criminal complaint in question

is restored on the file of the concerned Magistrate and shall be

dealt with in accordance with law.

20. We make it clear that we have not expressed any opinion as

to whether the cheque in question was issued for the discharge, in

Page 9 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019 whole or in part, of any debt or liability. The said issue shall be

decided by the Trial Court independently without being prejudiced

by any of the observations made in the order of the High Court

which has been set aside by this order.

21. Pending application(s), if any, shall stand disposed of.

……………………………J (MANOJ MISRA)

……………………………J (UJJAL BHUYAN) NEW DELHI;

DECEMBER 19, 2025

Page 10 of 10 Criminal Appeal @ SLP (Crl.) No. 8703/2019