Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | Crl.A. No.-005588-005588 – 2025 |
| Diary Number | 32336/2019 |
| Judge Name | HON’BLE MR. JUSTICE MANOJ MISRA |
| Bench | HON’BLE MR. JUSTICE MANOJ MISRA; HON’BLE MR. JUSTICE UJJAL BHUYAN |
| Precedent Value | Binding |
| Overrules / Affirms | Affirms existing precedent |
| Type of Law | Criminal (Negotiable Instruments Act) |
| Questions of Law | Whether High Courts can quash Section 138 NI Act complaints at pre-trial by evaluating debt discharge despite the presumption under Section 139 |
| Ratio Decidendi |
While exercising inherent power under Section 482 CrPC, courts at the threshold must only examine whether the allegations and supporting materials disclose a prima facie offence under Section 138 NI Act and whether process should issue. A roving inquiry into the purpose for which a cheque was issued is impermissible before trial because Section 139 NI Act raises a presumption that the cheque was received for the discharge of debt or liability, rebuttable only by evidence led at trial. High Courts may quash only in cases of abuse of process or to secure ends of justice, not by assessing disputed factual questions regarding debt discharge at the pre-trial stage. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court |
The complainant supplied goods and received a cheque for ₹20,00,000 dated 04.03.2013, which bounced twice for insufficient funds. A demand notice of 02.04.2013 elicited a denial on 08.04.2013, and no payment followed. The magistrate summoned the drawer, but the High Court quashed the complaint holding the cheque was not issued for debt discharge. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts |
| Persuasive For | High Courts considering quashing petitions under Section 482 CrPC in NI Act cases |
| Follows |
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What’s New / What Lawyers Should Note
- High Courts lack jurisdiction under Section 482 CrPC to carry out a pre-trial inquiry into whether a cheque was issued for discharge of debt when Section 139 NI Act raises a statutory presumption.
- Rebuttal of the presumption in Section 139 is confined to the trial stage; merits cannot be tested at the threshold.
- Section 482 power remains restricted to cases of abuse of the process of court or to secure the ends of justice.
- Advocates for complainants should resist pre-trial quashing petitions that seek to challenge the purpose of issuance of the cheque.
- Defendants challenging Section 138 complaints must prepare to raise factual disputes only at trial, not via quashing applications.
Summary of Legal Reasoning
- A quashing petition under Section 482 CrPC requires examination only of whether the complaint and annexed materials disclose a prima facie offence, not a detailed inquiry into disputed facts.
- The complaint in this case satisfied all ingredients of Section 138 NI Act: cheque issuance, dishonour memo, statutory notice, and non-payment.
- Section 139 NI Act raises a presumption that the cheque was received for discharge of debt or liability, rebuttable only by evidence at trial.
- The High Court erred in conducting a “roving inquiry” into whether the cheque was issued for debt discharge at the pre-trial stage, contrary to settled precedents.
- Reliance on Maruti Udyog, Rangappa, Rajeshbhai, and Rathish Babu underscores that factual disputes regarding debt discharge must be resolved during trial.
Arguments by the Parties
Petitioner (Complainant):
- The High Court exceeded its jurisdiction under Section 482 CrPC by testing the debt discharge element of Section 138 NI Act at the threshold.
- Section 139 NI Act raises a presumption of debt discharge that can only be rebutted at trial.
- The complaint disclosed a prima facie offence and process ought to issue.
Respondent (Accused):
- The complaint was mala fide and lacked any legally enforceable debt or liability.
- The cheque was not issued for the discharge of any debt.
- The High Court correctly quashed the proceedings on these facts.
Factual Background
The appellant supplied goods and received a cheque dated 04.03.2013 for ₹20,00,000, which bounced twice for insufficient funds. A demand notice was sent on 02.04.2013 and the drawer denied liability on 08.04.2013. The complainant filed a complaint under Section 138 NI Act; the magistrate summoned the accused. The High Court quashed the complaint on the ground that the cheque was not issued for discharge of liability. The Supreme Court restored the complaint, holding that the presumption under Section 139 NI Act and the prima facie nature of the offence preclude pre-trial quashing.
Statutory Analysis
- Section 138 NI Act: Defines the offence for dishonour of cheques for insufficiency of funds, requiring presentation, dishonour memo, notice, and non-payment.
- Section 139 NI Act: Raises a statutory presumption that a cheque drawn by the drawer and presented by the holder was issued for the discharge of debt or other liability, rebuttable only through evidence at trial.
- Section 482 CrPC: Grants inherent powers to quash criminal proceedings to prevent abuse of process and secure ends of justice, but not to decide disputed factual issues pre-trial.
Alert Indicators
- ✔ Precedent Followed