M/S SRI OM SALES v. ABHAY KUMAR @ ABHAY PATEL
Quashing of Complaint under Section 138 NI Act - High Court Erred in Pre-Trial Inquiry into Debt Discharge; Statutory Presumption Under Section 139 NI Act to be Rebutted at Trial.
Court: Supreme Court of India
Citation: 2025 INSC 1474
Decision Date: 19-12-2025
List of Laws
Negotiable Instruments Act, 1881; Section 138 of the Negotiable Instruments Act, 1881; Section 139 of the Negotiable Instruments Act, 1881; Code of Criminal Procedure, 1973; Section 482 of the Code of Criminal Procedure, 1973
- Facts: The appellant, M/S Sri Om Sales, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 against the first respondent, Abhay Kumar, alleging that the respondent took delivery of goods and issued a cheque for Rs. 20,00,000 in lieu thereof. The cheque was dishonored due to insufficient funds. Despite assurance of honoring the cheque upon re-presentation, it was again dishonored. The respondent denied issuing the cheque in reply to a legal notice.
- Procedural Posture: The Magistrate took cognizance and summoned the respondent. The respondent then filed an application under Section 482 of the Code of Criminal Procedure before the High Court, seeking to quash the complaint. The High Court quashed the complaint proceedings, leading the complainant to file an appeal before the Supreme Court.
- Issue: Did the High Court err in quashing the complaint proceedings under Section 138 of the Negotiable Instruments Act at the pre-trial stage by inquiring into whether the cheque was issued for the discharge of a debt or liability, thereby exceeding its jurisdiction under Section 482 of the Code of Criminal Procedure?
- Holding: Yes, the Supreme Court held that the High Court erred in quashing the complaint at the pre-trial stage. The Supreme Court set aside the order of the High Court and restored the criminal complaint.
- Reasoning: The Court reasoned that under Section 139 of the N.I. Act, there is a presumption that the holder of a cheque received it for the discharge of a debt or liability. This presumption is rebuttable, but only through evidence led at trial. The High Court should not have conducted a "roving enquiry" at the pre-trial stage to determine if the cheque was issued for the discharge of a debt or liability. The Court emphasized that when the complaint discloses the necessary ingredients of Section 138 N.I. Act, neither the summoning order nor the complaint should be quashed at the pre-trial stage. The Court cited previous judgments, including Maruti Udyog Ltd. v. Narender and others, Rangappa v. Sri Mohan, Rajeshbhai Muljibhai Patel v. State of Gujarat, and Rathish Babu Unnikrishnan v. State (NCT of Delhi), to support its view that a detailed enquiry into disputed questions of fact is inappropriate at the pre-trial stage when a legal presumption exists under Section 139 of the N.I. Act.
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