Summary
Under Section 138 of the NI Act each dishonour of a cheque, followed by its own notice and non-payment, gives a separate cause of action, even if several cheques arise from one transaction. The High Court was wrong to quash, under Section 482 CrPC, the complaint on the firm's cheques because a complaint on the proprietor's personal cheques for the same liability was already pending. Whether the cheques were alternative securities, and whether any debt still existed, are questions for trial given the presumption under Section 139. The complainant's appeal was allowed and the accused proprietor's appeals were dismissed.
Issues
- Whether the High Court could quash, under Section 482 CrPC, a Section 138 complaint on the firm's cheques on the ground that a complaint on the proprietor's personal cheques for the same underlying liability was already pending.
- Whether the High Court erred in refusing to quash the complaints against the proprietor on the personal cheques and on later cheques, given his plea that no debt or liability remained.
Provisions considered
- Section 482, Code of Criminal Procedure, 1973Applying Bhajan Lal and Neeharika Infrastructure, the Court held that the power to quash must be used sparingly. The High Court cannot assess whether the allegations are genuine or conduct a mini trial on disputed facts. It may consider only whether there is enough material to proceed. (¶¶ 26, 27, 28, 33, 34)
- Section 138, Negotiable Instruments Act, 1881A separate cause of action arises on each dishonour once presentation, dishonour, notice and failure to pay are complete. Cheques on different accounts, presented and dishonoured separately with independent notices, do not merge into one cause of action merely because they come from one transaction. The ingredients listed in Kusum Ingots were prima facie shown in each complaint. (¶¶ 33, 35, 38, 39, 40, 44)
- Section 139, Negotiable Instruments Act, 1881Once a cheque is shown to have been issued and dishonoured, the presumption of liability arises in the complainant's favour. The accused must rebut it at trial, and on a quashing petition the court cannot overlook it on the basis of the accused's averments. (¶¶ 42, 43)
- Sections 141 and 142, Negotiable Instruments Act, 1881The complaints were instituted under Section 138 read with these sections. The Court did not separately construe them. (¶ 2)
Held
- The inherent power under Section 482 CrPC to quash a complaint must be exercised sparingly. The High Court must not usurp the trial court's function or conduct a mini trial on disputed facts; it may only ask whether there is sufficient material to proceed against the accused. (¶¶ 26, 27, 28)
- Under Section 138 of the NI Act each dishonour gives a separate cause of action once the statutory sequence is complete, and several cheques from one transaction do not merge into a single cause of action. The firm's cheques and the proprietor's personal cheques were distinct instruments on different accounts, presented and dishonoured on different dates, each followed by its own notice. Prosecution on both sets is not barred. (¶ 33)
- Whether the firm's cheques were alternatives to, or substitutes for, the personal cheques, and whether both sets were meant to be enforceable at once, are disputed questions of fact for trial and cannot be decided under Section 482. The High Court exceeded its jurisdiction in quashing the complaint on the firm's cheques and the summoning order. (¶¶ 34, 35)
- The proprietor's plea that the amount had already been repaid and no debt remained could not be decided at the threshold. The complaints prima facie disclosed the ingredients of Section 138, and the presumption under Section 139 places the burden of rebuttal on the accused at trial. Courts should be circumspect about stifling such prosecutions before trial. (¶¶ 40, 41, 42, 43, 44)
Result
Criminal Appeal No. 141 of 2026 by the complainant allowed: the High Court's order quashing Complaint Case No. 3298 of 2019 and the summoning order dated 06.03.2019 set aside and the complaint restored for trial. Criminal Appeals Nos. 142 to 144 of 2026 by the proprietor dismissed. All contentions left open for the trial court.