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Cheque Bounce Case can’t be quashed u/s 482 CrPC when Cognizance and Notice of Sec.251 CrPC not challenged, Read HC Judgment
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07 Sep 2024
By : Riya Rathi
Categories : Case Analysis Cheque Bounce News Latest News
The High Court of Himachal Pradesh dealt with a petition praying for the quashing of a complaint under Section 138 of the NI Act, which was pending before a Magistrate’s Court.
Brief Facts:
The UCO Bank (complainant) had granted the accused a loan of ₹10 lakhs to obtain an office space. The loan was repayable in monthly instalments. The accused defaulted on the repayment schedule and issued a cheque of ₹1.19 lakhs towards the overdue loan, but it was dishonoured. The notice issued by the Bank was returned with the remark ‘refused delivery,’ so the Bank filed a complaint u/s.138 of the NI Act.
Petitioner/Accused’s Contentions:
The accused moved the High Court to quash the complaint, asserting that the complainant had filed two complaints regarding one loan, which was a gross misuse of the process of the court.
The accused submitted that he was regularly withdrawing and depositing amounts in his account, as reflected in the bank statement, and the bank failed to account for the deposit made by the accused as part payment. Thereby, it made the notice issued by the bank bad in law. Moreover, the accused stated that there was nothing on record to show that the cheque was issued in the discharge of the legal liability.
High Court’s Observations:
The High Court noted that the accused had herself issued two different cheques on two different occasions; hence two complaints were filed against her.
The Court refused to accept the accused’s submission that the cheque was not issued in the discharge of the legal liability. The HC relied on the Supreme Court’s observation in Rathish Babu Unnikrishnan v. State (NCT of Delhi), 2022, that the burden of proving that there is no existing debt of liability is to be discharged in the trial and the Court has to consider the presumption under Section 139 of NI Act in favour of the holder while deciding the petition under Section 482 of Cr.P.C. The Supreme Court had categorically stated “It is also relevant to bear in mind that the burden of proving that there is no existing debt or liability, is to be discharged in the trial.”
Thus, the High Court opined, “The legal presumption of the cheque having been issued in the discharge of liability must also receive due weightage. In a situation where the accused moves the Court for quashing even before the trial has commenced, the Court’s approach should be careful enough not to prematurely extinguish the case by disregarding the legal presumption which supports the complaint.”
After carefully reading the complaint and the Magistrate’s order, the High Court noted the possibility that the cheques had been drawn to discharge a debt for the purchase of shares. However, the bench perceived that “In any case, when there is a legal presumption, it would not be judicious for the quashing Court to carry out a detailed enquiry on the facts alleged, without first permitting the trial Court to evaluate the evidence of the parties. The quashing Court should not take upon itself, the burden of separating the wheat from the chaff where facts are contested. To say it differently, the quashing proceedings must not become an expedition into the merits of factual dispute, so as to conclusively vindicate either the complainant or the defence.”
Coming to the invocation of power under Section 482 of the Cr.P.C., the bench took note of the caution issued by the Supreme Court in the case of State of Haryana v. Bhajan Lal 1992, “We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases.”
Hence, the High Court found 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 defence without having to adduce any evidence needs to be of an unimpeachable quality, so as to altogether disprove the allegations made in the complaint.”
The High Court enunciated, “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 un-merited 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 favour of the complainant/prosecution, as the accused will have due opportunity to adduce defence evidence during the trial, to rebut the presumption.”
Thus, the High Court refused to quash the complaint on the grounds that the cheque was issued without consideration and the conditions for its presentation were not satisfied.
Moving to the next contention that the accused had deposited some amounts which the bank did not acknowledge as part payment. The HC found that even this submission did not assist the petitioner/accused as “the statement shows that an amount of ₹9,25,417/- was due towards the bank on 5.3.2019. The cheque was issued on 7.3.2019 for an amount of ₹1,19,423/- which is much less than the amount of ₹9,25,417/- due on 5.3.2019. Therefore, the plea of the petitioner/accused that she was not liable to pay ₹1,19,423/- on the date of the issuance of the cheque is not acceptable.”
Furthermore, the High Court noted that the Trial Court had completed the recording of evidence and listed the matter for recording the accused’s statement and the petitioner had not challenged the orders taking cognizance and putting notice of the accusation.
In Naresh Kumar & others v. State of H.P. & others (2023), it was laid down that where the orders passed by the Court of competent jurisdiction of taking cognizance and framing charges were not challenged, the Court will not exercise jurisdiction under Section 482 of Cr.P.C. to quash the F.I.R.
Therefore, the High Court found no reason to quash the complaint pending before the Trial Court and accordingly, the petition failed and was dismissed.
Read the Judgment @LatestLaws.com:
Picture Source :
Riya Rathi
Tags : High Court of Himachal Pradesh Section 138 of NI ACt cheque bounce CrPC Quashing of Complaint Negotiable Instruments Act
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