Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 21.11.2023
Pronounced on: 01.12.2023
+ CRL.M.C. 362/2023 & CRL.M.A. 1441/2023
AKBAR ALI ..... Petitioner
Through: Mr. Haneef Mohammad,
Advocate
versus
STATE OF NCT OF DELHI & ANR. ..... Respondents
Through: Mr. Satish Kumar, APP for the
State.
Mr. Javed Ali and Mr. Akash
Vajpayi, Advocates for
respondent No. 2
CORAM:
HON'BLE MS. JUSTICE SWARANA KANTA SHARMA
JUDGMENT
SWARANA KANTA SHARMA, J.
1. The present petition under Section 482 of the Code of Criminal
Procedure, 1973 ( ‘Cr.P.C’ ) has been filed by the petitioner seeking
quashing of criminal complaint bearing no. 1759/2019 titled as
“Imran vs. Akbar Ali” for the offence punishable under Section 138
of Negotiable Instruments Act, 1881 ( ‘NI Act’ ), as well as the
summoning order dated 09.09.2019 and notice framed under Section
251 of Cr.P.C. vide order dated 15.03.2022, passed by learned
Metropolitan Magistrate-01, North East, Karkardooma Courts, Delhi.
Signature Not Verified
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Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
2. Brief facts of the case, as per the complaint filed under Section
138 of NI Act, are that accused Akbar Ali, who was having cordial
relations with the complainant, had approached the complainant and
had offered to sell a property bearing number B-80/13 Rakba 89 (2
Bed Room Flat, First Floor, Rajat Vihar, Sector 62, Noida, U.P),
citing his dire need of money. It is stated that the complainant, being
a considerate friend, understood the situation of the accused and
when the accused had shown that the title documents of the above
mentioned property were in the name of accused himself, the
complainant had got ready to purchase the said property from him.
For the said purpose, he had signed an agreement dated 05.06.2014
with the accused for an agreed sum of Rs. 61,00,000/- and the said
amount had been paid as a lump sum cash amount of Rs. 61,00,000/-
in one go, despite the fact that the complainant had to borrow Rs.
50,00,000/- from his cousin uncles, namely Mukammil Khan and
Late Muzammil Khan, to ensure a quick and successful completion
of the said deal. Once the money was paid by the complainant, the
accused had sought time of three months for execution of sale deed
on 06.07.2014. It is stated that even after 06.07.2014, the accused had
kept postponing the execution of the sale deed on one pretext or
another. Despite all the excuses given by the accused to the
complainant, the complainant had shown empathy and had kept on
agreeing to the requests of the accused for postponing the date of
execution of sale deed. Finally, the complainant had approached the
accused on 22.10.2015 to merely warn him that since more than one
year had lapsed, the accused should transfer the said property in his
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Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
name as agreed between them or else return the consideration money
i.e. Rs. 61,00,000/-, otherwise he would be compelled to file a
complaint against the accused. As alleged, the accused had suddenly
become aggressive, and while verbally abusing the complainant, the
accused had told him that he had already sold the said property, and
he had also threatened to shoot the complainant. Thereafter, the
complainant had lodged a complaint against the accused at P.S.
Gokul Puri, New Delhi for the offence of cheating, breach of trust,
threatening and fraud. Thereafter, the complainant had filed a
complaint case under Section 156(3) read with Section 200 of Cr.P.C.
before learned Chief Metropolitan Magistrate, Karkardooma Courts,
Delhi, whereby the complainant was allowed to lead evidence in Pre-
Summoning stage. It is stated that on 29.05.2019, after the
complainant had examined himself before the Court as CW-1 and
had corroborated all the allegations levelled by him in complaint, the
accused had come forward to enter into a compromise with the
complainant. Thereafter, the matter was settled in presence of
respectable persons of society, in view of which the accused had
offered to pay back a sum of Rs. 45,00,000/- as against the actual
consideration amount of Rs. 61,00,000/-. In view of the aforesaid
compromise between the accused and the complainant, the accused
had handed over three cheques, each dated 01.06.2019, bearing No.
017042, 017036 and 017038, drawn on HSBC Advance, of amounts
Rs. 20,00,000/-, Rs. 15,00,000/- and Rs. 10,00,000/- respectively
(total sum amounting to Rs. 45,00,000/-). It was further agreed that
once these cheques would get honored, the complainant would
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Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
withdraw all pending cases and complaints against the accused.
Thereafter, the complainant had deposited aforesaid cheques with his
banker for realization of the amounts, however, they had got
dishonored for the reasons „Stop Payment‟ on 16.07.2019. The
complainant had again urged the accused to make the payment but he
had failed to do so, despite issuance of legal notice dated 28.07.2019.
Upon failure on part of accused to make the payment, the present
case under Section 138 of the NI Act was filed before the learned
Trial Court by the complainant.
3. Learned counsel for the petitioner argues that as per allegations
made in the complaint, on the face of it, the present complaint is not
maintainable as no case under Section 138 of NI Act is made out
from bare reading of the allegations since the alleged debt for which
the alleged cheques were issued is not a legally recoverable debt. It is
argued that as per allegations made in the complaint, the agreement
for sale was executed on 05.06.2014, the date for execution of sale
deed was allegedly fixed as 06.07.2014, and thus, the limitation to
file suit for specific performance or recovery suit arose on
06.07.2014, which had expired on 06.07.2017. It is stated that the
alleged cheques in question, issued on 01.06.2019, are towards
discharge of time barred liability, and thus, the same cannot be said
to have been issued for any legally recoverable debt, and hence, no
case under Section 138 of NI Act is made out in. It is stated that the
learned Trial Court has committed a grave error while passing the
impugned summoning order and by framing of notice under Section
251 of Cr.P.C. against the petitioner.
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CRL. M.C.362/2023 Page 4 of 12
Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
4. On the other hand, learned counsel for respondent no. 2
submits that the present petition filed by the petitioner is liable to be
dismissed since the issues raised herein are all matter of trial and
cannot be adjudicated upon by this Court in a petition filed under
Section 482 of Cr.P.C. It is argued that the question as to whether the
debt is legally recoverable or not or whether it is time barred has to
be decided on the basis of evidence, by the Trial Court, and the
complaint cannot be quashed on such grounds, especially when the
petitioner has admitted in his signatures on the cheques.
5. This Court has heard arguments addressed by learned counsel
for the petitioner and learned counsel for the respondent, and has
perused the material on record.
6. The issue for consideration before this Court is that whether
the present complaint filed under Section 138 of NI Act can be
quashed on the ground that the alleged cheques in question were
issued against time barred debt, and thus there was no legally
recoverable debt.
7. Before averting to the merits of the case, this Court deems it fit
to discuss the law on Section 138 of NI Act. The essentials to
constitute an offence under Section 138 of NI Act were discussed by
Hon'ble Apex Court in case of Dashrathbhai Trikambhai Patel v.
Hitesh Mahendrabhai Patel (2023) 1 SCC 578, which are
reproduced as under for reference:
“11. Section 138 of the Act provides that a drawer of a
cheque is deemed to have committed the offence if the
following ingredients are fulfilled:
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Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
(i) A cheque drawn for the payment of any amount of money
to another person;
(ii) The cheque is drawn for the discharge of the „whole
or part‟ of any debt or other liability. „Debt or other
liability‟ means legally enforceable debt or other liability ;
and
(iii) The cheque is returned by the bank unpaid because of
insufficient funds.
However, unless the stipulations in the proviso are fulfilled
the offence is not deemed to be committed. The conditions in
the proviso are as follows:
(i) The cheque must be presented in the bank within six
months from the date on which it was drawn or within the
period of its validity;
(ii) The holder of the cheque must make a demand for the
payment of the „said amount of money‟ by giving a notice in
writing to the drawer of the cheque within thirty days from
the receipt of the notice from the bank that the cheque was
returned dishonoured; and
(iii) The holder of the cheque fails to make the payment of
the „said amount of money‟ within fifteen days from the
receipt of the notice...”
(emphasis supplied)
8. Thus, there is no dispute regarding the arguments raised by
learned counsel for respondent that to constitute an offence under
Section 138 of NI Act, the cheque in question should have been
issued in discharge of some legally enforceable debt.
9. However, it is also well-settled through precedents of Hon‟ble
Apex Court that the issue as to whether or not a cheque was issued in
discharge of legally recoverable debt is to be decided during the
course of trial and the proceedings under Section 138 of NI Act ought
not to be quashed on such grounds at pre-trial stage. In this regard,
this Court deems it appropriate to refer to the decision of Hon‟ble
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Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
Apex Court in case of Rathish Babu Unnikrishnan v. State (NCT of
Delhi) 2022 SCC OnLine SC 513, wherein it was observed as under:
“6. As noted earlier, the appellant's basic contention is that
the cheque in question was not issued in discharge of
“legally recoverable debt”. They also raised a contention on
the obligation of the complainant to transfer the concerned
shares. A defence plea is raised by the appellant to the effect
that the cheques in question were issued as “security” and not
in discharge of any “legally recoverable debt”.
7. The learned Judge of the Delhi High Court while
considering the petition under Section 482 Cr.P.C kept in
mind the scope of limited enquiry in this jurisdiction by
1
referring to the ratio in HMT Watches Limited v. M.A. Abida .
2
and in Rajiv Thapar v. Madan Lal Kapoor and opined that
the exercise of powers by the High Court under Section 482
Cr.P.C, would negate the complainant's case without
allowing the complainant to lead evidence. Such a
determination should necessarily not be rendered by a Court
not conducting the trial. Therefore, unless the Court is fully
satisfied that the material produced would irrefutably rule out
the charges and such materials being of sterling and
impeccable quality, the invocation of Section 482 Cr.P.C
power to quash the criminal proceedings, would be unmerited.
Proceeding on this basis, verdict was given against the
appellant, who was facing the proceeding under Section 138
of the N.I. Act. With all liberty given to the appellant to raise
his defence in the trial court, his quashing petition came to be
dismissed.
8. The issue to be answered here is whether summons and
trial notice should have been quashed on the basis of factual
defences. The corollary therefrom is what should be the
responsibility of the quashing Court and whether it must
weigh the evidence presented by the parties, at a pre-trial
stage.
*
10. 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. For a two judges Bench in M.M.T.C.
3
Ltd. v. Medchl Chemicals and Pharma (P) Ltd. , Justice S.N.
Variava made the following pertinent observation on this
aspect:—
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CRL. M.C.362/2023 Page 7 of 12
Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
“17. There is therefore no requirement that the
complainant must specifically allege in the complaint
that there was a subsisting liability. The burden of
proving that there was no existing debt or liability
was on the respondents. This they have to discharge
in the trial. At this stage, merely on the basis of
averments in the petitions filed by them the High Court
could not have concluded that there was no existing debt
or liability.”
11. 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 Court
for quashing even before trial has commenced, the
Court's approach should be careful enough to not to
prematurely extinguish the case by disregarding the legal
presumption which supports the complaint. The opinion of
Justice K.G. Balakrishnan for a three judges Bench
4
in Rangappa v. Sri Mohan would at this stage, deserve our
attention:—
“26. … we are in agreement with the respondent claimant
that the presumption mandated by Section 139 of the Act
does indeed include the existence of a legally enforceable
debt or liability. As noted in the citations, this is of
course in the nature of a rebuttable presumption and it is
open to the accused to raise a defence wherein the
existence of a legally enforceable debt or liability can be
contested. However, there can be no doubt that there is
an initial presumption which favours the complainant.”
12. At any rate, whenever facts are disputed the truth
should be allowed to emerge by weighing the evidence. On
this aspect, we may benefit by referring to the ratio
5
in Rajeshbhai Muljibhai Patel v. State of Gujarat where the
following pertinent opinion was given by Justice R.
Banumathi:—
“22. ………….. When disputed questions of facts are
involved which need to be adjudicated after the
parties adduce evidence, the complaint under Section
138 of the NI Act ought not to have been quashed by
the High Court by taking recourse to Section 482
CrPC . Though, the Court has the power to quash the
criminal complaint filed under Section 138 of the NI Act
on the legal issues like limitation, etc. criminal complaint
filed under Section 138 of the NI Act against Yogeshbhai
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CRL. M.C.362/2023 Page 8 of 12
Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
ought not to have been quashed merely on the ground
that there are inter se disputes between Appellant 3 and
Respondent 2. Without keeping in view the statutory
presumption raised under Section 139 of the NI Act, the
High Court, in our view, committed a serious error in
quashing the criminal complaint in CC No. 367 of 2016
filed under Section 138 of the NI Act.”
*
16. 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 defence
without having to adduce any evidence need to be of an
unimpeachable quality, so as to altogether disprove the
allegations made in the complaint.
17. The consequences of scuttling the criminal process at a
pre-trial 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 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.
18. 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
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...”
(emphasis supplied)
10. Thus, in view of the law laid down by Hon‟ble Apex Court, it
is undisputed that whether the debt was legally recoverable or not is
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Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
to be decided during the course of trial and not at pre-trial stage. At
the stage of filing of complaint and issuing of summons, only a prima
facie view has to be taken by the Courts when considering quashing
of such a complaint, which can be done only in case when the
petitioner is able to prove, by bringing on record material of sterling
quality, that the essential ingredients of offence under Section 138 of
NI Act are not made out from the bare reading of the complaint.
11. In the present case, it is the contention of the petitioner that the
debt is not legally recoverable since it is time barred and thus the
complaint be quashed on this ground. However, the law on the same
has been discussed by the Hon‟ble Apex Court in the case of Yogesh
Jain v. Sumesh Chadha SLP (Crl.) 1805-1806/2020 which reads as
under:
“…Once a cheque is issued and upon getting dishonoured a
statutory notice is issued, it is for the accused to dislodge the
legal presumption available under Sections 118 and 139 reply
of the N.I. Act. Whether the cheque in question had been
issued for a time barred debt or not, itself prima facie, is a
matter of evidence and could not have been adjudicated in an
application filed by the accused under Section 482 of the
CrPC…”
12. The Hon‟ble Apex Court in the case of K. Hymavathi v. The
State of Andhra Pradesh and Ors. 2023 SCC OnLine SC 1128 also
has observed that whether a debt or liability is barred by limitation is
an issue which is to be considered based on evidence adduced by
parties. The relevant portion of the judgment reads as under:
“…10. From a perusal of the legal position enunciated, it is
crystal clear that this Court keeping in perspective the nature
of the proceedings arising under the NI Act and also keeping
in view that the cheque itself is a promise to pay even if the
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Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
debt is barred by time has in that circumstance kept in view
the provision contained in Section 25(3) of the Contract Act
and has indicated that if the question as to whether the debt or
liability being barred by limitation was an issue to be
considered in such proceedings, the same is to be decided
based on the evidence to be adduced by the parties since the
question of limitation is a mixed question of law and fact. It
is only in cases wherein an amount which is out and out non-
recoverable, towards which a cheque is issued, dishonored
and for recovery of which a criminal action is initiated, the
question of threshold jurisdiction will arise. In such cases, the
Court exercising jurisdiction under Section 482 CrPC will be
justified in interfering but not otherwise. In that light, this
Court was of the view that entertaining a petition under
Section 482 CrPC to quash the proceedings at the stage
earlier to the evidence would not be justified…”
13. Thus, in view of the aforesaid law laid down by the Hon‟ble
Apex Court, it is clear that whether a debt is legally enforceable or
not can be decided only based on evidence adduced by parties since
the question of limitation is a mixed question of law and fact.
14. In the present case, the quashing has been sought by the
petitioner at a pre-trial stage on the ground that the debt against
which the cheques were issued, is time barred. At the pre-trial stage,
this Court has to see whether the allegations leveled in the complaint
are specific or not, and the issue of whether the debt is time barred or
not is to be decided only at the stage of trial based on evidence
adduced by the parties. This Court has also perused the complaint
filed by the complainant which attributes specific role and allegations
against the petitioner, that he had issued cheque towards discharge of
his liability and the same had got dishonored upon its presentation
and thereafter, the complainant had also issued statutory legal notice
and on failure to pay the amount, the present complaint had been
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Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35
filed. As reflected from notice framed under Section 251 of Cr.P.C.,
the petitioner has admitted the issuance of cheques and his signatures
on the same, though he had disputed the purpose for which the same
were handed over to the complainant and had stated that the same
were issued as blank security cheques. Thus, prima facie, the basic
essentials of Section 138 NI Act are fulfilled in the present case, and
this Court at a pre-trial stage cannot decide whether the debt is
legally enforceable or not.
15. In view of the overall facts and circumstances of the case, and
that the complaint contains specific averments against the present
petitioner and the signatures on the cheques have not been disputed
by the petitioner, and that at pre-trial stage, this Court cannot decide
the issue of legal enforceability of the debt, this Court is not inclined
to allow the present petition for quashing of the complaint filed under
Section 138 of NI Act and subsequent proceedings thereto.
16. Accordingly, the present petition stands dismissed along with
pending application, if any.
17. It is however, clarified that the petitioner shall be at liberty to
raise all the issues raised in this petition, before the learned Trial
Court at appropriate stage, which shall be considered by the learned
Trial Court as per law, and without being influenced by any of the
observations made hereinabove.
18. The judgment be uploaded on the website forthwith .
SWARANA KANTA SHARMA, J
DECEMBER 1, 2023/zp
Signature Not Verified
CRL. M.C.362/2023 Page 12 of 12
Digitally Signed
By:ZEENAT PRAVEEN
Signing Date:06.12.2023
19:03:35