Full Judgment Text
REPORTABLE
2026 INSC 40
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 141 OF 2026
[ARISING OUT OF S.L.P. (CRIMINAL) NO.10770 of 2025]
SUMIT BANSAL … APPELLANT(S)
VERSUS
M/S MGI DEVELOPERS AND PROMOTERS
AND ANOTHER ... RESPONDENT(S)
WITH
CRIMINAL APPEAL NO. 142 OF 2026
[ARISING OUT OF S.L.P. (CRIMINAL) NO.11262 of 2025]
CRIMINAL APPEAL NO. 143 OF 2026
[ARISING OUT OF S.L.P. (CRIMINAL) NO.11647 of 2025]
AND
CRIMINAL APPEAL NO. 144 OF 2026
[ARISING OUT OF S.L.P. (CRIMINAL) NO.11787 of 2025]
J U D G M E N T
PRASHANT KUMAR MISHRA, J.
1. Leave granted.
2. The present batch of Appeals arises out of two separate judgments
1
dated 17.04.2025 passed by the High Court of Delhi in the petitions filed
2
under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing
Signature Not Verified
Digitally signed by
MINI
Date: 2026.01.09
11:45:45 IST
Reason:
1
‘High Court’
2
‘Cr.PC’
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 1 of 21
of a set of four complaints instituted under Section 138 read with Sections
3
141 and 142 of the Negotiable Instruments Act, 1881 .
3. The complainant in all the four complaints is one Shri Sumit Bansal,
who is appellant in the lead Appeal and respondent in the connected Appeals,
whereas the accused are M/s. MGI Developers and Promoters, a
proprietorship concern, and its proprietor Shri Manoj Goyal, who are the
respondents in the lead Appeal and the appellants in the connected Appeals.
For our convenience in adjudicating all the Appeals, Shri Sumit Bansal will
be referred to as ‘the complainant’, whereas M/s. MGI Developers and
Promoters and Shri Manoj Goyal will be referred to as ‘Respondent No. 1’ and
‘Respondent No. 2’ respectively.
FACTUAL MATRIX
4. The record discloses that the parties had entered into an Agreement to
Sell dated 07.11.2016 in respect of three commercial units bearing Nos. S-1,
S-2 and S-3 situated in a commercial project named “MGI Mansion”, located
at Khasra Nos. 966 and 967, Village Noor Nagar, Tehsil and District
Ghaziabad, Uttar Pradesh. The total sale consideration agreed between the
parties was Rs. 1,72,21,200/- (Rupees One Crore Seventy-two Lakh Twenty-
one Thousand and Two Hundred only), which was admittedly paid by the
complainant to the proprietorship firm. Under the terms of the Agreement,
the vendor was obliged to execute and register the Sale Deed(s) in favour of
the complainant on or before 30.09.2018, and in the event of failure to do so,
3
‘NI Act’
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 2 of 21
the entire amount received was to be refunded to the complainant together
with an appreciation amount by way of compensation.
5. On 27.07.2018, Respondent No.2 executed a personal guarantee
undertaking to ensure refund of the amount together with the appreciation
amount in case the sale deeds were not executed to the complainant within
the stipulated period. To secure the said liability, he also undertook to issue
personal cheques corresponding to the firm’s cheques, to provide an
alternative mechanism for repayment.
6. Upon the failure of Respondent Nos. 1 and 2 to execute the Sale Deed(s)
by 30.09.2018, Respondent No. 1 issued two cheques of that date, namely
Cheque No. 057140 for Rs. 1,72,21,200/- representing the principal
consideration, and Cheque No. 057141 for Rs. 35,00,000/- representing the
appreciation amount. In addition, in terms of his personal guarantee,
Respondent No. 2 issued two personal cheques, also dated 30.09.2018, being
Cheque No. 114256 for Rs. 1,72,21,200/- and Cheque No. 114257 for Rs.
35,00,000/-. These cheques were handed over to the complainant with an
understanding that the personal cheques could be presented earlier, while
the firm’s cheques would be available for presentation later.
7. Acting on such understanding, the complainant presented the personal
cheques for encashment on 05.12.2018. However, both the cheques were
returned dishonoured on 06.12.2018 with the bank’s remark “Exceeds
Arrangement”. Subsequently, the complainant presented the firm’s cheques
on 15.12.2018, which too were returned unpaid on 17.12.2018 with the
remark “Funds Insufficient”. The complainant thereafter issued a statutory
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 3 of 21
notice dated 21.12.2018 to all the accused persons demanding payment
within the statutory period, but despite service, no payment was made.
8. Consequently, the complainant instituted the first two complaints
under Section 138 of the NI Act. The first was Complaint Case No. 2823 of
2019, filed on 25.01.2019, in respect of the personal cheque Nos. 114256 and
114257 issued by Respondent No. 2, wherein cognizance was taken and
summons issued on 20.06.2019. The second was Complaint Case No. 3298
of 2019, filed on 30.01.2019, in respect of the firm’s cheques Nos. 057140
and 057141, for which the summoning order was passed on 06.03.2019.
9. Thereafter, in continuation of the earlier transaction, Respondent Nos.
1 and 2 again issued fresh cheques. On 28.02.2019, Respondent No. 1 issued
Cheque No. 562629 for Rs. 35,00,000/-, and Respondent No. 2 issued Cheque
No. 114275 for the same amount, again towards the appreciation sum.
Cheque No. 114275, when presented on 11.03.2019, was dishonoured on
12.03.2019 with the endorsement “Exceeds Arrangement”. Respondent No.
1’s cheque No. 562629, presented on 08.05.2019, was also dishonoured on
09.05.2019 with the remark “Funds Insufficient”. A statutory notice having
been issued and no payment made, the complainant filed another complaint,
Complaint Case No. 13508 of 2019, for which cognizance and summoning
were ordered on 17.08.2019.
10. Subsequently, on 31.07.2019, further cheques were issued in relation
to the same underlying transaction with Respondent No. 1 issued Cheque No.
562656 for Rs. 35,00,000/-, and Respondent No. 2 issued Cheque No.
000084 for Rs. 35,00,000/-. These were presented in October 2019 and were
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 4 of 21
dishonoured on 28.10.2019 and 26.10.2019, respectively. The complainant
issued statutory notices dated 30.10.2019, and upon failure of payment,
instituted two more complaints being Complaint Case Nos. 740 of 2020 and
743 of 2020, both filed on 09.01.2020, wherein cognizance and summoning
orders were passed on 24.11.2022.
11. In this manner, a total of five complaint cases came to be filed by the
complainant against the same set of accused, each complaint relating to
distinct cheque instruments and separate dates of presentation and
dishonour: (i) Complaint Case No. 2823/2019; (ii) Complaint Case No.
3298/2019; (iii) Complaint Case No. 13508/2019; (iv) Complaint Case No.
4
740/2020 ; and (v) Complaint Case No.743/2020, the last two arising out of
the same set of transactions.
12. Aggrieved by the institution and continuation of the said criminal
complaints and the summoning orders passed thereafter, Respondent Nos. 1
and 2 preferred petitions before the High Court of Delhi under Section 482 of
the Cr.PC seeking quashing of the complaints and the summoning orders.
13. Vide its judgment dated 17.04.2025 passed in Crl.MC No. 7912 of 2023
and Crl.MC No. 8002 of 2023, the High Court, upon consideration of the
material, observed that the cheques which formed the basis of the first two
complaints (i.e., Complaint Case Nos. 2823 of 2019 and 3298 of 2019) were
drawn and presented in respect of the same underlying liability, namely,
refund of the same sale consideration under the Agreement to Sell dated
4
This Complaint Case is not a subject-matter of the present Appeals.
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 5 of 21
07.11.2016. The Court held that the complainant could not simultaneously
maintain two separate complaints in respect of the same debt or liability,
merely because separate sets of cheques i.e., one issued in the name of the
firm and another personally by its proprietor, had been presented and
dishonoured. It was, thus, concluded that continuation of both complaints
would amount to parallel prosecution for the same cause of action. On that
reasoning, the High Court quashed the complaint relating to the firm’s
cheques (Complaint Case No. 3298 of 2019) in entirety, and also partially
quashed the complaint relating to the personal cheques (Complaint Case No.
2823 of 2019) only insofar as it concerned Smt. Kavita Rani Goyal, who was
not a signatory to the cheques nor shown to be involved in the transaction.
14. In a separate judgment dated 17.04.2025 passed in Crl.MC No. 2161 of
2024 and Crl.MC No. 7632 of 2023 as regard to the later complaints
(Complaint Case No. 13508 of 2019 and Complaint Case No. 743 of 2020)
against both the respondents, the High Court noted that those cheques were
issued subsequently, on distinct dates, representing independent and fresh
causes of action upon successive dishonours. The High Court, therefore, held
that the same could not be said to be barred by reason of multiplicity or
identity of cause and declined to quash those complaints at the threshold,
observing that whether those instruments were issued in discharge of legally
enforceable debt would be a matter of trial.
15. Being aggrieved, the complainant has preferred the present Appeal,
which is the lead matter, before this Court challenging the quashing of
Complaint Case No. 3298 of 2019 by the High Court, whereas Respondent
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 6 of 21
No. 2 has filed separate Appeals, which are companion Appeals, assailing the
refusal of the High Court to quash the other complaints against him. The
complainant did not challenge the order insofar as it related to Smt. Kavita
Rani Goyal, therefore, that portion remains uncontested before us.
16. While issuing notice on the lead Appeal, preferred by the complainant,
this Court had stayed the effect and operation of the impugned judgment
dated 17.04.2025 in Crl.MC No. 8002 of 2023, whereby the High Court had
quashed Complaint Case No. 3298 of 2019 against Respondent No. 2.
SUBMISSION OF PARTIES
17. Learned counsel for the complainant argued that the impugned
judgment of the High Court failed to recognise that the respondents
throughout the litigation have nowhere disputed the issuance, presentation
and dishonour of the cheques and nor have denied the underlying liability.
18. Learned counsel has submitted that the High Court erred in quashing
Complaint Case No. 3298 of 2019 against the respondents on the ground that
since the personal cheques issued by Respondent No. 2 were already
presented, the other cheques issued from the firm’s account ought to have
been returned. Learned counsel points out that neither of the cheques were
cancelled nor returned by the complainant to the respondents. Therefore,
learned counsel submits that once the ingredients of Section 138 of the NI Act
are satisfied, presumption of liability continues to exist against the
respondents.
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 7 of 21
19. With respect to the Appeals filed by the respondents challenging the
High Court’s refusal to quash other complaint cases, learned counsel for the
complainant submits that the impugned judgment of the High Court was
correct in not quashing Complaint No. 2823 of 2019 as regards Respondent
No.2, Complaint Case No. 13508/2019, and Complaint Case No. 743/2020,
registered against the respondents.
20. Lastly, learned counsel for the complainant submits that the arguments
of the respondents that the payment has already been made to the
complainant is a disputed question of fact and the High Court was right in
not interfering with the same under Section 482 of the Cr.PC.
21. Per contra , learned senior counsel for the respondents has argued that
all the four complaints against them are not in conformity with Section 138
of the NI Act. He points out that the principal amount in the alleged Agreement
dated 07.11.2016 was of Rs 1,72,21,200/- and Rs 35,00,000/- as
appreciation amount, however, the total amount claimed in these five
complaints goes to Rs 5,19,42,400/-.
22. Learned senior counsel for the respondents has argued that the
Complaint Case No. 3298 of 2019 was rightly quashed by the High Court. He
submits that the complainant had already exhausted his remedy by
instituting the personal cheque issued by Respondent No.2 and, therefore,
was barred by estoppel in instituting the other cheques issued by the firm.
23. Lastly, with respect to the other complaints, learned senior counsel for
the respondents submits that no amount is due to be paid to the complainant
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 8 of 21
as the same is already returned. Therefore, he submits that there exists no
liability whatsoever of the respondents.
ANALYSIS
24. We have heard the learned counsel for the parties and have carefully
perused the material on record.
25. The issues that arise for our consideration are:
a) Whether the High Court was right in quashing Complaint Case No.
3298 of 2019 and the consequential summoning order dated
06.03.2019 against Respondent Nos. 1 and 2 herein arising out of
the dishonour of the firm’s cheque Nos. 057140 and 057141, on the
ground that it related to the same underlying liability for which
another complaint i.e., Complaint Case No. 2823 of 2019 had
already been instituted and whether the same would not amount to
conducting a ‘mini trial’ which is clearly prohibited under the
scheme of Section 482 of the Cr.PC; and
b) Whether the High Court erred in not quashing the criminal
proceedings against Respondent No. 2 arising out of Complaint Case
No. 2823 of 2019, Complaint Case No. 13508 of 2019 and Complaint
Case No. 743 of 2020.
26. Before adverting to the rival contentions, it is appropriate to recall the
settled legal principles which govern the exercise of the inherent jurisdiction
of the High Court under Section 482 of the Cr.PC. This Court in catena of
judgments has emphasised that the High Court must avoid usurping the
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 9 of 21
function of a Trial Court or conducting a mini trial when disputed factual
questions attend the maintainability of a complaint. In State of Haryana
5
and Others vs. Bhajan Lal and Others , a Division Bench of this Court had
discussed about the scope of Section 482 of the Cr.PC as follows:
“102. In the backdrop of the interpretation of the various
relevant provisions of the Code under Chapter XIV and of the
principles of law enunciated by this Court in a series of decisions
relating to the exercise of the extraordinary power under Article
226 or the inherent powers under Section 482 of the Code which
we have extracted and reproduced above, we have given the
following categories of cases by way of illustration wherein such
power could be exercised either to prevent abuse of the process
of any court or otherwise to secure the ends of justice, though it
may not be possible to lay down any precise, clearly defined and
sufficiently channelised and inflexible guidelines or rigid
formulae and to give an exhaustive list of myriad kinds of cases
wherein such power should be exercised.
(1) Where the allegations made in the first information report
or the complaint, even if they are taken at their face value
and accepted in their entirety do not prima facie constitute
any offence or make out a case against the accused.
(2) Where the allegations in the first information report and
other materials, if any, accompanying the FIR do not disclose
a cognizable offence, justifying an investigation by police
officers under Section 156(1) of the Code except under an
order of a Magistrate within the purview of Section 155(2) of
the Code.
(3) Where the uncontroverted allegations made in the FIR or
complaint and the evidence collected in support of the same
do not disclose the commission of any offence and make out
a case against the accused.
(4) Where, the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer
without an order of a Magistrate as contemplated under
Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so
absurd and inherently improbable on the basis of which no
prudent person can ever reach a just conclusion that there is
sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the
provisions of the Code or the concerned Act (under which a
criminal proceeding is instituted) to the institution and
continuance of the proceedings and/or where there is a
5
1992 Supp (1) SCC 335
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 10 of 21
specific provision in the Code or the concerned Act, providing
efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with
mala fide and/or where the proceeding is maliciously
instituted with an ulterior motive for wreaking vengeance on
the accused and with a view to spite him due to private and
personal grudge.”
(emphasis supplied)
27. In a much recent decision of this Court in Neeharika Infrastructure
6
Private Limited vs. State of Maharashtra and Others , a three-Judge
Bench had held that the power to quash criminal proceedings must be
exercised sparingly, and only where the complaint, even if accepted in full,
discloses no offence or continuation would amount to abuse of process of law.
This Court had issued the following directions to the High Courts to be kept
in mind while exercising the power under Section 482 of the Cr.PC:
“ Conclusions
33. In view of the above and for the reasons stated above,
our final conclusions on the principal/core issue, whether
the High Court would be justified in passing an interim
order of stay of investigation and/or “no coercive steps to
be adopted”, during the pendency of the quashing petition
under Section 482CrPC and/or under Article 226 of the
Constitution of India and in what circumstances and
whether the High Court would be justified in passing the
order of not to arrest the accused or “no coercive steps to
be adopted” during the investigation or till the final
report/charge-sheet is filed under Section 173CrPC, while
dismissing/disposing of/not entertaining/not quashing
the criminal proceedings/complaint/FIR in exercise of
powers under Section 482CrPC and/or under Article 226
of the Constitution of India, our final conclusions are as
under:
33.1….
33.2. Courts would not thwart any investigation into the
cognizable offences.
33.3. It is only in cases where no cognizable offence or
offence of any kind is disclosed in the first information
6
(2021) 19 SCC 401
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 11 of 21
report that the Court will not permit an investigation to go
on.
33.4. The power of quashing should be exercised sparingly
with circumspection, as it has been observed, in the
“rarest of rare cases” (not to be confused with the
formation in the context of death penalty).
33.5. While examining an FIR/complaint, quashing of
which is sought, the court cannot embark upon an enquiry
as to the reliability or genuineness or otherwise of the
allegations made in the FIR/complaint.
33.6….
33.7. Quashing of a complaint/FIR should be an exception
rather than an ordinary rule.
33.8 to 33.11….
33.12. The first information report is not an encyclopedia
which must disclose all facts and details relating to the
offence reported. Therefore, when the investigation by the
police is in progress, the court should not go into the
merits of the allegations in the FIR. Police must be
permitted to complete the investigation. It would be
premature to pronounce the conclusion based on hazy
facts that the complaint/FIR does not deserve to be
investigated or that it amounts to abuse of process of law.
After investigation, if the investigating officer finds that
there is no substance in the application made by the
complainant, the investigating officer may file an
appropriate report/summary before the learned
Magistrate which may be considered by the learned
Magistrate in accordance with the known procedure.
33.13 and 33.14….
33.15. When a prayer for quashing the FIR is made by the
alleged accused and the court when it exercises the power
under Section 482CrPC, only has to consider whether the
allegations in the FIR disclose commission of a cognizable
offence or not. The court is not required to consider on
merits whether or not the merits of the allegations make
out a cognizable offence and the court has to permit the
investigating agency/police to investigate the allegations in
the FIR.
…..”
(emphasis supplied)
28. On these lines, it is apt clear that even though the powers under Section
482 of the Cr.PC are very wide, its conferment requires the High Court to be
more cautious and diligent. While examining any complaint or FIR, the High
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 12 of 21
Court exercising its power under this provision cannot go embarking upon
the genuineness of the allegations made. The Court must only consider
whether there exists any sufficient material to proceed against the accused or
not.
29. As we have now discussed the trite law on the powers of High Court
under Section 482 of the Cr.PC, we will now individually deal with the facts
of the present Appeals. Considering that there are two sets of Appeals before
us, one by the complainant and other three by Respondent No. 2, we would
be dealing both sets separately.
A. Criminal Appeal arising out of S.L.P. (Criminal) No.10770 of 2025
(preferred by the complainant)
30. From the material on record, it is evident that the complainant was in
possession of two cheques bearing nos. 057140 and 057141, both dated
30.09.2018, for Rs.1,72,21,200/- and Rs.35,00,000/- respectively, issued by
Respondent No. 2 on behalf of the firm. The complainant asserts that, citing
temporary financial constraints in the firm, Respondent No. 2 issued two
additional cheques from his personal joint account (with his wife Smt. Kavita
Rani Goyal) with nos. 114256 and 114257, also dated 30.09.2018, for the
same amounts as a personal guarantee, to be invoked if repayment was
sought prior to 15.12.2018. The complainant presented the personal cheques
for encashment on 05.12.2018, which were dishonoured, and return memos
were issued on 06.12.2018. Upon being apprised of the dishonour, the
accused had expressed regret and advised the complainant to present the
firm’s cheques, assuring their honour. When the firm’s cheques were
presented for encashment, they were also dishonoured. This led to two
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 13 of 21
complaints being filed, first was Complaint Case No. 2823 of 2019, filed on
25.01.2019, in respect of the personal cheques Nos. 114256 and 114257, and
the second was Complaint Case No. 3298 of 2019, filed on 30.01.2019, in
respect of the firm’s cheque Nos. 057140 and 057141.
31. The complainant is before us challenging the impugned judgment by
which the High Court had quashed Complainant Case No. 3298 of 2019
registered against Respondent Nos.1 and 2. In dealing with the case of the
complainant before us, it would be appropriate to advert to the observations
made by the High Court in paragraph 10 of the impugned judgment in Crl.MC
Nos.7912/2023 and 8002/2023:
“10. As pointed hereinabove, it is the case of the respondent
himself in CRL.M.C. 7912/2023 that the cheques issued from
the personal bank account of petitioner no. 1 (jointly held by
petitioner nos. 1 and 2) were given as an option to the
respondent in case he wanted the money to be credited in his
account before the date as stated in the said complaint, i.e.,
15.12.2018. In essence therefore, the cheques issued by
petitioner no. 1 from his personal bank account were in lieu of
the cheques issued by petitioner no. 1 from the bank account of
the petitioner firm. In these circumstances the cheques issued
by petitioner no. 1 on behalf of the petitioner firm in the first
instance should either have been returned by the respondent
and in any case, ought not to have been presented. There is
absolutely no disclosure on behalf of the respondent in the
complaint filed subsequently with respect to the cheques issued
by petitioner no. 1 on behalf of the petitioner firm, i.e., in
Complaint Case no. 3298/2019 (subject-matter of CRL. M.C.
8002/2023) with regard to the cheques already issued by
petitioner no. 1 from his personal bank account. In view of the
averments made in the complaints, there cannot be in any
manner, doubt left that the respondent exercised his option to
present the cheques issued from the personal bank account of
the petitioner towards the personal guarantee for discharge of
the liability. In these circumstances, the respondent cannot be
permitted to present the other set of cheques issued from the
bank account of the petitioner firm again for the same
transaction. In these circumstances, in the considered opinion
of this Court, continuance of proceedings in Criminal Complaint
no. 3298/2019 (subject matter of CRL.M.C. 8002/2023) would
be an abuse of process of law and therefore, in the interest of
justice, exercise of powers under Section 482 of the Cr.P.C. by
this Court is warranted in the present case.”
(emphasis supplied)
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 14 of 21
32. From a bare perusal of the above observation of the High Court, it can
be seen that one of the important factors that weighed in with the High Court
while allowing the quashing of Complainant Case No. 3298 of 2019 against
Respondent Nos.1 and 2 was that firm’s cheques (Nos. 057140 and 057141)
and the personal cheques (Nos. 114256 and 114257) issued by Respondent
No. 2 represented the same liability under the Agreement to Sell dated
07.11.2016 and, therefore, two parallel prosecutions could not
simultaneously stand. The High Court was of the view that the cheques
issued by Respondent No. 2 from his personal bank account were in lieu of
the cheques issued from the bank account of the firm and, therefore, once the
complainant had exercised his option to present the cheques issued by
Respondent No. 2 from his personal account, the cheques issued from
Respondent No. 1’s bank account ought not to have been presented later and
they should have been returned back. The High Court had also highlighted
that in Complainant Case No. 3298 of 2019 which was filed on 30.01.2019,
there was no disclosure on the part of the complainant about the earlier
Complaint Case No. 2823 of 2019 filed on 25.01.2019 regarding the cheques
issued by Respondent No. 2 from his personal bank account. In light of the
above, the High Court had proceeded to quash Complaint Case No. 3298 of
2019, holding that its continuation along with Complaint Case No. 2823 of
2019 for the same transaction would be an abuse of process of law.
33. In Neeharika Infrastructure Private Limited (supra), this Court had
made it clear that quashing was to be permissible only where the complaint
on its face fails to disclose any offence or where there is unimpeachable
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 15 of 21
material demonstrating abuse of process of law. On these lines, having
perused the impugned judgment of High Court qua quashing of Complaint
Case No. 3298 of 2019, we are unable to concur with the reasoning reached
by the High Court. It is well settled that under Section 138 of the NI Act, a
separate cause of action arises upon each dishonour of a cheque provided the
statutory sequence of presentation, dishonour, notice, and failure to pay is
complete. The fact that multiple cheques arise from one transaction will not
merge them into a single cause of action. In the present case, the cheques
forming the subject of the two complaints (Complaint Case No. 2823 of 2019
and Complaint Case No. 3298 of 2019) were distinct instruments drawn on
different accounts, presented on different dates, dishonoured separately, and
followed by independent statutory notices. The scheme of Section 138 of the
NI Act does not bar prosecution in such circumstances.
34. Whether those cheques were issued as alternative or supplementary
instruments, or represented fresh undertakings, is a disputed question of fact
requiring evidence at the time of trial and cannot be resolved at the threshold.
Questions such as whether the firm’s cheques were issued in substitution of
the personal cheques, whether the parties treated them as alternative
securities, and whether both were intended to be simultaneously enforceable,
are all mixed questions of fact. The inherent jurisdiction of the High Court
under Section 482 of the Cr.PC cannot be used to decide such disputed
issues.
35. For these reasons, we are of the view that the High Court exceeded its
jurisdiction and was not justified in quashing Complaint Case No. 3298 of
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 16 of 21
2019 and the summoning order dated 06.03.2019. The complaint on its face
discloses the ingredients of offence under Section 138 of the NI Act and must
proceed to trial.
B. Criminal Appeals arising out of S.L.P. (Criminal) Nos.11262 of
2025, 11647 of 2025 and 11787 of 2025 (preferred by Respondent
No.2)
36. We shall now turn to the three Appeals filed by Respondent No. 2
challenging the High Court’s refusal to quash Complaint Case No. 743 of
2020, Complaint Case No. 13508 of 2019 and Complaint Case No. 2823 of
2019.
37. Before we delve into the correctness of the impugned judgment of the
High Court qua the foregoing complaints, it is apposite for us to refer to the
Agreement to Sell dated 07.11.2016, which acts as a base for this entire
litigation. The relevant portion of the said Agreement is reproduced
hereinbelow:
“7a) That, in case the First Party is unable to get the Sale Deed
of the said Commercial Unit(s) registered in favour of the Second
Party till 30-09-2018, then the Second party shall be entitled to
the refund of Full & Final Payment given against the said
Commercial Unit(s). In such an eventuality, the First Party shall
be liable to pay a compensation of Rs. 15000/- (Rupees Fifteen
Thousand Only) Per day after 30-09-2018 which will be over &
above the Full & Final payment amount.
7b) That the first party will also provide irrevocable Authority
Letter in the name of Mr. Narinder Kumar Midha S/o Late Shri
nd
K.N. Midha R/o House No. 53, 2 Floor, Road No.-42, West
Punjabi Bagh, New Delhi-110026, enabling him to execute the
Power of Attorney, Sale Deed, Agreement to Sell, whichever is
applicable and receive consideration/Free transfer to third party
for the said commercial units.
7c) That the First Party also confirms for an appreciation amount
of Rs. 35,00,000/- (Rupees Thirty Five Lakh only) to the Second
Party if First Party will not be able to deliver the mentioned
commercial units in schedule course of time and a post-dated
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 17 of 21
cheque no. 057141 drawn on Central Bank of India, Ghaziabad
Dt. 30-09-2018 issued to Second Party.”
(emphasis supplied)
38. The record clearly indicates that these complaints (Complaint Case No.
2823 of 2019, Complaint Case No. 13508 of 2019 and Complaint Case No.
743 of 2020) arise out of cheques Nos. 114256, 114257, 562629 and 000084
respectively, as issued and dishonoured on different dates in 2018 and 2019,
each followed by independent statutory notices and complaint. It is also an
admitted fact that each of the above cheques were issued by Respondent No.2
over and above the cheques of the principal amount of Rs.1,72,21,200/- and
the appreciation amount of Rs. 35,00,000/-.
39. At this point, it is imperative to refer to the decision in Kusum Ingots
7
& Alloys Ltd. vs. Pennar Peterson Securities Ltd. and Others , wherein a
Division Bench of this Court had highlighted the ingredients which are to be
satisfied for making out a case under Section 138 of the NI Act. The relevant
excerpt is reproduced hereinbelow:
“10. On a reading of the provisions of Section 138 of the NI Act
it is clear that the ingredients which are to be satisfied for
making out a case under the provision are:
(i) a person must have drawn a cheque on an account
maintained by him in a bank for payment of a certain amount of
money to another person from out of that account for the
discharge of any debt or other liability;
(ii) that cheque has been presented to the bank within a period
of six months from the date on which it is drawn or within the
period of its validity, whichever is earlier;
(iii) that cheque is returned by the bank unpaid, either because
the amount of money standing to the credit of the account is
insufficient to honour the cheque or that it exceeds the amount
arranged to be paid from that account by an agreement made
with the bank;
7
(2000) 2 SCC 745
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 18 of 21
(iv) the payee or the holder in due course of the cheque makes a
demand for the payment of the said amount of money by giving
a notice in writing, to the drawer of the cheque, within 15 days
of the receipt of information by him from the bank regarding the
return of the cheque as unpaid;
(v) the drawer of such cheque fails to make payment of the said
amount of money to the payee or the holder in due course of the
cheque within 15 days of the receipt of the said notice.”
40. On a careful reading of the ingredients required for commission of
offence under Section 138 of the NI Act, we find that the record before us
clearly indicates that the cheques, as provided above, were dishonoured,
statutory notices were served, cheques were returned, and the summons were
thereafter issued. On such material, we are of the view that the complaint
prima facie stands. Any disputed question of fact qua the offence under
Section 138 of the NI Act or any defence that Respondent No. 2 wants to raise
against the offence alleged must be done during the trial.
41. One of the averments raised by the respondents is that the said cheques
were presented illegally by the complainant despite receiving the entire
amount already. Learned senior counsel for the respondents had argued that
in fact the complainant had invested only Rs 66,50,000/- for which they have
already returned Rs 97,00,000/-. Therefore, it is the case of the respondents
that there exists no debt or liability.
42. However, we are of the view that the burden of proving whether there
exists any debt or liability is something which must be discharged in trial. A
bare perusal of Section 139 of the NI Act would indicate that once a cheque
is issued in discharge of liability and dishonoured, a presumption of liability
in favour of the complainant arises. The accused person is then required to
rebut the presumption by raising facts that either there was no debt or liability
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 19 of 21
when the cheque was drawn, or the cheque was not drawn in discharge of
liability, or notice was not served in time. In this regard, we must refer to the
decision in M.M.T.C. Ltd. and Another vs. Medchl Chemicals and Pharma
8
(P) Ltd. and Another , wherein this Court had made the following observation
on this aspect:
“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.”
(emphasis supplied)
43. The statutory presumption attached to the issuance of a cheque, being
one made in discharge of a legally enforceable debt or liability, is required to
be accorded due weight. Therefore, in circumstances where the accused
approaches the Court seeking quashing of proceedings even before the
commencement of trial, the Court must exercise circumspection and refrain
from prematurely stifling the prosecution at the threshold, particularly by
overlooking the legal presumption that operates in favour of the complainant.
44. For these reasons, we are of the view that the High Court was justified
in not quashing Complaint Case No. 2823 of 2019, Complaint Case No.13508
of 2019 and Complaint Case No. 743 of 2020 registered against Respondent
No. 2 herein. The foregoing complaints prima facie discloses the ingredients
of offence under Section 138 of the NI Act and must proceed to trial.
8
(2002) 1 SCC 234
Criminal Appeal @ SLP (Crl.) No.10770/2025 etc. Page 20 of 21
CONCLUSION
45. In light of our aforesaid discussion and for the reasons above, we come
to the following conclusion:
a) The Appeal arising out of SLP (Crl.) No. 10770 of 2025 preferred by
the complainant is allowed. The judgment of the High Court dated
17.04.2025 passed in Crl.MC No. 8002 of 2023 quashing Complaint
Case No. 3298 of 2019 and the summoning order dated 06.03.2019,
is set aside . Complaint Case No. 3298 of 2019 shall stand restored
for trial before the concerned Trial Court.
b) The Appeals arising out of SLP (Crl.) Nos. 11262 of 2025, 11647 of
2025 and 11787 of 2025 preferred by Respondent No. 2 are
dismissed.
46. All contentions of the parties are left open, which shall be decided by
the Trial Court on its own merits and in accordance with law. We make it
clear that none of the observations contained herein shall have a bearing on
the main trial. The Trial Court shall independently arrive at its conclusion
based on the evidence tendered before it.
…….………………………………………J.
(SANJAY KAROL)
…….………………………………………J.
(PRASHANT KUMAR MISHRA)
NEW DELHI;
JANUARY 08, 2026
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