Sanjay Agrawal vs Umacharan Bilgaiyan

NEUTRAL CITATION NO. 2026:MPHC-GWL:9570
1 MCRC-16603-2025
IN THE HIGH COURT OF MADHYA PRADESH

AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE MILIND RAMESH PHADKE
th
ON THE 17 OF MARCH, 2026
MISC. CRIMINAL CASE No. 16603 of 2025
SANJAY AGRAWAL
Versus
UMACHARAN BILGAIYAN
Appearance:
Shri Harshvardhan Sharma - Advocate for the petitioner.
Shri Chandra Sen Roman - Advocate for the respondent.
ORDER
The present petition under Section 528 of the Bharatiya Nagarik
Suraksha Sanhita, 2023, has been filed by the petitioner Sanjay Agrawal
seeking quashment of the order dated 28.02.2025 passed by learned
Sessions Court, Datia in Criminal Revision No.02 of 2025 whereby
while dismissing the said revision filed by the petitioner, the order dated
11.12.2024 passed by the Judicial Magistrate First Class, Datia in SC
NIA No.220 of 202 was affirmed.
Short facts of the case are that the respondent/complainant filed a
complaint against the petitioner/accused under Section 138 of the
Negotiable Instruments Act alleging that the petitioner had issued a
cheque bearing No. 023590 dated 29.07.2022 for an amount of
₹ 5,82,450 drawn on Axis Bank, Datia. The said cheque was allegedly
Signature Not Verified
Signed by: PAWAN KUMAR
Signing time: 3/18/2026
11:28:01 AM

NEUTRAL CITATION NO. 2026:MPHC-GWL:9570
2 MCRC-16603-2025
issued in connection with payment related to investments made by the

complainant in Sahara India, with an understanding that in case payment
was not received, the cheque could be presented for encashment after
two months. Upon presentation of the cheque on 07.09.2022, the same
was dishonoured with the remark “account closed.” Thereafter, on the
assurance of the petitioner that the account had been reactivated, the
cheque was again presented on 20.10.2022, but it was again dishonoured
with the same remark. After complying with statutory requirements, the
complainant filed a complaint under Section 138 of the Negotiable
Instruments Act before the trial court. The learned Judicial Magistrate
First Class, Datia, by order dated 11.12.2024, framed charges against the
petitioner under Section 138 of the Negotiable Instruments Act.
Aggrieved by the same, the petitioner preferred a criminal revision,
which came to be dismissed by the learned Sessions Court, Datia vide
order dated 28.02.2025, affirming the order of the trial court. Hence, the
present petition.
Learned counsel for the petitioner submits that the impugned
orders passed by the learned Judicial Magistrate First Class, Datia as
well as the learned Sessions Court, Datia are wholly unsustainable in law
and on facts, and are liable to be set aside, as they have failed to
appreciate the material available on record in its true perspective and
have mechanically proceeded against the petitioner without satisfying
the essential ingredients required for constituting an offence under
Signature Not Verified
Signed by: PAWAN KUMAR
Signing time: 3/18/2026
11:28:01 AM

NEUTRAL CITATION NO. 2026:MPHC-GWL:9570
3 MCRC-16603-2025
Section 138 of the Negotiable Instruments Act.

It is further submitted that there exists no legally enforceable debt
or liability against the petitioner, which is a sine qua non for invoking
the provisions of Section 138 of the Negotiable Instruments Act and
even as per the case set up by the respondent/complainant, the alleged
liability arises out of investments made in Sahara India, and the default,
if any, has been attributed to Sahara India itself. The petitioner was
merely acting as an intermediary/agent and has not received any amount
in his personal capacity. Thus, no liability can be fastened upon the
petitioner.
It is further submitted that the cheque in question was admittedly
issued as a security cheque, which fact stands clearly acknowledged in
the complaint itself. The cheque was not issued in discharge of any
subsisting or crystallized liability, but was contingent upon the
occurrence of certain events. Specific terms and conditions governing the
presentation of the cheque were explicitly mentioned on the reverse side
of the cheque, which required the respondent to fulfill certain
obligations, including return of original documents, prior to presenting
the cheque for encashment.
It is further submitted that the respondent has failed to explain,
either in the complaint or otherwise, as to why the cheque was presented
without complying with the agreed terms and conditions. This omission
goes to the root of the matter and renders the very presentation of the
Signature Not Verified
Signed by: PAWAN KUMAR
Signing time: 3/18/2026
11:28:01 AM

NEUTRAL CITATION NO. 2026:MPHC-GWL:9570
4 MCRC-16603-2025
cheque invalid. The petitioner had also specifically raised these aspects

in his reply to the statutory notice; however, the same have not been
considered by the courts below.
It is further contended that the learned trial Court has proceeded
solely on the basis of presumptions under Sections 118 and 139 of the
Negotiable Instruments Act without first examining whether the
foundational facts necessary to invoke such presumptions were
established. It is well settled that such presumptions are rebuttable and
cannot be applied in a mechanical manner, particularly when the material
on record itself raises serious doubts regarding the existence of any
legally enforceable debt or liability.
It is further submitted that the facts and circumstances of the
present case clearly indicate that the cheque was issued only by way of
security and not towards discharge of any debt. Whether a cheque is a
security cheque and whether it was issued in discharge of liability are
issues which require proper consideration in light of the surrounding
circumstances. The learned courts below have failed to undertake such
an exercise and have instead adopted a cursory approach.
It is also submitted that where the respondent himself admits that
the default in payment was committed by a third party, namely Sahara
India, and where the cheque was subject to conditions which have
admittedly not been complied with, no offence under Section 138 of the
Negotiable Instruments Act is made out even prima facie. The
Signature Not Verified
Signed by: PAWAN KUMAR
Signing time: 3/18/2026
11:28:01 AM

NEUTRAL CITATION NO. 2026:MPHC-GWL:9570
5 MCRC-16603-2025
continuation of criminal proceedings against the petitioner in such

circumstances amounts to abuse of the process of law.
It is further submitted that the learned Sessions Court, while
exercising revisional jurisdiction, has failed to independently analyze the
legal and factual aspects of the matter and has merely affirmed the order
of the trial Court without proper application of mind. The impugned
orders thus suffer from patent illegality, perversity, and non-application
of mind.
In view of the aforesaid submissions, it is prayed that this Court
may be pleased to quash the impugned orders dated 11.12.2024 and
28.02.2025, as well as the entire criminal proceedings initiated against
the petitioner, as the same are nothing but an abuse of the process of law
and have resulted in grave miscarriage of justice.
Per contra, learned counsel for the respondent opposed the petition
and prayed for its dismissal, submitting that the impugned orders are
legal and well-reasoned. It is contended that since the cheque bears the
petitioner’s signature, the statutory presumptions under Sections 118 and
139 of the Negotiable Instruments Act apply, and the defence raised by
the petitioner involves disputed questions of fact which can only be
decided during trial and not in quashment proceedings.
Having heard learned counsel for the parties at length and upon
perusal of the record, this Court finds that the foundational requirement
for attracting the provisions of Section 138 of the Negotiable Instruments
Signature Not Verified
Signed by: PAWAN KUMAR
Signing time: 3/18/2026
11:28:01 AM

NEUTRAL CITATION NO. 2026:MPHC-GWL:9570
6 MCRC-16603-2025
Act, namely the existence of a legally enforceable debt or liability, is not

made out even prima facie in the present case. From the averments made
in the complaint itself, it is apparent that the alleged liability pertains to
Sahara India, and not to the present petitioner, who is stated to have
acted merely as an intermediary.
It is further evident that the cheque in question was issued as a
security cheque subject to certain conditions, which were required to be
fulfilled prior to its presentation. The existence of such conditions is not
disputed and is borne out from the material on record, including the
endorsement on the cheque. However, there is nothing on record to
indicate that the respondent complied with the said conditions before
presenting the cheque for encashment. In such circumstances, the very
presentation of the cheque appears to be contrary to the agreed terms.
This Court is of the considered opinion that the learned trial Court
had failed to examine these crucial aspects and had proceeded in a
mechanical manner solely on the basis of statutory presumptions. It is
well settled that the presumptions under Sections 118 and 139 of the
Negotiable Instruments Act are rebuttable and cannot be invoked in
isolation without first establishing the foundational facts. The material
on record, particularly the admissions in the complaint, raises serious
doubts regarding the existence of any legally enforceable liability against
the petitioner.
The revisional Court has also failed to exercise its jurisdiction in
Signature Not Verified
Signed by: PAWAN KUMAR
Signing time: 3/18/2026
11:28:01 AM

NEUTRAL CITATION NO. 2026:MPHC-GWL:9570
7 MCRC-16603-2025
accordance with law and has affirmed the order of the trial Court without

independently appreciating the factual and legal issues involved. The
impugned orders thus suffer from non-application of mind and cannot be
sustained.
In view of the aforesaid analysis, this Court is satisfied that
continuation of the criminal proceedings against the petitioner would
amount to an abuse of the process of law. Accordingly, the present
petition deserves to be and is hereby allowed. The impugned order dated
28.02.2025 passed by the learned Sessions Court, Datia in Criminal
Revision No. 02 of 2025, as well as the order dated 11.12.2024 passed
by the learned Judicial Magistrate First Class, Datia in SC NIA No. 220
of 2022, are hereby set aside. Consequently, the proceedings arising
therefrom against the petitioner stand quashed.
(MILIND RAMESH PHADKE)
JUDGE
pwn*

Signature Not Verified
Signed by: PAWAN KUMAR
Signing time: 3/18/2026
11:28:01 AM