82-Year-Old’s Claim Her Cheque Was Stolen And Signature Forged Must Be Tested At Trial As P&H HC Refuses To Quash ₹11 Lakh Case

In brief

The question

Whether the summoning order and complaint under Section 138 could be quashed under Section 482 CrPC on the petitioner’s claims that the cheque was stolen and forged and that no liability existed.

The court held

The Court held that the petitioner’s defences did not warrant quashing the complaint or summoning order at this stage.

It also directed

The petition was dismissed, with no opinion expressed on the merits of the case.

01Facts

The petitioner sought to quash a complaint under Section 138 of the Negotiable Instruments Act, 1881, and the summoning order dated 17 July 2019.

¶ 1

The complaint alleged that she issued a cheque for ₹11,00,000 towards a liability; the cheque was twice dishonoured for insufficient funds, and a legal notice was sent before the complaint was filed.

¶ 1, 7

The petitioner asserted that the cheque had been stolen and forged, denied receiving the alleged payment, and challenged the notice and the complainant’s account of the transaction.

¶ 2

The respondent did not contest the petition.

¶ 3

02Issues

i.Whether the summoning order and complaint under Section 138 could be quashed under Section 482 CrPC on the petitioner’s claims that the cheque was stolen and forged and that no liability existed.

¶ 8, 10–11

ii.Whether the petitioner’s age and the disputed circumstances of the alleged transaction justified quashing the complaint before trial.

¶ 10

03Law Applied

Sections 118 and 139 of the Negotiable Instruments Act, 1881, provide rebuttable presumptions that a negotiable instrument was made for consideration and that the holder received a cheque towards discharge of a debt or liability.

¶ 4–5

Under Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd., (2000) 2 SCC 745, the essential ingredients of an offence under Section 138 include drawing a cheque towards a debt or liability, its timely presentation and dishonour, service of a written demand notice, and failure to pay within the prescribed period.

¶ 6

M.M.T.C. Ltd. v. Medchl Chemicals & Pharma (P) Ltd., (2002) 1 SCC 234, places the burden of proving the absence of an existing debt or liability on the accused, ordinarily at trial.

¶ 9

Under Rajeshbhai Muljibhai Patel v. State of Gujarat, (2020) 3 SCC 794, disputed questions of fact requiring evidence should not ordinarily be determined in proceedings under Section 482 CrPC to quash a Section 138 complaint.

¶ 10

Provisions in the judgment · 4 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 482

Negotiable Instruments Act, 1881 Section 138 Section 118 Section 139

04Reasoning

The complaint and preliminary evidence showed, prima facie, that the cheque had been issued towards a liability, presented and dishonoured twice, followed by service of a legal notice and non-payment.

¶ 7

The petitioner’s allegations of theft, forgery and non-receipt of the alleged payment raised disputed factual matters.

¶ 8, 10–11

In light of the statutory presumptions, she would have to rebut the presumed liability by evidence at trial; the Court would not decide those disputes or assess her age-based contention in the quashing proceedings.

¶ 8, 10–11