Disputed Factual Defenses and Statutory Presumptions Under Section 139 NI Act Cannot Be Adjudicated Under Section 482 CrPC

The Petitioner (accused) allegedly lured the Complainant (O.P. No. 2) to invest ₹75 lakhs in the share market and a school project, promising high returns.

To return a portion of the investment, the Petitioner issued a cheque for ₹25,40,000 dated 20.09.2015.

The cheque was dishonoured on 03.10.2015 with the endorsement "payment stopped by drawer".

Despite a legal notice sent on 27.10.2015, the Petitioner failed to pay, leading to Complaint Case No. 3822 (C) of 2015.

The Trial Court took cognizance and issued summons on 21.05.2016.

The Petitioner moved the High Court under Section 482 Cr.P.C. to quash the order, contending he was in judicial custody since 19.06.2014, making the issuance of the cheque and service of notice impossible/false.

1. Whether the High Court, in exercise of its inherent jurisdiction under Section 482 of Cr.P.C., should quash a cognizance order by evaluating disputed factual defenses such as judicial custody and non-service of notice.

2. Whether the statutory presumption under Section 139 of the N.I. Act precludes the quashing of a complaint at the threshold when a prima facie case is made out.

Section 482 of the Cr.P.C. grants extraordinary power to prevent abuse of process but must be exercised sparingly and only when allegations do not disclose a prima facie offence.

Section 139 of the Negotiable Instruments Act, 1882 mandates a rebuttable presumption that the holder of a cheque received it for the discharge of a debt or liability.

The doctrine in State of Haryana v. Bhajan Lal establishes the limits of quashing powers.

The precedents in Sri Om Sales v. Abhay Kumar (2025) and Rajeshbhai Muljibhai Patel v. State of Gujarat (2020) establish that factual defenses and the rebuttal of statutory presumptions are matters for trial, not pre-trial quashing.

The Court reasoned that at the stage of taking cognizance or quashing, it cannot undertake a "meticulous appreciation of evidence" or adjudicate the correctness of allegations.

Since the complaint contained specific averments regarding the issuance of the cheque for a legal liability, its dishonour, and the subsequent demand notice, a prima facie case under Section 138 was established.

The Petitioner’s defenses—specifically his judicial custody at the time of alleged issuance and the alleged lack of service of notice—were deemed "disputed questions of fact".

Following the doctrine in Sri Om Sales, the Court held that because Section 139 N.I. Act creates a legal presumption in favor of the complainant, "scuttling the criminal process" at a nascent stage would be injudicious.

Such defenses must be tested via cross-examination and evidence during the trial rather than in a summary proceeding under Section 482.

The Court held that the issues raised by the Petitioner are matters of defense to be established at trial.

The interim order was vacated, and the Trial Court was directed to conclude the trial expeditiously and independently, without being influenced by the High Court's observations.