Non-compliance with mandatory Section 202 CrPC requires remand for inquiry, not automatic quashing.

The petitioners sought quashing under Section 482 CrPC of a complaint in which the Magistrate had taken cognizance of an offence under Section 420 IPC and issued summons.

The dispute arose from a long-running commercial relationship and two cheques for ₹91,87,990 each, allegedly issued towards outstanding dues and dishonoured; the petitioners had also initiated proceedings under Sections 138 and 141 of the Negotiable Instruments Act.

The complainant alleged that the cheques had been altered from 2011 to 2017. During the quashing proceedings, it relied on a forensic report from the Delhi proceedings that supported the allegation of alteration.

The petitioners also argued that the complaint did not disclose cheating and that the Magistrate had failed to comply with the mandatory inquiry requirement under Section 202 CrPC because the accused were outside the Magistrate’s territorial jurisdiction.

1. Whether the complaint and material on record justified quashing the Section 420 IPC proceedings at the threshold, including in light of the disputed cheques and the forensic report.

2. Whether the Magistrate’s failure to conduct an inquiry under Section 202 CrPC required the proceedings to be quashed or instead remitted for compliance.

Section 420 IPC requires dishonest or fraudulent intention at the time of inducement; a mere subsequent breach of contract does not, without more, constitute cheating.

Under Section 482 CrPC, the High Court may quash proceedings to prevent abuse of process, but must exercise that power sparingly and with due care.

Section 202 CrPC requires the Magistrate to postpone issuing process and conduct an inquiry or direct an investigation where the accused resides beyond the Magistrate’s territorial jurisdiction; the inquiry is directed to whether sufficient grounds exist to proceed.

The court also referred to Iqbal alias Bala v. State of Uttar Pradesh, (2023) 8 SCC 734, on considering attending circumstances emerging from the record, and to Sunil Bharati Mittal v. CBI, (2015) 4 SCC 609, on the absence of vicarious criminal liability unless a statute provides for it or the individual’s active role and criminal intent are shown.

The court considered the forensic material and developments in the pending Section 138 NI Act proceedings relevant to the complaint’s allegation that the cheque dates had been altered, and therefore declined to hold at the threshold that the complaint disclosed no case or that its continuation would necessarily be an abuse of process.

It distinguished the authorities relied on by the petitioners because, unlike those cases, the disputed cheques here had been examined by a forensic expert and the report prima facie supported the complainant’s allegation.

However, the Magistrate had issued process without conducting the inquiry required by Section 202 CrPC for accused residing outside the territorial jurisdiction.

In the court’s view, the appropriate course was to set aside the summons and remit the matter for that mandatory inquiry, rather than quash the complaint outright.

The order issuing summons under Section 420 IPC dated 2 March 2021 was set aside, and the matter was remitted to the Magistrate to comply with Section 202 CrPC, corresponding to Section 225 BNSS; the Magistrate was directed to proceed expeditiously and avoid unnecessary adjournments.