P&H HC Sets Aside Mumbai Woman’s ₹84-Lakh Cheque-Bounce Summons, Remands Case After Order Failed To Show Required Out-Of-State Inquiry

The respondent-company filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, alleging that the petitioner issued a cheque for ₹84,00,000 towards repayment of a loan. The cheque was dishonoured, and the Judicial Magistrate First Class, Rohtak, issued summons to the petitioner.

The petitioner, who resided in Mumbai, sought to set aside the summoning order, contending that the Magistrate had not complied with Section 225 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), which requires an inquiry before process is issued against an accused residing beyond the Magistrate’s territorial jurisdiction.

Section 225(1) BNSS requires a Magistrate to postpone issuance of process and conduct an inquiry where the accused resides beyond the Court’s territorial jurisdiction; the inquiry determines whether sufficient grounds exist to proceed and does not decide guilt or innocence.

In In Re: Expeditious Trial of Cases under Section 138 of N.I. Act, 1881, (2021) 16 SCC 116, the Supreme Court held that such an inquiry is required in Section 138 complaints involving an out-of-jurisdiction accused, and may be conducted through affidavit evidence or, in suitable cases, examination of documents.

Vijay Dhanuka v. Najima Mamtaj, (2014) 14 SCC 638, and Abhijit Pawar v. Hemant Madhukar Nimbalkar, (2017) 3 SCC 528, recognise the inquiry’s purpose as ascertaining whether sufficient grounds exist to proceed.

The inquiry is a substantive safeguard, not a prescribed form: it need not be separately labelled or repeated if the requisite judicial scrutiny has already occurred, but compliance must be discernible from the proceedings.

The Magistrate recorded the complainant’s preliminary evidence and referred to the cheque, dishonour memos and demand notice before finding a prima facie offence under Section 138.

However, because the petitioner resided in Mumbai, the Magistrate was required to consider whether sufficient grounds existed to proceed against an accused outside the Court’s territorial jurisdiction. The order did not disclose discernible consideration of that circumstance or of the statutory inquiry’s purpose. The defect was therefore not merely the absence of an express reference to Section 225 BNSS; it was the absence of demonstrated judicial scrutiny required by that provision.

It partly allowed the petition, set aside the summoning order and remitted the matter for fresh consideration, permitting the Magistrate to consider the existing affidavit evidence and documents and to undertake further inquiry if necessary. A fresh order on issuance of process was directed, preferably within six weeks of receipt of the certified copy. The complaint was not quashed, and the merits—including whether a legally enforceable debt or liability existed—were left open.