Prior Notice Not to Present a Cheque Does Not, by Itself, Defeat Section 138 Proceedings.

In brief

The question

Whether the petitioner’s prior notice alleging coercion and requesting that the cheque not be presented was sufficient to warrant quashing the proceedings under Section 138

The court held

The High Court held that the petitioner had not established sufficient grounds to interfere with the proceedings and dismissed the petition, reserving his right to raise legally available defences before the Magistrate

It also directed

It clarified that its observations did not finally determine the disputed facts or the existence of a legally enforceable debt or liability

Pending applications were dismissed as no longer surviving

01Facts

The respondent filed a private complaint alleging that a cheque issued by the petitioner was dishonoured with the endorsement “payment stopped by Drawer,” and sought prosecution under Section 138 of the Negotiable Instruments Act, 1881.

¶ 1

The Magistrate took cognizance on 6 March 2021 and issued summons in C.C. No. 9842/2021 on 15 April 2021

¶ 2

The petitioner sought to quash the proceedings, arguing that he had previously notified the respondent not to present the cheque because it had allegedly been obtained through coercion; that his notice did not identify the cheque; and that any liability arose from an agreement of sale made with his father

¶ 3.1–3.3

02Issues

i.Whether the petitioner’s prior notice alleging coercion and requesting that the cheque not be presented was sufficient to warrant quashing the proceedings under Section 138

¶ 3.1, 6–7

ii.Whether the notice’s alleged failure to identify the cheque provided a ground for quashing the proceedings

¶ 3.2, 5, 9

iii.Whether the claim that the underlying sale agreement was with the petitioner’s father established, at this stage, that the petitioner had no legally enforceable liability

¶ 3.3, 8

03Law Applied

The petition invoked the High Court’s inherent jurisdiction under Section 482 of the Code of Criminal Procedure, 1973, and Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, to challenge proceedings arising from an alleged offence under Section 138 of the Negotiable Instruments Act, 1881

case heading · ¶ 1

The Court treated whether the cheque was voluntarily issued, the purpose for which it was issued, and whether it represented a legally enforceable debt or liability as matters requiring assessment on the evidence; a prior notice requesting non-presentation does not, by itself, invalidate the cheque or extinguish any liability

¶ 6–8

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

Code of Criminal Procedure, 1973 Section 482 Section 200

Bharatiya Nagarik Suraksha Sanhita, 2023 Section 528

Negotiable Instruments Act, 1881 Section 138

04Reasoning

The Court noted that the petitioner admitted issuing the cheque, while his allegations of coercion and absence of liability raised factual questions that could not be resolved in his favour at the quashing stage

¶ 6, 8

The prior notice did not itself defeat the prosecution, since its legal effect had to be considered with the other circumstances and evidence

¶ 7

Further, the notice expressly identified the cheque by number, bank and amount, so the contention that it failed to specify the instrument was unsupported by the material on record

¶ 5, 9

Whether the cheque represented a legally enforceable liability remained for consideration by the Magistrate

¶ 8, 11