Section 482 cannot quash Section 138 proceedings where cheque liability remains a disputed question of fact.

The complainant alleged that Chandan Kumar, Director of Rauli Infra Build Real Estate Pvt. Ltd., agreed to purchase land for a total consideration of ₹52,29,000 and initially paid ₹8,00,000. A subsequent agreement allegedly provided for payment of the remaining consideration after execution and registration of the sale deed. The petitioner allegedly issued a cheque for ₹44,29,000, which was dishonoured; information of dishonour was received on 13 March 2019. The complainant issued a statutory notice on 4 April 2019, but the amount allegedly remained unpaid.

The complainant instituted Complaint Case No. 1292 of 2019 alleging offences under Sections 420, 406, 467 and 468 of the IPC and Section 138 of the Negotiable Instruments Act, 1881 (“N.I. Act”). The A.C.J.M.-XIV, Saran, took cognizance only under Section 138 of the N.I. Act and issued summons on 8 August 2019.

The petitioner sought quashing of the cognizance order and the consequential criminal proceedings under Section 482 Cr.P.C., contending that the cheque was not issued by him, that no legally enforceable liability existed, that the registered sale deed acknowledged full payment, and that the statutory notice was not served.

Whether the High Court should exercise its inherent jurisdiction under Section 482 Cr.P.C. to quash the order taking cognizance under Section 138 of the N.I. Act and the consequential criminal proceedings?

Whether the petitioner’s disputed defences—non-issuance of the cheque, absence of legally enforceable liability, the recital in the registered sale deed, and non-service of statutory notice—could be conclusively determined at the pre-trial stage?

Whether the complaint and supporting materials prima facie disclosed the essential ingredients of an offence under Section 138 of the N.I. Act?

The Court applied Section 482 Cr.P.C., under which inherent jurisdiction may be exercised sparingly to prevent abuse of process and secure the ends of justice, without ordinarily conducting a mini-trial or deciding disputed questions of fact.

Section 138 of the N.I. Act was applied concerning dishonour of a cheque issued towards a legally enforceable debt or liability, while Section 139 creates a rebuttable statutory presumption that the holder received the cheque for discharge of such debt or liability.

Relying on Sri Om Sales v. Abhay Kumar @ Abhay Patel, 2025 SCC OnLine SC 2897, as well as Maruti Udyog Ltd. v. Narender, Rangappa v. Sri Mohan, Rajeshbhai Muljibhai Patel v. State of Gujarat and Rathish Babu Unnikrishnan v. State (NCT of Delhi), the Court held that the question whether the cheque was issued towards a legally enforceable liability ordinarily requires determination at trial and should not be adjudicated under Section 482 Cr.P.C. at the threshold.

The Court also applied the illustrative principles in State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, permitting quashing where the allegations, even if accepted in full, do not constitute an offence or the prosecution is manifestly mala fide, while cautioning against using inherent powers to stifle a legitimate prosecution.

The complaint specifically alleged issuance of the ₹44,29,000 cheque, its presentation and dishonour, service of the statutory demand notice, and non-payment within the prescribed period, thereby prima facie satisfying the foundational requirements of Section 138 of the N.I. Act.

The statutory presumption under Section 139 consequently operated in favour of the complainant, subject to rebuttal by the petitioner through evidence at trial.

The petitioner’s reliance on the registered sale deed and his assertions that he neither issued the cheque nor owed the alleged amount raised disputed factual and evidentiary questions concerning the actual liability, the effect of the sale deed, the genuineness of the subsequent agreement, the cheque’s issuance and the service of notice.

Those questions could not be conclusively resolved on the basis of rival assertions in a Section 482 proceeding.

The Court further held that a detailed or elaborate reasoning order at the stage of cognizance was not indispensable where the materials demonstrated application of judicial mind.

Since the complaint was not inherently absurd, did not fail to disclose an offence, and did not fall within the Bhajan Lal categories, interference was unwarranted.

It therefore declined to exercise jurisdiction under Section 482 Cr.P.C. and dismissed the application challenging the cognizance order dated 8 August 2019 and the consequential proceedings.

The trial court was directed to proceed in accordance with law, uninfluenced by the observations made in the judgment, which were confined to the prayer for quashing at the preliminary stage.

Any interim order was vacated.