Statutory Presumptions under Section 139 NI Act Cannot Be Dislodged at Pre-Trial Stage despite Pending Civil Disputes

Respondent No. 2 (complainant), a former Director of Petitioner No. 1 company, filed a complaint under Section 138 of the Negotiable Instruments (NI) Act after a cheque for ₹6,20,000/- was dishonored

The cheque was allegedly issued pursuant to a separation agreement dated 06.05.2018 regarding the relinquishment of shareholding

The Petitioners challenged the summoning order dated 21.12.2021 and the Revisional Court’s dismissal dated 19.02.2024

They contended that the separation agreement was forged and that a Civil Court in Uttar Pradesh had stayed the operation of said agreement prior to the cheque's presentation, thus negating any "legally enforceable debt"

1. Whether a summoning order under Section 138 of the NI Act can be set aside at a pre-trial stage on the grounds that the underlying agreement is allegedly forged or stayed by a civil court.

2. Whether the subsistence of a civil injunction against an agreement automatically rebuts the statutory presumption of a legally enforceable debt at the threshold of criminal proceedings.

The court applied Section 138 of the NI Act regarding the dishonor of cheques and Section 139, which mandates a statutory presumption that a cheque is issued for the discharge of a debt or liability

It relied on Gimpex (P) Ltd. v. Manoj Goel, defining the essential ingredients of the offence

Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, stating the debt must be enforceable on the date of presentation

The court applied principles from Rathish Babu Unnikrishnan v. State (NCT of Delhi) and Renuka v. State of Maharashtra, which caution against scuttling Section 138 proceedings at the nascent stage when factual defenses requiring evidence are raised.

The Court reasoned that since the signatures on the cheque and the receipt of the statutory notice were not disputed, the presumption under Section 139 of the NI Act was triggered in favor of the complainant

Regarding the allegations of forgery and the civil stay order, the Court observed that these constitute factual defenses that cannot be adjudicated in a summary manner under Section 482 Cr.P.C.

It noted that the specific scope and effect of the civil injunction—including whether it rendered the debt wholly inoperative or merely restrained specific acts—require a full trial and appreciation of evidence

The Court emphasized that a "mini-trial" is impermissible at the summoning stage, and the burden of proof lies on the accused to rebut the legal presumption during the trial

The Court dismissed the petition, upholding the summoning and revisional orders. The Petitioners must raise their defenses regarding the legality of the debt before the Trial Court during the evidence stage. All pending applications were disposed of accordingly