Discharge Of Debt By Drawer To Be Determined At Trial, Can't Be Ground For Quashing Cheque Bounce Case U/S 138 NI Act: Jharkhand HC

The Jharkhand High Court has dismissed a petition to quash a cheque bounce case, emphasizing that determining whether the petitioner had settled the debt for which the cheques were issued is a factual matter requiring a full trial.

Justice Anil Kumar Choudhary, presiding over the case, observed, “Now whether or not the petitioner has discharged the debt for which the cheques were issued is a pure question of fact, the veracity of which can only be determined in a full dress trial of the case and certainly, the same being basically a defence of the petitioner cannot be a ground to quash the entire criminal proceeding in exercise of the power under Section 482 Cr.P.C.”

The above ruling came in a petition seeking to quash the order against the Petitioner by which cognizance was taken by the Chief Judicial Magistrate for the offence punishable under Section 138 of N.I. Act.

As per the factual matrix of the case, Petitioner Moina Khatoon issued a cheque amounting to Rs. 80,000 to the complainant for the purchase of cement from M/s. Abhinav Trading. However, the cheque was dishonoured due to insufficient funds when presented at the bank. Subsequently, the complainant re-presented the same cheque along with an additional post-dated cheque of Rs. 64,400, both of which were also dishonoured for similar reasons. Upon the complainant's demand for payment, the petitioner received a legal notice alleging forgery.

After the petitioner failed to settle the dues despite receiving a legal notice demanding Rs. 2.23 lakhs, which included the cheque amounts and other outstanding dues, the complainant initiated legal proceedings. The Chief Judicial Magistrate found a prima facie case under Section 138 of the Negotiable Instruments Act and issued summons to the petitioner. Thus, the petition was filed accordingly.

The court cited the Supreme Court of India's decision in State of M.P. vs. Awadh Kishore Gupta & Others (2004), emphasizing that the High Court should not assess the reliability of evidence, as this falls within the trial court's jurisdiction.

Referring to Shiji @ Pappu & Others vs. Radhika & Another (2012), the court noted the Supreme Court's caution that the expansive powers under Section 482 of the Cr.P.C. require careful and cautious exercise by the High Court.

The court underscored that determining whether a debt is discharged is solely a factual matter reserved for trial.

Consequently, the court dismissed the criminal miscellaneous petition.

Case Title: Moina Khatoon v. State of Jharkhand

LL Citation: 2024 LiveLaw (Jha) 111

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