Complaint U/s 138 NI Act Cannot Be Quashed When Disputed Question Of Facts Are Involved: SC [Read Judgment]

The Supreme Court has observed that a cheque bounce complaint under Section 138 of the Negotiable Instruments Act cannot be quashed when disputed questions of facts are involved.

In this case, the High Court, in a petition filed by the accused, observed that the criminal case has been filed under Section 138 of N.I. Act based on the alleged forged receipts, and thus quashed the complaint.

Before the Apex Court , it was contended that the High Court did not keep in view that issuance of cheques by the accused from his NRE Account has been admitted.

Agreeing with this contention, the bench comprising Justices R. Banumathi and AS Bopanna said that when once the issuance of cheque is admitted/established, the presumption would arise under Section 139 of the N.I. Act in favour of the holder of cheque. Allowing the appeal, the bench said:

When once the issuance of cheque is admitted/established, the presumption would arise under Section 139 of the N.I. Act in favour of the holder of cheque that is the complainant-appellant No.3. The nature of presumptions under Section139 of the N.I. Act and Section 118(a) of the Indian Evidence Act are rebuttable. Yogeshbhai has of course, raised the defence that there is no illegally enforceable debt and he issued the cheques to help appellant No.3-Hasmukhbhai for purchase of lands. The burden lies upon the accused to rebut the presumption by adducing evidence. The High Court did not keep in view that until the accused discharges his burden, the presumption under Section 139 of N.I. Act will continue to remain. It is for Yogeshbhai to adduce evidence to rebut the statutory presumption. When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the N.I. Act ought not to have been quashed by the High Court by taking recourse to Section 482 Cr.P.C.

Regarding the power under Section 482 CrPC, the bench said:

Though, the Court has the power to quash the criminal complaint filed under Section 138 of the N.I. Act on the legal issues like limitation, etc. Criminal complaint filed under Section 138 of the N.I. Act against Yogeshbhai ought not have been quashed merely on the ground that there are inter se dispute between appellant No.3 and respondent No.2. Without 16 keeping in view the statutory presumption raised under Section 139 of the N.I. Act, the High Court, in our view, committed a serious error in quashing the criminal complaint in C.C.No.367/2016 filed under Section 138 of N.I. Act 

Case Name: RAJESHBHAI MULJIBHAI PATEL vs. STATE OF GUJARAT 
Case no.: CRIMINAL APPEAL NOS. 251-252 OF 2020
Coram: Justices R. Banumathi and AS Bopanna
Counsel: Adv D.N. Parikh and Sr. Adv Aishwarya Bhati

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