Telangana High Court
Shri. Pyaraka Kodanda Pani vs The State Of Telengana on 31 March, 2026
HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
THE HONOURABLE SRI JUSTICE J. SREENIVAS RAO
CRIMINAL PETITION No. 8289 of 2025
DATE: 31.03.2026
Between :
Shri Pyaraka Kodanda Pani
....Petitioner/Accused
AND
The State of Telangana,
Rep. by its Public Prosecutor,
High Court of Judicature at Hyderabad and another
....Respondents
:ORDER:
This Criminal Petition has been filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, by the petitioner/accused seeking to quash the proceedings in STC.NI.No.310 of 2024 on the file of the II Additional Junior Civil Judge-cum-X Additional Metropolitan Magistrate, Ranga Reddy District, registered for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the N.I. Act').
2. Brief facts of the case:
2.1. On 28.02.2024, respondent No.2-Sri Enterprises, represented by V. Shilpa and A. Sridevi have filed a private complaint under Section 200 Cr.P.C. before the Hon'ble II Additional Junior Civil Judge- cum-X Additional Metropolitan Magistrate, Ranga Reddy 2 District, against Soukhyaa Enterprises, represented by authorized partners, the petitioner stating that G. Sarojini Devi, representative of the complainant's firm entered into a business arrangement with the petitioner firm-Soukhyaa Enterprises, represented by its partners Smt. Sucheta Acharya and the petitioner, and obtained distribution rights to market and sell their products. In connection with the said business transaction, the complainant paid a total advance amount of Rs.38,00,000/- to the petitioner's firm on various dates through bank transfers, PhonePe transactions, and cash. Out of the said amount, the petitioner repaid a sum of Rs.18,00,000/- in two installments to the bank account of Smt. Angaru Sridevi, leaving a balance amount due and payable. To discharge the subsisting liability, the petitioner issued two cheques bearing No. 010860 dated 04.09.2023 for Rs.9,00,000/- in favour of Angaru Sridevi and Cheque bearing No. 010861 dated 04.10.2023 for Rs.6,00,000/- in favour of Vandanapu Shilpa, both drawn on ICICI Bank, Vijayawada Branch.
When respondent No.2 presented the said cheques for encashment, they were dishonoured on the ground of "Funds Insufficient." Despite repeated requests and issuance of a statutory legal notice, the petitioner failed to make payment of the cheque amounts, thereby committed an offence punishable under Section 138 of the N.I. Act.
3. Heard Mr. Naresh Kumar Neemkar,, learned counsel for the petitioner, Ms. Lavanya Peddiredy, learned counsel for respondent 3 No.2 and Mr. Jithender Rao Veeramalla, learned Additional Public Prosecutor appearing on behalf of respondent No.1 State.
4. Submissions of learned counsel for the petitioner:
4.1. Learned counsel for the petitioner submitted that the allegation made in the complaint that respondent No.2 paid an amount of Rs.38,00,000/- towards distribution rights is false and incorrect, and in fact, respondent No.2 had paid only a sum of Rs.23,00,000/-and the further allegations that respondent No.2 received Rs.9,00,000/-
and Rs.6,00,000/- in cash are also false and that the petitioner's firm neither received the said amounts in cash nor acknowledged receipt of the same. He further submitted that respondent No.2 itself admitted the receipt of Rs.18,00,000/- from the petitioner's firm through bank transfers, which clearly establishes that substantial payments were already made towards the alleged liability. Even though respondent No.2 entitled only to an amount of Rs.23,00,000/- , with a malafide intention forced the petitioner to issue cheques for Rs.9,00,000/-, Rs.9,00,000/- and Rs.6,00,000/- as security. The said cheques are personal cheques of the petitioner and he was not issued on behalf of Soukhyaa Enterprises, and, therefore, the petitioner cannot be held personally liable.
4.2. He further submitted that respondent No.2 had already received an amount of Rs.9,00,000/- against one of the cheques and 4 had acknowledged the same through WhatsApp messages. However, they deliberately presented the cheque with a malafide intention to harass the petitioner and to extract the money. With regard to Cheque No.010861 for Rs.6,00,000/-, respondent No.2 received goods worth Rs.8,27,000/-, thereby receiving goods in excess to the extent of Rs.2,27,000/-, and therefore, there is no legally enforceable debt.
4.3. He also submitted that the complaint filed by respondent No.2 is not maintainable under law, as it has been filed in the name of Sri Enterprises, whereas, the cheques were issued in individual names and Angaru Sridevi has no locus standi to file the complaint, particularly when the partnership deed of Sri Enterprises stands between G. Sarojini Devi and Vandanapu Shilpa only. 4.4. He further submitted that as per the averments made in the complaint and the documents enclosed along with complaint, the cheques were returned through memo on 02.11.2023 and 13.11.2023, whereas, respondent No.2 got issued legal notice on 19.01.2024 after expiry of the prescribed period of 30 days. Hence, the mandatory requirement under Section 138(b) of the Negotiable Instruments Act, 1881 has not been complied with, and the complaint is liable to be quashed on the said ground alone. 5 4.5. He further submitted that even if the allegations in the complaint are taken at face value, they do not constitute an offence under Section 138 of the Negotiable Instruments Act, and continuation of the proceedings against the petitioner would amount to an abuse of the process of law.
5. Submissions of learned counsel for respondent No.2:
5.1. Per contra, learned counsel submitted that respondent No.2-Sri Enterprises, entered into a Distribution Agreement dated 28.11.2022 with Soukhyaa Enterprises, represented by Sucheta Acharya and the petitioner, for the sale and distribution of products, and in pursuance thereof, respondent No.2 paid a total amount of Rs.38,00,000/-
towards distribution rights through bank transfers, PhonePe transactions, and cash, all of which are duly supported by documentary evidence. Hence, the allegation that respondent No.2 paid Rs.23,00,000/- towards distribution rights is false and denied. She further submitted that at the request made by the petitioner, respondent No.2 paid remaining amount of Rs.15,00,000/- (Rs.9,00,000/- + Rs.6,00,000/-) was paid in cash. It is admitted that respondent No.2 received Rs.18,00,000/- from Soukhyaa Enterprises in two instalments. However, the same constitutes only a partial repayment of the total amount of Rs.38,00,000/-. The allegation that the cheques were forcibly obtained as security cheques 6 is false, and in fact, the petitioner voluntarily issued three cheques, out of which, one cheque was realized and the remaining two cheques were dishonoured.
5.2. She also submitted that the petitioner had supplied the goods worth of Rs.8,27,000/- against the cheque of Rs.6,00,000/- is not correct, as the petitioner himself admitted the issuance of the cheques and its dishonour for "Funds Insufficient," which clearly establishes the essential ingredients of the offence under Section 138 of the N.I. Act. The petitioner is closely connected with Soukhyaa Enterprises and is an authorized person/joint account holder, as evidenced by the bank statements.
5.3. She further submitted that the plea of lack of locus standi of Angaru Sridevi is untenable, as Angaru Sridevi and G. Sarojini Devi are mother and daughter, and a proper authorization letter has been filed along with the counter affidavit. The cheque return memo was received on 29.12.2023 and the legal notice was issued on 19.01.2024. Hence, the statutory notice was issued within the prescribed period thereby fully complying with the requirements under Section 138(b) of the Negotiable Instruments Act. Hence, the allegations made by the petitioner that the complaint is false, vexatious, and filed with malafide intention are baseless and are 7 made only to evade liability and the criminal petition filed by the petitioner is liable to be dismissed.
Analysis :
6. Having considered the rival submissions made by the respective parties and after perusal of the material available on record, it reveals that respondent No.2-Sri Enterprises filed a private complaint under Section 200 of the Cr.P.C. before the II Additional Junior Civil Judge-cum-X Additional Metropolitan Magistrate, Ranga Reddy District at Kukatpally against Soukhyaa Enterprises, represented by the petitioner as authorized partner, for the offence under Section 138 of the N.I. Act, as amended in 1988. In the said complaint, it is stated that the complainant knows Sucheta Acharya, who is one of the partners of Soukhyaa Enterprises, and with that friendship, the complainant took the distribution from Soukhyaa Enterprises for the sale of products and entrusted agreement with Soukhyaa Enterprises and for establishment of the business, the complainant paid total amount of Rs.38,00,000/- to Soukhyaa Enterprises towards advance and the petitioner received an amount of Rs.9,00,000/- on 24.07.2023 and on 02.09.2023 received an amount of Rs.9,00,000/-, total Rs.18,00,000/-. It is further stated that the petitioner from the Soukhyaa Enterprises issued two cheques bearing No.010860 for Rs.9,00,000/- drawn on ICICI Bank, Vijayawada on 04.09.2023 to Angaru Sridevi and the said cheque was 8 presented in her bank and the same was dishonoured with an endorsement 'Funds Insufficient' and respondent No.2 received the cheque return memo on 29.12.2023 from the Bank. It is further stated that the petitioner from the Soukhyaa Enterprises issued another cheque bearing No.010861 for an amount of Rs.6,00,000/-
drawn on ICICI Bank, Vijayawada branch, on 04.10.2023 to one Vandanapu Shilpa and the said cheque was presented in her bank account and the same was dishonoured with an endorsement 'Funds Insufficient' and she received the cheque return memo on 29.12.2023. Therefore, respondent No.2 issued statutory legal notice under Section 138 of the N.I. Act through its advocate on 19.01.2022. The petitioner has replied to the said notice on 30.01.2024. As the petitioner failed to pay the amount, respondent No.2 filed the complaint on 28.02.2024.
7. A perusal of the complaint and documents filed along with the complaint reveal that the alleged cheques were issued by the petitioner in his individual capacity and not in the name of the Soukhyaa Enterprises. From perusal of the cheques, it reveals that the petitioner issued cheque bearing No.010860 for Rs.9,00,000/- on 04.09.2023 in favour of Angaru Sridevi and he also issued another cheque bearing No.010861 for Rs.6,00,000/- on 04.10.2023 in favour of Vandanapu Shilpa. The said cheques issued in his individuals capacity and not as a partner of Soukhyaa Enterprises. Respondent 9 No.2 filed the complaint against the Soukhyaa Enterprises, but not against the petitioner.
8. It is very much relevant to mention that in Aparna A. Shah v. Sheth Developers Pvt. Ltd. 1, the Hon'ble Apex Court held that under Section 138 N.I. Act, criminal liability for dishonour of a cheque arises only against the drawer of the cheque i.e., the person who has actually signed the cheque.
9. In the case on hand, the petitioner has not issued cheques in the name of Soukhyaa Enterprises and he issued in individual capacity to individual persons, namely, Angarju Sridevi and Vandanapu Shilpa. However, the complainant filed the complaint in the name of Sri Enterprises against Soukhyaa Enterprises and not against the petitioner and the same is not maintainable under law.
10. A perusal of the complaint, it reveals that two cheques were issued by the petitioner were returned on the ground of 'Funds Insufficient' and the bank returned the said cheques through return memo dated 02.11.2023 and 13.11.2023 respectively. Therefore, respondent No.2 ought to have issued the statutory legal notice within a period of 30 days from the date of return memos from the Bank and respondent No.2 issued the statutory legal notice on 19.01.2024 after expiry of 30 days time. However, respondent No.2 1 (2013) 8 SCC 71 10 in the complaint averred that they received return cheques from the bank on 29.12.2023 but the said return memos were not enclosed in the list of documents filed along with the complaint, only filed return memo dated 02.11.2023 and 13.11.2023.
11. It is also relevant to mention that the Hon'ble Supreme Court in Sivakumar v. Natarajan 2, examined the limitation prescribed under clause (b) of the proviso to Section 138 of the N.I. Act for issuance of the statutory notice. The Court held that the expression "within thirty days of the receipt of information" regarding dishonour of the cheque is deliberate and significant. Parliament consciously did not use the expression "from the date of receipt of information", thereby excluding the application of Section 9 of the General Clauses Act. Consequently, the period of thirty days must be strictly computed from the date on which the complainant receives intimation of dishonour, and issuance of notice on the 31st day would fall beyond the prescribed period, rendering the complaint is not maintainable.
12. For the foregoing reasons as well as the precedent decisions, this Court is of the considered view that the continuation of the proceedings in STC.NI.No.310 of 2024 on the file of the II Additional Junior Civil Judge-cum-X Additional Metropolitan Magistrate, Ranga 2 (2009) 13 SCC 623 11 Reddy District, against the petitioner is a clear abuse of the process of law and the same is liable to be quashed, accordingly quashed.
13. In the result, the criminal petition is allowed.
Miscellaneous applications, pending if any, shall stand closed.
_______________________ J. SREENIVAS RAO, J Date: 31.03.2026 mar