Kapil Rastogi vs State Of U.P. And Another
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Allahabad High Court

Kapil Rastogi vs State Of U.P. And Another on 16 September, 2025

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


Neutral Citation No. - 2025:AHC:164482
 

 
HIGH COURT OF JUDICATURE AT ALLAHABAD 
 
APPLICATION U/S 528 BNSS No. - 35519 of 2025   
 
   Kapil Rastogi    
 
  .....Applicant(s)   
 
 Versus  
 
   State of U.P. and Another    
 
  .....Opposite Party(s)       
 
   
 
  
 
Counsel for Applicant(s)   
 
:   
 
Krishna Kumar Singh   
 
  
 
Counsel for Opposite Party(s)   
 
:   
 
G.A.   
 
     
 
 Court No. - 75
 
   
 
 HON'BLE VIKAS BUDHWAR, J.       

1. Heard Sri Krishna Kumar Singh learned counsel for the applicant and Sri Pankaj Srivastava, learned AGA for the State.

2. This is an application filed under Section 528 of the B.N.S.S. for quashing the impugned order dated 13.05.2025 passed by Additional Court 138 N.I. Act, Moradabad in Complaint Case No.23741 of 2025 (Vibhor Bhatnagar Vs. Kapil Rastogi, Director N.K.S. Jwelers Pvt. Ltd.) under Section 138 Negotiable Instrument Act, P.S. Nagphani, District Moradabad.

3. The case of the applicant is that a complaint was lodged under Section 138 of the N.I. Act against the applicant on 7.4.2025 by the opposite party no.2 with an allegation that with relationship of the applicant and the opposite party no.2 is with respect to sale and purchase jewellery. Allegation is that with respect to discharge of the liability the applicant herein had drawn two cheques bearing nos 000086 and 000087 of Rs.15,00,000/-each dated 17.2.2025 and 14.2.2025 which on presentation in the bank on 21.2.2025 came to be dishonoured on with the remark "Payment stop by drawer" followed by a statutory demand notice dated 6.3.2025 and the applicant came to be summoned on 13.5.2025 under Section 138 of the N.I. Act.

4. Learned counsel for the applicant submits that the summoning order cannot be sustained for more than one reason, (a) the statutory demand notice dated 6.3.2025 had not been served upon the applicant and service has been shown by the opposite party no.2 in connivance with the postman (b) there happens to be a first information report lodged by the applicant on 19.8.2025 being FIR No.0083 of 2025, under Sections 316(2), 318(4), 352, 351 B.N.S. against the opposite party no.2, (c) it is submitted that there is no legal debt or liability so as to invoke the provisions under Section 138 of the N.I. Act particularly when said cheque was a security cheque which was misutilized and further complaint has been lodged by the applicant even before the competent authorities regarding misutilizing of the cheque and also before MSME.

5. Learned AGA on the other hand submits that once the cheques stood drawn and it has been dishonoured then the presumption under Section 139 of the N.I. Act would be there.

6. I have heard the submissions so made across the bar and perused the record carefully.

7. Apparently, with respect to dishonouring of two cheques, a statutory demand notice came to be issued followed by a complaint and the applicant came to be summoned. So far as the first objection raised by the applicant that the statutory demand notice is concerned suffice is to say that what would be relevant is a clear recital in the complaint regarding issuance of a statutory demand notice. The question whether it has been served or not is a question of trial particularly in absence of any convincing document available on record, this Court is not required to delve into the said issue as the same is to be proved while leading evidence in the trial. In Ajeet Seeds Ltd. vs. K. Gopala Krishnaiah 2014 (12) SCC 685 it was observed as under:- "10. It is thus clear that Section 114 of the Evidence Act enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the GC Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business.

11. Applying the above conclusions to the facts of this case, it must be held that the High Court clearly erred in quashing the complaint on the ground that there was no recital in the complaint that the notice under Section 138 of the NI Act was served upon the accused. The High Court also erred in quashing the complaint on the ground that there was no proof either that the notice was served or it was returned unserved/unclaimed. That is a matter of evidence. We must mention that in C.C. Alavi Haji, this Court did not deviate from the view taken in Vinod Shivappa, but reiterated the view expressed therein with certain clarification. We have already quoted the relevant paragraphs from Vinod Shivappa where this Court has held that service of notice is a matter of evidence and proof and it would be premature at the stage of issuance of process to move the High Court for quashing of the proceeding under Section 482 of the Cr.P.C. These observations are squarely attracted to the present case. The High Court?s reliance on an order passed by a two.Judge Bench in Shakti Travel & Tours is misplaced. The order in Shakti Travel & Tours does not give any idea about the factual matrix of that case. It does not advert to rival submissions. It cannot be said therefore that it lays down any law. In any case in C.C. Alavi Haji, to which we have made a reference, the three. Judge Bench has conclusively decided the issue. In our opinion, the judgment of the two.Judge Bench in Shakti Travel & Tours does not hold the field any more."

8. As regards the second contention of learned counsel for the applicant that the said cheque is a security cheque and thus no legal enforceable debt or liability stands arisen is also not convincible particularly when the same is a subject of trial.

9. Reliance has been placed upon the Hon'ble Apex Court in the case of M/s Womb Laboratories Private Limited Vs. Vijay Ahuja & another (2022) 18 SCC 631 has observed as under:-

"In our opinion, the High Court has muddled the entire issue. The averment in the complaint does indicate that the signed cheques were handed over by the accused to the complainant. The cheques were given by way of security, is a matter of defence. Further, it was not for the discharge of any debt or any liability is also a matter of defence. The relevant facts to countenance the defence will have to be proved - that such security could not be treated as debt or other liability of the accused. That would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques."

10. In Sunil Todi and others Vs. State of Gujarat, (2022) 16 SCC 762 the Hon'ble Apex Court has reiterated the aforesaid law.

11. As regards the third contention of the learned counsel for the applicant that the said cheque has been mistutilized and the complaint has been lodged by the applicant before the other authorities and already a first information report has been lodged against the opposite party no.2 and their faction by the brother of the applicant is concerned the same at best the matter of defence which would be considered at the stage when the trial commences when a decision is to be taken whether it is a case of acquittal or conviction.

12. As regards the other contention of learned counsel for the applicant is that their bills and invoices and also GST document supporting the purchase of jewellery by the opposite party no.2 from the applicant is concerned the same may not be a relevant consideration at the stage of summoning and the same may be a question which can be raised when the trial commences.

13. Moreover the presumption under Section 139 of the N.I. Act is always there.

14. Accordingly, interference is declined. Application stands disposed of leaving it open to the applicant to raise all legal and factual issues as well as issue with respect to the fact that the cheque being a security cheque does not answer the description of a dishonour of the cheque in the trial and the Court has no reasons to disbelieve that the same shall be considered in accordance with law.

(Vikas Budhwar,J.)

September 16, 2025

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