Gujarat High Court
Highlife Industries Thro' Shankarbhai ... vs State Of Gujarat on 15 July, 2025
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 4391 of 2015
==========================================================
HIGHLIFE INDUSTRIES THRO' SHANKARBHAI BABALDAS PATEL
Versus
STATE OF GUJARAT & ANR.
==========================================================
Appearance:
MS.P J.JOSHI(3888) for the Applicant(s) No. 1
MR.HIREN M MODI(3732) for the Respondent(s) No. 2
MR TIRTHRAJ PANDYA, APP for the Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 15/07/2025
ORAL ORDER
1. By way of this petition under Article 226 of the
Constitution of India r/w section 482 of the Code of Criminal
Procedure, 1973, the petitioner has prayed to quash and set
aside the proceedings of Criminal Case No.87 of 2015 pending
before the Id. Metropolitan Magistrate Court, Ahmedabad.
2. Brief facts of the case are as under:-
2.1 As per case of the complainant, applicant is carrying out
activity of manufacturing High Life brand speed precision pillar
machine radial drill machine and magnetic drill and machine
and complainant is dealer of Bosch Ltd. and distributor of drill
machine. In the year 2005-2006, the applicant had purchased
two machines and transaction was completed and thereafter
another set of 10 machines were ordered on 10.09.2014 for three
machines and on 17.09.2014 for another three machines.
During this period, 3 drill machines were spoiled and send to
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
respondent no.2 on 18.10.2014 for repairing and on that day,
petitioner gave cheque of Rs.1,33,500/- to respondent no.2. On
06.11.2014, respondent no.2 has returned all the machines to
applicant. The respondent no.2 gave deliver of machines
amounting to Rs.1,78,000/- + 24,531/- for maintenance.
Respondent no.2 deposited advance dheque dated 30.01.2014 of
Rs.1,78,000/- bearing No.684447. Respondent no.2 deposited
the said cheque.
2.2 The complainant had deposited the cheque given for
security purpose and the same came to be dishonoured. The
complainant had therefore lodged a complaint under section 138
of the Negotiable Instruments Act. The said complaint came to
be registered as Criminal Complaint No.87 of 2015.
2.3. The Learned Metropolitan Magistrate, Ahmedabad was
pleased to issue process against the accused no.1 i.e. present
petitioner vide its order dated 13.04.2015. The said order was
passed despite the fact that no complaint under section 138 is
maintainable in the present facts and circumstances of the case.
2.4. Hence, present petition.
3. Learned advocate Ms. Joshi for the petitioner in her
submission argued that the cheque in question is not handed
over to the complainant for any subsisting or legally enforceable
liability, which subsists on the date of the cheque. She would
further submit that the documents on record produced by the
complainant itself indicates that the cheque in question was
given towards guarantee as per the payment terms. Therefore,
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
she would submit that it could be treated that the cheque in
question was granted towards security for liability which may
arose on subsequent date. She would submit that goods which
were sold to petitioner were defective goods. Cheque was given to
payment of goods purchased but since goods were defective no
liability arise upon the petitioner to pay bill amount. In premises
of this fact no subsisting liability exist on day of cheque
presented for encashment. She would further submit that the
learned trial Court committed serious error in issuing process
without referring any documents on record.
3.1 In nutshell, learned advocate for the petitioner submits
that since the essential ingredients of offence u/s 138 of the NI
Act are not satisfied, issuance of process against the petitioner
by the learned trial Court is gross error.
3.2 In support of her submissions, learned advocate Ms.Joshi
has relied on judgment of Hon'ble Supreme Court in the case of
M/s. Indus Airways Pvt. Ltd. v/s. M/s. Magnum Aviation Pvt.
Ltd. [2014 (12) SCC 539] and judgment of this Court in the case
of Nikhil P.Gandhi v/s. State of Gujarat [Criminal Misc.
Application No.968 of 2014].
3.3 Upon above submissions, learned advocate Ms. Joshi
submits to allow the petition and to quash and set aside order of
issuance of process in criminal case as well as to quash and set
aside proceedings of criminal case.
4. Per contra, learned advocate Mr. Modi appearing for the
respondent No.2 referring to judgment in case of Sunil Todi and
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
others Vs. State of Gujarat, 2022(16) SCC 762, more
particularly, para 30 to 34 and in case of Rathish Babu
Unnikrishnan v. State (Govt. of NCT of Delhi) and Another, 2022
SCC OnLine SC 513, more particularly, para 8.13 and 16 to 19
would submit that whether the cheque in question is issued
towards security, whether there is subsisting liability and the
cheque in question was issued towards subsisting liability,
whether there is any violation of the terms and conditions of the
purchase order, all are the questions of fact and cannot be a
reason to quash criminal complaint without weighing them in
evidence. He would further submit that the Court should slow in
quashing the complaint where disputed questions of facts are to
be weighed under the scale of the Evidence Act. He would
further submit that section 139 of the NI Act operates
presumption against accused that the cheque in question has
been given towards legally enforceable liability. The accused
however got chance to rebut the presumption by leading
evidence, but not by adjudicating the case u/s 482 of the Code
of Criminal Procedure, 1973. Therefore, he would submit that
since the signature of the petitioner is admitted on the disputed
cheque and the petitioner has also accepted that the cheque is
returned unpaid as payment was stopped, prima facie,
ingredients of section 138 of the NI Act are attracted and
therefore, the learned trial Court has rightly issued process to
the petitioners.
4.1 Upon such submissions, learned advocate Mr. Modi prays
to dismiss the petition.
5. Regard being had to the rival submissions of learned
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
advocates for both the sides and giving anxious thoughts and
consideration in context to the averments and documents on
record, at the outset, let refer judgment of the Hon'ble Apex
Court in case of State Of Orissa Versus Pratima Mohanty
Etc.,2022 (16) SCC 706 observed as under:-
"9. While quashing the criminal proceedings the High
Court has not at all adverted to itself the aforesaid
aspects and has embarked upon an enquiry as to the
reliability and genuineness of the evidence collected
during the investigation as if the High Court was
conducting the minitrial. Therefore, as such the
impugned judgment and order passed by the High
Court quashing the criminal proceedings against the
respondents herein - original accused Nos. 4, 5 and 3 -
Smt. Pratima Mohanty, Shri Prakash Chandra Patra
and Shri Rajendra Kumar Samal is unsustainable,
both, in law and/or facts and the same deserves to be
quashed and set aside."
6. At initial stage, where cognizable offence is disclosed in
FIR, whether investigation can be thwart by exercising inherent
power under section 482 of Cr.P.C., the Hon'ble Apex Court in
the case of Skoda Auto Volkswagen India Private Ltd. v/ s. State
of Uttar Pradesh [2020 SCC Online SC 958], in para 41 has held
as under :-
"41. It is needless to point out that ever since the
decision of the Privy Council in King Emperor v. Khwaja
Nazir Ahmed AIR 1945 PC 18, the law is well settled
that Courts would not thwart any investigation. It is
only in cases where no cognizable offence or offence of
any kind is disclosed in the first information report that
the Court will not permit an investigation to go on. As
cautioned by this Court in State of Haryana v. Bhajan
Lal 1992 Supp (1) SCC 335, the power of quashing
should be exercised very sparingly and with
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
circumspection and that too in the rarest of rare cases.
While examining a complaint, the quashing of which is
sought, the Court cannot embark upon an enquiry as
to the reliability or genuineness or otherwise of the
allegations made in the FIR or in the complaint. In S.M.
Datta v. State of Gujarat (2001) 7 SCC 659 this Court
again cautioned that criminal proceedings ought not to
be scuttled at the initial stage. Quashing of a complaint
should rather be an exception and a rarity than an
ordinary rule. In S.M. Datta (supra), this Court held
that if a perusal of the first information report leads to
disclosure of an offence even broadly, law courts are
barred from usurping the jurisdiction of the police,
since the two organs of the State operate in two specific
spheres of activities and one ought not to tread over the
other sphere."
7. In the case of State of Haryana Vs. Bhajanlal & ors., AIR
1992 SC 604, the Hon'ble Apex Court has opined that power of
quashing can be exercised very sparingly and that too in rarest
of rare case. Relevant observations reads as under:-
"We also give a note of caution to the effect that the
power of quashing a criminal proceeding should be
exercised very sparingly and with circumspection and
that too in the rarest of rare cases; that the court will
not be justified in embarking upon an enquiry as to the
reliability or genuineness or otherwise of the allegations
made in the FIR or the complaint and that the
extraordinary or inherent powers do not confer an
arbitrary jurisdiction on the court to act according to its
whims or caprice."
8. After considering ratio laid down as aforesaid, let examine
pleadings of the petition. The pleadings are indicative of the fact
that the petitioners, who is accused in the trial under the NI Act
did not deny issuance of the cheque nor signature thereof or the
complainant being holder in due course. It is also undeniable
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
aspect that the cheque was deposited by the complainant. The
cheque in question was presented by the complainant for
clearance on 15.9.2015 and it was returned unpaid with the
endorsement "stop payment". The statutory notice issued on
25.02.2015 demanding cheque amount of Rs.1,78,000/- being
unpaid, which admittedly was not paid within the stipulated
time period, leading to the complainant to file complaint u/s 138
of the NI Act before the jurisdictional Court. It is equally
indubitable that learned Metropolitan Magistrate, after
considering the averments made in the complaint and also
documents annexed with it and after applying its mind, issued
process to the petitioners In background of above aspects, the
contention of the petitioners if noticed it is that the cheque in
question was not given towards discharging existing or
subsisting liability, but it is given towards security and hence,
the cheque in question does not fall within the purview to call
the criminal proceedings u/s 138 of the NI Act.
9. At this juncture, let refer section 139 of the NI Act, which
reads as under:-
""139. Presumption in favour of holder.--
It shall be presumed, unless the contrary is proved,
that the holder of a cheque received the cheque of the
nature referred to in section 138 for the discharge, in
whole or in part, of any debt or other liability."
10. In Lakshmi Dyechem v State of Gujarat 2012(12) JT 65,
the Hon Apex Court has held that presumption under Section
139 of the Act is a rebuttal presumption and the accused issuing
the cheque is at liberty to prove to the contrary.
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
11. In Mandvi Cooperative Bank Vs. Nimesh B. Thakore
reported in 2010(3) SCC 83, it is held by the Hon Apex Court
that a rebuttal presumption is created under Section 139 of the
NI Act that cheque was issued by the drawer in discharge of any
debt or liability owned by him or its holder. Therefore, the
presumption available under Section 139 of the NI Act in favour
of the holder in cheque can be rebutted by the accused by
adducing evidence. The burden of proof is on the accused and
the evidence which is available on record will have to be tested
bearing in mind the facts regarding the burden of proof. The
rebuttal burden envisaged under Section 139 of the NI Act can
be discharged by placing a photocopy of the account maintained
by the petitioners accused in a proceedings under Section 482 of
the Criminal Procedural Code.
12. This Court in case of M/s Jalaram Jyot Sales Agency &
Anr. Vs. State of Gujarat, Special Criminal Application No.2125
of 2018, in para 6.5 held as under:-
"6.5. A plain reading of Section 139 of the Negotiable
Instruments Act, 1881 establishes a statutory
presumption in favour of the holder of the cheque, to
the effect that the cheque was received for the
discharge, in whole or in part, of any debt or other
legally enforceable liability, unless the contrary is
proved. In other words, the burden of proof shifts upon
accused to rebut the presumption and to demonstrate
that the cheque was not issued in discharge of any debt
or liability. Though the presumption under Section 139
is a rebuttable one, it continues to operate in favour of
the holder of the cheque until it is successfully rebutted
by the accused by leading cogent evidence."
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
13. It is apposite to refer to the judgment of the Hon'ble
Supreme Court in Rohitbhai Jivanlal Patel v. State of Gujarat,
AIR 2019 SC 1876, wherein the Hon'ble Court, in paragraph 7
and 7.1, extracted and examined the findings of the High Court
as under:
"7. Against the aforementioned judgment and orders of
acquittal, the complainant preferred appeals before the
High Court of Gujarat, which have been considered and
decided together by the impugned common judgment and
order dated 08.01.2018. The High Court observed that the
presumption under Sections 118 and 139 of the NI Act was
required to be drawn that the cheques were issued for
consideration and until contrary was proved, such
presumption would hold good; that the complainant had
proved legally enforceable debt in the oral as also
documentary evidence, including the written
acknowledgment by the accused on stamp paper; and that
except bare denial, nothing was brought on record by the
accused to dislodge the proof adduced by the complainant.
7.1. The High Court observed that if the transaction in
question was not reflected in the accounts and income-tax
returns, that would at best hold the assesse or lender
liable for action under the income-tax laws but, if the
complainant succeeds in showing the lending of amount,
the existence of legally enforceable debt cannot be denied.
The High Court also observed that the issue regarding
washing away of the cheques in rain water was of no
significance when the accused had accepted his liability in
clear terms. The High Court found that the defence plea of
the accused that the money was given as hand loan by his
friend Shri Jagdishbhai got falsified by the version of the
said Shri Jagdishbhai, who was examined as a witness on
behalf of the complainant. The High Court, therefore, set
aside the impugned orders and, while convicting the
accused-appellant for the offence under Section 138 of the
NI Act, sentenced him in the manner noticed hereinbefore.
The High Court, inter alia, observed and held as under:
"24. It is necessary at this stage also to refer to the
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
emphasis laid by the learned counsel appearing for the
respondent No.2 on the source of the fund which has been
lent by the appellant. It has emerged from the detailed
examination of the record, as also detailed examination-in-
chief as well as cross-examination, that the complainant
runs the business. He also maintains the books of account
and he has his own factory in the name and style of
'Ashirwad Enterprise' and manufactures plastic. The said
factory is situated at Jambusar. Ordinarily, any prudent
business person would prefer to transact by cheque while
lending money, but it is quite often noticed that the cash
transactions in the business would allow huge sum of
money as cash, which sometimes are shown in the books
of account as cash on hands or otherwise as amount
available on books. Assuming that cheque transaction of
lending of amount is absent and income-tax returns also
do not reflect such amount, that at the best would hold the
assessee or lender liable for action under the Income-tax
laws. However, otherwise, if he succeeds in showing
lending of such amount, both by oral evidence of himself
and his friend, on whom even respondent No.2 relies upon
and from the writing of the respondent No.2 given
separately along with seven cheques signed by him, what
possible reasons could weigh with the Court to deny the
existence of legally enforceable debt in such glaring
circumstances.
25. Considering the fact that the complainant maintains
his books of account, coupled with the fact that the
respondent No.2 had merely refuted on flimsy ground of
his having transacted with witness Jagdishbhai and not
with the complainant, has failed to discharge the burden
which had shifted upon him. It is to be noted that the
respondent No.2 has admitted his signature on the
impugned cheque. At no point of time, the cheque has
been disputed......Once this fact is acknowledged that the
signature on the cheque is that of the respondent No. 2-
accused, section 139 of the Negotiable Instruments Act
would mandate the presumption that the cheque concerns
a legally enforceable debt or liability. Of course, this
presumption is in the nature of rebuttal and onus is on the
accused thereafter to raise a probable defence. 25.1 As can
be noted from the chronology of events and the material
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
that has been placed before this Court that the defence
raised by the accused is not at all probable. The
respondent No.2-accused states that the money was given
as a hand loan by his friend Jagdishbhai and not the
appellant, also gets falsified completely by the version of
Jagdishbhai. It appears that in case of all the seven
cheques when notices were given prior to the filing of the
complaint, he has chosen not to reply to four of the
notices. Either on account of insufficiency of the funds or
because he has closed account that the cheques could not
be realized. All these circumstances cumulatively lead this
Court to conclude that the appellant succeeded in proving
the legally enforceable debt and no probable defence for
rebutting the statutory presumption is raised by the
respondent No.2. 25.2 Initial presumption as contemplated
under section 139 of the Negotiable Instruments Act, when
the proof of lending of the money and acceptance of the
signatures on the cheques, shall need to be raised by the
Court in favour of the appellant.
28. .......... Reasonably, when the appellant had proved the
legally enforceable debt, not only through his own
evidence, but also through the evidence of his friend
Jagdishbhai and also other contemporaneous record, more
particularly, the document at Exhibit 24, which is a
writing by which the respondent No.2 clearly indicates and
accepts his liability to the tune of Rs. 22.50 lakh. Thus,
the burden had shifted upon the respondent No. 2. The
presumption which was needed to be drawn by the Court
under section 118 of the Negotiable Instruments Act would
oblige the Court to presume that the cheque had been
issued for consideration and until contrary is proved, such
presumption would hold the ground. Except the bare
denial, nothing has been found to come on record to
dislodge the positive proof that has been adduced by the
appellant.
29. In the opinion of this Court, the entire argument that
the rainy water could not have washed away the cheques,
pales into insignificance and is not argument worth
consideration, more particularly, when the respondent-
accused in no unclear terms had accepted his liability of
his having accepted the amount of Rs. 22.50 lakh from the
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
complainant and it also declared the issuance of seven
cheques of particular dates towards such legally
enforceable debt. If it was an understanding between the
parties qua issuance of fresh cheques, with an ostensible
reason of old cheques having washed away, those are the
non-issues. This Court cannot be oblivious of the fact
that section 138 of the Negotiable Instruments Act has
been made a penal provision not only for the cheques to
give acceptability in the transaction, but it is the economic
blood-line of the country and, therefore, the law makers
have made the special rules of evidence by
introducing sections 118 and 139 of the Negotiable
Instruments Act.
30. The trial Court has committed a serious error by not
discharging its obligation of recognizing the evidentiary
value and not appreciating the positive evidence which led
to the reasonable proof of legally enforceable debt existing
on the side of the original complainant."
14. Therefore, applying the ratio laid down in the aforesaid
judgments to the facts of the present case, the petitioner accused
cannot contend at this juncture that the cheque in question is
issued towards security and hence, the case u/s 138 of the NI
Act is not made out or cannot contend that the cheque in
question is not issued towards discharge of any legally
enforceable or subsisting liability. These contentions are
disputed facts and can be addressed and weighed during trial.
To be noted that once the process is issued, presumption u/s
139 of the NI Act starts operating in favour of the complainant.
The accused can discharge rebuttal burden by leading evidence.
The complaint cannot be quashed until the accused discharges
burden envisaged upon.
15. In case of Sampelly Satyanarayana Rao v/s. Indian
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
Renewable and Energy Development Agency Ltd. [AIR 2016 SC
4363], Hon'ble Apex Court held in Paras 14, 13, and 16 as
under:-
"13. In Balaji Seafoods (supra), the High Court noted that
the cheque was not handed over with the intention of
discharging the subsisting liability or debt. There is, thus,
no similarity in the facts of that case simply because in that
case also loan was advanced. It was noticed specifically
therein - as was the admitted case of the parties - that the
cheque was issued as "security" for the advance and was
not intended to be in discharge of the liability, as in the
present case.
14. In HMT Watches Ltd. versus M.A. Abida[8], relied
upon on behalf of the respondent, this Court dealt with the
contention that the proceedings under Section 138 were
liable to be quashed as the cheques were given as "security"
as per defence of the accused. Negativing the contention,
this Court held :-
"10. Having heard the learned counsel for the parties,
we are of the view that the accused (Respondent 1)
challenged the proceedings of criminal complaint
cases before the High Court, taking factual defences.
Whether the cheques were given as security or not, or
whether there was outstanding liability or not is a
question of fact which could have been determined
only by the trial court after recording evidence of the
parties. In our opinion, the High Court should not
have expressed its view on the disputed questions of
fact in a petition under Section 482 of the Code of
Criminal Procedure, to come to a conclusion that the
offence is not made out. The High Court has erred in
law in going into the factual aspects of the matter
which were not admitted between the parties. The
High Court further erred in observing that Section
138(b) of the NI Act stood uncomplied with, even
though Respondent 1 (accused) had admitted that he
replied to the notice issued by the complainant. Also,
the fact, as to whether the signatory of demand notice
was authorised by the complainant company or not,
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
could not have been examined by the High Court in
its jurisdiction under Section 482 of the Code of
Criminal Procedure when such plea was controverted
by the complainant before it.
11. In Suryalakshmi Cotton Mills Ltd. v. Rajvir
Industries Ltd.[(2008) 13 SCC 678], this Court has
made the following observations explaining the
parameters of jurisdiction of the High Court in
exercising its jurisdiction under Section 482 of the
Code of Criminal Procedure: (SCC pp. 685-87, paras
17 & 22)
"17. The parameters of jurisdiction of the High
Court in exercising its jurisdiction under Section
482 of the Code of Criminal Procedure is now well
settled. Although it is of wide amplitude, a great
deal of caution is also required in its exercise.
What is required is application of the well-known
legal principles involved in the matter.
22. Ordinarily, a defence of an accused although
appears to be plausible should not be taken into
consideration for exercise of the said jurisdiction. Yet
again, the High Court at that stage would not
ordinarily enter into a disputed question of fact. It,
however, does not mean that documents of
unimpeachable character should not be taken into
consideration at any cost for the purpose of finding
out as to whether continuance of the criminal
proceedings would amount to an abuse of process of
court or that the complaint petition is filed for causing
mere harassment to the accused. While we are not
oblivious of the fact that although a large number of
disputes should ordinarily be determined only by the
civil courts, but criminal cases are filed only for
achieving the ultimate goal, namely, to force the
accused to pay the amount due to the complainant
immediately. The courts on the one hand should not
encourage such a practice; but, on the other, cannot
also travel beyond its jurisdiction to interfere with the
proceeding which is otherwise genuine. The courts
cannot also lose sight of the fact that in certain
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
matters, both civil proceedings and criminal
proceedings would be maintainable."
12. In Rallis India Ltd. v. Poduru Vidya Bhushan [(2011) 13
SCC 88], this Court expressed its views on this point as
under: (SCC p. 93, para 12)
"12. At the threshold, the High Court should not have
interfered with the cognizance of the complaints having
been taken by the trial court. The High Court could not
have discharged the respondents of the said liability at
the threshold. Unless the parties are given opportunity
to lead evidence, it is not possible to come to a definite
conclusion as to what was the date when the earlier
partnership was dissolved and since what date the
respondents ceased to be the partners of the firm."
16. In the recent judgment rendered in the case of Rathish
Babu Unnikrishnan (supra), the Hon'ble Supreme Court, while
referring to the ratio laid down in Rajeshbhai Muljibhai Patel v.
State of Gujarat, (2020) 3 SCC 794, has categorically held that
disputed questions of fact are not required to be adjudicated at
the threshold stage. Instead, such issues ought to be considered
and decided only after the parties lead evidence. The relevant
paragraphs of the judgment are reproduced hereinbelow:-
"12. At any rate, whenever facts are disputed the truth
should be allowed to emerge by weighing the evidence. On
this aspect, we may benefit by referring to the ratio in
Rajeshbhai Muljibhai Patel vs. State of Gujarat5 where the
following pertinent opinion was given by Justice R.
Banumathi: -
"22. .............. When disputed questions of facts are
involved which need to be adjudicated after the parties
adduce evidence, the complaint under Section 138 of the NI
Act ought not to have been quashed by the High Court by
taking recourse to Section 482 CrPC. Though, the Court has
the power to quash the criminal complaint filed under
Section 138 of the NI Act on the legal issues like limitation,
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
etc. criminal complaint filed under Section 138 of the NI Act
against Yogeshbhai ought not to have been quashed (2010)
11 SCC 441 5 (2020) 3 SCC 794 merely on the ground that
there are inter se disputes between Appellant 3 and
Respondent 2. Without keeping in view the statutory
presumption raised under Section 139 of the NI Act, the
High Court, in our view, committed a serious error in
quashing the criminal complaint in CC No. 367 of 2016 filed
under Section 138 of the NI Act."
13. Bearing in mind the principles for exercise of
jurisdiction in a proceeding for quashing, let us now turn to
the materials in this case. On careful reading of the
complaint and the order passed by the Magistrate, what is
discernible is that a possible view is taken that the cheques
drawn were, in discharge of a debt for purchase of shares.
In any case, when there is legal presumption, it would not
be judicious for the quashing Court to carry out a detailed
enquiry on the facts alleged, without first permitting the
trial Court to evaluate the evidence of the parties. The
quashing Court should not take upon itself, the burden of
separating the wheat from the chaff where facts are
contested. To say it differently, the quashing proceedings
must not become an expedition into the merits of factual
dispute, so as to conclusively vindicate either the
complainant or the defence.
14. The parameters for invoking the inherent jurisdiction of
the Court to quash the criminal proceedings under S.482
CrPC, have been spelled out by Justice S. Ratnavel Pandian
for the two judges' bench in State of Haryana v. Bhajan
Lal6, and the suggested precautionary principles serve as
good law even today, for invocation of power under Section
482 of the Cr.P.C.
"103. We also give a note of caution to the effect that the
power of quashing a criminal proceeding should be
exercised very sparingly and with circumspection and
that too in the rarest of rare cases; that the court will not
be justified in embarking upon an enquiry as to the
reliability or genuineness or otherwise of the allegations
made in the FIR or the complaint and that the
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
extraordinary or inherent powers do not confer an
arbitrary jurisdiction on the court to act according to its
whim or caprice."
15. In the impugned judgment, the learned Judge had
rightly relied upon the opinion of Justice J.S.Khehar for a
Division Bench in Rajiv Thapar (supra), which succinctly
express the following relevant parameters to be considered
by the quashing Court, at the stage of issuing process,
committal, or framing of charges,
"28. The High Court, in exercise of its jurisdiction under
Section 482 CrPC, must make a just and rightful choice.
This is not a stage of evaluating the truthfulness or
otherwise of the allegations levelled by the prosecution/
complainant against the accused. Likewise, it is not a
stage for determining how weighty the defences raised on
behalf of the accused are. Even if the accused is
successful in showing some suspicion or doubt, in the
allegations levelled by the prosecution/ complainant, it
would be impermissible to discharge the accused before
trial. This is so because it would result in giving finality to
the accusations levelled by the prosecution/complainant,
without allowing the prosecution or the complainant to
adduce evidence to substantiate the same."
16. The proposition of law as set out above makes it
abundantly clear that the Court should be slow to grant
the relief of quashing a complaint at a pre-trial stage,
when the factual controversy is in the realm of possibility
particularly because of the legal presumption, as in this
matter. What is also of note is that the factual defence
without having to adduce any evidence need to be of an
unimpeachable quality, so as to altogether disprove the
allegations made in the complaint.
17. The consequences of scuttling the criminal process at
a pre-trial stage can be grave and irreparable. Quashing
proceedings at preliminary stages will result in finality
without the parties having had an opportunity to adduce
evidence and the consequence then is that the proper
forum i.e., the trial Court is ousted from weighing the
NEUTRAL CITATION
R/SCR.A/4391/2015 ORDER DATED: 15/07/2025
undefined
material evidence. If this is allowed, the accused may be
given an un-merited advantage in the criminal process.
Also because of the legal presumption, when the cheque
and the signature are not disputed by the appellant, the
balance of convenience at this stage is in favour of the
complainant/prosecution, as the accused will have due
opportunity to adduce defence evidence during the trial,
to rebut the presumption.
18. Situated thus, to non-suit the complainant, at the
stage of the summoning order, when the factual
controversy is yet to be canvassed and considered by the
trial court will not in our opinion be judicious. Based
upon a prima facie impression, an element of criminality
cannot entirely be ruled out here subject to the
determination by the trial Court. Therefore, when the
proceedings are at a nascent stage, scuttling of the
criminal process is not merited."
17. Considering the application of ratio of above judgments,
the judgment cited by learned advocate for the petitioners
renders no help to his case.
18. In view of above and for the foregoing reasons, the
contention of the petitioners to quash the complaint does not
hold the field and the same can at the most be a good defence
and can be raised during trial, but upon such finding, the Court
cannot quash the complaint.
19. Resultantly, the petition fails and stands dismissed. Rule
discharged. Interim relief granted earlier stands vacated.
(J. C. DOSHI,J)
SATISH
