Shri. Pyaraka Kodanda Pani vs The State Of Telengana
2026 Latest Caselaw 174 Tel

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

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

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

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.

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

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

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

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

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

(2013) 8 SCC 71

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

(2009) 13 SCC 623

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