Himachal Pradesh High Court
Reserved On: 13.08.2025 vs Sanjeev Vaid on 22 August, 2025
2025:HHC:28472
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. MMO No. 776 of 2025.
.
Reserved on: 13.08.2025.
Date of Decision: 22.08.2025.
Uma Rani ...Petitioner
Versus
Sanjeev Vaid ...Respondent
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1 Yes
For the Petitioner : Mr. Shivank Singh Panta,
Advocate.
For the Respondent : Nemo.
Rakesh Kainthla, Judge
The petitioner has filed the present petition for
quashing of complaint No. 279 of 2021, titled “Sanjeev Vaid Vs Smt.
Uma Rani”, pending before the Court of the learned Judicial
Magistrate First Class, Paonta Sahib (learned Trial Court). (The
parties shall hereinafter be referred to in the same manner as they
were arrayed before the learned trial Court for convenience.)
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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2. Briefly stated, the facts giving rise to the present
petition are that the complainant filed a complaint against the
.
petitioner-accused for the commission of an offence punishable
under Section 138 of the Negotiable Instruments Act (NI Act). It
was asserted that the accused and the complainant were known to
each other. The accused required money for her domestic
purposes, so she borrowed an amount of ₹ 8,00,000/- from the
complainant in June 2019.
r The accused promised to repay ₹
75,000/- in cash and the balance amount through cheque. She
issued post-dated cheque dated 19.02.2021 for ₹ 7,25,000/- drawn
on Oriental Bank of Commerce, Branch Bhamian Khurd, Mundian
Kalan, Ludhiana, Punjab, to discharge her legal liability. The
accused failed to repay the money; hence, the complainant
presented the cheque to his bank, Punjab National Bank, from
where it was sent to the bank of the accused. The bank of the
accused dishonoured the cheque with an endorsement ‘Insufficient
Funds’. The complainant served a notice upon the accused asking
her to repay the amount within 15 days from the date of the receipt
of the notice. The accused refused to receive the demand notice.
She failed to repay the amount. Hence, a complaint was filed before
the learned Trial Court for taking action, as per the law.
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3. Learned Trial Court found sufficient reasons to proceed
against the accused and ordered the issuance of the summons.
.
4. Being aggrieved by the filing of the complaint and
issuance of the summons, the accused has filed the present petition
for quashing of the complaint and the consequential proceedings.
It was asserted that the essential ingredient of Section 138 of the NI
Act, that the cheque was issued towards the legally enforceable
debt or liability, is absent. The cheque was issued on an oral
request. No written promissory note, loan agreement or
acknowledgement exists to demonstrate any legally enforceable
debt or liability. The complaint is to be filed within one month
from the date of the cause of action. The notice was issued on
16.03.2021, which was returned to the complainant on 25.03.2021.
The statutory period of 15 days is to be calculated from the date of
refusal, i.e. 22.03.2021. The criminal complaint was filed on
25.11.2021, much beyond the statutory period of one month for
filing the complaint. The legal notice was not served upon the
accused because she was not residing at the address furnished by
her. She has been residing outside India since June 2019, and the
refusal to accept the delivery does not constitute a valid service.
The presumption of service can be drawn when the notice is sent to
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the correct address. Therefore, it was prayed that the present
petition be allowed and the complaint, as well as consequential
.
proceedings arising out of the complaint, be quashed.
5. Mr. Shivank Singh Panta, learned Counsel for the
petitioner, submitted that the petitioner is residing outside India
and the notice issued to her was not served. The cheque was not
issued in discharge of the legal liability, and the complaint was
filed beyond the period of limitation. Continuation of the
proceedings before the learned Trial Court amounts to an abuse of
the process of the Court. Hence, he prayed that the present petition
be allowed and the complaint, as well as consequential proceedings
arising out of the same, be quashed. He relied upon the judgments
of R.L.Varma & Sons (Huf) Vs P.C. Sharma, (2019) 263 DLT 586, and
Jugesh Sehgal Vs Shamsher Singh Gogi, 2009 (14) SCC 683, in
support of his submission.
6. I have given considerable thought to his submissions
made at the bar and have gone through the records carefully.
7. The law relating to quashing of FIR was explained by
the Hon’ble Supreme Court in B.N. John v. State of U.P., 2025 SCC
OnLine SC 7 as under: –
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“7. As far as the quashing of criminal cases is concerned,
it is now more or less well settled as regards the
principles to be applied by the court. In this regard, one.
may refer to the decision of this Court in State of
Haryana v. Ch. Bhajan Lal, 1992 Supp (1) SCC
335, wherein this Court has summarised some of the
principles under which FIR/complaints/criminal cases
could be quashed in the following words:
“102. In the backdrop of the interpretation of the
various relevant provisions of the Code underChapter XIV and of the principles of law enunciated
by this Court in a series of decisions relating to the
exercise of the extraordinary power under Article 226
or the inherent powers under Section 482 of the Codewhich we have extracted and reproduced above, we
give the following categories of cases by way of
illustration wherein such power could be exercised
either to prevent abuse of the process of any court orotherwise to secure the ends of justice, though it may
not be possible to lay down any precise, clearly
defined and sufficiently channelised and inflexibleguidelines or rigid formulae and to give an exhaustive
list of myriad kinds of cases wherein such powershould be exercised.
(1) Where the allegations made in the first
information report or the complaint, even if
they are taken at their face value and accepted
in their entirety, do not prima facie constitute
any offence or make out a case against the
accused.
(2) Where the allegations in the first
information report and other materials, if any,
accompanying the FIR do not disclose a
cognizable offence, justifying an investigation
by police officers under Section 156(1) of the::: Downloaded on – 23/08/2025 02:28:22 :::CIS
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2025:HHC:28472Code except under an order of a Magistrate
within the purview of Section 155(2) of the
Code.
.
(3) Where the uncontroverted allegations made
in the FIR or complaint and the evidence
collected in support of the same do not disclosethe commission of any offence and make out a
case against the accused.
(4) Where the allegations in the FIR do not
constitute a cognizable offence but constituteonly a non-cognizable offence, no investigation
is permitted by a police officer without an order
of a Magistrate as contemplated under Section155(2) of the Code.
(5) Where the allegations made in the FIR or
complaint are so absurd and inherently
improbable based on which no prudent personcan ever reach a just conclusion that there is
sufficient ground for proceeding against the
accused.
(6) Where there is an express legal bar
engrafted in any of the provisions of the Code orthe concerned Act (under which a criminal
proceeding is instituted) to the institution andcontinuance of the proceedings and/or where
there is a specific provision in the Code or the
concerned Act, providing efficacious redress for
the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly
attended with mala fide and/or where the
proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the
accused and with a view to spite him due to a::: Downloaded on – 23/08/2025 02:28:22 :::CIS
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2025:HHC:28472private and personal grudge.” (emphasis
added)
8. Of the aforesaid criteria, clause no. (1), (4) and (6)
.
would be of relevance to us in this case.
In clause (1), it has been mentioned that where the
allegations made in the first information report or the
complaint, even if they are taken at their face value and
accepted in their entirety, do not prima facie constitute
any offence or make out a case against the accused, then
the FIR or the complaint can be quashed.
As per clause (4), where the allegations in the FIR do not
constitute a cognizable offence but constitute only a
non-cognizable offence, no investigation is permitted
by a police officer without an order dated by the
Magistrate as contemplated under Section 155 (2) of
the CrPC, and in such a situation, the FIR can be
quashed.
Similarly, as provided under clause (6), if there is an
express legal bar engrafted in any of the provisions of
the CrPC or the concerned Act under which the criminal
proceedings are instituted, such proceedings can be
quashed.”
8. This position was reiterated in Ajay Malik v. State of
Uttarakhand, 2025 SCC OnLine SC 185, wherein it was observed:
“8. It is well established that a High Court, in exercising
its extraordinary powers under Section 482 of the CrPC,
may issue orders to prevent the abuse of court processes
or to secure the ends of justice.
These inherent powers are neither controlled nor
limited by any other statutory provision. However,
given the broad and profound nature of this authority,
the High Court must exercise it sparingly. The::: Downloaded on – 23/08/2025 02:28:22 :::CIS
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2025:HHC:28472conditions for invoking such powers are embedded
within Section 482 of the CrPC itself, allowing the High
Court to act only in cases of clear abuse of process or.
where intervention is essential to uphold the
ends of justice.
9. It is in this backdrop that this Court, over the
course of several decades, has laid down the principles
and guidelines that High Courts must follow before
quashing criminal proceedings at the threshold, thereby
pre-empting the Prosecution from building its casebefore the Trial Court. The grounds for quashing, inter
alia, contemplate the following situations : (i) the
criminal complaint has been filed with mala fides; (ii)
the FIR represents an abuse of the legal process; (iii)no prima facie offence is made out; (iv) the dispute is
civil in nature; (v.) the complaint contains vague and
omnibus allegations; and (vi) the parties are willing to
settle and compound the dispute amicably (State ofHaryana v. Bhajan Lal, 1992 Supp (1) SCC 335)
9. The present petition is to be decided as per the
parameters laid down by the Hon’ble Supreme Court.
10. It was submitted that, as per the complaint, the cheque
was issued as security and does not attract the provisions of Section
138 of the NI Act. This submission is not acceptable. It was laid
down by this Court in Hamid Mohammad Versus Jaimal Dass 2016
(1) HLJ 456, that even if the cheque was issued towards the security,
the accused will be liable. It was observed:
“9. Submission of learned Advocate appearing on behalf
of the revisionist that the cheque in question was issued::: Downloaded on – 23/08/2025 02:28:22 :::CIS
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2025:HHC:28472to the complainant as security and on this ground, the
criminal revision petition be accepted is rejected being
devoid of any force for the reasons hereinafter.
mentioned. As per Section 138 of the Negotiable
Instruments Act 1881, if any cheque is issued on account
of other liability, then the provisions of Section 138 of
the Negotiable Instruments Act 1881 would be attracted.
The court has perused the original cheque, Ext. C-1
dated 30.10.2008, placed on record. There is no recital in
the cheque Ext. C-1, that cheque was issued as a securitycheque. It is well-settled law that a cheque issued as
security would also come under the provision of Section
138 of the Negotiable Instruments Act 1881. See 2016 (3)
SCC page 1 titled Don Ayengia v. State of Assam &another. It is well-settled law that where there is a
conflict between former law and subsequent law, then
subsequent law always prevails.”
11. It was laid down by the Hon’ble Supreme Court in
Sampelly Satyanarayana Rao vs. Indian Renewable Energy
Development Agency Limited 2016(10) SCC 458 that issuing a
cheque toward security will also attract the liability for the
commission of an offence punishable under Section 138 of N.I. Act.
It was observed: –
“10. We have given due consideration to the submission
advanced on behalf of the appellant as well as the
observations of this Court in Indus Airways Private
Limited versus Magnum Aviation Private Limited (2014)
12 SCC 53 with reference to the explanation to Section
138 of the Act and the expression “for the discharge of
any debt or other liability” occurring in Section 138 of
the Act. We are of the view that the question of whether
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a post-dated cheque is for “discharge of debt or
liability” depends on the nature of the transaction. If on
the date of the cheque, liability or debt exists or the
.
amount has become legally recoverable, the Section is
attracted and not otherwise.
11. Reference to the facts of the present case clearly
shows that though the word “security” is used in clause
3.1(iii) of the agreement, the said expression refers to
the cheques being towards repayment of instalments.
The repayment becomes due under the agreement, the
moment the loan is advanced and the instalment falls
due. It is undisputed that the loan was duly disbursed on
28th February 2002, which was prior to the date of the
cheques. Once the loan was disbursed and instalments
have fallen due on the date of the cheque as per the
agreement, the dishonour of such cheques would fall
under Section 138 of the Act. The cheques undoubtedly
represent the outstanding liability.
12. Judgment in Indus Airways (supra) is clearly
distinguishable. As already noted, it was held therein
that liability arising out of a claim for breach of contract
under Section 138, which arises on account of dishonour
of a cheque issued, was not by itself at par with a
criminal liability towards discharge of acknowledged
and admitted debt under a loan transaction. Dishonour
of a cheque issued for the discharge of a later liability is
clearly covered by the statute in question. Admittedly,
on the date of the cheque, there was a debt/liability in
praesenti in terms of the loan agreement, as against the
case of Indus Airways (supra), where the purchase order
had been cancelled and a cheque issued towards advance
payment for the purchase order was dishonoured. In
that case, it was found that the cheque had not been
issued for discharge of liability but as an advance for the
purchase order, which was cancelled. Keeping in mind
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this fine, but the real distinction, the said judgment
cannot be applied to a case of the present nature where
the cheque was for repayment of a loan instalment
.
which had fallen due, though such deposit of cheques
towards repayment of instalments was also described as
“security” in the loan agreement. In applying the
judgment in Indus Airways (supra), one cannot lose
sight of the difference between a transaction of the
purchase order which is cancelled and that of a loan
transaction where the loan has actually been advanced
and its repayment is due on the date of the cheque.
13. The crucial question to determine the applicability of
Section 138 of the Act is whether the cheque represents
the discharge of an existing enforceable debt or liability,
or whether it represents an advance payment without
there being a subsisting debt or liability. While
approving the views of different High Courts noted
earlier, this is the underlying principle as can be
discerned from the discussion of the said cases in the
judgment of this Court.” (Emphasis supplied)
12. This position was reiterated in Sripati Singh v. State of
Jharkhand, 2021 SCC OnLine SC 1002: AIR 2021 SC 5732, and it was
held that a cheque issued as security is not waste paper and a
complaint under section 138 of the NI Act can be filed on its
dishonour. It was observed:
“17. A cheque issued as security pursuant to a financial
transaction cannot be considered as a worthless piece of
paper under every circumstance. ‘Security’ in its true
sense is the state of being safe, and the security given
for a loan is something given as a pledge of payment. It
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2025:HHC:28472fulfilment of an obligation to which the parties to the
transaction are bound. If in a transaction, a loan is
advanced and the borrower agrees to repay the amount.
in a specified timeframe and issues a cheque as security
to secure such repayment; if the loan amount is not
repaid in any other form before the due date or if there is
no other understanding or agreement between theparties to defer the payment of the amount, the cheque
which is issued as security would mature for
presentation and the drawee of the cheque would beentitled to present the same. On such a presentation, if
the same is dishonoured, the consequences
contemplated under Section 138 and the other
provisions of N.I. Act would flow.”
13. Therefore, the fact that the cheque was issued as a
security is not sufficient to quash the complaint.
14. It was specifically stated in the complaint that the
accused borrowed ₹ 8,00,000/- from the complainant. She
promised to repay ₹ 75,000/- in cash and issued a cheque of
₹7,25,000/- to discharge her legal liability. It was laid down by the
Hon’ble Supreme Court in Punit Beriwala v. State (NCT of Delhi),
2025 SCC OnLine SC 983, that the averments in the complaint are to
be taken as correct while exercising inherent jurisdiction. It was
observed: –
“29. It is settled law that the power of quashing a
complaint/FIR should be exercised sparingly with
circumspection, and while exercising this power, the::: Downloaded on – 23/08/2025 02:28:22 :::CIS
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2025:HHC:28472Court must believe the averments and allegations in the
complaint to be true and correct. It has been repeatedly
held that, save in exceptional cases where non-
.
interference would result in a miscarriage of justice, the
Court and the judicial process should not interfere at the
stage of investigation of offences. Extraordinary and
inherent powers of the Court should not be used in aroutine manner according to its whims or caprice.”
15. Therefore, prima facie, the complaint discloses the
commission of an offence punishable under Section 138 of the NI
Act. r
16. It was submitted that there was no proof of the payment
of ₹ 8,00,000/- and the cheque was not issued in discharge of the
legal liability. This submission will not help the petitioner-
accused. It was laid down by the Hon’ble Supreme Court in Rathish
Babu Unnikrishnan v. State (NCT of Delhi), 2022 SCC OnLine SC 513
that the cheque carries with it a presumption of consideration
which is to be rebutted by leading evidence, and any factual dispute
is to be resolved by weighing evidence. It was observed:
“10. It is also relevant to bear in mind that the burden of
proving that there is no existing debt or liability is to be
discharged in the trial. For a two-judge Bench
in M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd.
(2002) 1 SCC 234, Justice S.N. Variava made the following
pertinent observation on this aspect: —
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“17. There is, therefore, no requirement that the
complainant must specifically allege in the complaint
that there was a subsisting liability. The burden of
.
proving that there was no existing debt or liability
was on the respondents. This they have to discharge
in the trial. At this stage, merely on the basis of
averments in the petitions filed by them, the High
Court could not have concluded that there was no
existing debt or liability.”
11. The legal presumption of the cheque having been
issued in the discharge of liability must also receive due
weightage. In a situation where the accused moves
the Court for quashing even before the trial has
commenced, the Court’s approach should be careful
enough not to prematurely extinguish the case by
disregarding the legal presumption which supports the
complaint. The opinion of Justice K.G. Balakrishnan for
a three-judge Bench in Rangappa v. Sri Mohan (2010) 11
SCC 441 would, at this stage, deserve our attention: —
“26. … we are in agreement with the respondent
claimant that the presumption mandated by Section139 of the Act does indeed include the existence of a
legally enforceable debt or liability. As noted in the
citations, this is, of course, in the nature of a
rebuttable presumption, and it is open to the accusedto raise a defence wherein the existence of a legally
enforceable debt or liability can be contested.
However, there can be no doubt that there is an initial
presumption which favours the complainant.”
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 v. State of Gujarat (2020) 3
SCC 794, where the following pertinent opinion was
given by Justice R. Banumathi: —
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“22. ………….. When disputed questions of fact 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 legal issues like limitation, etc. criminal
complaint filed under Section 138 of the NI Act
against Yogeshbhai ought not to have been quashed
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 the 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 the discharge of a debt for
the purchase of shares. In any case, when there is a 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 a factual dispute, so as to
conclusively vindicate either the complainant or the
defence.”
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17. It was further held that the Courts should be slow in
scuttling the complaint at a pre-trial stage. It was observed:
.
“14. The parameters for invoking the inherent
jurisdiction of the Court to quash the criminal
proceedings under S.482 CrPC, have been spelt out byJustice S. Ratnavel Pandian for the two judges’ bench
in State of Haryana v. Bhajan Lal 1992 Supp (1) SCC 335:
AIR 1992 SC 604, and the suggested precautionary
principles serve as good law even today, for invocationof 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 proceedingshould 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 madein the FIR or the complaint and that the
extraordinary or inherent powers do not confer an
arbitrary jurisdiction on the court to act accordingto 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 expresses 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 the 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
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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 needs to be of an unimpeachable quality, 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
material evidence. If this is allowed, the accused may be
given an unmerited 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
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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, the scuttling of
the criminal process is not merited.”
18. Therefore, the Court cannot hold that the cheque was
issued without any legal liability and quash the complaint without
allowing the complainant to prove his case before the learned Trial
Court.
19. to
It was submitted that the complaint was filed beyond
the period of 30 days from the accrual of the cause of action. The
cause of action accrued to the complainant on 22.03.2021, when the
accused is stated to have refused the receipt of the notice and the
complaint was filed on 25.11.2021, which is beyond the period of
one month, provided under the law. This submission overlooks the
fact that the Hon’ble Supreme Court excluded the period of
limitation w.e.f. 15.3.2020 till 28.2.2022, including that prescribed
under Section 138 of the proviso (b) and (c) in Cognisance for
Extension of Limitation, in re, (2022) 3 SCC 117: 2022 SCC OnLine SC
27, wherein it was observed at page 119: –
“5. Taking into consideration the arguments advanced
by the learned counsel and the impact of the surge of the
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2025:HHC:28472in the prevailing conditions, we deem it appropriate to
dispose of MA No. 21 of 2022 with the following
directions:
.
5.1. The order dated 23-3-2020 [Cognizance for
Extension of Limitation, In re, (2020) 19 SCC 10 : (2021) 3
SCC (Cri) 801] is restored and in continuation of the
subsequent orders dated 8-3-2021 [Cognizance forExtension of Limitation, In re, (2021) 5 SCC 452 : (2021) 3
SCC (Civ) 40 : (2021) 2 SCC (Cri) 615 : (2021) 2 SCC (L&S)
50], 27-4-2021 [Cognizance for Extension of Limitation,In re, (2021) 17 SCC 231: 2021 SCC OnLine SC 373] and 23-
9-2021 [Cognizance for Extension of Limitation, In re,
2021 SCC OnLine SC 947], it is directed that the period
from 15-3-2020 till 28-2-2022 shall stand excluded for
the purposes of limitation as may be prescribed under
any general or special laws in respect of all judicial or
quasi-judicial proceedings.
5.2. Consequently, the balance period of limitation
remaining as on 3-10-2021, if any, shall become
available with effect from 1-3-2022.
5.3. In cases where the limitation would have expired
during the period between 15-3-2020 and 28-2-2022,
notwithstanding the actual balance period of limitation
remaining, all persons shall have a limitation period of
90 days from 1-3-2022. In the event the actual balance
period of limitation remaining, with effect from 1-3-
2022, is greater than 90 days, that longer period shall
apply.
5.4. It is further clarified that the period from 15-3-2020
till 28-2-2022 shall also stand excluded in computing
the periods prescribed under Sections 23(4) and 29-A of
the Arbitration and Conciliation Act, 1996, Section 12-A
of the Commercial Courts Act, 2015 and provisos (b) and
(c) of Section 138 of the Negotiable Instruments Act,
1881 and any other laws, which prescribe period(s) of
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limitation for instituting proceedings, outer limits
(within which the court or tribunal can condone delay)
and termination of proceedings.”
.
20. Therefore, the limitation period w.e.f. 15.03.2020 till
28.02.2022, is to be excluded. The complaint was filed before the
expiry of the extended period of limitation, and the same cannot be
said to be barred by limitation.
21. It was submitted that the petitioner was not residing in
India; she left India on 11th June, 2019 and is a permanent resident
of Portugal. Therefore, the proceedings against her are not
maintainable. Reference was made to Annexure P-3 to Annexure
P-5. These are the photocopies, and their authenticity has not been
established. Further, the complete copy of the passport has not
been filed, and no reliance can be placed upon a part of the
passport. It is impermissible to exercise the inherent jurisdiction by
relying upon the documents, which do not form part of the record
of the learned Trial Court, especially when the authenticity of the
documents is yet to be established. It was laid down by the Hon’ble
Supreme Court in MCD v. Ram Kishan Rohtagi, (1983) 1 SCC 1: 1983
SCC (Cri) 115 that the proceedings can be quashed on the face of the
complaint and the papers accompanying the same, no offence is
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constituted. It is not permissible to add or subtract anything. It was
observed:
.
“10. It is, therefore, manifestly clear that proceedings
against an accused in the initial stages can be quashed
only if, on the face of the complaint or the papersaccompanying the same, no offence is constituted. In
other words, the test is that taking the allegations and
the complaint as they are, without adding or subtracting
anything, if no offence is made out, then the High Courtwill be justified in quashing the proceedings in exercise
of its powers under Section 482 of the present Code.”
22. Madras High Court also held in Ganga Bai v. Shriram,
1990 SCC OnLine MP 213: ILR 1992 MP 964: 1991 Cri LJ 2018, that the
fresh evidence is not permissible or desirable in the proceedings
under Section 482 of Cr. P.C. It was observed:
“Proceedings under Section 482, Cr.P.C. cannot be
allowed to be converted into a full-dressed trial. Shri
Maheshwari filed a photostat copy of an order dated28.7.1983, passed in Criminal Case No. 1005 of 1977, to
which the present petitioner was not a party. Freshevidence at this stage is neither permissible nor
desirable. The respondent, by filing this document, is
virtually introducing additional evidence, which is not
the object of Section 482, Cr. P.C.”
23. Andhra Pradesh High Court also took a similar view in
Bharat Metal Box Company Limited, Hyderabad and Others vs. G. K.
Strips Private Limited and another, 2004 STPL 43 AP, and held:
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“9. This Court can only look into the complaint and the
documents filed along with it, and the sworn
statements of the witnesses, if any, recorded. While.
judging the correctness of the proceedings, it cannot
look into the documents, which were not filed before
the lower Court. Section 482 Cr.PC debars the Court
from looking into fresh documents, in view of the
principles laid down by the Supreme Court in State of
Karnataka v. M. Devendrappa and another, 2002 (1)
Supreme 192. The relevant portion of the said judgment
reads as follows:
“The complaint has to be read as a whole. If it
appears that on consideration of the allegations, in
the light of the statement made on oath of thecomplainant that the ingredients of the offence or
offences are disclosed and there is no material to
show that the complaint is mala fide, frivolous or
vexatious, in that event there would be nojustification for interference by the High Court.
When information is lodged at the Police Station
and an offence is registered, then the mala fides ofthe informant would be of secondary importance. It
is the material collected during the investigationand the evidence presented in Court which decides
the fate of the accused person. The allegations ofmala fides against the informant are of no
consequence and cannot by itself be the basis for
quashing the proceedings”.
24. A similar view was taken in Mahendra K.C. v. State of
Karnataka, (2022) 2 SCC 129: (2022) 1 SCC (Cri) 401, wherein it was
observed on page 142:
“16. … the test to be applied is whether the allegations
in the complaint, as they stand, without adding or::: Downloaded on – 23/08/2025 02:28:22 :::CIS
23
2025:HHC:28472detracting from the complaint, prima facie establish
the ingredients of the offence alleged. At this stage, the
High Court cannot test the veracity of the allegations,.
nor, for that matter, can it proceed in the manner that a
judge conducting a trial would, based on the evidence
collected during the course of the trial.”
25. This position was reiterated in Supriya Jain v. State of
Haryana, (2023) 7 SCC 711: 2023 SCC OnLine SC 765, wherein it was
held:
13. All these documents, which the petitioner seeks to
rely on, if genuine, could be helpful for her defence atthe trial, but the same are not material at the stage of
deciding whether quashing as prayed for by her before
the High Court was warranted or not. We, therefore, see
no reason to place any reliance on these three
documents.
26. A similar view was taken in Iveco Magirus
Brandschutztechnik GMBH v. Nirmal Kishore Bhartiya, (2024) 2 SCC
86: (2024) 1 SCC (Cri) 512: 2023 SCC OnLine SC 1258, wherein it was
observed:
“63. Adverting to the aspect of the exercise of
jurisdiction by the High Courts under Section 482CrPC,
in a case where the offence of defamation is claimed by
the accused to have not been committed based on any of
the Exceptions and a prayer for quashing is made, the
law seems to be well settled that the High Courts can go
no further and enlarge the scope of inquiry if the
accused seeks to rely on materials which were not there
before the Magistrate. This is based on the simple::: Downloaded on – 23/08/2025 02:28:22 :::CIS
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2025:HHC:28472proposition that what the Magistrate could not do, the
High Courts may not do. We may not be understood to
undermine the High Courts’ powers saved by Section.
482 CrPC; such powers are always available to be
exercised ex debito justitiae, i.e. to do real and
substantial justice for the administration of which alone
the High Courts exist. However, the tests laid down forquashing an FIR or criminal proceedings arising from a
police report by the High Courts in the exercise of
jurisdiction under Section 482CrPC not beingsubstantially different from the tests laid down for
quashing a process issued under Section 204 read with
Section 200, the High Courts on recording due
satisfaction are empowered to interfere if on a readingof the complaint, the substance of statements on oath of
the complainant and the witness, if any, and
documentary evidence as produced, no offence is made
out and that proceedings, if allowed to continue, wouldamount to an abuse of the legal process. This, too,
would be impermissible if the justice of a given case
does not overwhelmingly so demand.” (Emphasissupplied).
27. Therefore, it is impermissible to look into the
documents and to hold that the petitioner was not present in India
on the day when the endorsement for refusal was made.
28. It was submitted that the notice was not served upon the
accused, and the essential part of the cause of action is not
established. This submission is not acceptable. The notice was
sent to House No. 1703, Iqbal Nagar, Tibba Road, Near Samrala
Chowk, Ludhiana, Punjab, which is the same address mentioned in
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the present petition. Therefore, the notice was sent to the correct
address. Whether the petitioner was available in India at that time
.
or not is a disputed question of fact. The notice was returned with
the endorsement refused and is deemed to be served. It was laid
down by the Hon’ble Supreme Court in D. Vinod Shivappa v. Nanda
Belliappa, (2006) 6 SCC 456: (2006) 3 SCC (Cri) 114: (2006) 131 Comp
Cas 663: 2006 SCC OnLine SC 629 that a complaint cannot be
quashed when rthe notice is returned unserved with an
endorsement. It was observed at page 460:
“7. We do not agree with the counsel for the appellant
that the complainant has admitted in the complaint thatnotice had not been served within the meaning of
Section 138 of the Act. What has been stated in para 8 of
the complaint is the factum of the legal notice havingbeen returned unserved on 25-3-2004 with an
endorsement. This was a fact which the complainantcould not deny. But in para 10 of the complaint, the
complainant has stated that notice may be deemed to
have been served. The reasons for deeming service arestated in the earlier paragraphs of the complaint. The
question which, therefore, arises is whether in these
circumstances the appellant could pray for quashing of
the proceedings under Section 482 of the Code of
Criminal Procedure.
8. Under Section 138 of the Act, where a cheque issued by
the drawer in the discharge of any debt or any other
liability is returned by the bank unpaid, because the
amount standing to the credit of that account is
insufficient to honour the cheque, the said person is::: Downloaded on – 23/08/2025 02:28:22 :::CIS
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2025:HHC:28472deemed to have committed an offence. This is subject to
the proviso to Section 138, which provides that the
cheque should have been presented to the bank within.
the period of six months from the date on which it is
drawn or within the period of its validity, whichever is
earlier. The payee must also make a demand for the
payment of the said amount by giving a notice in writingto the drawer of the cheque within 30 days of the receipt
of the information by him from the bank regarding the
return of the cheque unpaid. If, despite this demand, thedrawer fails to make the payment within fifteen days of
the receipt of the notice, a cause of action arises for
prosecuting him for the offence punishable under
Section 138 of the Act. Section 142 provides that thecourt shall take cognisance of an offence punishable
under Section 138 of the Act upon receipt of a complaint
in writing made by the payee or, as the case may be, the
holder in due course of the cheque. Such a complaintmust be made within one month of the date on which
the cause of action arises under clause (c) of the proviso
to Section 138. However, discretion is given to the courtto take cognisance of the complaint even after the
prescribed period, if the complainant satisfies the courtthat he had sufficient cause for not making the
complaint within such period.
9. It is not disputed that the drawer of the cheque makes
himself liable for prosecution under Section 138 of the
Act if he fails to make the payment within fifteen days of
the receipt of the notice given by the drawee. His failure
to make the payment within the stipulated period gives
rise to a cause of action for the complainant to prosecute
the drawer under Section 138 of the Act.
10. Mr Kailash Vasdev, learned Senior Counsel appearing
for the appellant, vehemently contended before us that
clause (c) of the proviso to Section 138 of the Act leaves
no room for doubt that the cause of action arises only if::: Downloaded on – 23/08/2025 02:28:22 :::CIS
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2025:HHC:28472the drawer of the cheque fails to make the payment
within 15 days “of the receipt of the said notice”.
According to him, therefore, it must be established on
.
record that the notice issued by the payee was in fact
received by him. He conceded that if the drawer of the
cheque refuses to accept the notice, the court may
presume service of notice, but in a case where the notice
is not served for any other reason, it cannot be said to be
deemed service of notice giving rise to a cause of action.
He submitted that apart from the seven notices in these
seven cases, several other notices were issued to the
appellant on the same address, which he accepted, and
where due, paid the amount also. He, therefore,
submitted that the appellant has settled all those
disputes where the claim of the respondent was
justified, but he is not willing to pay the amount claimed
by the respondent unjustifiably. It is a queer coincidence
that the appellant received all those notices where the
demand was justified, and all the notices which could
not be served upon him on account of his absence from
his residence are those where the demand of the
respondent is, according to the appellant, not justified.
We need not make any further comment on this aspect
of the matter.
xxxx
14. If a notice is issued and served upon the drawer of
the cheque, no controversy arises. Similarly, if the
notice is refused by the addressee, it may be presumed
to have been served. This is also not disputed. This
leaves us with the third situation where the notice could
not be served on the addressee for one or the other
reason, such as his non-availability at the time of
delivery, or premises remaining locked on account of his
having gone elsewhere, etc. etc. If in each such case the
law is understood to mean that there has been no
service of notice, it would completely defeat the very
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purpose of the Act. It would then be very easy for an
unscrupulous and dishonest drawer of a cheque to make
himself scarce for some time after issuing the cheque so
.
that the requisite statutory notice can never be served
upon him, and consequently, he can never be
prosecuted. There is good authority to support the
proposition that once the complainant, the payee of the
cheque, issues notice to the drawer of the cheque, the
cause of action to file a complaint arises on the expiry of
the period prescribed for payment by the drawer of the
cheque. If he does not file a complaint within one month
of the date on which the cause of action arises under
clause (c) of the proviso to Section 138 of the Act, his
complaint gets barred by time. Thus, a person who can
dodge the postman for about a month or two, or a
person who can get a fake endorsement made regarding
his non-availability can successfully avoid his
prosecution because the payee is bound to issue notice
to him within a period of 30 days from the date of
receipt of information from the bank regarding the
return of the cheque as unpaid. He is, therefore, bound
to issue the legal notice, which may be returned with an
endorsement that the addressee is not available on the
given address.
15. We cannot also lose sight of the fact that the drawer
may, by dubious means, manage to get an incorrect
endorsement made on the envelope that the premises
has been found locked or that the addressee was not
available at the time when the postman went for
delivery of the letter. It may be that the address is
correct and even the addressee is available, but a wrong
endorsement is manipulated by the addressee. In such a
case, if the facts are proved, it may amount to a refusal
of the notice. If the complainant is able to prove that the
drawer of the cheque knew about the notice and
deliberately evaded service and got a false endorsement
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made only to defeat the process of law, the court shall
presume service of notice. This, however, is a matter of
evidence and proof. Thus even in a case where the notice
.
is returned with the endorsement that the premises has
always been found locked or the addressee was not
available at the time of postal delivery, it will be open to
the complainant to prove at the trial by evidence that
the endorsement is not correct and that the addressee,
namely, the drawer of the cheque, with knowledge of
the notice had deliberately avoided to receive notice.
Therefore, 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 Code of
Criminal Procedure. The question as to whether the
service of notice has been fraudulently refused by
unscrupulous means is a question of fact to be decided
on the basis of evidence. In such a case, the High Court
ought not to exercise its jurisdiction under Section 482
of the Code of Criminal Procedure.”
29. Thus, it is impermissible to quash the complaint
because the notice was returned with an endorsement of refusal.
30. In any case, it was laid down in C.C. Allavi Haji vs. Pala
Pelly Mohd. 2007(6) SCC 555, that the person who claims that he
had not received the notice has to pay the amount within 15 days
from the date of the receipt of the summons from the Court and in
case of failure to do so, he cannot take the advantage of the fact
that notice was not received by him. It was observed:
“It is also to be borne in mind that the requirement of
giving of notice is a clear departure from the rule of::: Downloaded on – 23/08/2025 02:28:22 :::CIS
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2025:HHC:28472Criminal Law, where there is no stipulation of giving
notice before filing a complaint. Any drawer who claims
that he did not receive the notice sent by post, can,.
within 15 days of receipt of summons from the court in
respect of the complaint under Section 138 of the Act,
make payment of the cheque amount and submit to the
Court that he had made payment within 15 days ofreceipt of summons (by receiving a copy of the
complaint with the summons) and, therefore, the
complaint is liable to be rejected. A person who does notpay within 15 days of receipt of the summons from the
Court along with the copy of the complaint under
Section 138 of the Act, cannot obviously contend that
there was no proper service of notice as required underSection 138, by ignoring statutory presumption to the
contrary under Section 27 of the G.C. Act and Section 114
of the Evidence Act. In our view, any other interpretation
of the proviso would defeat the very object of thelegislation. As observed in Bhaskaran’s case (supra), if
the giving of notice in the context of Clause (b) of the
proviso was the same as the receipt of notice, a trickstercheque drawer would get the premium to avoid receiving
the notice by adopting different strategies and escapefrom legal consequences of Section 138 of the
Act.”(Emphasis supplied)
31. Therefore, the submission that the essential ingredients
of Section 138 of the NI Act are not satisfied cannot be accepted.
32. In R.L. Varma & Sons (supra), the Delhi High Court
found that there was no service of the statutory notice. The address
mentioned on the letter was different from the address of the
accused, which is not the case here. In Jugesh Sehgal (supra), the
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Hon’ble Supreme Court held that the cheque was issued from an
account which was not maintained by the accused. In the present
.
case, the cheque was issued from the account maintained by the
accused, and this judgment also does not apply to the present case.
33. No other point was urged.
34. In view of the above, the present petition fails, and the
same is dismissed.
35. to
The observation made herein before shall remain
confined to the disposal of the petition and will have no bearing,
whatsoever, on the merits of the case.
(Rakesh Kainthla)
Judge
22 August, 2025
(Pramod)
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