The High Court · 2025

THE HON'BLE SMT. JUSTICE TIRUMALA DEUI EADA CRIMINAL PETITION No.5843 OF 2O2t DATE:29-12-2025 Between: t\4/s JlVl Financial Services Limited And Petitio ner The State of Telangana, Rep. by its Public Prosecutor. High Court of Telangana at Hyderabad and another ilespondents ORDER: ' This Crrminal Petition is filed by the petitioner- rccused No.4 seeking to quash the proceedings against it in S.T.C r ''ll)No.41 of 2023 on the file of learned I Additional Junior Civit ,t .rdge-cum-Xll Additional Metropolitan Magistrate, Medchal-Malkar rri District at Kukatpally, registered for the offence under Sectir: 138 of the Negotiable lnstruments Act, 1BB1 (for short, 'the N.l. r r:t').

2. Heard Sri J. Kumaresan, learned counsel for he petitioner and Sri Jithender Rao Veeramalla, learned Arirl lional Public Prosecutor for respondent No.1 -State. I t 2 ETI)..I Crl.P \o.584,] of 20li ln spite of service of notice, none appears for respondent 3 No2

4. Learned counsel for the petitioner submitted that the petitroner herein is accused No.4; that it has not issued any cheque in favour of respondent No.2-complainant; that even according to the contents of the complaint, no allegations are levelled against the petitioner herein and thus, the offence under Section 'l 38 of N. L Act does not attract against the petitioner herein. He further submitted that the alleged cheques are purported to have been signed by accused Nos.2 and 3 and that when the petitioner herein has not issued any cheque, roping the petitioner into the case under Section '1 38 of the N.l. Act is not justified. He further submitted that the allegations in the complaint do not attract the offence under Section 138 of the N.l. Act against the petitioner herein and therefore, continuation of proceedings against the petitioner is an abuse of process of law. He further submitted that there is no co-relation between the seven cheques that are alleged to have been issued and that it is not clear as to which cheque is dishonoured. The legal notices are alleged to have been issued on 12.10 2022 and 07. 1 1 .2022, but the complaint is filed on 14.12.2022 and thus, on the ground of ) ,,/ J ]]TD,] rl.P No.5843 01 2025 limitation also, the complaint fails. He, therefore, p i yed to quash the proceedings in the present S T.C.(N.1.).No.41 cl 2023 against the petitioner herein Learned counsel, in st cport of his submissions, has relied upon the judgment of tlr, Honourable Apex Court in Pawan Kumar Goel v. State of U.P. i nd anotherl. 5 Learned Additional Public Prosecutor st cmitted that accused No.1-Company is affiliated to the pet t r>ner/accused No.4-Company and accused No.2 is the Proprie,r ' of accused No.1-Company. Since the cheques issued by acct sed No.2 are dishonoured. the present complaint is filed against ::;cused Nos.1 to 4. He, therefore, prayed to dismiss the Criminal Ir,:tition. 6

7. Perused the record. lt is alleged that accused No.2 is the autho-;ed person to the petitioner/accused No.4-Company and also a r: ;istered Stock Broker under Security Exchange Board of lndia (SEE i). lt is further alleged that accused No.1-Company is affiliated to tccused No.4- Company and that generated a trust that investmerr with accused No, 1-Company was a secured investment. lt is furtr- ::r alleged that accused No.3 has introduced himself as a Manaoe r to the clients I 2022 [.au.Suit (sc) 1359 .! 4 ETD,J Crl.P.No.5843 of2025 whoever approaches the accused No.1-Company, and used to sign the bonds as authorized signatory and issue cheques of accused No.1-Company signed by accused No 2. lt is alleged that the accused have persuaded the complainant to believe that accused No.'l -Company is affiliated with petitioner/accused No.4-Company, but for this there are no other allegations against the petitioner herein. The cheques are alleged to have been issued by accused No.2. The contents of the complaint point out that the cheques are signed by accused No.2 for accused No.1-Company. The only allegation against the petitioner is that accused No.1-Company is affiliated to the petitioner/accused No.4-Company. B. Section 138 of the N.l. Act is extracted hereunder for the sake of reference "138. Dishonour of cheque for insufficiency, etc., of funds in the account:- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount, of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall - be deemed to have committed an offence and shall, ) IJ'I D.J rl.P.r"o 5841 ot 2025 without prejudice to any other provision of thir, Act, be punished with imprisonment for a term which nay be extended to two years, or with fine which may r rtend to twice the amount of the cheque. or with both. Provided that nothing contained rn this section slr rll apply unless- (a) the cheque has been presented to the bank period of six months from the date on which it is r .vithrn a 'awn or within the period of its validity, whichever is earlier (b) the payee or the holder in due course of the clr ,qUe aS the case may be, makes a demand for the paymr: rt of the said amount of money by giving a notice, in writirr drawer of the cheque, within thirty days of the rr information by him from the bank regarding the r , to the ,reipt of ,:turn of the cheque as unpaid, and (c) the drawer of such cheque fails to make the pit' .nent of the said amount of money to the payee or, as the c be, to the holder in due course of the cheque, wrth se may 'r fifteen days of the receipt of the said notice." I As per the allegations in the complaint as dis I rssed above, none of the ingredients of the offence under Section ' 38 of the N.l Act get attracted against the petitioner. When the petitioner/accused No.4-Company herein has nct issued any cheque, it cannot be charged under Section 138 of tl-r N.l. Act )

10. The Honourable Apex Court in State of Haryana and 6 I'TD.J Crl.P.No.5841 0f2025 others v. Bhajan Lal and others2, held that where the allegations made in the First lnformation 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, the extra ordinary power under Article 226 of the Constitution or the inherent powers under Section 482 Cr.P.C can be exercised by the High Court either to prevent abuse of process of any Court or otherwise to secure the ends of justice.

11. ln Pawan Kumar Goel's case (supra 1), the appellant therein filed four criminal complaints on the ground that the account payee cheque issued by respondent No.2 therein towards the outstanding bills was dishonoured. The summoning order and the proceedings issued by the trial Court were quashed by the High Court of Allahabad. The Honourable Apex Court held that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. lt was further held that liability under Sectron '141 of the N.l. Act is sought to be fastened vicariously on a person connected with the company, the principal accused being the company itself. So far as signatory of ' t 992 scc ic.i; +zo ETD,J ( lI'.l\-o 5843 of 2025 the cheque, which rs dishonoured, is concerned, .re is clearly 7 responsible for the incriminating act and will be (;( vered under Section 141(2) of the N.l. Act. Thus, the orderof the ligh Court of Allahabad was upheld by the Honourable Apex Cour .

12. In the present case, the allegations do not ma< .t oul a prima facie case against the petitioner Hence, in view c'l the principle laid down by the Honourable Apex Court in Bhajan Lal's case (supra 2) and also in Pawan Kumar Goel's case ( ;upra 1), the continuation of proceedings against the petitioner hr: ein would be an abuse of process of law.

13. Accordingly, the Criminal Petition is allo I r:d and the proceedings in S T.C.(N.1.).No.41 of 2023 on the fil' of learned I Additional Junior Civil Judge-cum-Xll Additiona Metropolitan Magistrate, Medchal-Malkajgiri District at Kukatpal ' , are hereby quashed against the petitioner herein. Miscellaneous Petitions pending, if any, shall :; ilnd closed //TRUE COPY// Sd/- B.REKHA RANI SiI STANT REGISTRAR $ SECTION OFFICER i \ If

1. The I Additional J unior Civil Judge-Cum-\l \ Adc tional lvletropolitan Magistrate Court, Medchal-Malkajgiri District at Kukat6,illy.

2. The Station House Officer, Kukatpally Police Station, l\4o icha l-lvlalkajgiri. 3. Two CCs to the Public Prosecutor, High Court for the St te of Telangana, at Hyderabad. [OUT] 4. One CC to Mr. J. KUIVARESAN, Advocate IOPUC] 5. Two CD Copies To M, HIGH COURT DATED: 2911212025 ORDER CRLP.No.5843 of 2025 l llt ih>.*. "'c''\,^-\\ (:- \\ 6r)2 i * €o'e ,:) ,,-) 16 :. ).. ..,. ,r '\- I)e .. -.ir -\ . Accordingly, this Criminal Petition is A, lowed. I