High Court of Orissa
Case Details
IN THE HIG E HIGH COURT OF ORISSA AT CUTT CUTTACK CRLMC No. 2498 of 2016 Krushna Pr. Sab . Sabat & Anr. …. Petitioner Mr. Prasanna K nna Ku. Mishra, Advocate -versus- Nirma Consumer umer Care Ltd. …. Oppos pposite Parties Mr. S. J Addl. Standin Mr. R. K. Advocate for r. S. J. Mohanty tanding Counsel R. K. Satapathy, ate for O.P No.2 CORAM: THE HON’BLE BLE MR. JUSTICE CHITTARANJAN D JAN DASH Date of Judgment: 09.07.2025 Chittaranjan Dash, ash, J. 1. By means eans of the present application, the Petitione etitioner seeks the indulgence of this f this Court under Section 482 of the Code o Code of Criminal Procedure, prayin praying for quashing of the criminal inal proceeding instituted under S nder Section 138 of the Negotiable Instru Instruments Act, 1881, in connectio nection with 1CC No. 18 of 2015, pending ending before the learned S.D.J.M., P .J.M., Paralakhemundi. 2. The backg background facts of the case are that th hat the Opposite Party, M/s. Nirma Nirma Consumer Care Limited, a registere gistered company engaged in the sal the sale and marketing of Nirma brand prod d products across India, filed a co a complaint under Section 138 of the f the Negotiable Instruments Act, 1
Facts
ct, 1881 against one partnership firm, na irm, namely M/s. CRLMC No. 2498 of of 2016 Page 1 of 10 Simran Agency, an ncy, and its partners, Krushna Prasad Sabat Sabat and Ghasia Barik. It was alleg s alleged that the said firm had a business r iness relationship with the complain plainant and had purchased goods from it, om it, pursuant to orders placed from d from time to time, and had taken delivery livery of the said goods through vari gh various invoices raised by the complainan lainant company. Towards d ards discharge of the outstanding liability a ility arising from the said transactio sactions, M/s. Simran Agency issued a cheq a cheque bearing No. 906753 dated dated 02.03.2006 for an amount of ₹8,12,67 8,12,674/-, drawn on State Bank of nk of India, Paralakhemundi Branch, in fav in favour of the complainant. Rely . Relying upon the verbal assurances and ins nd instructions of the accused, the c , the complainant deposited the said cheq cheque with its banker—Kalupur lupur Commercial Cooperative Bank Limit Limited, Assam Road Branch, A ch, Ahmedabad. Following the standar tandard banking procedure, the che he cheque was forwarded for clearance to ce to the drawee bank, i.e., State B tate Bank of India, Paralakhemundi Branch ranch. However, the cheque was r was returned unpaid on 14.02.2006 with with the remark “account closed o sed on 06.02.2006” as recorded at Column olumn No. 16 of n slip. the intimation slip. Following wing dishonour of the cheque, the complai mplainant issued a legal notice date e dated 31.03.2006 through registered post d post with A.D., demanding payme payment of the cheque amount within 1 thin 15 days as mandated under th nder the Act. Though the notice was recei received by the accused, they neith y neither responded with any bona fide expl e explanation nor made payment wit nt within the stipulated statutory period. Co d. Consequently, the complainant in nant initially filed a complaint before the lea the learned Addl. Chief Metropolit ropolitan Magistrate, Court No. 35, A 35, Ahmedabad. CRLMC No. 2498 of of 2016 Page 2 of 10 However, in view view of the law laid down by the Hon’ ’ble Supreme Court in Dasrath rath Rupsingh Rathod vs. State of Ma f Maharashtra, reported in (2014) (2014) 9 SCC 129, the learned Magistrate r trate returned the complaint for pre or presentation before the competent co nt court having territorial jurisdicti risdiction. Pursuant th uant thereto, the complaint was filed before efore the learned S.D.J.M., Paralakh ralakhemundi, which was registered as 1CC as 1CC Case No. 18 of 2015. Upon Upon consideration of the complaint and t and supporting materials, the lear e learned Magistrate took cognizance of t e of the offence under Section 138 n 138 of the Negotiable Instruments Act by ct by order dated 22.06.2015 and is and issued process against the accused per ersons—M/s. Simran Agency (A ncy (Accused No. 1), Krushna Prasad Saba d Sabat (Accused No. 2), and Ghasia Ghasia Barik (Accused No. 3). Thereafter, eafter, the accused entered appearance an nce and filed an application under under Section 205 CrPC seeking exemp exemption from personal appearan pearance and permission to be represente resented through counsel, which wa ich was allowed by order dated 04.04.2016 4.2016 subject to conditions. Aggrie Aggrieved by the order taking cognizance izance, Accused Nos. 2 and 3, being , being partners of the firm, have approached oached this Court by way of the pres e present application under Section 482 CrP 82 CrPC, seeking quashing of the cri the criminal proceeding in 1CC No. 18 of 20 of 2015. 3. Learned co ned counsel for the Petitioner submits that s that the cheque in question, bearin bearing No. 906753, was admittedly dated 0 dated 02.03.2006, yet the same was e was presented by the complainant for enca or encashment on 14.02.2006, i.e., p i.e., prior to its date of issue. It is contende ntended that such premature presentation prese renders the dishonou honour legally CRLMC No. 2498 of of 2016 Page 3 of 10 inconsequential fo tial for the purposes of Section 138 of the of the Negotiable Instruments Act, Act, 1881, as the cheque had not yet m yet matured for presentation. It is f . It is further argued that the complainant, de ant, despite being aware of the said e said discrepancy, initiated proceedings und gs under Section 138 NI Act wit ct without adhering to the statutory pr ry prerequisites, including presenta esentation of the cheque after its date of iss of issue. Hence, the legal fiction cr tion created under Section 138 cannot be inv be invoked in the absence of valid pr
Legal Reasoning
the Petitioner, prima facie demonstrate that te that the cheque was presented prio ed prior to the date of its issuance and was d was dishonoured on 14.02.2006 on 06 on the ground of “account closed” as early as 06.02.2006—a dat a date prior to even the issuance of the ch the cheque. It is contended that su hat such uncurable defects strike at the r the root of the complaint and no nd no amount of trial or evidence can cure n cure the same. The continuation o ation of the proceeding would therefore am ore amount to an abuse of the proc e process of law, and in exercise of inher inherent powers under Section 482 on 482 CrPC, this Hon’ble Court may be ay be pleased to quash the same. ame. Apart from the above, it is also argu o argued that the CRLMC No. 2498 of of 2016 Page 4 of 10 learned Magistra agistrate at Paralakhemundi d lacked the the territorial jurisdiction to ente to entertain the complaint. 4. Learned c ned counsel for the Opposite Party, thou , though absent during the course ourse of hearing, has filed a written note of ote of arguments opposing the prese present application. 5. The primar primary objection raised by the complainant lainant pertains to the question of ter of territorial jurisdiction. It is contended th ded that, in view of the amendment dment brought to the Negotiable Instruments uments Act, 1881 by the Negotiab gotiable Instruments (Amendment) Act, Act, 2015, the jurisdiction to ente to entertain a complaint under Section 138 N 138 NI Act vests with the court whe rt where the cheque is presented for encashm ncashment by the payee. On that bas hat basis, it is urged that the cheque in ques n question having been presented at ted at Ahmedabad, the proper jurisdiction li tion lies with the court at Ahmed hmedabad, and not with the learned arned S.D.J.M., Paralakhemundi. C undi. Consequently, the complainant assert asserts that this Court also lacks lacks territorial jurisdiction to entertain t rtain the present application under under Section 482 CrPC. However, th er, there is no explanation whatso whatsoever from the complainant as to how o how the cheque bearing the date 0 date 02.03.2006 could have been presented sented prior to its date of issue, no e, nor is there any justification offered fered for how a dishonour that oc hat occurred before the issuance of the ch the cheque could attract the penal pr enal provisions of Section 138 NI Act. In the In the absence of such clarification, ation, the fundamental requirement under S nder Section 138 i.e., that the cheq e cheque was lawfully issued and dishon ishonoured after being duly presen presented, remains prima facie unsatisfie satisfied, thereby weakening the cas he case against the Petitioners. CRLMC No. 2498 of of 2016 Page 5 of 10 6. Section 13 ion 138 of the Negotiable Instruments Act, 1 Act, 1881, reads as follows – cy, etc., of Dishonour of cheque for insufficiency, et in the account.— e any cheque drawn by a person on an ac tained by him with a banker for payment o nt of money to another person from out of nt for the discharge, in whole or in part, of any her liability, is returned by the bank unpaid, se of the amount of money standing to the cre ccount is insufficient to honour the cheque or t ds the amount arranged to be paid from that ac agreement made with that bank, such person eemed to have committed an offence and ut prejudice to any other provisions of this A hed with imprisonment for a term which ma ded to two years, or with fine which may exte the amount of the cheque, or with both: ded that nothing contained in this section shall an account ent of any out of that of any debt paid, either he credit of ue or that it that account erson shall and shall, this Act, be ich may be y extend to shall apply nk within a e cheque has been presented to the bank wit is drawn or d of six months from the date on which it is draw arlier; n the period of its validity, whichever is earlier; e cheque, as e payee or the holder in due course of the cheq ment of the ase may be, makes a demand for the payment o iting, to the mount of money by giving a notice in writing, e receipt of er of the cheque, [within thirty days of the rece he return of ation by him from the bank regarding the retu eque as unpaid; and e drawer of such cheque fails to make the pay said amount of money to the payee or, as the be, to the holder in due course of the cheque, w n days of the receipt of the said notice. nation.— For the purposes of this section, “de liability” means a legally enforceable debt or he payment as the case que, within debt or ebt or other “138. Dish funds in th Where any maintained amount of account for or other lia because of that accoun exceeds the by an agree be deemed without pre punished w extended to twice the am Provided th unless— (a) the cheq period of six within the p (b) the paye the case ma said amoun drawer of th information the cheque a (c) the draw of the said may be, to fifteen days Explanation other liabili liability.] 7. Section 13 ion 138 of the Negotiable Instruments Act, 1 Act, 1881 creates a statutory presum resumption of criminal liability in cases whe s where a cheque CRLMC No. 2498 of of 2016 Page 6 of 10 issued towards th rds the discharge of a legally enforceab orceable debt or liability is returne eturned unpaid due to insufficiency of fun of funds or other stated reasons. Ho ns. However, the provision is triggered only d only upon strict compliance with t with the conditions stipulated therein. It i n. It is therefore well settled that a that a valid and mature presentment of the f the cheque is a sine qua non for on for the invocation of penal consequen sequences under Section 138. In th . In the absence of such valid presentment, tment, no offence under the provisio ovision can be said to have been made out, de out, regardless of the drawer’s int s intent or the nature of the underlying liab g liability. 8. A plain lain reading of Section 138 of the Negotiable the Instruments Act, 1 Act, 1881, makes it evident that the offence fence is made out only upon the fu the fulfilment of certain mandatory cond conditions, the cheque must be is t be issued for the discharge, in whole or in le or in part, of a legally enforceable rceable debt or liability; it must be presented sented to the bank within its validity lidity period; and upon dishonour, the draw e drawer must be served with a dem a demand notice, with failure to make paym e payment within fifteen days there thereafter. Among these, the requiremen irement of valid presentation of th of the cheque is foundational. It necessar cessarily implies that the cheque m eque must be presented on or after the r the date of its issuance, when it hen it is legally capable of being acted up ted upon by the bank. 9. In the pres e present case, it is an admitted position that n that the cheque in question, bear , bearing the date 02.03.2006, was pre as presented for encashment prior prior to its date of issue and was disho dishonoured on 14.02.2006 i.e., b i.e., before the cheque had even come come into legal existence. This pr his procedural infirmity strikes at the very very root of the CRLMC No. 2498 of of 2016 Page 7 of 10 statutory scheme heme contemplated under Section 138. A 38. A dishonour occurring prior to rior to the cheque’s date of issuance is, in l is, in law, a non- event, and such pr uch premature presentation renders the entire entire process of invoking criminal iminal liability under the Act untenable. nable. The legal fiction created un ted under Section 138 cannot be stretched tched to cover a case where the b the basic act of lawful presentation itself itself is absent. Accordingly, the , the alleged dishonour in such a scenario enario cannot be brought within the hin the four corners of the offence under S der Section 138, and any proceedin ceedings initiated on that basis are vitiated in ted in law. 10. In view of iew of the foregoing discussion, this Cour s Court is of the considered opinion pinion that the continuation of the criminal minal proceeding against the Petitio Petitioners is not legally sustainable. The ad The admitted fact that the cheque in que in question was presented for encashme cashment prior to its date of issuanc issuance vitiates the very foundation of the of the complaint under Section 138 138 of the Negotiable Instruments Act, 1 Act, 1881. Valid presentation of the of the cheque being a mandatory precond recondition under the statutory sch y scheme, its premature presentation r tion renders the subsequent dishon dishonour legally inconsequential and in nd incapable of attracting penal c nal consequences under the Act. This is a f is a fatal defect, going to the root o root of the matter, and is not curable at any s t any stage of the proceeding. No am No amount of evidence led during trial ca rial can cure this legal infirmity, an ity, and as such, the continuation of the f the proceeding nt to an abuse of the process of law. would amount to a 11. This Cour Court also finds it necessary to briefly a iefly address the issue of territorial itorial jurisdiction, particularly in light of t ht of the reliance placed by the lear he learned Magistrate on the decision of th n of the Hon’ble Supreme Court i ourt in Dashrath Rupsingh Rathod v vs. State of CRLMC No. 2498 of of 2016 Page 8 of 10 Maharashtra, (20 (2014) 9 SCC 129. In that decision, it wa , it was held that the jurisdiction fo ion for offences under Section 138 of the f the Negotiable Instruments Act, 1 Act, 1881, would lie only with the court wi urt within whose territorial limits mits the drawee bank i.e., the bank of the of the drawer is located. 12. However, ever, the legal position underwent a signific ignificant change following the the enactment of ble the Negotiable Instruments I (Amendment) Act t) Act, 2015, which was given retrospec rospective effect. Under the amende mended law, if the cheque is delivered for red for collection through an accoun account, the branch of the bank where th ere the payee or holder in due cour e course, as the case may be, maintains the ns the account, is situated; or if the if the cheque is presented for payment by th t by the payee or holder in due cour e course, otherwise through an account, the nt, the branch of the drawee bank bank where the drawer maintains the a the account, is situated. In the p the present case, since the cheque was was admittedly deposited through hrough the complainant’s bank at Ahme Ahmedabad, the technically correct correct jurisdiction, in terms of the amended ended provision, Ahmedabad, not Paralakhemundi. would be at Ahme 13. Be that as hat as it may, this Court refrains from expr expressing any conclusive opinio opinion on the question of jurisdiction, a ion, as it is not determinative to th e to the outcome of the present application. cation. The Court is primarily persua persuaded by the substantive defect in the ca the case namely, the admitted fact fact that the cheque was presented for e for encashment prior to its date of ate of issuance, thereby rendering the alleged alleged dishonour legally inconsequ nsequential and incapable of attracting cting the penal provisions of Secti f Section 138. Though the issue of jurisdicti isdiction may not be fatal in itself, i tself, it certainly lends further weight to the to the conclusion CRLMC No. 2498 of of 2016 Page 9 of 10 that the proceeding eeding suffers from serious legal infirmities rmities. Since the complaint is itself lf legally untenable, the jurisdictional asp nal aspect merely reinforces the case e case for quashing. In the present circums ircumstances, the defect in the timin timing of presentment is, by itself, sufficien fficient to render the complaint unsu t unsustainable. 14. According ordingly, the CRLMC is allowed. The . The criminal proceeding in 1CC n 1CC Case No. 18 of 2015, pending before before the learned S.D.J.M., Paralakh ralakhemundi, including the order of cogniz cognizance dated 22.06.2015, is her is hereby quashed so far as the present Pet nt Petitioners are concerned. There s
Arguments
alid presentment. The learned counsel also s also submits that the complaint was nt was originally filed before the learned M ned Metropolitan Magistrate, Ahme medabad, on 24.04.2006, which was p was prior to the expiry of the stat e statutory 15-day period following the l the legal notice dated 31.03.2006. .2006. It is urged that filing of the compl complaint before completion of the of the statutory waiting period amounts to nts to premature institution, render endering the entire proceeding legally gally untenable. Reliance is placed placed on the documents appended to the to the complaint, including the che e cheque, intimation slip, and legal noti l notice, which, according to the P
Decision
here shall be no order as to costs. (Chittaranjan Da n Dash) Judge Bijay Signature Not Verified Digitally Signed Signed by: BIJAY KETAN SAHOO Reason: Authentication Location: HIGH COURT OF ORISSA Date: 11-Jul-2025 17:31:32 CRLMC No. 2498 of of 2016 Page 10 of 10