Vinay Gupta v. Anuj Sharma, summoning the

1. Heard Sri Vinod Kumar Singh (D-596/96R) holding brief of Sri Praveen Kumar Tripathi, learned counsel for the applicant and Sri Vikas Sharma, learned State Law Officer for the State.

2. A joint statement has been made by the learned counsel for the parties that they do not propose to file any affidavit and the application be decided on the basis of the documents available on record. When the consent of the parties, the application is being decided at the fresh stage.

3. The facts of the leading application are that a complaint under Section 138 of the N.I. Act came to be filed by the opposite party no.2 on 4.3.2020 under Section 138 of the N.I. Act against the applicant with an allegation that with respect to discharge of a liability pursuant to an agreement/memorandum of understanding made and executed on 1.7.2019 between the parties, the balance payment of Rs.1,28,00,000/- were to be paid and the applicant herein had drawn a cheque bearing number 000119 dated 19.01.2020 of the said amount, which on presentation in the bank was dishonoured with the remarks "payment stopped by the drawer" on 28.01.2020 followed by a statutory demand notice dated 12.02.2020 and the complaint under Section 138 N.I. Act on 4.3.2020.

4. On 15.10.2020, the court of Presiding Officer, Additional Court, Court No.1, Gautam Budhnagar in Complaint Case No. 421 of 2020 summoned the applicant under Section 138 of the N.I.Act.

5. As regards the connected application, the same has been preferred by the opposite party no.2-complainant with an allegation that a complaint stood lodged on 30.01.2020 with an allegation that with respect to discharge of a liability pursuant to the execution of an agreement/memorandum of understanding between the applicant and the opposite party no.2 a cheque of an amount of Rs.75 lakhs dated 19.10.2019 bearing number 000118 came to be drawn which on presentation in the bank on 20.12.2019 was dishonoured with the remarks "funds insufficient" a statutory demand notice was also issued on 2.01.2020 followed by the complaint on 30.01.2020 and the summoning order came to be passed on 15.1.2021 in Complaint Case No. 295 of 2020, Vinay Gupta vs. Anuj Sharma, summoning the applicant under Section 138 of the N.I. Act by Presiding Officer, Additional Court, Court No.1, Gautam Budhnagar.

6. Questioning the summoning orders, summoning the applicants under Section 138 of the N.I. Act in the leading and the connected application, the present applications have been preferred.

7. Learned counsel for the applicants in leading and connected application has submitted that the summoning order cannot be sustained for a single moment for more than one reason, firstly, the trial court while summoning the applicants had no jurisdiction, particularly when in the leading application, the cheques were drawn from the UCO Bank branch, Andheri, Mumbai, which came to be dishonoured while being presented in Axis Bank, Gautam Budhnagar.

8. Submission is that the jurisdiction would obviously be in the courts at Mumbai, secondly, the complaint itself is bereft of any logic so as to substantiate the chain of events that any legal enforceable debt or liability stood casted upon the applicants. Further submission is that the cheques so drawn as per the statements under Section 251 Cr.P.C. was a security document which was not given in discharge of a liability but was to enhance the confidence between the parties and thus no offence under Section 138 of the N.I. Act stood committed. Thirdly, the complaint itself was not maintainable and further the procedure so sought to be adopted by the court below at pre-summoning and post-summoning stage itself is faulty and erroneous. Fourthly, the summoning has been passed in a cryptic manner without due application of mind in routine manner.

9. Learned AGA on the other hand submits that none of the contentions so sought to be raised by the learned counsel for the applicants has any less to stand for the simple reason that the summoning orders in leading and the connected applications came to be passed on 15.10.2020 and 15.1.2021, however, leading application and connected applications came to be filed on 2.6.2025. Further, as per the documents available on record, the applicants are contesting the matter and the statement under Section 251 CrP.C. is already on record. He also submits that whatever contentions, the applicants seek to raise, it is always open for him to raise while contesting the applications and the question as to whether the cheques were by way of security or not is a question of trial.

10. I have heard the submissions so made across the bar and perused the record carefully.

11. Apparently, the allegations in the leading and the connected applications relate to dishonouring of a cheque which is stated to have been drawn on 19.1.2020 of Rs.1,28,00,000/- in the leading and Rs.75,00,000/- in the connected application dated 19.10.2019 which came to be dishonoured post issuance of the statutory of demand notice, the applicants have been summoned.

11. The question as to whether at the stage of summoning, Court is required to go into the issue of the fact that the cheque was with the holder as security or not is no more res integra as the Hon'ble Apex Court in the case of M/s Womb Laboratories Private Limited Vs. Vijay Ahuja & another (2022) 18 SCC 631 has observed as under:- "In our opinion, the High Court has muddled the entire issue. The averment in the complaint does indicate that the signed cheques were handed over by the accused to the complainant. The cheques were given by way of security, is a matter of defence. Further, it was not for the discharge of any debt or any liability is also a matter of defence. The relevant facts to countenance the defence will have to be proved - that such security could not be treated as debt or other liability of the accused. That would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques."

12. In Sunil Todi and others Vs. State of Gujarat (2022) 16 SCC 762 the Hon'ble Apex Court has reiterated the aforesaid law.

13. Nonetheless, the other issue relatable to the jurisdiction aspect is concerned, suffice is to say that post amendment in the Section 142 of the N.I. Act on 15.6.2015, the objection of the counsel for the applicant is not convinceable. Further, once the applicants are themselves contesting the matter and raising issues, then it would not be appropriate for the court to delve into the said issue, particularly when the proceedings are under way. Nonetheless, the Court finds that the summoning order in the leading application is dated 15.10.2020 and in the connected application on 15.1 2021 however, the application has been filed in the month of June 2025 after a more than five years, there is no plausible explanation for justifying the inordinate delay in approaching the court. Less to say that the applicants, as per the record, available with the court, are contesting the matter.

14. Looking into the case of the four corners of law, no good ground is made to interfere at this stage in the present proceedings. Accordingly, interference is declined. It is left open for the applicants to raise all legal and factual issues while contesting the matter on merits and this Court has no reason to disbelieve that whatever contentions are raised will be appropriately dealt in accordance with law.

15. Accordingly, the interference is declined. Both the applications stand disposed of . Order Date :- 7.7.2025 piyush

1. Heard Sri Vinod Kumar Singh (D-596/96R) holding brief of Sri Praveen Kumar Tripathi, learned counsel for the applicant and Sri Vikas Sharma, learned State Law Officer for the State.

2. A joint statement has been made by the learned counsel for the parties that they do not propose to file any affidavit and the application be decided on the basis of the documents available on record. When the consent of the parties, the application is being decided at the fresh stage.

3. The facts of the leading application are that a complaint under Section 138 of the N.I. Act came to be filed by the opposite party no.2 on 4.3.2020 under Section 138 of the N.I. Act against the applicant with an allegation that with respect to discharge of a liability pursuant to an agreement/memorandum of understanding made and executed on 1.7.2019 between the parties, the balance payment of Rs.1,28,00,000/- were to be paid and the applicant herein had drawn a cheque bearing number 000119 dated 19.01.2020 of the said amount, which on presentation in the bank was dishonoured with the remarks "payment stopped by the drawer" on 28.01.2020 followed by a statutory demand notice dated 12.02.2020 and the complaint under Section 138 N.I. Act on 4.3.2020.

4. On 15.10.2020, the court of Presiding Officer, Additional Court, Court No.1, Gautam Budhnagar in Complaint Case No. 421 of 2020 summoned the applicant under Section 138 of the N.I.Act.

5. As regards the connected application, the same has been preferred by the opposite party no.2-complainant with an allegation that a complaint stood lodged on 30.01.2020 with an allegation that with respect to discharge of a liability pursuant to the execution of an agreement/memorandum of understanding between the applicant and the opposite party no.2 a cheque of an amount of Rs.75 lakhs dated 19.10.2019 bearing number 000118 came to be drawn which on presentation in the bank on 20.12.2019 was dishonoured with the remarks "funds insufficient" a statutory demand notice was also issued on 2.01.2020 followed by the complaint on 30.01.2020 and the summoning order came to be passed on 15.1.2021 in Complaint Case No. 295 of 2020, Vinay Gupta vs. Anuj Sharma, summoning the applicant under Section 138 of the N.I. Act by Presiding Officer, Additional Court, Court No.1, Gautam Budhnagar.

6. Questioning the summoning orders, summoning the applicants under Section 138 of the N.I. Act in the leading and the connected application, the present applications have been preferred.

7. Learned counsel for the applicants in leading and connected application has submitted that the summoning order cannot be sustained for a single moment for more than one reason, firstly, the trial court while summoning the applicants had no jurisdiction, particularly when in the leading application, the cheques were drawn from the UCO Bank branch, Andheri, Mumbai, which came to be dishonoured while being presented in Axis Bank, Gautam Budhnagar.

8. Submission is that the jurisdiction would obviously be in the courts at Mumbai, secondly, the complaint itself is bereft of any logic so as to substantiate the chain of events that any legal enforceable debt or liability stood casted upon the applicants. Further submission is that the cheques so drawn as per the statements under Section 251 Cr.P.C. was a security document which was not given in discharge of a liability but was to enhance the confidence between the parties and thus no offence under Section 138 of the N.I. Act stood committed. Thirdly, the complaint itself was not maintainable and further the procedure so sought to be adopted by the court below at pre-summoning and post-summoning stage itself is faulty and erroneous. Fourthly, the summoning has been passed in a cryptic manner without due application of mind in routine manner.

9. Learned AGA on the other hand submits that none of the contentions so sought to be raised by the learned counsel for the applicants has any less to stand for the simple reason that the summoning orders in leading and the connected applications came to be passed on 15.10.2020 and 15.1.2021, however, leading application and connected applications came to be filed on 2.6.2025. Further, as per the documents available on record, the applicants are contesting the matter and the statement under Section 251 CrP.C. is already on record. He also submits that whatever contentions, the applicants seek to raise, it is always open for him to raise while contesting the applications and the question as to whether the cheques were by way of security or not is a question of trial.

10. I have heard the submissions so made across the bar and perused the record carefully.

11. Apparently, the allegations in the leading and the connected applications relate to dishonouring of a cheque which is stated to have been drawn on 19.1.2020 of Rs.1,28,00,000/- in the leading and Rs.75,00,000/- in the connected application dated 19.10.2019 which came to be dishonoured post issuance of the statutory of demand notice, the applicants have been summoned.

11. The question as to whether at the stage of summoning, Court is required to go into the issue of the fact that the cheque was with the holder as security or not is no more res integra as the Hon'ble Apex Court in the case of M/s Womb Laboratories Private Limited Vs. Vijay Ahuja & another (2022) 18 SCC 631 has observed as under:- "In our opinion, the High Court has muddled the entire issue. The averment in the complaint does indicate that the signed cheques were handed over by the accused to the complainant. The cheques were given by way of security, is a matter of defence. Further, it was not for the discharge of any debt or any liability is also a matter of defence. The relevant facts to countenance the defence will have to be proved - that such security could not be treated as debt or other liability of the accused. That would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques."

12. In Sunil Todi and others Vs. State of Gujarat (2022) 16 SCC 762 the Hon'ble Apex Court has reiterated the aforesaid law.

13. Nonetheless, the other issue relatable to the jurisdiction aspect is concerned, suffice is to say that post amendment in the Section 142 of the N.I. Act on 15.6.2015, the objection of the counsel for the applicant is not convinceable. Further, once the applicants are themselves contesting the matter and raising issues, then it would not be appropriate for the court to delve into the said issue, particularly when the proceedings are under way. Nonetheless, the Court finds that the summoning order in the leading application is dated 15.10.2020 and in the connected application on 15.1 2021 however, the application has been filed in the month of June 2025 after a more than five years, there is no plausible explanation for justifying the inordinate delay in approaching the court. Less to say that the applicants, as per the record, available with the court, are contesting the matter.

14. Looking into the case of the four corners of law, no good ground is made to interfere at this stage in the present proceedings. Accordingly, interference is declined. It is left open for the applicants to raise all legal and factual issues while contesting the matter on merits and this Court has no reason to disbelieve that whatever contentions are raised will be appropriately dealt in accordance with law.

15. Accordingly, the interference is declined. Both the applications stand disposed of . Order Date :- 7.7.2025 piyush