Sh. Ram Kumar Jaiswal & another v. Presence

Judgment

1. The present application under Section 482 CrPC has been filed by the applicants seeking quashing of the summoning order dated

07.09.2016 passed by the Judicial Magistrate, Rishikesh, District Dehradun, in Criminal Case No. 586 of 2016, M/s Ashish Associates v. Raj Kumar & Others, and the entire proceedings arising therefrom under Section 138 of the Negotiable Instruments Act, 1881.

2. The proceedings stem from a complaint filed by the respondent firm, M/s Ashish Associates, alleging that a cheque dated 06.05.2016 for ₹1,30,00,000/- (Rupees One Crore Thirty Lakhs), issued by the

applicant firm, M/s Mahakaal Traders, was dishonoured on two occasions—first on 09.05.2016, and again on 26.05.2016. A statutory demand notice dated 24.06.2016 was subsequently issued, seeking payment within 15 days.

3. It is further alleged that the said cheque was issued toward repayment of a loan of ₹1.3 crores, disbursed by the respondent firm Criminal Misc. Application No.862 of 2019-----Ram Kumar Jaiswal & others vs M/s Ashish Associates 1 Ashish Naithani J. through bank transfers on 12.06.2015 and 13.06.2015 to the applicant firm’s account.

4. Upon examining the complainant under Section 200 CrPC and considering the materials on record, the learned Magistrate issued summons under Section 204 CrPC vide the impugned order dated

07.09.2016.

5. The applicants initially failed to appear before the trial court, resulting in the issuance of bailable warrants. They later surrendered on

20.04.2019 and were granted bail the same day.

6. Learned counsel for the applicants contends that the proceedings are a manifest abuse of process and warrant quashing. It is submitted that the cheque in question was not issued in discharge of any legally enforceable debt, but was misused by one of the partners in collusion with the firm’s manager and the respondent’s representative.

7. It is the applicants’ case that Applicant No. 2, M/s Mahakaal Traders, was a registered partnership firm engaged in liquor vending in Ujjain, Madhya Pradesh, which ceased operations in January 2016 due to financial losses. The firm’s partnership deed dated 22.02.2015 included Mr. Mahesh Pokhriyal as a partner, who also happens to be the authorised representative of the complainant firm.

8. The applicants argue that Mr. Pokhriyal, being both a complainant and a partner in the accused firm, is legally barred from maintaining a complaint under Section 138 of the NI Act, as the transaction pertains to internal affairs of the firm. The complaint, therefore, is urged not to be maintainable.

9. It is further alleged that blank cheques were signed and entrusted to the firm’s manager for routine business use. The cheque in question Criminal Misc. Application No.862 of 2019-----Ram Kumar Jaiswal & others vs M/s Ashish Associates 2 Ashish Naithani J. was misused by the manager, Om Prakash, along with partner Pawan Jaiswal, who was acting in conspiracy with Mr. Pokhriyal.

10. Learned counsel submits that the statutory notice under Section 138 of the NI Act is barred by limitation. The cheque was first dishonoured on 09.05.2016, re-presented on 18.05.2016, and dishonoured again on 26.05.2016. However, the demand notice was issued only on 24.06.2016. Calculated from the first dishonour, the notice exceeds the statutory 30-day period.

11. Additionally, it is argued that the respondent firm lacked authorisation to advance loans, as it was neither registered under the U.P. Money Lenders Act nor licensed as a Non-Banking Financial Company under the RBI Act. Therefore, the alleged advance does not qualify as a legally recoverable debt, rendering the proceedings under Section 138 of the NI Act untenable.

12. Lastly, it is submitted that the summoning order dated 07.09.2016 is mechanical and passed without due application of mind. The Magistrate allegedly failed to examine the nature of the dispute, the background of the cheque issuance, or any material particulars regarding the alleged disbursal of ₹1.3 crores.

13. Learned counsel for the respondent, M/s Ashish Associates, strongly opposes the application under Section 482 CrPC, terming it a desperate attempt to obstruct lawful proceedings at the threshold. It is submitted that the applicants, having issued a cheque dated 06.05.2016 for ₹1.30 crores in discharge of an acknowledged liability, are now seeking to evade their legal obligations through frivolous, afterthought defences.

14. It is submitted that the respondent firm transferred ₹1.30 crores to the applicants via bank transactions dated 12.06.2015 and 13.06.2015, Criminal Misc. Application No.862 of 2019-----Ram Kumar Jaiswal & others vs M/s Ashish Associates 3 Ashish Naithani J. which were duly acknowledged. The impugned cheque was issued to repay this liability. Upon its dishonour—first on 09.05.2016 and again on 26.05.2016—the respondent served a statutory notice dated

24.06.2016 in compliance with Section 138 of the Negotiable Instruments Act.

15. The respondent contends the applicants’ reply dated

04.07.2016 was evasive and fabricated. The allegation that the cheque was misused by the firm’s manager, Om Prakash, in conspiracy with partner Pawan Jaiswal, is denied as baseless. It is asserted that the cheque was signed and issued in the normal course of business.

16. While not disputing that Mr. Mahesh Pokhriyal held a 5% stake in M/s Mahakaal Traders, it is argued that this was a nominal interest. He filed the complaint solely in his capacity as authorised representative of M/s Ashish Associates, a distinct legal entity, and there is no conflict of interest affecting the maintainability of the complaint.

17. On the issue of limitation, it is submitted that a cheque may be presented multiple times during its validity, and the limitation period under Section 138 of the NI Act is calculated from the date of the last dishonour. Since the cheque was last dishonoured on 26.05.2016, the notice dated 24.06.2016 was well within the prescribed 30-day window.

18. As respondent’s authority extend financial accommodation, it is submitted that the transaction was commercial in nature. The absence of a moneylending license or NBFC registration is irrelevant for the purposes of Section 138 NI Act, provided the underlying debt is not tainted by illegality and the cheque was issued in discharge thereof.

19. Finally, it is contended that the applicants evaded service for nearly three years, causing inordinate delay. The summoning order Criminal Misc. Application No.862 of 2019-----Ram Kumar Jaiswal & others vs M/s Ashish Associates 4 Ashish Naithani J. dated 07.09.2016 was passed after due satisfaction of the requirements under Section 138 of the NI Act. The complaint and summoning order disclose a prima facie case, and no exceptional ground has been made out to invoke this Court’s inherent jurisdiction.

21. Heard learned counsel for the parties and perused the records. The present application under Section 482 CrPC seeks quashing of the criminal proceedings arising out of Complaint Case No. 586 of 2016 pending before the Judicial Magistrate, Rishikesh, District Dehradun, including the summoning order dated 07.09.2016.

22. The applicants primarily contend that the cheque dated 06.05.2016 for ₹1.30 crores was not issued in discharge of a legally enforceable debt but was misused by internal members of the firm in collusion with the respondent’s representative. It is asserted that the cheque was pre- signed and entrusted to the manager, Om Prakash, for operational purposes and was misappropriated without consent. It is further alleged that Mr. Mahesh Pokhriyal, the complainant’s representative, being a 5% partner in the applicant firm, was disqualified from initiating the complaint.

23. The applicants also claim the statutory notice under Section 138 of the NI Act was barred by limitation. They compute the 30-day period from the first dishonour on 09.05.2016, contending that the notice dated

24.06.2016 was beyond time. Additionally, it is urged that the respondent firm lacked a valid license under the U.P. Money Lenders Act or NBFC registration, and hence, the debt was not legally enforceable.

24. Conversely, the respondent submits that ₹1.30 crores were transferred via banking channels on 12.06.2015 and 13.06.2015 and that the cheque was issued in part repayment. Upon its dishonour on

09.05.2016 and again on 26.05.2016, a statutory notice dated Criminal Misc. Application No.862 of 2019-----Ram Kumar Jaiswal & others vs M/s Ashish Associates 5 Ashish Naithani J.

24.06.2016 was issued. The respondent asserts that all statutory requirements under Section 138 of the NI Act have been duly fulfilled and that Mr. Pokhriyal is prosecuting the complaint in his capacity as representative of M/s Ashish Associates, a separate legal entity.

25. The law governing quashing under Section 482 CrPC is well- settled. In Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra, (2021) 6 SCC 516, the Hon’ble Supreme Court held that criminal proceedings may be quashed only where the complaint, taken at face value, discloses no offence or where continuation of proceedings would result in manifest injustice. The High Court is not to weigh the defence or conduct a mini-trial at this stage.

26. Tested on that standard, this Court finds that the complaint discloses a cognisable offence. The alleged transaction of ₹1.30 crores through banking channels, the admitted issuance and dishonour of the cheque, and the statutory notice issued thereafter, all constitute the necessary ingredients under Section 138 of the NI Act.

27. On the issue of limitation, the Supreme Court in Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., (2016) 10 SCC 458, held that a cheque may be presented multiple times during its validity and that the cause of action arises on the last dishonour. Since the cheque was last dishonoured on 26.05.2016, and the notice was issued on 24.06.2016, it is within the prescribed 30-day limit.

28. The question of Mr. Pokhriyal’s association with the applicant firm cannot be conclusively resolved at this stage. The complaint is filed by M/s Ashish Associates through its authorised representative. Any issue of disqualification or conflict of interest is a matter of evidence to be addressed during the trial. Criminal Misc. Application No.862 of 2019-----Ram Kumar Jaiswal & others vs M/s Ashish Associates 6 Ashish Naithani J.

29. The plea that rogue employees or partners misused the cheque also involves disputed facts. The applicants admit to having signed blank cheques for operational use. As held by the Hon’ble Supreme Court in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, liability under Section 138 of the NI Act arises when a cheque is drawn by the account holder and is dishonoured, and the payment is not made within the stipulated 15 days of receipt of the statutory notice. Whether the cheque was misused is a matter of defence, turning on evidence, and cannot be conclusively determined at the threshold

30. The argument regarding the respondent’s lack of registration as a lender may have relevance in civil proceedings but is not determinative for Section 138 of the NI Act. No material has been placed on record to show that the debt is prima facie illegal or unenforceable.

31. This Court reiterates, as held in Rajesh Agarwal v. State and Another, 2010 SCC OnLine Del 274, that a disputed claim as to the source, nature, or legality of the underlying debt does not furnish a valid ground for quashing a complaint under Section 138 of the Negotiable Instruments Act at the threshold, unless such facts are incontrovertible on record.

32. It is also notable that the applicants' delayed appearance before the trial court for nearly three years, despite repeated service efforts, and surrendered only on 20.04.2019. This delay weakens the bona fides of the present application. ORDER This Court finds no apparent legal infirmity in the complaint or the summoning order. The statutory ingredients of Section 138 of the Negotiable Instruments Act, 1881, are clearly pleaded, and the matter raises factual controversies that require adjudication during trial. Criminal Misc. Application No.862 of 2019-----Ram Kumar Jaiswal & others vs M/s Ashish Associates 7 Ashish Naithani J. No exceptional ground has been made out to warrant interference in the exercise of inherent jurisdiction under Section 482 CrPC. Accordingly, the Criminal Miscellaneous Application stands dismissed. Dated:15.05.2025 NR/ (Ashish Naithani, J.) Criminal Misc. Application No.862 of 2019-----Ram Kumar Jaiswal & others vs M/s Ashish Associates 8 Ashish Naithani J.