State of Uttarakhand and Anr v. Mr. Lokendra Dobhal, learned counsel for the

Judgment

1. The present application under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, has been filed by the Applicant, Sunil Singh, seeking quashing of the order dated 16.01.2023 passed by the learned Chief Judicial Magistrate, New Tehri, District Tehri Garhwal, whereby cognizance was taken against the Applicant under Section 138 of the Negotiable Instruments Act, 1881, and summons were issued in Criminal Case No. 07 of 2023 titled Rishi Ganga Nidhi Ltd. v. Sunil Singh. The proceedings arise from an alleged cheque bounce transaction involving the sum of Rs. 4,00,000.

2. As per the pleadings, the Applicant had obtained a loan of Rs. 7,50,000 in May 2018 from Rishi Ganga Nidhi Ltd., a registered non- banking financial company (NBFC), operating under the Companies Act, 2013, and Nidhi Rules, 2014. The said loan was disbursed from the Ghansali branch of the company. The Applicant claims to have made regular repayments by depositing Rs. 1500 per day over an extended period. It is stated that a total of Rs. 7,83,750 was paid by February 2023. However, according to the Opposite Party, as of Criminal Misc. Application No. 248 of 2024, Sunil Singh Vs State of Uttarakhand and Anr 1 Ashish Naithani J. November 2022, only Rs. 7,76,750 stood paid against a total liability of Rs. 11,76,750, leaving an outstanding balance of Rs. 4,00,000.

3. To address the remaining liability, the Applicant allegedly issued Cheque No. 677650 dated 01.12.2022, drawn on Canara Bank, Ghansali Branch, in favour of the complainant company. The cheque was presented on the same date and was returned dishonoured on

03.12.2022 with the remark “funds insufficient.” Thereafter, a demand notice under Section 138 of the NI Act was issued on 13.12.2022 and served on the Applicant. When no payment was made within the statutory period, the complainant instituted the present criminal complaint on January 9, 2023, leading to the order of cognisance and summons dated January 16, 2023.

4. In the course of the proceedings, the complainant’s authorised

representative, Shri Kedar Singh Negi, was examined as P.W.1 and cross-examined. The Applicant also filed his affidavit of evidence and produced account statements to show that further payments were made even after the cheque’s dishonour, including deposits on 10.01.2023,

11.01.2023, 04.02.2023, 13.02.2023, and 24.02.2023. It is claimed that these amounts, including deposits made in the name of the Applicant’s mother, were not disclosed by the complainant. The Applicant’s contention is that the cheque was given as security, and not in discharge of a legally enforceable debt, thereby rendering the very substratum of the offence under Section 138 of the NI Act unsustainable.

5. Learned counsel for the Applicant submits that the entire loan account statement, if correctly considered, reveals that substantial repayment had already been made prior to and even after the date on which the cheque in question was issued and dishonoured. It is contended that these payments, which include amounts credited from both the Applicant’s own account and the savings account of his Criminal Misc. Application No. 248 of 2024, Sunil Singh Vs State of Uttarakhand and Anr 2 Ashish Naithani J. mother, were material and relevant to the issue of liability, but were deliberately suppressed by the complainant in his evidence.

6. It is further submitted that the cheque in question was issued as a security instrument and not towards discharge of an existing liability. Reliance is placed on the fact the complainant’s own representative, in his cross-examination, admitted that the loan application did not mention the rate of interest and that the proceedings regarding loan disbursement and recovery were not conducted by him, but by the branch manager. It is argued that the admission by the complainant regarding absence of clarity on the amount due and the fact that the cheque was presented prematurely, during the middle of the loan tenure, reflects absence of a crystallised liability. Therefore, the cheque does not qualify as having been issued against a legally enforceable debt at the time of its dishonour.

7. Learned counsel contends that in view of the part-payments made after the dishonour but before filing of the complaint, the complainant was obliged to make endorsement of such payments on the cheque as per Section 56 of the NI Act. Failure to do so, it is argued, vitiates the proceedings. It is also urged that the order taking cognizance has been passed mechanically without compliance with Section 202 CrPC, and that no inquiry or satisfaction was recorded by the Magistrate in the absence of material justifying issuance of summons.

8. Learned counsel appearing for the Respondent No. 2, the complainant company, opposes the application and submits that the present petition is a belated attempt to stall proceedings at the stage when the matter is ripe for final hearing. It is submitted that the Applicant participated the proceedings, cross-examined complainant, filed his evidence and underwent examination under Section 313 CrPC. The matter is currently at the stage of final Criminal Misc. Application No. 248 of 2024, Sunil Singh Vs State of Uttarakhand and Anr 3 Ashish Naithani J. arguments, and the present application has been filed only to delay the inevitable conclusion of trial.

9. It is further contended that the Applicant’s liability to the tune of Rs. 4,00,000 is duly acknowledged and admitted. The cheque issued on

01.12.2022 was presented on the same date and dishonoured for want of sufficient funds. Statutory notice was duly served, and no payment was made within the period contemplated under the NI Act. The complainant asserts that the documents supporting the complaint were annexed at the initial stage and that the Magistrate was well within jurisdiction to take cognizance based on the materials produced under Section 200 CrPC.

10. Learned counsel submits that the plea regarding cheque being issued as security is an afterthought and devoid of merit. It is argued that the question whether the cheque was issued in discharge of a debt or otherwise involves appreciation of evidence and cannot be determined in a petition under Section 528 BNSS. The complainant further denies any suppression of payments or manipulation of accounts and maintains that the statements relied upon by the Applicant are disputed facts that require trial. It is submitted that quashing at this stage would be contrary to law and would set a dangerous precedent in cheque bounce cases, particularly when the proceedings have reached an advanced stage.

12. Heard learned counsel for the Parties and Perused the records. The principal relief sought in this application is for quashing of the summoning order dated 16.01.2023 and all consequential proceedings arising out of Criminal Case No. 07 of 2023, instituted under Section 138 of the Negotiable Instruments Act, 1881.

13. The law governing quashing of criminal complaints under Section 482 CrPC, now re-enacted in Section 528 of the BNSS, is well settled. The jurisdiction is to be exercised sparingly and with caution, Criminal Misc. Application No. 248 of 2024, Sunil Singh Vs State of Uttarakhand and Anr 4 Ashish Naithani J. particularly in matters involving cheque dishonour under Section 138 of the NI Act, where the offence is founded upon presumptions of law under Sections 118 and 139. Whether the cheque was issued in discharge of a legally enforceable debt or liability, whether it was given as security, whether subsequent payments dilute such liability, and whether there has been compliance with Sections 138 and 142, are all matters that fall squarely within the domain of the Trial Court.

14. In the present case, the complaint has proceeded beyond the initial stages. The Trial Court has already recorded the evidence of both sides. The Applicant has participated in the trial and has also filed his affidavit of evidence. The stage is now set for final adjudication. At such an advanced stage, to invoke inherent jurisdiction to interdict the proceedings would amount to short-circuiting the trial and engaging in a mini-trial at the quashing stage, which the law disallows.

15. It is also significant that the Applicant has not disputed issuance of the cheque or its dishonour. His primary defence that the cheque was issued as a security and that part-payments made thereafter dilute the liability are contentions that must be adjudicated on the basis of evidence.

16. The submission that the Magistrate did not conduct an inquiry under Section 202 CrPC is also of limited relevance in view of the fact that the complaint was supported by documentary evidence and the complainant was examined on oath. It cannot be said that there was no material before the Magistrate for taking cognizance.

17. This Court is therefore not inclined to exercise its inherent jurisdiction at this belated stage, particularly when the matter has matured for final decision before the Trial Court. ORDER Criminal Misc. Application No. 248 of 2024, Sunil Singh Vs State of Uttarakhand and Anr 5 Ashish Naithani J. In view of the foregoing discussion, the present application under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, is dismissed. The stay granted earlier by this Court shall stand vacated. The learned Trial Court shall proceed to decide Criminal Case No. 07 of 2023, Rishi Ganga Nidhi Ltd. v. Sunil Singh, in accordance with law, without being influenced by any observation made in this order. Dated:16.07.2025 NR/ (Ashish Naithani J.) Criminal Misc. Application No. 248 of 2024, Sunil Singh Vs State of Uttarakhand and Anr 6 Ashish Naithani J.