HIGH COURT OF UTTARAKHAND AT NAINITAL v. Mr. Tapan Singh, Advocates for the

confirmed that stop payment instructions had been carried 1 out and the said cheques had been rendered incapable of encashment. The bank further debited the requisite charges for such stop-payment from the account of the applicant. It was alleged by the applicant that the said cheques, which had been reported lost, were in fact stolen and misused by the respondent no.2 after leaving employment. On the basis of such alleged misuse, the respondent no.2 instituted the complaint, alleging that on account of cordial relations between the parties, the applicant had issued a cheque bearing no. 724484 dated

05.12.2016 for a sum of ₹5,00,000/-in his favour. The cheque, when presented, was dishonoured on 15.12.2016 the endorsement “insufficient funds.”On complaint so filed, learned Magistrate cognizance and summoned the applicant to face trial by order dated 13.02.2017. Non-bailable warrants were thereafter issued, and the applicant was arrested on

14.06.2019. He was later released on bail. Hence, this C482 applicant.

3. The learned counsel for the applicant submits that the entire proceedings amount to a gross abuse of the process of law. The cheque in question had already been reported lost on 12.07.2016, stop-payment instructions were duly issued by the bank on that very date. He submits that once payment had been stopped, the cheque could never have been validly presented in December 2016, nor could it have been dishonoured on the ground of “insufficient funds.” It is argued by the learned counsel for the applicant that the respondent no.2, 2 in collusion with certain bank officials, misused the cheque which was already the subject of stop-payment instructions. The dishonour memo indicating “insufficient funds” is contrary to the contemporaneous record and casts serious doubt on the bona fides of the complaint.

4. The learned counsel for the applicant placed reliance upon the judgment of the Hon’ble Supreme Court in Raj Kumar Khurana v. State (NCT of Delhi), (2009) 6 SCC 72, wherein it was held that where a cheque has been reported lost and stop-payment instructions were given prior to its alleged issuance, there is no “issuance” in the eye of law and, therefore, no offence under Section 138 NI Act is made out. The learned counsel for the applicant contends that the present case is in alignment with the above judgment, as the cheque was rendered incapable of encashment much prior to the alleged date of presentation, and subsequent misuse by complainant cannot give rise to criminal liability.

5. The learned counsel for the applicant further submits that the summoning order dated 13.02.2017 itself is vitiated. The respondent no.2/complainant failed to comply with the mandatory requirement under Section 204(2) Cr.P.C., namely, to file a list of prosecution witnesses along with the complaint. In the absence of such compliance, issuance of process against applicant was illegal. It is further contended that no offence under Section 138 NI Act is made out, as one of the essential ingredients — dishonour of the cheque on account of insufficiency of funds against a legally 3 enforceable debt or liability — is absent in the present case. The cheque was already reported lost and stopped for payment, and therefore its presentation and dishonour cannot give rise to criminal liability under Section 138. It is also submitted that the complaint itself is premature, as the respondent no.2/complainant has failed to prove the date of service of the statutory notice dated 20.12.2016 upon the applicant. No acknowledgment due card or any other proof of service has been filed.

6. The learned counsel for the applicant also placed reliance on the judgment of the Hon’ble Supreme Court in Yogendra Pratap Singh v. Savitri Pandey, (2014) 10 SCC 713, which categorically holds that a complaint filed prior to expiry of the statutory 15-day period is premature and not maintainable. In the present case, in absence of proof of service, it is clear that no valid cause of action had accrued on the date of filing of the complaint, rendering the proceedings without jurisdiction. It is also submitted by the learned counsel that the complaint has been filed with mala fide intention to harass the applicant.

7. The learned counsel for the applicant by means of his supplementary affidavit has further submitted that the respondent no. 2 has failed to disclose in his complaint the specific date on which the statutory notice dated 20.12.2016 was served upon the applicant. He submits that no acknowledgment due card or any other proof of service has been brought on record, thereby 4 creating serious doubt as to whether the notice was ever served within the statutory period. Therefore, in absence of such proof, the complaint filed on 16.01.2017 is clearly premature, as the statutory period of 15 days for making payment had not even expired.

8. Per contra, the learned counsel for the State submits that the learned Chief Judicial Magistrate has rightly taken cognizance of the matter. It is submitted that the Magistrate, after perusal of the complaint, annexures, and statutory notice, found that a prima facie case under Section 138 NI Act was made out and accordingly summoned the applicant. The learned counsel emphasizes that taking cognizance at this stage involves only a prima facie examination of the material and does not constitute a detailed inquiry into disputed facts, which are to be decided at trial.

9. The learned counsel for the respondent no.2 submits the present criminal miscellaneous application under Section 482 Cr.P.C. is not maintainable as the applicant has an alternative remedy by way of revision before the Sessions Judge, which has not been availed. The learned counsel further contends that there was never any employer–employee relationship between the parties, as alleged. In fact, the relationship was of an implied partnership for the execution of certain work relating to the 33 KV Line at Bhowali, Nainital Road, in the course of which the applicant was liable to pay dues towards work done, vehicle rent (Chota Hathi), gas cutter, 5 and other equipment. For discharge of such dues, the applicant himself issued the cheque in question. Upon dishonour of the cheque, a legal demand notice was duly issued and served; as the applicant failed to make payment within the statutory period, a valid complaint under Section 138 NI Act was instituted within limitation.

10. It is further argued by the learned counsel for the respondent no. 2 that the signature on the cheque has been admitted by the applicant, thereby attracting the statutory presumption under Section 139 NI Act that the cheque was issued towards a legally enforceable debt or liability. The burden of rebutting the said presumption lies upon the applicant, which he has failed to discharge. Allegations that the cheque was issued under pressure or for ulterior motives are frivolous and misconceived, being an afterthought to evade lawful liability.

11. The learned counsel for the respondent no.2 also points out that the demand notice was sent through registered post at the correct address and hence due service upon the applicant must be presumed. The learned counsel also placed reliance on the judgment of Hon’ble Apex Court in Kishore Sharma v. Sachin Dubey (2019), in criminal revision no. 1326 of 2019. This judgment establishes that disputes regarding the service of statutory notice or remarks on the cheque return memo are factual issues which must be adjudicated during the trial.

12. The learned counsel for the respondent no.2 further placed reliance on M/s Ajeet Seeds Ltd. v. K. 6 Gopala Krishnaiah (2014) 12 SCC 685 where the hon'ble Apex Court clarified that even if a complaint does not explicitly aver the service of statutory notice, such technical or procedural omissions do not render the complaint invalid. These matters are also triable issues and cannot justify pre-trial quashing. Therefore, the learned counsel for the respondent no.2 submits that the Magistrate has rightly found a prima facie case under Section 138 NI Act and has issued summons after due consideration.

13. The learned counsel for the applicant by means of his rejoinder affidavit submits that the cheque in question was never issued in discharge of any legally enforceable debt or liability. It is specifically contended that the said cheque had been lost, and immediately thereafter the applicant submitted an application to his bank on 12.07.2016 requesting for stop payment of the lost cheque. This fact itself demonstrates that the cheque was not available with the applicant after the said date.

14. It is further submitted by the learned counsel for the applicant that the respondent no. 2 has misused the cheque of the applicant by presenting it with the date

05.12.2016, which is several months after the applicant had already lodged a stop payment request. The sequence of events clearly establishes the cheque was misappropriated and misused by the respondent no. 2 in order to create a false liability against the applicant.

15. The learned counsel for the respondent no. 2 7 by means of his supplementary counter affidavit submits that the statutory demand notice dated 20.12.2016 was duly dispatched to the applicant through registered post at his correct address. It is further submitted that when the postman approached the applicant’s residence, applicant was not personally available at home, and the postman accordingly intimated the person present at the applicant’s house regarding the registered article. The learned counsel further points out the postal endorsement on the envelope clearly records the attempts made on 24.12.2016 and again on 26.12.2016. Despite due intimation, the notice could not be served upon the applicant, and the envelope was ultimately returned to the counsel of the respondent no. 2 with the endorsement of non-service. It is, therefore, contended that the respondent duly complied with the requirement of law by issuing the demand notice within the statutory period, and the applicant cannot take advantage of his own non- availability to avoid service of notice.

16. Having heard learned counsel for the parties and upon perusal of the material on record, this Court finds that the continuation of proceedings against the applicant would be wholly unwarranted in law. It stands admitted on record that the applicant had lodged a stop- payment request with his banker on 12.07.2016 in respect of the cheques in question, much prior to the alleged date of issuance i.e. 05.12.2016. The bank’s contemporaneous report dated 15.07.2016 confirms that the stop-payment instructions had been acted upon and charges debited. In 8 such circumstances, the subsequent presentation of the cheque in December 2016, resulting in dishonour on the ground of “insufficient funds,” cannot be treated as valid dishonour attracting the penal consequences of Section 138 NI Act. The ratio of Raj Kumar Khurana v. State (NCT of Delhi), (2009) 6 SCC 72, squarely applies. Once the cheque had been rendered incapable of encashment before the alleged date of issue, there is in the eye of law no “issuance,” and therefore no offence under Section 138 can be said to be made out.

17. This Court also finds merit in the contention that the complaint is premature and not maintainable. The respondent alleged dispatch of statutory notice dated

20.12.2016, but no proof of service such as acknowledgment due card or postal receipt showing actual delivery has been brought on record. Even if the date of dispatch is accepted, the 15-day statutory period for making payment would have expired only after

03.02.2017, and cause of action would have arisen thereafter. However, the complaint was instituted on

16.01.2017, much prior to accrual of cause of action. The law laid down in Yogendra Pratap Singh v. Savitri Pandey, (2014) 10 SCC 713, clearly holds that a complaint filed prior to expiry of the 15-day period is premature and liable to be dismissed. The present complaint, having been instituted before accrual of cause of action, is thus legally unsustainable. The legal position with regard to dishonor of a cheque, in circumstances where stop-payment instructions had already been issued, 9 has been clearly laid down in Raj Kukmar Khurana (Supra), in the following terms: “36. A complaint filed before the expiry of 15 days from the date on which notice has been served on drawer/accused cannot be said to disclose the cause of action in terms of clause (c) of the proviso to Section 138 and upon such complaint which does not disclose the cause of action the court is not competent to take cognizance. A conjoint reading of Section 138, which defines as to when and under what circumstances an offence can be said to have been committed, with Section 142(b) of the NI Act, that reiterates the position of the point of time when the cause of action has arisen, leaves no manner of doubt that no offence can be said to have been committed unless and until the period of 15 days, as prescribed under clause (c) of the proviso to Section 138, has, in fact, elapsed. Therefore, a court is barred in law from taking cognizance of such complaint. It is not open to the court to take cognizance of such a complaint merely because on the date of consideration or taking cognizance thereof a period of 15 days from the date on which the notice has been served on the drawer/accused has elapsed. We have no doubt that all the five essential features of Section 138 of the NI Act, as noted in the judgment of this Court in Kusum Ingots & Alloys Ltd. [Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd., (2000) 2 SCC 745 : 2000 SCC (Cri) 546 : AIR 2000 SC 954] and which we have approved, must be satisfied for a complaint to be filed under Section 138. If the period prescribed in clause (c) of the proviso to Section 138 has not expired, there is no commission of an offence nor accrual of cause of action for filing of complaint under Section 138 of the NI Act.”

18. The reliance placed by the respondent on presumptions under Section 139 NI Act is misconceived. The presumption arises only when a cheque is shown to have been issued in discharge of a legally enforceable debt or liability. In the present case, the admitted and undisputed fact of stop-payment prior to the alleged date of issuance, coupled with the absence of proof regarding service of statutory notice, negates the foundational requirements of Section 138. Consequently, presumption under Section 139 cannot be invoked to the prejudice of the applicant. 10

19. In light of the above discussion, this Court is of the considered opinion that allowing the proceedings to continue would amount to abuse of process of law. The complaint is suffers both on account of absence of a valid cause of action and failure to satisfy the essential ingredients of Section 138 NI Act. The principles laid down in Raj Kumar Khurana (supra) and Yogendra Pratap Singh (supra) fully support the case of the applicant. The contrary reliance by the respondent on Kishore Sharma v. Sachin Dubey (supra) and M/s Ajeet Seeds Ltd. v. K. Gopala Krishnaiah (supra) distinguishable, since those decisions dealt with disputed factual issues, whereas here, the admitted record itself demonstrates that no offence is made out.

20. Accordingly, criminal miscellaneous application under Section 482 Cr.P.C. deserves to be allowed. Allowed accordingly. R.Dang (Pankaj Purohit, J.) 26.09.2025 11