Shriram Finance Limited v. Janki Sharan) under Section

1. Heard Sri V.D. Yadav, learned counsel for the applicant as well as Sri Vikas Sharma, learned State Law Officer for the State.

2. This is an application under Section 528 of BNSS preferred by the applicant for quashing the criminal proceedings including summoning order dated 21.7.2023 passed by learned Judicial Magistrate, Chitrakoot in Criminal Complaint Case No. 2845 of 2023 (Shriram Finance Limited Vs. Janki Sharan) under Section 138 N.I. Act, Police Station-Kotwali Karvi, District Chitrakoot and further proceedings thereof pending in the Court of learned Judicial Magistrate-IInd, Chitrakoot.

3. Learned counsel for the applicant has submitted that a complaint stood lodged by the O.P. No.2 against the applicant under Section 138 of N.I. Act on 22.05.2023 with an allegation that with respect to discharge of a liability, the applicant had drawn a cheque bearing number "772384" of an amount Rs.10,00,000/- dated 20.03.2023, which on presentation in the bank on 20.03..2023 came to be dishonoured on 04.04.2023 followed by a statutory demand notice issued on 25.04.2023, which is stated to have been served upon the O.P. No.2 on 01.05.2023 and the complaint stood lodged on 22.05.2023 and thereafter applicant came to be summoned under Section 138 of N.I. Act on 21.07.2023. Learned counsel for the applicant has submitted that the summoning order cannot be sustained for more than one reason. Firstly, the cheque which was with O.P. No.2 was security cheque which does not answer the description of the debt and liability under Section 138 of the N.I. Act. Secondly, all the payment had been made and there was nothing due, as they are supported with documents and thirdly, the statutory demand notice had not been issued within 15 days from the date of dishonour and the complaint was also beyond permissible period. 2 NA528 No. 31180 of 2025

4. Learned State Law Officer on the other hand submits that once the cheque stood drawn and it has been dishonoured, then the presumption under Section 139 of N.I. Act is there.

5. I have heard submissions so made across the Bar and perused the record carefully.

6. Apparently, with respect to dishonour of a cheque dated 20.03.2023 of an amount of Rs.10,00,000/- bearing number "772384" on 04.04.2023 and a statutory demand notice came to be issued on 25.04.2023 and thereafter the complaint stood lodged on 22.05.2023. So far as the first objection so raised by learned counsel for the applicant that the said cheque was security cheque and it does not answer the description of debt and liability is concerned, the same is not convincible, particularly when it is a subject matter of trial. In M/s Womb Laboratories Private Limited Vs. Vijay Ahuja & another, (2022) 18 SCC 631, the Hon'ble Apex Court had the occasion to consider the issue as to whether the determination can be done at the stage of summoning when the allegation that the cheque was a security cheque is concerned. The Hon'ble Apex Court 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."

7. The aforesaid law has been followed subsequently in Sunil Todi and others vs. State of Gujarat, (2022) 16 SCC 762.

8. As regards the second submission of the learned counsel for the applicant that the entire payment stood made, the same is also not liable to be accepted at this stage, particularly when these are the matter of defences and evidence is to be led with regard to the payment so made, which is a subject matter of trial. With respect to the argument of the learned counsel for the applicant that the statutory demand notice was not issued within 15 days is also not acceptable for the simple reason that in view of the provisions contained under Section 138 of N.I. Act, a statutory demand notice is to be issued within 30 days from the date of the 3 NA528 No. 31180 of 2025 information of dishonour of the cheque and the date of the dishonour of the cheque is 04.04.2023 and the statutory demand notice came to be issued well within time on 25.04.2023 and further so far as the issue relatable to lodging of the complaint is concerned, the same is also within the time period. With respect to another submission of the learned counsel for the applicant that the summoning order is unreasoned is concerned, a perusal of the same at page-62 itself shows that the same is a speaking order taking into consideration all the relevant facts. Moreover, the presumption under Sect6ion 139 of the N.I. Act is there. As regards the submission of learned counsel for the applicant that the application for discharge so preferred by the applicant has not been decided, suffice it to say that the discharge application under N.I. Act is not maintainable, as held in In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act, 1881 (2021) 16 SCC 116.

9. Accordingly, interference is declined. The application is disposed of leaving it open to the applicant to contest the trial before the court below while taking all the legal and factual grounds and this Court has no reason to disbelieve that the court below shall consider the same in correct perspective. Order Date :- 23.8.2025 N.S.Rathour (Vikas Budhwar, J) NIPENDRA SINGH RATHOUR High Court of Judicature at Allahabad

1. Heard Sri V.D. Yadav, learned counsel for the applicant as well as Sri Vikas Sharma, learned State Law Officer for the State.

2. This is an application under Section 528 of BNSS preferred by the applicant for quashing the criminal proceedings including summoning order dated 21.7.2023 passed by learned Judicial Magistrate, Chitrakoot in Criminal Complaint Case No. 2845 of 2023 (Shriram Finance Limited Vs. Janki Sharan) under Section 138 N.I. Act, Police Station-Kotwali Karvi, District Chitrakoot and further proceedings thereof pending in the Court of learned Judicial Magistrate-IInd, Chitrakoot.

3. Learned counsel for the applicant has submitted that a complaint stood lodged by the O.P. No.2 against the applicant under Section 138 of N.I. Act on 22.05.2023 with an allegation that with respect to discharge of a liability, the applicant had drawn a cheque bearing number "772384" of an amount Rs.10,00,000/- dated 20.03.2023, which on presentation in the bank on 20.03..2023 came to be dishonoured on 04.04.2023 followed by a statutory demand notice issued on 25.04.2023, which is stated to have been served upon the O.P. No.2 on 01.05.2023 and the complaint stood lodged on 22.05.2023 and thereafter applicant came to be summoned under Section 138 of N.I. Act on 21.07.2023. Learned counsel for the applicant has submitted that the summoning order cannot be sustained for more than one reason. Firstly, the cheque which was with O.P. No.2 was security cheque which does not answer the description of the debt and liability under Section 138 of the N.I. Act. Secondly, all the payment had been made and there was nothing due, as they are supported with documents and thirdly, the statutory demand notice had not been issued within 15 days from the date of dishonour and the complaint was also beyond permissible period. 2 NA528 No. 31180 of 2025

4. Learned State Law Officer on the other hand submits that once the cheque stood drawn and it has been dishonoured, then the presumption under Section 139 of N.I. Act is there.

5. I have heard submissions so made across the Bar and perused the record carefully.

6. Apparently, with respect to dishonour of a cheque dated 20.03.2023 of an amount of Rs.10,00,000/- bearing number "772384" on 04.04.2023 and a statutory demand notice came to be issued on 25.04.2023 and thereafter the complaint stood lodged on 22.05.2023. So far as the first objection so raised by learned counsel for the applicant that the said cheque was security cheque and it does not answer the description of debt and liability is concerned, the same is not convincible, particularly when it is a subject matter of trial. In M/s Womb Laboratories Private Limited Vs. Vijay Ahuja & another, (2022) 18 SCC 631, the Hon'ble Apex Court had the occasion to consider the issue as to whether the determination can be done at the stage of summoning when the allegation that the cheque was a security cheque is concerned. The Hon'ble Apex Court 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."

7. The aforesaid law has been followed subsequently in Sunil Todi and others vs. State of Gujarat, (2022) 16 SCC 762.

8. As regards the second submission of the learned counsel for the applicant that the entire payment stood made, the same is also not liable to be accepted at this stage, particularly when these are the matter of defences and evidence is to be led with regard to the payment so made, which is a subject matter of trial. With respect to the argument of the learned counsel for the applicant that the statutory demand notice was not issued within 15 days is also not acceptable for the simple reason that in view of the provisions contained under Section 138 of N.I. Act, a statutory demand notice is to be issued within 30 days from the date of the 3 NA528 No. 31180 of 2025 information of dishonour of the cheque and the date of the dishonour of the cheque is 04.04.2023 and the statutory demand notice came to be issued well within time on 25.04.2023 and further so far as the issue relatable to lodging of the complaint is concerned, the same is also within the time period. With respect to another submission of the learned counsel for the applicant that the summoning order is unreasoned is concerned, a perusal of the same at page-62 itself shows that the same is a speaking order taking into consideration all the relevant facts. Moreover, the presumption under Sect6ion 139 of the N.I. Act is there. As regards the submission of learned counsel for the applicant that the application for discharge so preferred by the applicant has not been decided, suffice it to say that the discharge application under N.I. Act is not maintainable, as held in In Re: Expeditious Trial of Cases Under Section 138 of N.I. Act, 1881 (2021) 16 SCC 116.

9. Accordingly, interference is declined. The application is disposed of leaving it open to the applicant to contest the trial before the court below while taking all the legal and factual grounds and this Court has no reason to disbelieve that the court below shall consider the same in correct perspective. Order Date :- 23.8.2025 N.S.Rathour (Vikas Budhwar, J) NIPENDRA SINGH RATHOUR High Court of Judicature at Allahabad