The Supreme Court set aside a Patna High Court order that quashed a cheque dishonour complaint, holding that the High Court wrongly conducted a “roving enquiry” at the pre-trial stage. The apex court restored the complaint, saying a prima facie case under Section 138 of the Negotiable Instruments Act was made out.
New Delhi: The Supreme Court on Friday set aside a Patna High Court order which had quashed criminal proceedings in a cheque dishonour case, holding that the High Court committed a serious error by conducting a detailed and unnecessary examination of facts at a very early stage of the case.
A Bench comprising Justices Manoj Misra and Ujjal Bhuyan observed that the High Court went beyond its limited powers while exercising jurisdiction under Section 482 of the Code of Criminal Procedure (CrPC).
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The apex court said that the High Court wrongly tried to examine whether the cheque was issued towards repayment of a debt or liability, which is a matter to be decided during trial and not at the pre-trial stage.
Referring to earlier Supreme Court judgments and the provisions of the Negotiable Instruments Act, the Bench clearly stated,
“We are of the considered view that the high court committed an error by conducting a roving enquiry, at the pre-trial stage, as regards the cheque being issued for the discharge of debt or liability”.
The Supreme Court noted that the basic requirements of an offence under Section 138 of the Negotiable Instruments Act were clearly made out from the complaint itself.
Therefore, there was no legal basis for quashing either the summoning order or the complaint at such an early stage of the proceedings.
The Bench further observed that Section 138 of the Act deals with cases where a cheque is dishonoured due to insufficient funds or other related reasons in the drawer’s bank account.
The Court emphasised that once the complaint discloses all the essential ingredients of the offence, the matter must proceed to trial.
The verdict was delivered in an appeal filed against a June 2019 order of the Patna High Court, which had quashed criminal proceedings arising out of a cheque dishonour complaint. In the present case, the appellant had filed a complaint alleging that a cheque worth Rs 20 lakh, issued by the accused towards the delivery of goods, was dishonoured.
After examining the complaint, the magistrate had taken cognisance of the offence and issued summons to the accused under Section 138 of the Negotiable Instruments Act. Challenging this summoning order, the accused approached the Patna High Court.
The High Court quashed the proceedings on the ground that the cheque was not issued for the discharge, either wholly or partly, of any debt or other legally enforceable liability. However, the Supreme Court disagreed with this approach.
While dealing with the appeal, the apex court reiterated the settled legal position and observed,
“The law is well settled that while considering a prayer to quash the criminal complaint and the consequential proceedings at the threshold, the court is required to examine whether the allegations made in the complaint along with materials in support thereof make out a prima facie case to proceed against the accused or not.”
The Bench further clarified that although courts can interfere in exceptional cases, such power must be exercised sparingly.
It observed that courts may take note of special circumstances only where continuing the proceedings would clearly amount to misuse of the legal process or where intervention is required to secure justice.
Applying these principles to the present case, the Supreme Court found that the complaint clearly mentioned all the necessary elements required to constitute an offence under Section 138 of the Negotiable Instruments Act. Therefore, the High Court should not have interfered at the pre-trial stage.
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Accordingly, the Supreme Court allowed the appeal, set aside the Patna High Court’s order, and restored the criminal complaint to the file of the concerned magistrate for further proceedings in accordance with law.
The apex court, however, clarified that its decision was limited to the issue of maintainability and did not touch upon the merits of the case.
It specifically stated that it had not expressed any opinion on whether the cheque was actually issued for repayment of any debt or liability, leaving that question to be decided during trial.
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