Negotiable Instruments Act, 1881 — Sections 138 and 139 — Criminal Procedure Code, 1973 — Section 482 — Quashing of Complaint — Legally Enforceable Debt — Statutory Presumption.

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Negotiable Instruments Act, 1881 — Sections 138 and 139 — Criminal Procedure Code, 1973 — Section 482 — Quashing of Complaint — Legally Enforceable Debt — Statutory Presumption.

1. Scope of Section 482 CrPC at Pre-trial Stage: While exercising inherent powers to quash a complaint under Section 482, the High Court is restricted to examining whether a prima facie case is made out. It cannot engage in a "roving inquiry" or appreciate evidence to determine factual disputes that are properly the subject of a trial. (Paras 11, 18).

2. Mandatory Presumption under Section 139 N.I. Act: Section 139 mandates a statutory presumption that the holder of a cheque received it for the discharge of a debt or liability. This presumption includes the existence of a legally enforceable debt. Once the basic ingredients of Section 138 are satisfied in the complaint, the burden shifts to the accused to rebut this presumption during the trial. (Paras 8, 13, 15).

3. Interference with Summoning Order: The High Court erred in quashing a complaint on the grounds that no debt existed. Such a finding at the threshold ousts the Trial Court from weighing material evidence and gives the accused an "unmerited advantage." The balance of convenience at the summoning stage lies with the complainant due to the legal presumption. (Paras 17, 19).

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ANALYSIS OF FACTS AND LAW

I. Factual Matrix

1. The Appellant (Complainant) alleged that the Respondent (Accused) took delivery of goods and issued a cheque for Rs. 20,00,000 dated 04.03.2013.

2. The cheque was dishonored twice for "insufficient funds." Following the second dishonor, a legal demand notice was sent on 02.04.2013.

3. The Respondent replied to the notice, denying the issuance of the cheque and the existence of any liability.

4. The Magistrate took cognizance and issued a summoning order on 27.09.2013.

5. The High Court of Patna, acting under Section 482 CrPC, quashed the entire proceedings, holding that the cheque was not issued for the discharge of any debt or liability.

II. Legal Framework: The Conflict of Jurisdiction

The core legal conflict involves the intersection of the High Court's power to prevent the abuse of process (Section 482 CrPC) and the statutory protection given to cheque holders (Section 139 N.I. Act).

III. Analysis of Law

4. The Nature of Section 139 Presumption: The Supreme Court reaffirmed that Section 139 is not a mere discretionary rule but a mandatory presumption. As established in Rangappa v. Sri Mohan (2010), this presumption is not limited to the act of receiving the cheque but extends to the existence of a legally enforceable debt.

5. Limitation of Quashing Powers: The Court noted that the High Court exceeded its jurisdiction by treating a quashing petition like a mini-trial. Under the "prima facie" test:

• If the complaint alleges the issuance of a cheque, dishonor, notice, and non-payment, the criminal process must proceed.

• A factual defense (e.g., "I never bought these goods") requires evidence of "unimpeachable quality" to be considered at the Section 482 stage. Otherwise, it must be proved in cross-examination during trial.

6. Protection of the Trial Process: Citing Rathish Babu Unnikrishnan (2022), the Bench observed that scuttling the process at the nascent stage is "not judicious." It prevents the proper forum (the Trial Court) from weighing evidence and denies the complainant the benefit of the statutory presumption they are legally entitled to hold until the trial's conclusion.

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FINAL DECISION

The Supreme Court allowed the appeal, set aside the Patna High Court's judgment, and restored the complaint. The Trial Court is directed to proceed independently of the High Court's observations regarding the existence of the debt.