Cheque dishonour prosecution and BIFR restraint orders: quashing is not automatic, and the defence may be raised at trial.

Criminal proceedings under section 138 of the Negotiable Instruments Act were examined against a plea that a BIFR restraint order under section 22A of SICA barred prosecution. The Court noted that cheque dishonour liability is not automatically excluded by pendency of sick-company proceedings; the effect of the restraint order depends on the facts, including the timing of the cheque, the expiry of the statutory notice period, and whether the BIFR order existed before completion of the offence. It further held that, in section 482 CrPC proceedings, the Court cannot go beyond the complaint and materials before the Magistrate, leaving the SICA-based defence to be raised before trial. The quashing petition was not maintainable on the record placed before it.

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Issues: Whether criminal proceedings under section 138 of the Negotiable Instruments Act, 1881 could be quashed at the threshold on the ground that the drawer-company was subject to a restraint order issued by the Board for Industrial and Financial Reconstruction under section 22A of the Sick Industrial Companies (Special Provisions) Act, 1985.

Analysis: The complaint disclosed dishonour of a cheque and the statutory notice and response sequence. The Court relied on the Supreme Court's rulings that a cheque dishonour prosecution is not automatically barred by pendency of sick-company proceedings, and that the effect of a restraint order under section 22A depends on the facts and timing, particularly the date of the cheque, the expiry of the statutory notice period, and whether the BIFR order existed before completion of the offence. The Court also noted that in proceedings under section 482 of the Code of Criminal Procedure, 1973, it cannot travel beyond the complaint and materials placed before the Magistrate, and that the accused may raise the SICA-based defence before the trial court on proper materials.

Conclusion: The petition for quashing was not maintainable on the facts placed before the Court, and the Magistrate's order taking cognizance under section 138 was upheld.

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