Cheque dishonour complaint quashed where no prima facie debt existed and complainant lacked authority to file proceedings.

A cheque-dishonour complaint under Section 138 NI Act may be quashed under Section 482 CrPC where the record s no prima facie legally enforceable debt or liability and the complainant lacks authority to institute proceedings. In this case, the cheque was linked to a proposed share transfer and takeover arrangement, but the surrounding material indicated no concluded contract and no completed transfer, weakening the basis for a subsisting liability. Although the Section 139 presumption ordinarily supports the complainant, it can be rebutted at the threshold when the complaint itself shows a basic infirmity. The complaint was also found defective for want of competence in the person who filed it, and the proceedings were quashed.

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Issues: Whether the criminal complaint under Section 138 of the Negotiable Instruments Act was liable to be quashed under Section 482 of the Code of Criminal Procedure, 1973 for want of a prima facie legally enforceable debt or liability and for want of competence of the complainant to institute the proceedings.

Analysis: The complaint alleged dishonour of a cheque issued in connection with a proposed transfer of shares and takeover arrangement. The petitioner relied on contemporaneous civil proceedings and the complainant's own affidavits to contend that there was no concluded contract, no completed transfer of shares, and consequently no subsisting legal liability supporting the cheque. The Court held that, although the statutory presumption under Section 139 of the Negotiable Instruments Act generally operates in favour of the complainant, the presumption can be rebutted at the threshold where the material on record shows a basic infirmity in the complaint. The Court further found that the complaint suffered from a maintainability defect because the person who filed it lacked the necessary authority to act for the payee in the factual setting presented.

Conclusion: The complaint was held not maintainable in the facts of the case, and the proceedings were quashed.

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