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Issues: (i) Whether the FIR alleging forgery and cheating, founded on disputed receipts, ought to be quashed when the genuineness of the receipts was already in issue in a pending civil suit and the handwriting expert's opinion was only a relevant but not conclusive piece of evidence. (ii) Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 could be quashed on the ground of the inter se dispute between the parties despite admitted issuance of cheques and the statutory presumptions under the Act.
Issue (i): Whether the FIR alleging forgery and cheating, founded on disputed receipts, ought to be quashed when the genuineness of the receipts was already in issue in a pending civil suit and the handwriting expert's opinion was only a relevant but not conclusive piece of evidence.
Analysis: The dispute over the four receipts was already directly pending in the summary suit, including the issue whether the receipts were forged. The handwriting expert's report indicated that the signatures did not tally with the admitted signatures, but that opinion was only evidentiary and not conclusive. The Court held that the genuineness of the receipts could still be tested by other evidence and by comparison under the Evidence Act. In these circumstances, continuation of the FIR would prejudice the parties in the civil proceedings and amount to abuse of process.
Conclusion: The FIR was liable to be quashed in favour of the appellants.
Issue (ii): Whether the complaint under Section 138 of the Negotiable Instruments Act, 1881 could be quashed on the ground of the inter se dispute between the parties despite admitted issuance of cheques and the statutory presumptions under the Act.
Analysis: The Court held that once issuance of the cheques is admitted, the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881 arise in favour of the holder of the cheque. Those presumptions are rebuttable, and the defence raised by the drawer required evidence. Since disputed questions of fact remained to be tried, the complaint could not be terminated at the threshold merely because there was a collateral dispute between the parties. The High Court had overlooked the effect of the statutory presumptions.
Conclusion: The quashing of the complaint was set aside and the complaint was restored in favour of the appellants.
Final Conclusion: The appeals succeeded, the FIR was quashed, and the cheque dishonour proceedings were restored for trial in accordance with law.
Ratio Decidendi: Where the genuineness of disputed documents is already sub judice and the supporting expert opinion is only evidentiary, criminal proceedings based solely on that dispute may be quashed as abuse of process; conversely, a complaint under Section 138 of the Negotiable Instruments Act, 1881 cannot be quashed at the threshold when issuance of cheque is admitted and the statutory presumptions remain unrebutted by evidence.
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