Section 138 NI Act complaint quash petition refused where statutory presumption arises and defenses are matters for trial.

A high court considered whether a Section 138 NI Act complaint and the consequent summoning order should be quashed. The court applied the statutory scheme that an unpaid cheque satisfying Section 138 elements gives rise to the presumption of liability under the statutory presumption, which is sufficient to summon the accused. The petitioner conceded signature, issuance to discharge liability, and service of notice, asserting only a collateral defence about instrument acceptability after a bank merger and alleged misuse. Those contentions were held to be matters for trial and rebuttal evidence; therefore the quash petition was dismissed and the summoning order retained.

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Issues: Whether the complaint dated 23.07.2019 and the summoning order dated 23.07.2019 under Section 138 of the Negotiable Instruments Act, 1881 should be quashed.

Analysis: The statutory framework requires that where a cheque is returned unpaid and the conditions of Section 138 are fulfilled, the presumption under Section 139 arises in favour of the holder, which suffices at the initial stage to warrant summoning. The petitioner did not dispute signature on the cheque, issuance of the cheque in discharge of liability, or receipt of the legal notice, and instead raised a defence that the cheque was returned because State Bank of Patiala cheques were not acceptable at SBI after a merger and alleged misuse by the complainant. Those contentions are matters for trial and amount to rebuttal evidence against the presumption under Section 139. At the prima facie stage, the elements required by Section 138 and the consequent presumption under Section 139 are not negatived on the record before the court; therefore the complaint and summoning cannot be quashed at this stage.

Conclusion: The petition to quash the complaint and the summoning order under Section 138 of the Negotiable Instruments Act, 1881 is dismissed; decision adverse to the petitioner and in favour of the respondent.

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