TaxTMI 
TaxTMI 
2026 (8) TMI 89
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....s on record, the learned trial Court, vide orders dated 18.02.2022, 08.04.2022, 09.08.2022 and 15.11.2022 respectively, took cognizance of the offence under Section 138 of the N.I. Act against the petitioners. Aggrieved by the aforesaid orders taking cognizance of the offence, the petitioners have preferred the present petitions seeking quashing of the said orders as well as the entire criminal proceedings initiated against them in the aforesaid complaint cases. 3. Heard Mr. Devashis Panda, learned counsel appearing for the petitioners and Mr. Laxmidhar Pangari, learned Senior Counsel appearing for the opposite party. 4. The prosecution case, in brief, is that petitioner No.1-Company, represented through its Director (petitioner No. 2), approached the opposite party-company seeking its technical qualifying credentials for participating in the bid floated by U.P. Power Transmission Corporation Ltd. (UPPTCL) for the project titled "Construction of 220/33 KV GIS Substation, Khorabar (Gorakhpur) with SAS on turnkey basis." Pursuant thereto, the parties executed a Memorandum of Understanding (MoU) dated 10.06.2021, whereunder the opposite party agreed to provide technical services....
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....at in the MoU at Clause-2.5(g), it is stipulated that the complainant is entitled to be paid the technical service fee of 1.8% of the total contract value in five instalments. First instalment of 0.9% of the estimated cost of Rs. 29,54,700/- was only payable on issuance of LOA to the opposite party/complainant by UPPTCL with three instalments from out of the remaining four being payable @ 0.3% of the estimated cost i.e. Rs. 9,84,900/- within three months from the payment of the first, second and third instalments respectively and towards the fifth instalment, after the award of the project work. The final award cost was to be finally computed and any further technical service fees payable was to be paid separately through a cheque to be issued after the completion of payments by SAG projects or within one month from the date of fourth instalment. It is the case of the petitioners that Letter of Intent (LOI) was issued on 03.09.2021 by UPPTCL and immediately thereafter on 04.11.2021, 31.01.2022, 26.05.2022 and on 05.09.2022, the cheques were deposited and in the year 2022, the complaint cases were initiated. The Letter of Acceptance (LOA) was only issued by the UPPTCL on 22.03.20....
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....tion of law was left open. In view of the judgments of this Court in Vijay Dhanuka [Vijay Dhanuka v. Najima Mamtaj, (2014) 14 SCC 638 : (2015) 1 SCC (Cri) 479], Abhijit Pawar [Abhijit Pawar v. Hemant Madhukar Nimbalkar, (2017) 3 SCC 528 : (2017) 2 SCC (Cri) 192] and Birla Corpn. [Birla Corpn. Ltd. v. Adventz Investments & Holdings Ltd., (2019) 16 SCC 610 : (2020) 2 SCC (Civ) 713 : (2020) 2 SCC (Cri) 828], the inquiry to be held by the Magistrate before issuance of summons to the accused residing outside the jurisdiction of the court cannot be dispensed with. The learned Amici Curiae recommended that the Magistrate should come to a conclusion after holding an inquiry that there are sufficient grounds to proceed against the accused. We are in agreement with the learned Amicus Curiae. 12. Another point that has been brought to our notice relates to the interpretation of Section 202(2) which stipulates that the Magistrate shall take evidence of the witness on oath in an inquiry conducted under Section 202(1) for the purpose of issuance of process. Section 145 of the Act provides that the evidence of the complainant may be given by him on affidavit, which shall be read in evide....
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....roceed against the accused, when such accused resides beyond the territorial jurisdiction of the court. 24.3. For the conduct of inquiry under Section 202 of the Code, evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit. In suitable cases, the Magistrate can restrict the inquiry to examination of documents without insisting for examination of witnesses. 24.4. We recommend that suitable amendments be made to the Act for provision of one trial against a person for multiple offences under Section 138 of the Act committed within a period of 12 months, notwithstanding the restriction in Section 219 of the Code. 24.5. The High Courts are requested to issue practice directions to the trial courts to treat service of summons in one complaint under Section 138 forming part of a transaction, as deemed service in respect of all the complaints filed before the same court relating to dishonour of cheques issued as part of the said transaction. 24.6. The judgments of this Court in Adalat Prasad [Adalat Prasad v. Rooplal Jindal, (2004) 7 SCC 338 : 2004 SCC (Cri) 1927] and Subramanium Sethuraman [Subramanium Sethuraman ....
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....itioners. According to him, such presumption, though rebuttable, can only be displaced by the accused during the course of trial by leading appropriate evidence. He contended that the grounds urged by the petitioners in the present petitions under Section 482 Cr.P.C. involve disputed questions of fact, cannot be adjudicated while exercising the inherent jurisdiction by this Court and that could only be threshed out in the trial. Therefore, as per his submission, this Court is forbidden to enter into merits of the case at this stage by scuttling the expected trial. Mr. Pangari, learned Senior Counsel further submitted that the present petitions are pending since the year 2022/2023 and by virtue of the interim order dated 09.09.2022 and 04.08.2023, further proceedings in the complaint cases have remained stayed causing delay in the trial. He further submitted that under Section 143(3) of the N.I. Act, the statute mandates that the cases of the present nature needs to be concluded as expeditiously as possible preferably within a period of six months from the date of filing of the complaint. In support of his submissions, he has placed reliance upon the decisions of the Hon'ble Sup....
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....NU/SC/0376/2010 : 2010:INSC:289 : (2010) 11 SCC 441, it was held that the presumption mandated by Section 139 of the N.I. Act includes the existence of a legally enforceable debt or liability. It was observed that such a presumption is rebuttable, and the Accused must raise its defense in the trial. 16. In Rajeshbhai Muljibhai Patel v. State of Gujarat MANU/SC/0155/2020 : 2020:INSC:160 : (2020) 3 SCC 794, it was held that the High Court should not quash the criminal complaint Under Section 138 of N.I. Act by going into disputed questions of fact regarding the cheque in question being issued for the discharge of debt or liability. Moreso, when Section 139 of the N.I. Act raises a statutory presumption as regards the cheque being issued for discharge of debt or liability. 17. In Rathish Babu Unnikrishnan v. State (NCT of Delhi) MANU/SC/0542/2022 : 2022:INSC:480 : (2022) 20 SCC 661, this Court held that when there is a legal presumption Under Section 139 of N.I. Act, it would not be judicious to carry out a detailed enquiry on a disputed question of fact at a pre-trial stage to quash the complaint. The relevant observations in the judgment are extracted below: ....
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....ummoning order nor the complaint could have been quashed by the High Court at the pre-trial stage." 9. I have carefully perused the materials available on record, including the documents placed by both the parties, and have considered the rival submissions advanced by the learned counsel appearing for the respective parties. The first contention of Mr. Panda, learned counsel for the petitioners was regarding the non-compliance with the mandatory procedural requirements contemplated under Sections 200 and 202 of the Cr.P.C. In order to appreciate the aforesaid contention, it is apposite to refer to the order dated 18.02.2022 passed by the learned S.D.J.M., Bhubaneswar in I.C.C. Case No.929 of 2022 (in CRLMC No. 2471 of 2022), whereby cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act was taken. The order reads thus:- "Perused the complaint, initial statement of the complainant on affidavit, original cheque, intimation slip, postal receipt, postal A.D. and the pleader notice. From the above documents, I am satisfied that prima facie of the offence U/s.138 of N.I. Act is well made out against the accused persons. Hence, cognizance of o....
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....sion of law that once the cheque is admittedly issued by the accused and even after issuance of statutory notice under Section 138(b) of N.I. Act, the amount is not paid, the presumption under Section 139 read with Section 118 of N.I. Act operates. The petitioner being the accused is at liberty to revert the same by bringing adequate evidence in the trial. In this context, the recent decision of the Hon'ble Supreme Court in Sanjabij Tari v. Kishore S. Borcar and Others, reported in MANU/SC/1336/2025, assumes significance. In the aforesaid decision, the Hon'ble Supreme Court emphasized the mandatory nature of the statutory presumptions under Sections 118 and 139 of the N.I. Act, and deprecated any approach inconsistent with the settled legal position governing prosecutions under Section 138 of the Act. In the present case, it is an admitted position that the statutory notice under Section 138(b) of the N.I. Act was duly issued and received by the petitioners. Despite receipt of the notice, the petitioners neither replied to the same nor complied with the demand made therein by making payment of the cheque amount. Therefore, the statutory presumption under Sections 118 and....