The Supreme Court held that a cheque bounce case under Section 138 of the Negotiable Instruments Act, 1881 (NIA) cannot be quashed at the pre-trial stage by carrying out an enquiry on the disputed question of fact.
The appellant corporation lodged a complaint under Section 138 of the NIA, alleging that the cheque of Rs 20,00,000 issued by the respondent was declined owing to insufficient funds. After legal notice was issued, the respondent denied having issued the cheque and refused to make the payment. Subsequently, the trial court took cognisance of the complaint. Aggrieved by the summoning order of the trial court, the respondent appealed to the Patna High Court under Section 482 of the Code of Criminal Procedure 1973, the High Court quashed the entire criminal proceeding, holding that the cheque was not issued for the discharge of debt or any other liability.
The Supreme Court held that at the pre-trial stage, the Court is only required to examine whether the material placed on record make out a prima facie case. It cannot carry out a detailed inquiry into the nature of debt or liability. Further, the Court stated that the High Court exceeded its jurisdiction under Section 482 by conducting an inquiry at the pre-trial stage.
19 December 2025
Citations: 2025 INSC 1474 | 2025 SCO.LR 12(5)[21]
Case comment
Held, Having regard to the aforesaid decisions of this Court as also the provisions of Section 139 of the N.I. Act, we are of the considered view that the High Court committed an error by conducting a roving enquiry, at the pre-trial stage, as regards the cheque being issued for the discharge of debt or liability. Such an exercise, in our view, was not merited in exercise of power under Section 482 of the Code more so when the complaint allegations disclosed that the cheque was issued for discharge of liability. As fulfillment of the necessary ingredients of Section 138 N.I. Act are prima facie made out from the complaint allegations, in our view, neither the summoning order nor the complaint could have been quashed by the High Court at the pre-trial stage.
Bench: Justices Manoj Mishra and Ujjal Bhuyan
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Key words/Phrases: Cheque dishonour–Section 138–Negotiable Instruments Act, 1881–Complaint–Section 482–Code of Criminal Procedure–Complaint Quashed–Appeal–Court cannot conduct pre-trial inquiry–Appeal allowed.
Read the Judgement here.