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SUPREME COURT OF INDIA
SANJAY KAROL, PRASHANT KUMAR MISHRA, JJ.
Sumit Bansal – Appellant
Versus
M/s MGI Developers And Promoters And Another – Respondent
Criminal Appeal No. 141 of 2026 [Arising out of S.L.P. (Criminal) No. 10770 of 2025] With Criminal Appeal No. 142 OF 2026 [Arising out of S.L.P. (Criminal) No. 11262 of 2025] Criminal Appeal No. 143 OF 2026 [Arising out of S.L.P. (Criminal) No. 11647 of 2025] AND Criminal Appeal No. 144 OF 2026 [Arising out of S.L.P. (Criminal) No. 11787 of 2025]
Decided On : 08-01-2026
Criminal Procedure Code, 1973 – Section 482 [Section 528 of BNSS] – Quashing of criminal complaint – High Court must avoid usurping function of Trial Court or conducting mini trial when disputed factual questions attend maintainability of complaint – Even though powers under Section 482 of Cr.P.C. are very wide, its conferment requires High Court to be more cautious and diligent – While examining any complaint or FIR, High Court exercising its power under this provision cannot go embarking upon genuineness of allegations made – Court must only consider whether there exists any sufficient material to proceed against accused or not. (Paras 26 and 28)
Criminal Appeal arising out of S.L.P. (Criminal) No.10770 of 2025 (Preferred by Complainant)
(B) Negotiable Instruments Act, 1881 – Sections 138 read with Sections 141 and 142 – Criminal Procedure Code, 1973 – Section 482 [Section 528 of BNSS] – Dishonour of cheques – Quashing of complaint cases – Under Section 138 of NI Act, a separate cause of action arises upon each dishonour of a cheque provided statutory sequence of presentation, dishonour, notice, and failure to pay is complete – Fact that multiple cheques arise from one transaction will not merge them into a single cause of action – In present case, cheques forming subject of two complaints were distinct instruments drawn on different accounts, presented on different dates, dishonoured separately, and followed by independent statutory notices – Scheme of Section 138 of NI Act does not bar prosecution in such circumstances – Whether those cheques were issued as alternative or supplementary instruments, or represented fresh undertakings, is a disputed question of fact requiring evidence at the time of trial and cannot be resolved at threshold – Questions such as whether firm’s cheques were issued in substitution of personal cheques, whether parties treated them as alternative securities, and whether both were intended to be simultaneously enforceable, are all mixed questions of fact – Inherent jurisdiction of High Court under Section 482 of Cr.P.C. cannot be used to decide such disputed issues – High Court exceeded its jurisdiction and was not justified in quashing Complaint Case and summoning order – Complaint on its face discloses ingredients of offence under Section 138 of NI Act and must proceed to trial. (Paras 33, 34 and 35)
Criminal Appeals arising out of S.L.P. (Criminal) Nos.11262 of 2025, 11647 of 2025 and 11787 of 2025 (Preferred by Respondent No.2)
(C) Negotiable Instruments Act, 1881 – Sections 138 read with Sections 141 and 142 – Criminal Procedure Code, 1973 – Section 482 [Section 528 of BNSS] – Dishonour of cheques – Refusal to quash complaint cases – Cheques were dishonoured, statutory notices were served, cheques were returned, and summons were thereafter issued – On such material, complaint prima facie stands – Any disputed question of fact qua offence under Section 138 of NI Act or any defence that Respondent No. 2 wants to raise against offence alleged must be done during trial – Burden of proving whether there exists any debt or liability is something which must be discharged in trial – Statutory presumption attached to issuance of a cheque, being one made in discharge of a legally enforceable debt or liability, is required to be accorded due weight – In circumstances where accused approaches Court seeking quashing of proceedings even before commencement of trial, Court must exercise circumspection and refrain from prematurely stifling prosecution at threshold, particularly by overlooking legal presumption that operates in favour of complainant – High Court was justified in not quashing complaint cases. (Paras 40, 42, 44 and 45)
Facts of the case:
Present batch of appeals arises out of two separate judgments dated 17.04.2025 passed by High Court of Delhi in the petitions filed under Section 482 of Code of Criminal Procedure, 1973 seeking quashing of a set of four complaints instituted under Section 138 read with Sections 141 and 142 of Negotiable Instruments Act, 1881.
Findings of Court:
High Court was justified in not quashing Complaint Case No. 2823 of 2019, Complaint Case No.13508 of 2019 and Complaint Case No. 743 of 2020 registered against Respondent No. 2 herein. The foregoing complaints prima facie discloses the ingredients of offence under Section 138 of the NI Act and must proceed to trial.
Result : Appeal filed by complainant allowed and appeal filed by respondent dismissed.
Certainly. Based on the provided legal document, here are the key points:
The case involves multiple criminal appeals arising from complaints filed under Section 138 of the Negotiable Instruments Act, 1881, concerning dishonoured cheques issued in relation to an agreement to sell commercial units (!) (!) .
The core dispute centers around whether the multiple cheques issued by Respondent No. 2, including personal and firm cheques, represent separate causes of action or are part of a single transaction, and whether the subsequent complaints are maintainable or constitute an abuse of process (!) (!) .
The High Court quashed certain complaints on the grounds that multiple complaints related to the same underlying liability, particularly when cheques issued from the personal account and the firm account were involved, and it viewed the continuation of parallel proceedings as an abuse of process (!) (!) .
The Supreme Court clarified that under the law, each dishonoured cheque can constitute a separate cause of action, provided the statutory requirements are met and each cheque is dishonoured independently. The Court emphasized that the scheme of the law does not prohibit multiple prosecutions arising from different cheques, even if they relate to the same transaction (!) (!) .
The Court pointed out that whether the cheques were issued as alternatives, in substitution, or as fresh undertakings is a question of fact that cannot be decided at the threshold through the inherent jurisdiction of the High Court. Such questions should be determined during trial based on evidence (!) (!) .
The Court reiterated that the power to quash under Section 482 should be exercised sparingly and only in cases where the complaint does not disclose any offence on its face or where there is clear abuse of process. It is not permissible to conduct a mini trial or to weigh the evidence at this stage (!) (!) .
The Court found that the complaints filed by the appellant (the complainant) did disclose the ingredients of an offence under Section 138 of the NI Act, as the cheques were dishonoured, statutory notices were served, and there was a failure to pay within the statutory period (!) (!) .
The Court set aside the quashing of the complaint against Respondent No. 2 and restored the case for trial, emphasizing that the issues regarding the nature of the liability and the issuance of multiple cheques are matters for the trial court to determine based on evidence (!) .
The Court dismissed the appeals filed by Respondent No. 2 challenging the refusal to quash certain complaints, reaffirming that the proceedings should continue and that the question of whether any amount is due or whether the cheques were issued in discharge of a debt is a matter for trial, not for summary disposal (!) .
Overall, the decision underscores that multiple cheques issued in relation to a single transaction can each constitute a separate cause of action under Section 138, and the High Court's jurisdiction to quash such proceedings is limited to clear cases of abuse or non-disclosure of an offence on the face of the complaint.
JUDGMENT :
PRASHANT KUMAR MISHRA, J.
1. Leave granted.
2. The present batch of Appeals arises out of two separate judgments dated 17.04.2025 passed by the High Court of Delhi1[‘High Court’] in the petitions filed under Section 482 of the Code of Criminal Procedure, 19732[‘Cr.PC’] seeking quashing of a set of four complaints instituted under Section 138 read with Sections 141 and 142 of the Negotiable Instruments Act, 18813[‘NI Act’].
3. The complainant in all the four complaints is one Shri Sumit Bansal, who is appellant in the lead Appeal and respondent in the connected Appeals, whereas the accused are M/s. MGI Developers and Promoters, a proprietorship concern, and its proprietor Shri Manoj Goyal, who are the respondents in the lead Appeal and the appellants in the connected Appeals. For our convenience in adjudicating all the Appeals, Shri Sumit Bansal will be referred to as ‘the complainant’, whereas M/s. MGI Developers and Promoters and Shri Manoj Goyal will be referred to as ‘Respondent No. 1’ and ‘Respondent No. 2’ respectively.
FACTUAL MATRIX
4. The record discloses that the parties had entered into an Agreement to Sell dated 07.11.2016 in respect of three commercial units bearing Nos. S-1, S-2 and S-3 situated in a commercial project named “MGI Mansion”, located at Khasra Nos. 966 and 967, Village Noor Nagar, Tehsil and District Ghaziabad, Uttar Pradesh. The total sale consideration agreed between the parties was Rs. 1,72,21,200/- (Rupees One Crore Seventy-two Lakh Twenty- one Thousand and Two Hundred only), which was admittedly paid by the complainant to the proprietorship firm. Under the terms of the Agreement, the vendor was obliged to execute and register the Sale Deed(s) in favour of the complainant on or before 30.09.2018, and in the event of failure to do so, the entire amount received was to be refunded to the complainant together with an appreciation amount by way of compensation.
5. On 27.07.2018, Respondent No.2 executed a personal guarantee undertaking to ensure refund of the amount together with the appreciation amount in case the sale deeds were not executed to the complainant within the stipulated period. To secure the said liability, he also undertook to issue personal cheques corresponding to the firm’s cheques, to provide an alternative mechanism for repayment.
6. Upon the failure of Respondent Nos. 1 and 2 to execute the Sale Deed(s) by 30.09.2018, Respondent No. 1 issued two cheques of that date, namely Cheque No. 057140 for Rs. 1,72,21,200/- representing the principal consideration, and Cheque No. 057141 for Rs. 35,00,000/- representing the appreciation amount. In addition, in terms of his personal guarantee, Respondent No. 2 issued two personal cheques, also dated 30.09.2018, being Cheque No. 114256 for Rs. 1,72,21,200/- and Cheque No. 114257 for Rs. 35,00,000/-. These cheques were handed over to the complainant with an understanding that the personal cheques could be presented earlier, while the firm’s cheques would be available for presentation later.
7. Acting on such understanding, the complainant presented the personal cheques for encashment on 05.12.2018. However, both the cheques were returned dishonoured on 06.12.2018 with the bank’s remark “Exceeds Arrangement”. Subsequently, the complainant presented the firm’s cheques on 15.12.2018, which too were returned unpaid on 17.12.2018 with the remark “Funds Insufficient”. The complainant thereafter issued a statutory notice dated 21.12.2018 to all the accused persons demanding payment within the statutory period, but despite service, no payment was made.
8. Consequently, the complainant instituted the first two complaints under Section 138 of the NI Act. The first was Complaint Case No. 2823 of 2019, filed on 25.01.2019, in respect of the personal cheque Nos. 114256 and 114257 issued by Respondent No. 2, wherein cognizance was taken and summons issued on 20.06.2019. The second was Complaint Case No. 3298 of 2019, filed on 30.01.2019, in respect of th
(1) Dishonour of cheques – Under Section 138 of NI Act, a separate cause of action arises upon each dishonour of a cheque provided statutory sequence of presentation, dishonour, notice, and failure t....
Cheques issued as security can still be subject to Section 138 if a legally enforceable debt exists at the time of issuance.
The court emphasized that the determination of whether cheques were issued for a legally enforceable debt or as security is a matter for trial, not for quashing proceedings.
The court emphasized that the determination of whether cheques were issued for a legally enforceable debt or as security is a matter for trial, not for quashing proceedings.
The court emphasized that the determination of whether a cheque was issued for a legally enforceable debt or as security is a factual issue for trial.
The issuance of a cheque implies liability under the NI Act, and courts should not quash complaints based on disputed facts without trial.
The court reiterated that issues around cheque liability under Section 138 NI Act must be decided at trial, underscoring the necessity for allegations in complaints to be accepted as true at the quas....
(1) Dishonour of cheques – Legal presumption of cheque having been issued in discharge of liability must also receive due weightage.(2) To non-suit complainant, at the stage of summoning order, when ....
Dishonour of cheque – Consequences of scuttling criminal process at a pre-trial stage can be grave and irreparable.
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