Gulafsha vs State of U. P. - 2023 Supreme(All) 2283

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(All) 2283

IN THE HIGH COURT OF ALLAHABAD
MANJU RANI CHAUHAN, J.
Gulafsha - Applicant
Versus
State of U.P. and Another - Opposite Parties
APPLICATION U/S 482 NO. - 21382 OF 2022.
Decided On : 22-02-2023

Advocates appeared:
For the Applicant : Gagan Pratap Singh.
For the Opposite Parties : G.A., Ashok Trivedi, Mahesh Chandra Tiwari.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Dishonour of cheque - Complaint filed for dishonour of a cheque on grounds of insufficient funds - Summoning order upheld; circumstances indicate a prima facie case exists against the applicant, who claimed the cheque was issued merely as a security and to dispute the liability. (Paras 4, 5, 9, 14)

(B) Presumption - Under Section 139, a cheque is presumed to be issued for a debt or liability unless disproven by the accused - Burden of proof lies on the accused to establish the defence that the cheque was not issued for any enforceable debt. (Paras 9, 12)

(C) Quashing of Proceedings - The court finds no grounds to quash the summoning order; allegations require evidentiary support, which must be established in the trial court. (Paras 13, 14)

Facts of the case:
The applicant issued a cheque for Rs.4,07,000/-, which was dishonoured due to insufficiency of funds, leading to a complaint. The applicant contended that the cheque was a security, not tied to a legal debt.

Findings of Court:
No abuse of court's process at the pre-trial stage; application for quashing dismissed.

Issues: Whether the applicant had a business transaction with the complainant, and if the cheque was misused as alleged.

Ratio Decidendi: The presumption that a cheque is issued for a debt stands unless the applicant disproves this; all divergent views should be resolved in the trial.

Result: Application dismissed.

Table of Content
1. background of the cheque dispute (Para 3 , 4)
2. contentions from both parties regarding the cheque (Para 5 , 6)
3. legal principles under section 138 and presumptions of liability (Para 7 , 8 , 9 , 10 , 11 , 12 , 13)
4. decision to dismiss the application (Para 14 , 15)

JUDGMENT

Manju Rani Chauhan, J.

Supplementary affidavit filed by learned counsel for the applicant today in the Court, is taken on record.

2. Heard Mr. Gagan Pratap Singh, learned counsel for the applicant, Mr. Ashok Trivedi, learned counsel for the opposite party no.2 and Mr. K.P. Pathak, learned AGA for the State and perused the records.

3. The present application under Section 482 Cr.P.C. has been filed to quash the summoning order dated 11.03.2022 as well as the entire proceedings of Complaint Case No.13105 of 2021 (Sanjay Kumar Jain v. Gulafsha), under section 138 of Negotiable Instruments Act, 1881, Police Station-Lohamandi, District-Agra, pending in the Court of the Special Chief Judicial Magistrate, Agra.

4. Brief facts of the case are that the opposite party no.2 filed a complaint under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act') against the applicant stating therein that the opposite party no.2, who is running a firm in the name and style of S.K. Steel Industries situated at Agra, is the owner and proprietor of the same and was in business relationship with the applicant as well as his other family members. For purchase of certain iron material, the applicant has issued a cheque of Rs.4,07,000/- from Punjab National Bank, Pashchim Puri Road, Shastripuram (Agra), bearing cheque no.279257 dated 12.10.2021 in favour of opposite party no.2. On receipt of the same, opposite party no.2 has presented the same before the concerned Bank for encashment on 13.10.2021, but the same was dishonoured due to insufficient amount. Thereafter, opposite party no.2 sent a legal notice to the applicant on 30.10.2021 which has been received by him on 01.11.2021. After the notice neither any amount was paid nor reply was submitted by the applicant, therefore, the present compliant has been filed on 30.10.2021. Subsequently, the learned Magistrate after recording the statement under Sections 200 and 202 Cr.P.C. summoned the applicant vide order dated 11.03.2022, under Section 138 of the Act.

5. Learned counsel for the applicant submits that the applicant has no business transactions with the opposite party no.2. It is her brother-in-law with whom all the transactions took place and the said cheque was given to the opposite party no.2 by the brother-in-law of the applicant as security cheque, which was misused by the opposite party no.2. He further submits that in the said cheque, only signature is appended by the applicant whereas the amount payable and date mentioned in the cheque were filled by the complainant/opposite party no.2 in his writing and misusing the same. The said cheque in question was security cheque and the same was not issued against any existing legally enforceable debt or liability, therefore, the present case has been instituted with mala fide intentions, in order to harass and extract money from the applicant. Thus, the summoning order as well as the entire proceedings is liable to be quashed.

6. On the other hand, Mr. K.P. Pathak, learned AGA for the State, has submitted that in the complaint itself, it has been mentioned that the said cheque was issued in lieu of payment said to be made in regard to business transaction, therefore, the submission made by the learned counsel for the applicant in this regard is also not acceptable. He further submits that the summoning order passed by the concerned Magistrate is legal and just in the eyes of the law and at this stage, only a prima facie case is to be seen and the complaint cannot be thrown at the threshold. Therefore, the present application is liable to be dismissed.

7. I have carefully considered the submissions advanced by learned counsel fo