IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

238 Date of Decision: 13.02.2026 M/S H.S Pioneer and another ...Petitioners VERSUS Sandeep Jain and another ...Respondents CORAM : HON'BLE MR. JUSTICE VINOD S. BHARDWAJ Present: - Ms. Prabhleen Kaur, Advocate for Mr. J.S. Lalli, Advocate for the petitioners.

Ms. Tanveen Kaur, Legal Aid Counsel for the respondents.

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VINOD S. BHARDWAJ, J. (Oral)

The instant petition has been filed for seeking quashing of criminal complaint no. 5855 dated 20.05.2015 registered under section 138 of Negotiable Instruments Act, 1881 titled as “Sandeep Jain & Another v/s M/S H.S. Pioneer & Another” pending before JMIC, Ludhiana for 23.08.2016 alongwith the summoning order dated 21.05.2015 and the proceedings arising therefrom.

FACTS

2. Briefly the facts of the petitioner are that the petitioner–firm had been regularly purchasing different quantities of dyed acrylic/nylon yarn from the respondents. In discharge of its liability, arising out of such commercial transactions, the petitioner had been issuing cheques from time to time, which, on all earlier occasions, were duly honoured and encashed.

3. It is the case of the petitioner that certain consignments supplied by the respondents were defective, leading to a dispute between the parties regarding payments and reconciliation of accounts. Thereafter, on account of stated financial disputes and constraints, four cheques bearing No. 296412 dated 17.04.2015 for Rs.25,000/-, No. 296413 dated 17.04.2015 for Rs.25,000/-, No. 296414 dated 17.04.2015 for Rs.25,000/-, and No. 648430 dated 17.04.2015 for a sum of Rs.1,00,000/-, all drawn on Indian Overseas Bank, Sundernagar Branch, Ludhiana, were issued by the petitioner and the same was presented by the respondents for encashment. The said cheques, however, were dishonoured vide return memos dated 18.04.2015 with the remarks “Exceeds Arrangement”.

4. Consequent upon such dishonour, the respondents issued a legal notice dated 22.04.2015 under Section 138 of the Negotiable Instruments Act, 1881, calling upon the petitioner to make payment of the cheque amounts. Upon receipt of the said notice, the petitioner furnished a reply dated 06.05.2015, wherein it was intimated that two bank drafts, namely Draft No. 953968693 dated 04.05.2015 for Rs.90,000/- and Draft No. 953968704 dated 06.05.2015 for Rs.85,000/-, both drawn on Indian Overseas Bank, Sundernagar, Ludhiana, had been prepared towards discharge of the outstanding liability. It was further stated that the said drafts could be collected from the office of the petitioner’s counsel and photocopies thereof were enclosed with the reply.

5. As per the case of the petitioner, the aforesaid drafts were duly collected by the respondents’ counsel and were encashed. Reliance has been placed on bank status reports evidencing encashment of the drafts. It is further the case of the petitioner that, in addition thereto, a sum of Rs.60,000/- was additionally paid through four receipts issued by the respondents, and another cheque bearing No. 296443 dated 20.08.2016 for Rs.30,000/- was also issued with an undertaking that it would be honoured upon presentation after the stipulated date. The petitioner asserts that, in this manner, the entire liability of approximately Rs.2,65,000/-, as reflected in the invoice and legal notice, stood fully discharged.

6. Notwithstanding the above, the respondents instituted a complaint under Section 138 of the Negotiable Instruments Act, 1881, alleging non-payment of the cheque amounts despite service of statutory notice, without disclosing the receipt and encashment of the bank drafts and other payments.

7. Upon presentation of the complaint, the learned Judicial Magistrate First Class, Ludhiana, vide order dated 21.05.2015, issued summoning orders against the petitioner. The grievance of the petitioner is that despite having allegedly received the entire amount claimed, the respondents have neither withdrawn the complaint nor acknowledged fu