Sri Om Sales v. Abhay Kumar: Limiting Section 482 CrPC in Cheque Dishonour Cases in Light of the Section 139 NI Act Presumption

1. Introduction

The Supreme Court of India in M/s Sri Om Sales v. Abhay Kumar @ Abhay Patel & Anr., 2025 INSC 1474 (decided on 19 December 2025), has once again clarified and reinforced the doctrinal limits on the High Court’s power to quash criminal proceedings under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) in prosecutions under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).

The central issue was whether, at the very threshold, the High Court could examine and decide if a cheque had indeed been issued “for the discharge, in whole or in part, of any debt or other liability”, and on that basis quash a complaint under Section 138 NI Act, despite the statutory presumption in favour of the holder under Section 139 NI Act.

The Court (per Manoj Misra J., with Ujjal Bhuyan J. concurring) held that once a complaint discloses all the basic ingredients of an offence under Section 138 NI Act, the High Court normally cannot conduct a roving enquiry into the existence or otherwise of legally enforceable debt or liability at the pre-trial stage under Section 482 CrPC. That question is to be tested at trial in the backdrop of the statutory presumption under Section 139 NI Act, which can only be rebutted by the accused by leading evidence (or incontrovertible material) before the trial court.

1.1. Parties and Procedural Background

Appellant: M/s Sri Om Sales – the complainant/holder of the cheque.
Respondent No. 1: Abhay Kumar @ Abhay Patel – the accused/drawer of the cheque.
Respondent No. 2: (not central to the reasoning; not elaborated in the judgment extract).

The appellant filed a complaint under Section 138 NI Act alleging dishonour of a cheque issued by the first respondent for Rs. 20,00,000 towards payment for goods supplied. The cheque, on two presentations, was returned unpaid for “insufficient funds”. After issuing the statutory demand notice and non-payment within the stipulated period, the complaint case (No. 1563(C) of 2013) was instituted.

The Magistrate took cognizance and issued process (summoning order dated 27.09.2013). The accused approached the Patna High Court by way of an application under Section 482 CrPC (Criminal Misc. No. 3744 of 2015), which allowed the petition and quashed the complaint and all proceedings, holding that the cheque was not issued for discharge of any legally enforceable debt or liability.

The complainant challenged this quashing order before the Supreme Court, leading to the present criminal appeal (arising out of SLP (Crl.) No. 8703/2019).

2. Summary of the Judgment

2.1. Core Holding

The Supreme Court set aside the Patna High Court’s order and restored the complaint to the file of the Magistrate. It held:

When a complaint under Section 138 NI Act clearly alleges that:
- the cheque was issued in discharge of a debt/liability;
- the cheque was dishonoured due to insufficiency of funds;
- a valid statutory demand notice was issued within time; and
- no payment was made within the statutory period,
then the complaint prima facie discloses all ingredients of the offence, and issuance of process is justified.
In such circumstances, the High Court, in exercise of its inherent powers under Section 482 CrPC, ought not to enter into a factual determination at the pre-trial stage as to whether the cheque was indeed issued towards a legally enforceable debt or liability.
Section 139 NI Act creates a statutory presumption that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability, and this presumption is rebuttable only at the stage of trial (or on the basis of unimpeachable materials of a kind appropriate to a quashing petition).
A “roving enquiry” into disputed factual questions – such as the genuineness of the transaction or the existence of consideration – at the Section 482 stage is impermissible when the complaint itself discloses a prima facie offence.

2.2. Directions Issued

The Court:

Allowed the appeal.
Set aside the Patna High Court’s judgment dated 20.06.2019.
Restored the complaint case to the file of the concerned Magistrate for trial in accordance with law.
Explicitly clarified that it was not expressing any opinion on whether the cheque was in fact issued in discharge of a debt or liability. That issue was left open to be decided by the trial court independently.

3. Detailed Analysis

3.1. Factual Matrix and Ingredients of Section 138 NI Act

The essential factual steps alleged in the complaint, as noted by the Supreme Court, were:

The first respondent took delivery of goods from the appellant/complainant.
In consideration thereof, the first respondent issued a cheque dated 04.03.2013 for Rs. 20,00,000 in favour of the appellant.
The cheque was presented on 04.03.2013; it was dishonoured on 11.03.2013 due to insufficient funds.
Upon the accused’s assurance that it would be honoured on re-presentation, the cheque was presented again on 17.03.2013; it was dishonoured again on 18.03.2013 with the same remark of insufficient funds.
The complainant issued a legal demand notice on 02.04.2013, within the prescribed statutory period.
The first respondent, by reply dated 08.04.2013, denied having issued the cheque and refused to make any payment.
No payment was made within 15 days of receipt of the notice, prompting the filing of the criminal complaint.

On these averments and accompanying documents (cheque; banker’s return memo citing insufficiency of funds; notice), the Supreme Court concluded that the complaint clearly spelt out the necessary ingredients of Section 138 NI Act, thereby justifying the Magistrate’s order of summoning.

3.2. The High Court’s Approach and Its Rejection

The Patna High Court had quashed the entire complaint proceedings on the basis that the cheque was not issued “for the discharge, in whole or in part, of any debt or other liability”. In other words, the High Court:

Went behind the complaint’s assertions;
Embarked on an evaluation of whether a legally enforceable debt/liability existed; and
Accepted the defence of the accused at the threshold, without a full-fledged trial.

The Supreme Court held that this was a classic case of overstepping the limits of Section 482 CrPC, particularly in the face of a statutory presumption under Section 139 NI Act. The High Court, instead of examining only whether the complaint and supporting materials disclosed a prima facie case, had entered into a factual merit-based adjudication, which is the domain of the trial court.

4. Precedents Cited and Their Influence

4.1. Maruti Udyog Ltd. v. Narender & Ors., (1999) 1 SCC 113

In Maruti Udyog, the Supreme Court had emphasised that:

A presumption must be drawn that the holder of the cheque received it for the discharge of a debt or other liability, unless the contrary is proved.
At the initial stage of the proceedings, the High Court is not justified in entertaining and accepting the defence of the accused to quash the complaint on the ground that no liability existed.

In the present case, the Supreme Court explicitly referred to this principle (para 14 of the judgment), and applied the same logic: since Section 139 NI Act mandates such presumption, it was improper for the High Court to quash the complaint at the threshold on the accused’s plea that no debt or liability existed.

4.2. Rangappa v. Sri Mohan, (2010) 11 SCC 441

Rangappa is a foundational decision in NI Act jurisprudence. The Supreme Court in that case held:

The presumption under Section 139 NI Act is not confined merely to the issuance of the cheque, but extends to the existence of a legally enforceable debt or liability.
This presumption is rebuttable. The accused can rebut it by raising a probable defence, which can be either by direct evidence or through the circumstances elicited from the complainant’s evidence.

In the present case (para 15), the Supreme Court relied on Rangappa to underscore that the very question that the High Court purported to decide at the Section 482 stage – whether there was a legally enforceable debt – is the subject of a statutory presumption in the complainant’s favour. Therefore:

It is not a question that should ordinarily be conclusively decided on a quashing petition.
The proper course is to permit the trial to proceed, allowing the accused an opportunity to rebut the presumption in accordance with the evidentiary regime laid down in Rangappa.

4.3. Rajeshbhai Muljibhai Patel v. State of Gujarat, (2020) 3 SCC 794

In Rajeshbhai Patel, the Supreme Court clarified that:

The High Court, while exercising powers under Section 482 CrPC, should not quash a complaint under Section 138 NI Act by entering into disputed questions of fact – such as whether the cheque was indeed issued for the discharge of debt or liability – when there is a presumption under Section 139 in favour of the holder.
The realm of factual contestation lies with the trial court, which can assess the credibility of evidence and the strength of the defence.

In the present judgment (para 16), the Court used Rajeshbhai Patel squarely to support its conclusion that the Patna High Court’s interference was unwarranted. It emphasised that, given the statutory presumption, disputed factual pleas by the accused (like denial of issuing the cheque, or alleging lack of consideration) are ill-suited for adjudication in a quashing petition.

4.4. Rathish Babu Unnikrishnan v. State (NCT of Delhi), (2022) 20 SCC 661

Rathish Babu is a relatively recent and significant pronouncement on the interplay between statutory presumptions under the NI Act and the High Court’s powers under Section 482 CrPC. In that case, the Supreme Court held:

Where there is a legal presumption under Section 139 NI Act, courts should be slow to quash complaints at the pre-trial stage, especially when the factual dispute lies in the realm of possibility.
A factual defence that does not require evidence but is to be accepted at the Section 482 stage must be of unimpeachable quality – so conclusive that it altogether demolishes the complaint.
Prematurely scuttling criminal proceedings can have grave and irreparable consequences by depriving the complainant of a full trial and “ousting” the trial court from its role as the proper forum to weigh evidence.

The present judgment (para 17) quotes extensively from Rathish Babu, including:

“The proposition of law as set out above makes it abundantly clear that the court should be slow to grant the relief of quashing a complaint at a pre-trial stage, when the factual controversy is in the realm of possibility particularly because of the legal presumption... What is also of note is that the factual defense without having to adduce any evidence need to be of an unimpeachable quality...”

By invoking this precedent, the Court anchored its reasoning in an already well-articulated doctrine: Section 482 CrPC cannot be used to short-circuit statutory presumptions and the trial process, except where the accused’s defence is so incontrovertible that continuation of the proceedings would be an abuse of process.

5. Legal Reasoning of the Supreme Court

5.1. The Threshold Test under Section 482 CrPC

At the heart of the judgment is a restatement of the correct approach under Section 482 CrPC:

The High Court must examine whether, on a plain reading of the complaint and the supporting materials, a prima facie case is disclosed against the accused.
If such a prima facie case exists, the High Court generally should not quash the complaint by:
- Weighing evidence;
- Assessing the probable defence; or
- Resolving disputed questions of fact.
Only in exceptional circumstances – e.g., where the allegations are absurd, inherently implausible, or where an incontrovertible legal bar exists – can the High Court quash proceedings to prevent abuse of process or to secure the ends of justice.

The Supreme Court found that none of these exceptional circumstances existed in the present case. Instead:

The complaint tracked the statutory requirements of Section 138 NI Act.
The materials annexed (cheque, return memo, notice) supported the allegations.
The accused’s defence that the cheque was not issued for any debt/liability was essentially a factual defence that must be tested at trial.

5.2. Role of the Statutory Presumption under Section 139 NI Act

Section 139 NI Act provides:

“It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.”

The Court emphasised several key aspects:

The presumption is legal/mandatory in nature: the court must draw it once the foundational facts (that the cheque was drawn by the accused and was dishonoured) are established.
The presumption includes the existence of a legally enforceable debt/liability, as clarified in Rangappa.
The presumption is rebuttable, but the onus to rebut it lies squarely on the accused, typically at the stage of trial.
Therefore, at the pre-trial stage, it is generally impermissible for a High Court to accept the accused’s version that no debt/liability existed, without evidence being led and evaluated in accordance with law.

The core doctrinal point is this: the statutory presumption effectively disables the High Court from prematurely concluding that there was no debt or liability unless the accused produces material of an exceptional and unimpeachable character that completely demolishes the very foundation of the complaint – a threshold not met in this case.

5.3. No “Roving Enquiry” at the Pre-trial Stage

The Court was critical of the High Court’s “roving enquiry” into the merits. By that, it meant:

The High Court went beyond the four corners of the complaint and the primary documents.
It embarked on a detailed and evaluative exercise about the genuineness of the transaction and the purpose of the cheque, a task reserved for the trial court.
In doing so, it effectively decided the very question that Section 139 NI Act presumes in favour of the complainant.

This kind of enquiry is inconsistent with:

The summary and limited scrutiny permissible under Section 482 CrPC; and
The legislative intent behind Section 138 & 139 NI Act, which seek to enhance the credibility of negotiable instruments and reduce delays in cheque dishonour cases by shifting the initial evidentiary burden to the accused.

5.4. Abuse of Process and “Ends of Justice” – The Exceptional Category

The Court did reiterate the well-accepted caveat: in exceptional cases, the High Court can and must intervene to:

Prevent abuse of the process of the court; or
Secure the ends of justice.

However, for a Section 138 complaint:

Mere allegation of mala fides or an assertion that no debt existed—without incontrovertible supporting material—does not amount to such an exceptional circumstance.
The accused’s remedy in such a situation lies in defending the case at trial, including by cross-examining the complainant, producing documentary evidence, and raising a probable defence to rebut the presumption.

Thus, the Court carefully preserved the idea of “exceptional” quashing but held that the present case did not fall within that category.

6. Impact and Significance

6.1. For High Courts: Tightening the Use of Section 482 CrPC in NI Act Cases

This judgment strengthens and clarifies the consistent line of authority cautioning High Courts against overuse of Section 482 CrPC to quash complaints under Section 138 NI Act. Its implications for High Courts are:

When a complaint clearly discloses the statutory ingredients of Section 138, and the foundational documents support it, quashing should be rare.
Disputed factual questions – such as whether the cheque was given as security, whether the transaction failed, or whether any consideration passed – are generally unsuited for determination at the quashing stage.
Arguments that go to the merits of the liability or the probability of the complainant’s story are best left to be weighed by the trial court in light of Section 139’s presumption.

6.2. For Accused Persons: Clarifying the Route to Defending NI Act Prosecutions

For accused persons, the judgment sends a clear signal:

Section 482 CrPC is not a substitute for trial. Attempts to use inherent powers to short-circuit the process, particularly by raising contested factual defences, will usually fail.
The proper path is to:
- Enter appearance before the trial court;
- Challenge the complainant’s evidence;
- Lead defence evidence, if necessary; and
- Seek acquittal by rebutting the presumption under Section 139 NI Act.
Resort to Section 482 may still be available, but only where there is some clear, unimpeachable, and undisputed material that completely negates the basic ingredients of the offence (for example, an admitted and undisputed settlement, clear proof of forgery that is acknowledged by both sides, etc.).

6.3. For Complainants and the NI Act Regime

From the complainant’s perspective, the decision:

Reinforces the legislative intent that complaints under Section 138 NI Act should normally go to trial, and not be derailed at the threshold on the basis of contested factual pleas.
Strengthens the efficacy of Section 139’s presumption by limiting opportunities for premature adjudication of the existence or enforceability of the underlying debt.
Contributes to the broader policy objective of enhancing confidence in cheque-based transactions.

6.4. Doctrinal Continuity and Incremental Clarification

While the judgment does not radically innovate on existing doctrine, it is important as a reaffirmation and consolidation of principles laid down in Maruti Udyog, Rangappa, Rajeshbhai Patel, and Rathish Babu:

It confirms that the presumption under Section 139 NI Act is central to the approach in Section 138 prosecutions and must shape how Section 482 petitions are decided.
It reiterates that prima facie satisfaction at the summoning stage is sufficient, and the evidentiary contest must occur at trial, not before the High Court in a quashing proceeding.
It underscores that “no roving enquiry” and “no mini-trials” at the Section 482 stage are not merely slogans but binding principles in NI Act jurisprudence.

7. Complex Concepts Simplified

7.1. Section 138 NI Act – Essential Ingredients

A person commits an offence under Section 138 NI Act when:

A cheque is drawn by them on a bank account for payment of any amount of money to another person for the discharge of a debt or other liability.
The cheque is returned (“bounced”) by the bank due to:
- Insufficient funds; or
- Exceeding arrangement with the bank, etc.
The cheque is presented within its validity period (statutory or specified).
The payee/holder issues a written demand notice to the drawer within 30 days (now 30 days; earlier 15 days) of learning of the dishonour.
The drawer fails to make the payment within 15 days of receiving the notice.

Only when all these conditions are satisfied does the offence under Section 138 NI Act crystallise.

7.2. Section 139 NI Act – Statutory Presumption

A “presumption” in law is a rule that requires the court to assume a fact to be true, unless someone proves otherwise. Under Section 139 NI Act:

Once it is established that the accused drew the cheque, and it bounced, the court must presume that:
- The cheque was issued; and
- It was for the discharge of a legally enforceable debt or liability.
The accused can rebut this presumption, but the burden of proof lies initially on them (though not necessarily beyond a reasonable doubt; often on the standard of preponderance of probabilities).

7.3. Section 482 CrPC – Inherent Powers of the High Court

Section 482 CrPC preserves the High Court’s inherent powers to:

Give effect to any order under the CrPC;
Prevent abuse of the process of any court; and
Secure the ends of justice.

However, these powers are:

Extraordinary and must be used sparingly;
Not a substitute for statutory appeals, revisions, or trial;
Generally not meant for resolving factual disputes or weighing evidence.

7.4. “Prima Facie Case” and “Roving Enquiry”

Prima facie case means that on a basic, initial reading of the complaint and documents, there appears to be sufficient ground to proceed, even though the final outcome may differ after full trial.

A “roving enquiry” at the Section 482 stage would mean:

Minutely examining evidence;
Considering rival factual narratives; and
Making conclusive findings on disputed facts,

which is inappropriate at that stage and is reserved for trial.

8. Conclusion

M/s Sri Om Sales v. Abhay Kumar @ Abhay Patel & Anr. stands as a clear reaffirmation of the limited and carefully circumscribed role of High Courts when dealing with petitions to quash complaints under Section 138 NI Act.

The key takeaways are:

Once a Section 138 complaint discloses all statutory ingredients and is supported by the basic documents, the Magistrate’s decision to issue process should normally stand.
Section 139 NI Act creates a presumption not only of issuance of the cheque but also of the existence of a legally enforceable debt or liability, which the accused must rebut at trial.
The High Court, under Section 482 CrPC, cannot short-circuit the statutory scheme by deciding disputed factual questions – such as whether the cheque was indeed issued for a debt – at the pre-trial stage, except in truly exceptional cases supported by unimpeachable material.
The trial court remains the primary forum for adjudicating the accused’s defences, assessing evidence, and balancing the statutory presumptions with the material on record.

In doctrinal terms, the judgment strengthens the jurisprudence that protects the integrity of cheque transactions and limits recourse to inherent powers that might otherwise undercut the NI Act’s objective of ensuring the credibility and reliability of negotiable instruments. It thus contributes to a more coherent and consistent framework for handling cheque dishonour prosecutions across the country.