IN THE HIGH COURT OF PUNJAB AND HARYANA Rajesh Goyal State of Haryana CORAM: HON’BLE MR. JUSTICE SUBHAS MEHLA Present: Mr. Amit Jhanji, Senior Mr. Arjun Singh, Mr. Sehejbir Singh, Advocate, for the petitioner Mr. Satbir Singh Goripuria, DAG, Haryana Mr. Arjun Kaushal, Advocate for respondent *** SUBHAS MEHLA, J. 1. The present petition has been filed under Section 482 of Criminal Procedure, 1973 (hereinafter ‘ No.NACT/111/ instituted under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter, ‘the Class, Panchkula BRIEF FACTS 2. Briefly stated, respondent No.2 Agreement to Sell dated 22.10.2015 Pvt. Ltd., through its Managing Director, namely the present petitioner, in respect of two residential units in a group housing project being developed by IN THE HIGH COURT OF PUNJAB AND HARYANA CHANDIGARH CRM Reserved On Pronounced o VS State of Haryana & Another HON’BLE MR. JUSTICE SUBHAS MEHLA Mr. Amit Jhanji, Senior Advocate with Mr. Arjun Singh, Advocate, and Mr. Sehejbir Singh, Advocate, for the petitioner Mr. Satbir Singh Goripuria, DAG, Haryana Mr. Arjun Kaushal, Advocate for respondent No.2. *** SUBHAS MEHLA, J. The present petition has been filed under Section 482 of Criminal Procedure, 1973 (hereinafter ‘Cr.P.C. /2019 titled ‘Sunit Bansal vs. Rajesh Goyal instituted under Section 138 of the Negotiable Instruments Act, 1881 the Act’), pending before the learned , Panchkula (Annexure P-1). BRIEF FACTS Briefly stated, respondent No.2- Agreement to Sell dated 22.10.2015 (Annexure P Pvt. Ltd., through its Managing Director, namely the present petitioner, in respect of two residential units in a group housing project being developed by IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CRM-M-48700-2019 (O&M) Reserved On: 29.04.2026 Pronounced on: 27.07.2026 ...Petitioner ...Respondents HON’BLE MR. JUSTICE SUBHAS MEHLA Advocate with Mr. Sehejbir Singh, Advocate, for the petitioner. Mr. Satbir Singh Goripuria, DAG, Haryana. The present petition has been filed under Section 482 of the Code Cr.P.C.’) for quashing of Complaint Sunit Bansal vs. Rajesh Goyal’ dated 17.01.2019 instituted under Section 138 of the Negotiable Instruments Act, 1881 ), pending before the learned Judicial Magistrate 1st -complainant entered into an (Annexure P-2) with M/s RG Residency Pvt. Ltd., through its Managing Director, namely the present petitioner, in respect of two residential units in a group housing project being developed by respect of two residential units in a group housing project being developed by GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 the company at Plot No. GH consideration admittedly stood paid by respondent No.2. In terms of the agreement, the sale deed in respect of the said units was to be executed on or before The agreement further contemplated that in the event the sale deed was not executed by the stipulated date, respondent No.2 would become entitled to refund of the entire amount paid towards the said units. 3. Towards discharge of the obligatio transaction, M/s RG Residency Pvt. Ltd. issued post dated 30.09.2018 for a sum of amount and appreciation cheques bearing Nos.407339 and 969832, each in t sum of Rs.3,03,750/ affidavit and a Personal Guarantee in favour of respondent No.2 and, in pursuance thereof, issued cheque No.336743 dated 30.09.2018 for a sum of Rs.45,00,000/- 4. According to the complaint, the sale deed was not executed within the stipulated period. encashment on 27.11.2018 Insufficient” vide Returning Memo proceedings are concerned with the complaint founded upon dishonour of cheque No.336743 statutory notice dated upon failure of payment within the prescribed period, the complaint in question came to be instituted. 2019 -2- the company at Plot No. GH-02, Sector- agreed between the parties was admittedly stood paid by respondent No.2. In terms of the agreement, the sale deed in respect of the said units was to be executed on or before The agreement further contemplated that in the event the sale deed was not executed by the stipulated date, respondent No.2 would become entitled to refund of the entire amount paid towards the said units. Towards discharge of the obligatio transaction, M/s RG Residency Pvt. Ltd. issued post dated 30.09.2018 for a sum of Rs.45,00,000/- towards refund of the principal amount and appreciation cheques bearing Nos.407339 and 969832, each in t 3,03,750/-. The petitioner is further stated to have executed an affidavit and a Personal Guarantee in favour of respondent No.2 and, in pursuance thereof, issued cheque No.336743 dated 30.09.2018 for a sum of drawn on his personal account. According to the complaint, the sale deed was not executed within the stipulated period. All the aforesaid cheques were presented for on 27.11.2018 and came to be dishonoured Insufficient” vide Returning Memo dated 28.11.2018 proceedings are concerned with the complaint founded upon dishonour of 336743 issued by the petitioner from his personal account. A statutory notice dated 24.12.2018 was thereafter issued to the petitioner and failure of payment within the prescribed period, the complaint in question came to be instituted. Aggrieved by the initiation of the aforesaid -120, Noida. The total sale agreed between the parties was Rs.45,00,000/-, which admittedly stood paid by respondent No.2. In terms of the agreement, the sale deed in respect of the said units was to be executed on or before 30.09.2018. The agreement further contemplated that in the event the sale deed was not executed by the stipulated date, respondent No.2 would become entitled to refund of the entire amount paid towards the said units. Towards discharge of the obligations arising out of the aforesaid transaction, M/s RG Residency Pvt. Ltd. issued post-dated cheque No.407322 towards refund of the principal amount and appreciation cheques bearing Nos.407339 and 969832, each in the . The petitioner is further stated to have executed an affidavit and a Personal Guarantee in favour of respondent No.2 and, in pursuance thereof, issued cheque No.336743 dated 30.09.2018 for a sum of According to the complaint, the sale deed was not executed All the aforesaid cheques were presented for and came to be dishonoured with remarks “Funds dated 28.11.2018. The present proceedings are concerned with the complaint founded upon dishonour of issued by the petitioner from his personal account. A was thereafter issued to the petitioner and failure of payment within the prescribed period, the complaint in Aggrieved by the initiation of the aforesaid GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 proceedings, the petitioner has approached this Court by way of the present petition. CONTENTIONS 5. Learned counsel for the petitioner assailed the complaint in question by contending that it is a gross abuse of the process of law and deserves to be quashed. It was contended that the transaction in question essentially arises out of an A No.2 and M/s RG Residency Pvt. Ltd. and that the petitioner has been unnecessarily dragged into criminal proceedings despite there being no legally enforceable debt or liability against him. Agreement to Sell was executed between respondent No.2 and M/s RG Residency Pvt. Ltd. and, therefore, the liability, if any, was that of the company and not of the petitioner in his individual capacity. further contended guarantee/security necessary for attracting Section 138 of the Act are, therefore, not satisfied 6. Learned counsel further submit simultaneously presented the cheque issued by the company towards refund of the principal amount and the cheque issued by the petitioner under the Personal Guarantee liability of the guarantor discharge its obligation and after invocation of the guarantee in accordance with law. It was against the petitioner on the date of pres the essential ingredients of Section 138 of the Act are not satisfied 2019 -3- proceedings, the petitioner has approached this Court by way of the present CONTENTIONS ON BEHALF OF THE PETITIONER Learned counsel for the petitioner assailed the complaint in ion by contending that it is a gross abuse of the process of law and to be quashed. It was contended that the transaction in question essentially arises out of an Agreement to Sell executed between respondent No.2 and M/s RG Residency Pvt. Ltd. and that the petitioner has been unnecessarily dragged into criminal proceedings despite there being no legally enforceable debt or liability against him. Learned counsel subm Agreement to Sell was executed between respondent No.2 and M/s RG Residency Pvt. Ltd. and, therefore, the liability, if any, was that of the company and not of the petitioner in his individual capacity. further contended that the cheque in question was issued merely by way of guarantee/security for the obligations of the company and that the ingredients necessary for attracting Section 138 of the Act are, therefore, not satisfied Learned counsel further submit simultaneously presented the cheque issued by the company towards refund of the principal amount and the cheque issued by the petitioner under the Personal Guarantee (Annexure P-3). According to learned counsel, the liability of the guarantor could arise only after failure of the principal debtor to discharge its obligation and after invocation of the guarantee in accordance was argued that no legally enforceable liability had crystallized against the petitioner on the date of presentation of the cheque and, therefore, the essential ingredients of Section 138 of the Act are not satisfied proceedings, the petitioner has approached this Court by way of the present E PETITIONER Learned counsel for the petitioner assailed the complaint in ion by contending that it is a gross abuse of the process of law and to be quashed. It was contended that the transaction in question greement to Sell executed between respondent No.2 and M/s RG Residency Pvt. Ltd. and that the petitioner has been unnecessarily dragged into criminal proceedings despite there being no legally Learned counsel submitted that the Agreement to Sell was executed between respondent No.2 and M/s RG Residency Pvt. Ltd. and, therefore, the liability, if any, was that of the company and not of the petitioner in his individual capacity. Learned counsel cheque in question was issued merely by way of for the obligations of the company and that the ingredients necessary for attracting Section 138 of the Act are, therefore, not satisfied. Learned counsel further submitted that the complainant simultaneously presented the cheque issued by the company towards refund of the principal amount and the cheque issued by the petitioner under the . According to learned counsel, the could arise only after failure of the principal debtor to discharge its obligation and after invocation of the guarantee in accordance argued that no legally enforceable liability had crystallized entation of the cheque and, therefore, the essential ingredients of Section 138 of the Act are not satisfied. Hence, unnecessarily dragged into criminal proceedings despite there being no legally GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 learned counsel submitted that continuation of the criminal proceedings would amount to abuse of the process of law and the complaint deser quashed. CONTENTIONS ON BEHALF OF STATE 7. Learned State counsel case is being prosecuted under Section 138 of the respondent /respondent No.2 is the principal contesting party, a the controversy essentially pertains to the petitioner and respondent No.2. that the State has no significant role in the present case the discretion of the Court. CONTENTIONS ON BEHALF OF RESPONDENT NO.2 8. Learned counsel appearing on behalf of respondent No.2 submitted that the complaint, read in conjunction with the documents relied upon therein, clearly discloses commission of an offence under Section 138 of the Act. 9. Learned counsel submitted that Agreement to Sell Personal Guarantee personal account various writings and undertakings. Particular reference has been made to the affidavit and Personal Guarantee (Annexure P 26.10.2018 (Annexure R R-2/5). Learned counsel argued that the d petitioner is contrary to the documents executed by him and raises disputed 2019 -4- learned counsel submitted that continuation of the criminal proceedings would amount to abuse of the process of law and the complaint deser CONTENTIONS ON BEHALF OF STATE earned State counsel submitted that the petitioner in the present case is being prosecuted under Section 138 of the respondent No.2 is the principal contesting party, a the controversy essentially pertains to the petitioner and respondent No.2. Accordingly, learned has no significant role in the present case scretion of the Court. CONTENTIONS ON BEHALF OF RESPONDENT NO.2 Learned counsel appearing on behalf of respondent No.2 submitted that the complaint, read in conjunction with the documents relied upon therein, clearly discloses commission of an offence under Section 138 of Learned counsel submitted that Agreement to Sell on behalf of the company, the petitioner furnished a Personal Guarantee and issued cheque No.336743 dated 30.09.2018 from his personal account, and thereafter repeatedly acknowledged his liability through writings and undertakings. Particular reference has been made to the affidavit and Personal Guarantee (Annexure P (Annexure R-2/7) and the undertaking dated 20.01.2019 . Learned counsel argued that the defence now petitioner is contrary to the documents executed by him and raises disputed learned counsel submitted that continuation of the criminal proceedings would amount to abuse of the process of law and the complaint deserves to be submitted that the petitioner in the present case is being prosecuted under Section 138 of the Act, and the private respondent No.2 is the principal contesting party, and further, that the controversy essentially pertains to the inter se dispute between the learned State counsel submitted has no significant role in the present case, and left the matter to CONTENTIONS ON BEHALF OF RESPONDENT NO.2 Learned counsel appearing on behalf of respondent No.2 submitted that the complaint, read in conjunction with the documents relied upon therein, clearly discloses commission of an offence under Section 138 of Learned counsel submitted that apart from executing the on behalf of the company, the petitioner furnished a issued cheque No.336743 dated 30.09.2018 from his and thereafter repeatedly acknowledged his liability through writings and undertakings. Particular reference has been made to the affidavit and Personal Guarantee (Annexure P-3), the ratification dated and the undertaking dated 20.01.2019(Annexure efence now being taken by the petitioner is contrary to the documents executed by him and raises disputed GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 questions of fact which can only be adjudicated upon accordingly prayed for dismissal of the petition. OBSERVATIONS AND ANAL 10. Heard and record perused. 11. While exercising jurisdiction under Section 482 Cr.P.C., th Court is not required to adjudicate upon the merits of the rival claims or determine the probable defence of the accused, which are matters falling within the province of the trial Court. Hence, the principal question which arises for consideration is whether, on a prima facie appraisal of the complaint and the material relied upon by the complainant, the ingredients necessary to constitute an offence under petitioner. 12. The principal submission advanced on behalf of the petitioner is that the cheque in question was issued by him in the capacity of a guarantor and that the liability, if any, was that of M/s principal debtor. It has further been argued that the complainant simultaneously sought to proceed against both the principal debtor and the guarantor and, therefore, the ingredients of Section 138 of the Act are not attracted against the petitioner 13. Although the petitioner has sought to before this Court in light of the provisions governing the contract of guarantee, however, the present case cannot be viewed the law relating to guarantees circumstances and the contemporaneous documents placed on record. 2019 -5- questions of fact which can only be adjudicated upon accordingly prayed for dismissal of the petition. OBSERVATIONS AND ANALYSIS Heard and record perused. hile exercising jurisdiction under Section 482 Cr.P.C., th Court is not required to adjudicate upon the merits of the rival claims or determine the probable defence of the accused, which are matters falling the province of the trial Court. Hence, the principal question which arises for consideration is whether, on a prima facie appraisal of the complaint and the material relied upon by the complainant, the ingredients necessary to constitute an offence under Section 138 of the Act are disclosed against the The principal submission advanced on behalf of the petitioner is that the cheque in question was issued by him in the capacity of a guarantor and that the liability, if any, was that of M/s RG Residency Pvt. Ltd., being the principal debtor. It has further been argued that the complainant simultaneously sought to proceed against both the principal debtor and the guarantor and, therefore, the ingredients of Section 138 of the Act are not acted against the petitioner. Although the petitioner has sought to before this Court in light of the provisions governing the contract of guarantee, however, the present case cannot be viewed elating to guarantees, while disregarding the surrounding circumstances and the contemporaneous documents placed on record. questions of fact which can only be adjudicated upon in trial. Learned counsel accordingly prayed for dismissal of the petition. hile exercising jurisdiction under Section 482 Cr.P.C., the Court is not required to adjudicate upon the merits of the rival claims or determine the probable defence of the accused, which are matters falling the province of the trial Court. Hence, the principal question which arises for consideration is whether, on a prima facie appraisal of the complaint and the material relied upon by the complainant, the ingredients necessary to Section 138 of the Act are disclosed against the The principal submission advanced on behalf of the petitioner is that the cheque in question was issued by him in the capacity of a guarantor RG Residency Pvt. Ltd., being the principal debtor. It has further been argued that the complainant simultaneously sought to proceed against both the principal debtor and the guarantor and, therefore, the ingredients of Section 138 of the Act are not Although the petitioner has sought to challenge the complaint before this Court in light of the provisions governing the contract of guarantee, however, the present case cannot be viewed solely in the context of , while disregarding the surrounding circumstances and the contemporaneous documents placed on record. GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 14. A perusal of the record reveals that the petitioner was not a stranger to the transaction in question. The Agreement to Sell da 22.10.2015 (Annexure P through the petitioner in his capacity as Managing Director. The affidavit forming part of Annexure P Managing Director, authori to-day affairs of the company. The petitioner further affirmed therein that he possessed authority to execute documents relating to the transaction and that the obligations arising therefrom would be honoured not merely a third transaction, but was the very individual who represented the company and admittedly controlled its affairs. 15. Equally significant is the Personal Guarantee executed by the petitioner. The document expressly stipulates that in the event M/s RG Residency Pvt. Ltd. failed to execute the sale deed by 30.09.2018, the petitioner and his successors would No.2 to the extent of issuance of cheque No.336743 dated 30.09.2018 for petitioner’s personal account and contains a specific assurance that the cheque would be honoured upon presentation 16. The aforesaid circumstances are further reinforced by the undertaking dated 20.01.2019 the said undertaking, the petitioner unequivocally acknowledged his legal liability towards respondent No.2, admit bank with his consent had been dishonoured and further assured that the 2019 -6- A perusal of the record reveals that the petitioner was not a stranger to the transaction in question. The Agreement to Sell da (Annexure P-2) was executed by M/s RG Residency Pvt. Ltd. through the petitioner in his capacity as Managing Director. The affidavit forming part of Annexure P-3 specifically records that the petitioner was the Managing Director, authorized signatory and the person in day affairs of the company. The petitioner further affirmed therein that he possessed authority to execute documents relating to the transaction and that the obligations arising therefrom would be honoured not merely a third-party guarantor unconnected with the underlying but was the very individual who represented the company and admittedly controlled its affairs. Equally significant is the Personal Guarantee executed by the petitioner. The document expressly stipulates that in the event M/s RG Residency Pvt. Ltd. failed to execute the sale deed by 30.09.2018, the petitioner and his successors would stand as principal debtors to respondent he extent of Rs.45,00,000/-. The said document further records the issuance of cheque No.336743 dated 30.09.2018 for s personal account and contains a specific assurance that the cheque would be honoured upon presentation. The aforesaid circumstances are further reinforced by the undertaking dated 20.01.2019 (Annexure R-2/5) the said undertaking, the petitioner unequivocally acknowledged his legal liability towards respondent No.2, admitted that the cheques deposited in the bank with his consent had been dishonoured and further assured that the A perusal of the record reveals that the petitioner was not a stranger to the transaction in question. The Agreement to Sell dated was executed by M/s RG Residency Pvt. Ltd. through the petitioner in his capacity as Managing Director. The affidavit 3 specifically records that the petitioner was the d signatory and the person in charge of the day- day affairs of the company. The petitioner further affirmed therein that he possessed authority to execute documents relating to the transaction and that the obligations arising therefrom would be honoured. Thus, the petitioner was party guarantor unconnected with the underlying but was the very individual who represented the company and Equally significant is the Personal Guarantee (Annexure P-3) executed by the petitioner. The document expressly stipulates that in the event M/s RG Residency Pvt. Ltd. failed to execute the sale deed by 30.09.2018, the as principal debtors to respondent . The said document further records the issuance of cheque No.336743 dated 30.09.2018 for Rs.45,00,000/- from the s personal account and contains a specific assurance that the cheque The aforesaid circumstances are further reinforced by the 2/5) executed by the petitioner. In the said undertaking, the petitioner unequivocally acknowledged his legal ted that the cheques deposited in the bank with his consent had been dishonoured and further assured that the GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 outstanding liabilities would be cleared by 31.03.2019. Prima facie, therefore, the petitioner was not only aware of the dishonour of the cheque i but also consciously accepted the liability arising therefrom. 17. The cumulative effect of the aforesaid documents assumes significance in the facts of the present case. The petitioner seeks to resist the proceedings by emphasizing that he act record simultaneously discloses that he was the Managing Director of the company, admittedly in charge of its affairs, the executant of the Personal Guarantee, the drawer of the cheque in question and, subsequently, a to an undertaking acknowledging the liability in express terms. These circumstances cannot be viewed in isolation from one another while considering the prayer for quashing. 18. At this stage, this Court is only required to examine whether the complaint and the material placed on record prima facie disclose commission of an offence under Section 138 of the Act. The scope of enquiry is not to determine the guilt or innocence of the accused but merely to assess whether the foundational ingredients disclosed from the material available on record. For facility of reference, Section 138 of the Act is reproduced hereunder: “Where any cheque drawn by a person on an account maintained by him with a banke another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that acc that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be 2019 -7- outstanding liabilities would be cleared by 31.03.2019. Prima facie, therefore, the petitioner was not only aware of the dishonour of the cheque i but also consciously accepted the liability arising therefrom. The cumulative effect of the aforesaid documents assumes significance in the facts of the present case. The petitioner seeks to resist the proceedings by emphasizing that he acted merely as a guarantor. However, the record simultaneously discloses that he was the Managing Director of the company, admittedly in charge of its affairs, the executant of the Personal Guarantee, the drawer of the cheque in question and, subsequently, a to an undertaking acknowledging the liability in express terms. These circumstances cannot be viewed in isolation from one another while considering the prayer for quashing. At this stage, this Court is only required to examine whether the complaint and the material placed on record prima facie disclose commission of an offence under Section 138 of the Act. The scope of enquiry is not to determine the guilt or innocence of the accused but merely to assess whether the foundational ingredients necessary for continuation of the prosecution are disclosed from the material available on record. For facility of reference, Section 138 of the Act is reproduced hereunder: “Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be outstanding liabilities would be cleared by 31.03.2019. Prima facie, therefore, the petitioner was not only aware of the dishonour of the cheque in question but also consciously accepted the liability arising therefrom. The cumulative effect of the aforesaid documents assumes significance in the facts of the present case. The petitioner seeks to resist the ed merely as a guarantor. However, the record simultaneously discloses that he was the Managing Director of the company, admittedly in charge of its affairs, the executant of the Personal Guarantee, the drawer of the cheque in question and, subsequently, a signatory to an undertaking acknowledging the liability in express terms. These circumstances cannot be viewed in isolation from one another while At this stage, this Court is only required to examine whether the complaint and the material placed on record prima facie disclose commission of an offence under Section 138 of the Act. The scope of enquiry is not to determine the guilt or innocence of the accused but merely to assess whether necessary for continuation of the prosecution are disclosed from the material available on record. For facility of reference, Section 138 of the Act is reproduced hereunder:- “Where any cheque drawn by a person on an account maintained r for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to ount is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 deemed to have committed an offence and shall, without prejudice to any other provisions imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless (a) of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) said amount of money to the payee or, as the case may be, to the holder in due receipt of the said notice. Explanation. Explanation. For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.]” The facts of the present case indicate admittedly issued by the petitioner from his personal account; that the same was issued in connection with the obligations arising out of the transaction between the parties, more particularly, in terms of the Personal Guarantee furnished by him; that the cheque was presented within its validity period and was dishonoured for insufficiency of funds; and that despite issuance of the statutory notice, the amount remained unpaid within the prescribed period. It is also not the petitioner' 2019 -8- deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless— (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days of the receipt of information by him om the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.— For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.]” ts of the present case indicate that the c admittedly issued by the petitioner from his personal account; that the same was issued in connection with the obligations arising out of the transaction between the parties, more particularly, in terms of the Personal Guarantee shed by him; that the cheque was presented within its validity period and was dishonoured for insufficiency of funds; and that despite issuance of the statutory notice, the amount remained unpaid within the prescribed period. It is also not the petitioner's case that on the date the cheque was presented for deemed to have committed an offence and shall, without prejudice of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or Provided that nothing contained in this section shall apply the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days of the receipt of information by him om the bank regarding the return of the cheque as unpaid; and the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the course of the cheque, within fifteen days of the For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.]” that the cheque in question was admittedly issued by the petitioner from his personal account; that the same was issued in connection with the obligations arising out of the transaction between the parties, more particularly, in terms of the Personal Guarantee shed by him; that the cheque was presented within its validity period and was dishonoured for insufficiency of funds; and that despite issuance of the statutory notice, the amount remained unpaid within the prescribed period. It s case that on the date the cheque was presented for admittedly issued by the petitioner from his personal account; that the same GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 encashment, the liability in question already stood discharged or that the obligations arising under the underlying transaction had otherwise been duly satisfied. Accordingly, on a prima facie considerat available on record, the essential ingredients contemplated under Section 138 of the Act appear to Whether the petitioner ultimately succeeds in establishing his defence, and whether the various documents relied legal consequences sought to be attributed to them, are matters which fall within the domain of the trial Court and adjudicated upon after the parties have led their respective evidence. Entertaining these proceedings under Section 482 Cr.P.C. into a trial before the trial itself. The inherent jurisdiction under Section 482 Cr.P.C. is not intended to facilitate a mini-trial, nor can exceptionally compelling circumstances procedure and perversion of justice. Quashing of criminal proceedings is an extraordinary remedy. It is intended to prevent manifest abuse of the process of law and to secure the ends of justice in cases where continuation of the proceedings would be wholly unwarranted. Unless the allegations commission of any offence, or the prosecution is demonstrably frivolous, vexatious or legally untenable, the criminal process ordinarily ought to be permitted to take its course. The present case does not f exceptional category. This Court would, therefore, refrain from undertaking a 2019 -9- encashment, the liability in question already stood discharged or that the obligations arising under the underlying transaction had otherwise been duly satisfied. Accordingly, on a prima facie considerat available on record, the essential ingredients contemplated under Section 138 of the Act appear to be satisfied. Whether the petitioner ultimately succeeds in establishing his defence, and whether the various documents relied upon by the respective parties bear the legal consequences sought to be attributed to them, are matters which fall within the domain of the trial Court and adjudicated upon after the parties have led their respective evidence. these questions at the threshold stage would amount to converting proceedings under Section 482 Cr.P.C. into a trial before the trial itself. The inherent jurisdiction under Section 482 Cr.P.C. is not intended to facilitate a trial, nor can it be invoked to stifle a prosecution exceptionally compelling circumstances which evince misuse of legal procedure and perversion of justice. Quashing of criminal proceedings is an extraordinary remedy. It is intended to prevent manifest abuse of the process of law and to secure the ends of justice in cases where continuation of the proceedings would be wholly unwarranted. Unless the allegations, taken at their face value, fail to disclose the commission of any offence, or the prosecution is demonstrably frivolous, vexatious or legally untenable, the criminal process ordinarily ought to be permitted to take its course. The present case does not f exceptional category. This Court would, therefore, refrain from undertaking a encashment, the liability in question already stood discharged or that the obligations arising under the underlying transaction had otherwise been duly satisfied. Accordingly, on a prima facie consideration of the material presently available on record, the essential ingredients contemplated under Section 138 Whether the petitioner ultimately succeeds in establishing his defence, and upon by the respective parties bear the legal consequences sought to be attributed to them, are matters which fall within the domain of the trial Court and such questions can only be adjudicated upon after the parties have led their respective evidence. questions at the threshold stage would amount to converting proceedings under Section 482 Cr.P.C. into a trial before the trial itself. The inherent jurisdiction under Section 482 Cr.P.C. is not intended to facilitate a it be invoked to stifle a prosecution other than in which evince misuse of legal Quashing of criminal proceedings is an extraordinary remedy. It is intended to prevent manifest abuse of the process of law and to secure the ends of justice in cases where continuation of the proceedings would be wholly unwarranted. , taken at their face value, fail to disclose the commission of any offence, or the prosecution is demonstrably frivolous, vexatious or legally untenable, the criminal process ordinarily ought to be permitted to take its course. The present case does not fall within any such exceptional category. This Court would, therefore, refrain from undertaking a GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 detailed examination of disputed factual issues or conducting a roving enquiry into the merits of the rival claims. 19. The object underlying Section 138 of credibility of commercial transactions and to instill confidence in the use of cheques as a reliable instrument of payment. The provision seeks to ensure that a person who issues a cheque in discharge of an admitted liability does not evade the consequences flowing from its dishonour. In the peculiar facts of the present case, where the petitioner had due notice of the dishonour, expressly acknowledged the liability and nevertheless failed to honour the commitment undertaken by hi proceedings at the threshold stage. 20. In view of the above circumstances documents on record, accompanying it Section 138 of the Act. petitioner's status as a guarantor, but upon the cumulative effect of the documents executed by him and the subsequent acknowledgements dishonour of the cheque in question. the Personal Guarantee affidavit forming part of Annexure P undertaking dated 20.01. value, furnish sufficient material to sustain the continuation of the proceedings at this stage. 21. Needless to and the cumulative impact of the surrounding circumstances are matters which 2019 -10- detailed examination of disputed factual issues or conducting a roving enquiry into the merits of the rival claims. The object underlying Section 138 of credibility of commercial transactions and to instill confidence in the use of cheques as a reliable instrument of payment. The provision seeks to ensure that a person who issues a cheque in discharge of an admitted liability does not evade the consequences flowing from its dishonour. In the peculiar facts of the present case, where the petitioner had due notice of the dishonour, expressly acknowledged the liability and nevertheless failed to honour the commitment undertaken by him, this Court finds no justification interdict the proceedings at the threshold stage. In view of the above circumstances documents on record, this Court is satisfied that the complaint and the material accompanying it prima facie disclose the ingredients necessary to attract Section 138 of the Act. This conclusion is not petitioner's status as a guarantor, but upon the cumulative effect of the documents executed by him and the subsequent acknowledgements dishonour of the cheque in question. The Agreement to Sell the Personal Guarantee (Annexure P-3) executed by the petitioner, the affidavit forming part of Annexure P-3, the subsequent ratification and the undertaking dated 20.01.2019 (Annexure R-2/5 value, furnish sufficient material to sustain the continuation of the proceedings Needless to say, the precise nature and extent of the petitioner's liability, and the cumulative impact of the surrounding circumstances are matters which detailed examination of disputed factual issues or conducting a roving enquiry The object underlying Section 138 of the Act is to enhance the credibility of commercial transactions and to instill confidence in the use of cheques as a reliable instrument of payment. The provision seeks to ensure that a person who issues a cheque in discharge of an admitted liability does not evade the consequences flowing from its dishonour. In the peculiar facts of the present case, where the petitioner had due notice of the dishonour, expressly acknowledged the liability and nevertheless failed to honour the , this Court finds no justification interdict the In view of the above circumstances, arguments advanced and this Court is satisfied that the complaint and the material disclose the ingredients necessary to attract his conclusion is not solely founded upon the petitioner's status as a guarantor, but upon the cumulative effect of the documents executed by him and the subsequent acknowledgements made after The Agreement to Sell (Annexure P-2), executed by the petitioner, the 3, the subsequent ratification and the 2/5), when taken at their face value, furnish sufficient material to sustain the continuation of the proceedings the precise nature and extent of the petitioner's liability, and the cumulative impact of the surrounding circumstances are matters which the precise nature and extent of the petitioner's liability, GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh CRM-M-48700-2019 would appropriately fall for consideration before the learned trial Court upon appreciation of the evidence led by the observations recorded herein are confined solely to the adjudication of the present petition under Section 482 Cr.P.C. and shall not be construed as an expression of opinion on the merits of the case. raised by the petitioner are matters which remain open to be urged before the learned trial Court at the appropriate stage. 22. Consequently, finding no merit in the present petition, the same is dismissed. 23. Pending miscellaneous application(s), of. 27.07.2026 Geeta 2019 -11- would appropriately fall for consideration before the learned trial Court upon appreciation of the evidence led by the parties. observations recorded herein are confined solely to the adjudication of the present petition under Section 482 Cr.P.C. and shall not be construed as an expression of opinion on the merits of the case. raised by the petitioner are matters which remain open to be urged before the learned trial Court at the appropriate stage. Consequently, finding no merit in the present petition, the same is Pending miscellaneous application(s), Whether Speaking/Reasoned: Whether Reportable: would appropriately fall for consideration before the learned trial Court upon parties. It is clarified that the observations recorded herein are confined solely to the adjudication of the present petition under Section 482 Cr.P.C. and shall not be construed as an expression of opinion on the merits of the case. The defences sought to be raised by the petitioner are matters which remain open to be urged before the Consequently, finding no merit in the present petition, the same is Pending miscellaneous application(s), if any, also stand disposed (SUBHAS MEHLA) JUDGE YES/NO YES/NO GEETA RANI 2026.07.27 17:27 I attest to the accuracy and authenticity of this order/judgment Punjab & Haryana High Court at Chandigarh