CRM-M-30351 IN THE PUNJAB AND HARYANA HIGH COURT AT Balwinder M/s Shriram Finance Limited CORAM: HON'BLE MS. JUSTICE SHALINI SINGH NAGPAL Present: SHALINI SINGH NAGPAL, J. 1. Nagarik Suraksha Sanhita, 2023 dated 22.04.2025 of learned JMIC, Amritsar ‘Shriram Finance vs. Balwinder Singh’ Negotiable and all incidental proceeding arising therefrom 2. was summoned as on complaint without application of jud The complaint based on a loan agreement between was not placed on record nor was relied upon in the list of documents Contents of 30351-2025(O&M) IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH CRM Reserved on: 08.07.2026 Pronounced on: 15. Uploaded on : 15. Singh V/S M/s Shriram Finance Limited CORAM: HON'BLE MS. JUSTICE SHALINI SINGH NAGPAL Mr. Sukhandeep Singh, Advocate for the petitioner. **** SHALINI SINGH NAGPAL, J. Prayer in the petition under Nagarik Suraksha Sanhita, 2023 is for quashing of dated 22.04.2025 of learned JMIC, Amritsar ‘Shriram Finance vs. Balwinder Singh’ Instruments Act, 1885 (hereinafter referred to as ‘NI Act’) and all incidental proceeding arising therefrom Learned counsel for the petitioner was summoned as an accused, to face trial under Section 138 of NI A on complaint filed by respondent. The summoning order was passed without application of judicial mind, without recording any complaint would reveal that entire case of the respondent was based on a loan agreement between the parties was not placed on record nor was relied upon in the list of documents Contents of the loan agreement were also not reproduced in the 1 IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH CRM-M-30351-2025(O&M) Reserved on: 08.07.2026 Pronounced on: 15.07.2026 Uploaded on : 15.07.2026 …Petitioner …Respondent CORAM: HON'BLE MS. JUSTICE SHALINI SINGH NAGPAL , Advocate Prayer in the petition under Section 528 of Bhartiya is for quashing of summoning order dated 22.04.2025 of learned JMIC, Amritsar in NACT-35-2025 titled ‘Shriram Finance vs. Balwinder Singh’ under Section 138 of (hereinafter referred to as ‘NI Act’) and all incidental proceeding arising therefrom. Learned counsel for the petitioner submits that petitioner trial under Section 138 of NI Act filed by respondent. The summoning order was passed icial mind, without recording any reasons. would reveal that entire case of the respondent was parties, but the loan agreement was not placed on record nor was relied upon in the list of documents. loan agreement were also not reproduced in the KAPIL 2026.07.15 19:41 I attest to the accuracy and integrity of this document CRM-M-30351 complaint nor it was by the complainant or The complaint did not disclose when the loan was advanced, when the cheque was given to the respondent by the petitioner and whether the alleged cheque was in discharge of complete liability under the agreement or was merely part payme disclose any cause of action to summon the petitioner to face trial under Section 138 the transaction of the cheque, therefore, summoning of the petitioner vide impugned order dated deserved to be quashed. 3. attached to the Negotiable Instruments Act, which read presumptions shall be made: (a) (b) 30351-2025(O&M) complaint nor it was averred in what capacity the cheque was received by the complainant or if it was against any The complaint did not disclose when the loan was advanced, when the cheque was given to the respondent by the petitioner and whether the alleged cheque was in discharge of complete liability under the agreement or was merely part payment. Prima facie disclose any cause of action to summon the petitioner to face trial under Section 138 of NI Act. There was nothing in the complaint regarding the transaction of the cheque, therefore, summoning of the petitioner ugned order dated 22.04.2025 was bad in law and the order deserved to be quashed. Relevant for decision of the matter are the presumptions attached to a Negotiable instrument, as provided under Section 118 of the Negotiable Instruments Act, which read S.118 Presumptions as to negotiable instruments: Until the contrary is proved, the following presumptions shall be made: (a) of consideration; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; (b) as to date; that every negotiable instrument bearing a date was made or drawn on such date; 2 in what capacity the cheque was received against any legally enforceable debt. The complaint did not disclose when the loan was advanced, when the cheque was given to the respondent by the petitioner and whether the alleged cheque was in discharge of complete liability under the Prima facie, complaint did not disclose any cause of action to summon the petitioner to face trial under of NI Act. There was nothing in the complaint regarding the transaction of the cheque, therefore, summoning of the petitioner was bad in law and the order Relevant for decision of the matter are the presumptions egotiable instrument, as provided under Section 118 of the Negotiable Instruments Act, which reads as under:- S.118 Presumptions as to negotiable instruments: ntil the contrary is proved, the following of consideration; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; as to date; that every negotiable instrument bearing a date was made or drawn on such date; KAPIL 2026.07.15 19:41 I attest to the accuracy and integrity of this document CRM-M-30351 (c) (d) (e) (f) (g) 4. Further, Section 139 of the Act reads as under 30351-2025(O&M) (c) as to time of acceptance; that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; (d) as to time of transfer; that every transfer of a negotiable instrument was made before its maturity; (e) as to order of indorsements; that appearing upon a negotiable instrument were made in the order in which they appear thereon; (f) as to stamp; that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course; that the holder of a negotiable instrument is a holder in due course: Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an SP offence or fraud, or has been obtained from the maker or acceptor an offence or fraud, or for unlawful consideration, the burthen of proving that the holder is a holder in due course lies upon him. Further, Section 139 of the Act reads as under 139. Presumption in favour of holder. 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. 3 tance; that every accepted bill of exchange was accepted within a reasonable time after its as to time of transfer; that every transfer of a negotiable instrument was made before its maturity; as to order of indorsements; that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; as to stamp; that a lost promissory note, bill of exchange that holder is a holder in due course; that the holder of a negotiable instrument is a holder in due course: Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an SP offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burthen of proving that the holder is a holder in due course Further, Section 139 of the Act reads as under:- 139. Presumption in favour of holder.— 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. KAPIL 2026.07.15 19:41 I attest to the accuracy and integrity of this document CRM-M-30351 5. Securities Ltd. and Others (2000) 2 SCC 745 noticed the ingredients of the offence under Section 138 of NI Act as under:-: 30351-2025(O&M) In Kusum Ingots & Alloys Securities Ltd. and Others (2000) 2 SCC 745 noticed the ingredients of the offence under Section 138 of NI Act as “(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability; (ii) that 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 va whichever is earlier; (iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the 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 the bank; (iv) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; 4 Kusum Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd. and Others (2000) 2 SCC 745, Hon’ble Apex Court noticed the ingredients of the offence under Section 138 of NI Act as “(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of in amount of money to another person from out of that account for the discharge of any debt or (ii) that 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, (iii) that cheque is returned by the bank unpaid, either because the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be t by an agreement made with the payee or the holder in due course of the cheque 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 15 days of the ion by him from the bank regarding the return of the cheque as unpaid; KAPIL 2026.07.15 19:41 I attest to the accuracy and integrity of this document CRM-M-30351 6. under Section 138 of NI Act as also the affidavit CW-1/A filed by Sh. Sorav Yadav, Executive Legal affidavit, it liability, owed by the (respondent) AMTSRTW200131002, dated 12.11.2024 for Rs Bank Ltd. assuring was present “refers to drawer to complainant’s Banker (respondent complainant 26.11.2024, receipt. The accused (petitioner) was given 15 days to make the payment which he failed to pay 7. learned trial court was of the view that there proceed again 30351-2025(O&M) (v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.” On record is the complaint filed against the petitioner under Section 138 of NI Act as also the affidavit 1/A filed by Sh. Sorav Yadav, Executive Legal it prima facie transpires that in discharge of his lawful owed by the accused (petitioner) towards the complainant (respondent) in respect of loan taken vide AMTSRTW200131002, accused(petitioner dated 12.11.2024 for Rs.94,000/- drawn upon assuring that the cheque would be was presented for clearance and was dishonored with the remarks refers to drawer”. The Banker returned the original complainant’s Banker, who in turn, respondent) vide cheque return memo dated 15.11.2024. Thereafter, complainant (respondent) sent legal notice dated 25.11.2024 posted on 26.11.2024, which was duly received by the accused as per p receipt. The accused (petitioner) was given 15 days to make the payment which he failed to pay up. On the basis of this evidence trial court was of the view that there proceed against the accused (petitioner) under Section 138 of NI A 5 (v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.” On record is the complaint filed against the petitioner under Section 138 of NI Act as also the affidavit tendered Annexure 1/A filed by Sh. Sorav Yadav, Executive Legal Senior. From the transpires that in discharge of his lawful accused (petitioner) towards the complainant taken vide agreement number petitioner) issued cheque No.035372 drawn upon his Banker IndusInd would be dishonored. The cheque dishonored with the remarks returned the original dishonored cheque informed the complainant vide cheque return memo dated 15.11.2024. Thereafter, sent legal notice dated 25.11.2024 posted on was duly received by the accused as per postal receipt. The accused (petitioner) was given 15 days to make the On the basis of this evidence led at preliminary stage, trial court was of the view that there were sufficient grounds to under Section 138 of NI Act KAPIL 2026.07.15 19:41 I attest to the accuracy and integrity of this document CRM-M-30351 and this Court has that the loan agreement referred to in the complaint and in the affidavit of the complainants representative was not 139 of Negotiable Instruments Act would be attracted and there would be a presumption cheque was issued in discharge of liability claims there was no liability, onus would be on him to prove the plea, during trial, at the appropriate stage. 8. Court in Pharma (P) Ltd. and Another (2002) 1 S this context complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was o have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability.” 9. the course of evidence by making a prayer under Section 311 Cr.P.C. The summoning order is not liable to be quashed on the ground that the complaint is not accompanied by the loan agreement and that the 30351-2025(O&M) and this Court has no reason to hold otherwise. Even if that the loan agreement referred to in the complaint and in the affidavit of the complainants representative was not 139 of Negotiable Instruments Act would be attracted and there would be a presumption in favour of the complainant ( cheque was issued in discharge of liability there was no liability, onus would be on him to prove the plea, during trial, at the appropriate stage. Following observations made by Hon’ble Supreme M.M.T.C. Ltd. and Another v. Medchl Chemicals and Pharma (P) Ltd. and Another (2002) 1 SCC 234 this context: “17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability.” In any case, the loan agreement the course of evidence by making a prayer under Section 311 Cr.P.C. The summoning order is not liable to be quashed on the ground that the complaint is not accompanied by the loan agreement and that the 6 otherwise. Even if, it is accepted that the loan agreement referred to in the complaint and in the affidavit of the complainants representative was not placed on record, Section 139 of Negotiable Instruments Act would be attracted and there would in favour of the complainant (respondent) that the cheque was issued in discharge of liability of debt. If the petitioner there was no liability, onus would be on him to prove the plea, Following observations made by Hon’ble Supreme M.M.T.C. Ltd. and Another v. Medchl Chemicals and CC 234, would be relevant in “17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was n the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability.” (emphasis supplied) agreement may even be produced in the course of evidence by making a prayer under Section 311 Cr.P.C. The summoning order is not liable to be quashed on the ground that the complaint is not accompanied by the loan agreement and that the KAPIL 2026.07.15 19:41 I attest to the accuracy and integrity of this document CRM-M-30351 cheque was not issued against any legally enforceable debt. When the accused moves before trial has commenced, prematurely stifle the prosecution by ignoring the legal presumption accruing in favour of the complainant (respondent). disputed questions of court to determine on the basis of evidence of the Hon’ble Apex Court in Gujarat (2020) 3 SCC 794 30351-2025(O&M) cheque was not issued against any legally enforceable debt. When the accused moves to a Court for quashing of the summoning order even before trial has commenced, endeavour of the C prematurely stifle the prosecution by ignoring the legal presumption accruing in favour of the complainant (respondent). questions of facts are involved, they are best left to the trial court to determine on the basis of evidence of the Hon’ble Apex Court in Rajeshbhai Muljibhai Patel v. State of Gujarat (2020) 3 SCC 794 would be relevant “22. ……… When disputed questions of facts are involved which need to be adjudicated after the part adduce evidence, the complaint under section 138 of the NI Act ought not to have been quashed by the High Court by taking recourse to section 482 CrPC, 1973. Though, the Court has the power to quash the criminal complaint filed under section 138 of the NI Act on the legal issues like limitation. etc. criminal complaint filed under section 138 of the NI Act against Yogeshbhai ought not to have been quashed merely on the ground that there are inter se disputes between Appellant 3 and Respondent 2. Without keeping in view the statutory presumption raised under section 139 of the NI Act, the High Court, in our view, committed a serious error in quashing the criminal 7 cheque was not issued against any legally enforceable debt. When the to a Court for quashing of the summoning order even endeavour of the Court should not be to prematurely stifle the prosecution by ignoring the legal presumption accruing in favour of the complainant (respondent). Whenever acts are involved, they are best left to the trial court to determine on the basis of evidence led. Following observations Rajeshbhai Muljibhai Patel v. State of would be relevant in this context : When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under section 138 of the NI Act ought not to have been quashed by the High Court by taking recourse to section 482 CrPC, 1973. Though, the Court has the power to quash the criminal complaint filed NI Act on the legal issues like limitation. etc. criminal complaint filed under section 138 of the NI Act against Yogeshbhai ought not to have been quashed merely on the ground that there are inter se disputes between Appellant 3 and Respondent 2. Without keeping in view the statutory presumption raised under section 139 of the NI Act, the High Court, in our view, committed a serious error in quashing the criminal KAPIL 2026.07.15 19:41 I attest to the accuracy and integrity of this document CRM-M-30351 10. and Section 139 o quashed for the reason that the agreement has not been appended that there is no averment in the complaint in what capacity the was received by the complainant (respondent) any legally enforceable debt. The argument that the summoning order did not reflect due application of mind is against record. 11. 12. of. 15.07.2026 Kapil 30351-2025(O&M) complaint in CC No. 367 of 2016 filed under section 138 of the NI Act." Considering the statutory presumption and Section 139 of NI Act, the summoning order is not liable to be quashed for the reason that the agreement has not been appended there is no averment in the complaint in what capacity the was received by the complainant (respondent) any legally enforceable debt. The argument that the summoning order did not reflect due application of mind is against record. There is no merit in the petition Pending miscellaneous application, if any, stands disposed (SHALINI SINGH NAGPAL) .2026 Whether speaking/reasoned Whether reportable 8 complaint in CC No. 367 of 2016 filed under section 138 presumptions under Section 118 f NI Act, the summoning order is not liable to be quashed for the reason that the agreement has not been appended or there is no averment in the complaint in what capacity the cheque was received by the complainant (respondent) and that it was against any legally enforceable debt. The argument that the summoning order did not reflect due application of mind is against record. There is no merit in the petition which stands dismissed. Pending miscellaneous application, if any, stands disposed SHALINI SINGH NAGPAL) JUDGE Whether speaking/reasoned : Yes/No : Yes/No KAPIL 2026.07.15 19:41 I attest to the accuracy and integrity of this document