2025:UHC:4275 IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL THE HON’BLE SRI JUSTICE ASHISH NAITHANI 16th May, 2025 CRIMINAL MISCELLANEOUS APPLICATION NO. 64 OF 2018 Rajendra Mandola …Applicant Versus State of Uttarakhand …Respondent Counsel for the Applicant : Mr. Rajesh Sharma, Advocate. Counsel for the State : Mr. Bhaskar Chandra Joshi, A.G.A. Counsel for Respondent : Mr. Nagesh Aggarwal, No. 2 Advocate. Hon’ble Ashish Naithani, J. The present application under Section 482 of the Code of Criminal Procedure has been filed by the applicant, Rajendra Mandola, assailing the judgment and order dated 28.11.2017 passed by the learned District and Sessions Judge, Pauri Garhwal, in Criminal Revision No. 21 of 2017. By the impugned order, the revisional court set aside the summoning order dated 24.10.2016 and the order issuing a non-bailable warrant dated 25.02.2017, passed by the Trial Court in Criminal Complaint Case No. 614 of 2016, instituted under Section 138 of the Negotiable Instruments Act, 1881. 2. The dispute arises out of a business understanding between the applicant and the respondent, Naveen Kumar, relating to property transactions in Kotdwara. As part of this arrangement, both parties exchanged signed cheques for 1 Criminal Misc. Application No. 64 of 2018 – Rajendra Mandola vs. Naveen Kumar and Others. Ashish Naithani J. 2 2025:UHC:4275 ₹62,00,000/-, intended to be used upon execution of a land deal. 3. The applicant presented Cheque No. 676302 dated 15.03.2016, issued by the respondent, which was dishonoured on 02.06.2016 with the remark “account closed.” A legal notice dated 09.06.2016 demanding payment was served but went unheeded. 4. Based on this, the applicant filed a complaint under Section 138 of the Negotiable Instruments Act, 1881. The Trial Court took cognizance on 24.10.2016 and summoned the respondent. Upon his non-appearance, a non-bailable warrant was issued on 25.02.2017. 5. The revisional Court quashed these orders, holding that no prima facie evidence of legally enforceable liability was established. The applicant now seeks restoration of the summoning order, asserting that the ingredients of Section 138 of the NI Act are prima facie fulfilled. 6. Heard learned counsel for the parties and perused the records. 7. Learned counsel for the applicant, Rajendra Mandola, submits that the learned Sessions Judge erred in setting aside the summoning and non-bailable warrant orders dated 24.10.2016 and 25.02.2017 in Complaint Case No. 614 of 2016. It is argued that Cheque No. 676302 dated 15.03.2016 for ₹62,00,000/-, issued by the respondent, was dishonoured with the endorsement “account closed.” A statutory notice was duly served, yet no payment was made, thereby satisfying all essential ingredients under Section 138 of the Negotiable Instruments Act. 8. It is contended that the revisional court prematurely evaluated factual disputes and defences, which are matters for 2 Criminal Misc. Application No. 64 of 2018 – Rajendra Mandola vs. Naveen Kumar and Others. Ashish Naithani J. 3 2025:UHC:4275 trial. The applicant asserts that the cheque was issued towards a legally enforceable liability under a business understanding and that the respondent’s defence ought to be tested during evidence, not at the summoning stage. 9. Learned counsel further submits that the respondent had similarly presented a cheque issued by the applicant, resulting in a separate complaint, though the applicant was eventually acquitted. Quashing the present proceedings, it is urged, results in a miscarriage of justice and undermines the deterrent value of Section 138 of the NI Act. The applicant prays for the setting aside of the order dated 28.11.2017 and for the resumption of the trial. 10. The State supported the revisional order, arguing that the cheque appeared to be part of a business arrangement or security, not issued in discharge of a legal debt. It was submitted that Section 138 does not apply to such security cheques unless liability existed at the time of presentation. 11. The State also pointed to documentary evidence indicating that the applicant had wrongfully retained the cheque after the termination of business ties. It prayed for dismissal of the application under Section 482 CrPC and for the revisional order to be upheld. 12. Upon careful perusal of the record, pleadings, and submissions of both parties, this Court makes the following observations: 13. To constitute an offence under Section 138 of the Negotiable Instruments Act, 1881, there must be a legally enforceable debt or liability at the time of cheque presentation. The applicant has alleged that Cheque No. 676302 dated 15.03.2016 for ₹62,00,000/- was issued by the respondent pursuant to mutual property dealings. Both parties admit that 3 Criminal Misc. Application No. 64 of 2018 – Rajendra Mandola vs. Naveen Kumar and Others. Ashish Naithani J. 4 2025:UHC:4275 cheques were exchanged under a broader business arrangement rather than against any fixed, quantifiable liability at the time of issuance. 14. The respondent contends that the cheque was issued in 2008 as security and became stale upon account closure in 2013, coinciding with the bank’s CBS upgradation. While this is a matter of defence, such disputed factual claims cannot be conclusively adjudicated at the summoning stage. 15. The cheque was dishonoured with the endorsement “account closed” on 02.06.2016. A statutory notice dated 09.06.2016 was issued, and the complaint under Section 138 of the NI Act was filed within the prescribed period in July 2016. The Trial Court, upon considering the complaint, bank memo, and legal notice, found prima facie satisfaction and issued summons on 24.10.2016. 16. The Sessions Judge, however, set aside the summoning and warrant orders by re-evaluating the factual matrix, holding that no enforceable debt was made out. This amounts to a premature adjudication of disputed facts at the threshold stage, which is contrary to established legal principles. 17. Once the execution of the cheque is admitted, a statutory presumption arises under Sections 118 and 139 of the Negotiable Instruments Act that the cheque was issued in discharge of a legally enforceable debt or liability. The contention that the cheque was given as security or had become stale is a matter of defence, which can only be adjudicated upon after the parties have led evidence. At the stage of summoning, the law does not require the complainant to establish the debt beyond a doubt. The presumption, though rebuttable, cannot be displaced without the rigours of trial. 4 Criminal Misc. Application No. 64 of 2018 – Rajendra Mandola vs. Naveen Kumar and Others. Ashish Naithani J. 5 2025:UHC:4275 18. Thus, the revisional court’s approach amounts to a substitution of trial-stage scrutiny with a threshold evaluation, which is impermissible. In State of Haryana v. Bhajan Lal, AIR 1992 SC 604, the Supreme Court cautioned against such interference unless the complaint discloses no offence or is patently malicious. Similarly, in Mahesh Choudhary v. State of Rajasthan, (2009) 4 SCC 439, it was held that criminal prosecution arising out of a civil transaction must not be quashed unless it is clearly vexatious or an abuse of process. 19. In the present case, the dishonour of a ₹62,00,000/- cheque with the endorsement “account closed” falls squarely within the mischief of Section 138 NI Act. The respondent failed to make payment despite due notice. The Trial Court rightly took cognisance based on statutory compliance and supporting material. 20. The respondent’s assertion that the cheque pertained to a 2008 transaction and had become invalid is a plausible defence, but cannot form the basis for quashing prior to trial. The Trial Court is the appropriate forum to assess such claims after the leading of evidence and cross-examination. 21. It is also noteworthy that the respondent failed to appear before the Trial Court, leading to the issuance of a non- bailable warrant. The revisional court’s order prematurely halted proceedings before trial could commence and deprived the complainant of an opportunity to prove his case. 22. There is no indication of mala fide or abuse of process by the applicant. The complaint was filed timely, after dishonour of the cheque and service of legal notice. The mere pendency of a prior complaint by the respondent, where the applicant was acquitted, does not detract from the present cause of action. 5 Criminal Misc. Application No. 64 of 2018 – Rajendra Mandola vs. Naveen Kumar and Others. Ashish Naithani J. 6 2025:UHC:4275 23. In view of the above, this Court is of the considered opinion that the learned Sessions Judge overstepped the bounds of revisional jurisdiction. The elements of Section 138 NI Act—issuance of cheque, dishonour, service of notice, and non-payment—are clearly satisfied on record. The respondent’s defences require adjudication at trial, not in revision. 24. Premature quashing of proceedings would stifle the statutory right of the complainant and undermine the object of the N.I. An Act that aims to ensure financial accountability and penal deterrence for dishonoured cheques. ORDER In view of the foregoing analysis and findings, the present Criminal Miscellaneous Application under Section 482 CrPC is allowed. The judgment and order dated 28.11.2017 passed by the learned District and Sessions Judge, Pauri Garhwal in Criminal Revision No. 21 of 2017, whereby the summoning order dated 24.10.2016 and the non-bailable warrant dated 25.02.2017 passed by the learned Additional Chief Judicial Magistrate, Kotdwara, District Pauri Garhwal in Complaint Case No. 614 of 2016 were set aside, is hereby quashed. The summoning order dated 24.10.2016 and the order issuing a non-bailable warrant dated 25.02.2017 are restored. ___________________ ASHISH NAITHANI, J. Dt: 16.05.2025 SB 6 Criminal Misc. Application No. 64 of 2018 – Rajendra Mandola vs. Naveen Kumar and Others. Ashish Naithani J.