PRESUMPTIONS AT THE THRESHOLD: RESTRAINING PREMATURE QUASHING UNDER THE NEGOTIABLE INSTRUMENTS ACT

INTRODUCTION
The Supreme Court of India delivered an important ruling on 19 December 2025 in M/s Sri Om Sales v. Abhay Kumar @ Abhay Patel & Anr., Criminal Appeal No. 5588 of 2025. The Judgment was pronounced by a Division Bench consisting of Justice Manoj Misra and Justice Ujjal Bhuyan.
The Judgment reaffirms the settled limits on the High Court’s inherent powers under Section 482 of the Code of Criminal Procedure, 1973, particularly in prosecutions under Section 138 of the Negotiable Instruments Act, 1881 and underscores the centrality of the statutory presumption under Section 139 of the Act at the pre-trial stage.

BRIEF FACTS
The Appellant-Complainant alleged that the first Respondent had taken delivery of goods and in discharge of the resulting liability, issued a cheque dated 04.03.2013 for a sum of ₹.20,00,000. The cheque was dishonoured twice on presentation due to insufficient funds. Following the second dishonour, a statutory demand notice was issued, to which the Respondent replied by denying issuance of the cheque and refusing payment.
Consequently, a Complaint under Section 138 of the Negotiable Instruments Act was filed. The learned Magistrate, upon taking cognizance of the offence, proceeded to issue summons to the Accused. Aggrieved by the Summoning Order, the Accused approached the Patna High Court under Section 482 CrPC, seeking quashing of the proceedings.
The High Court allowed the Petition and quashed the Complaint, holding that the cheque had not been issued in discharge of any legally enforceable debt or liability. This Order was challenged before the Supreme Court by the Complainant.

ISSUES OF LAW
The Supreme Court was required to consider:
1) Whether the High Court was justified in quashing a complaint under Section 138 of the Negotiable Instruments Act at the pre-trial stage.
2) Whether, while exercising jurisdiction under Section 482 CrPC, the High Court could examine disputed questions of fact relating to the existence of a debt or liability.
3) The scope and effect of the statutory presumption under Section 139 of the Negotiable Instruments Act at the stage of cognizance and summoning.

ANALYSIS OF THE JUDGMENT
The Supreme Court reiterated the well-established principle that, at the stage of considering a petition for quashing, the Court’s inquiry is confined to examining whether the Complaint, on its face, discloses the essential ingredients of the alleged offence. If a prima facie case is made out, the proceedings ought not to be scuttled prematurely by embarking upon an appreciation of evidence or adjudication of disputed facts.
Applying this principle, the Court noted that the Complaint in the present case clearly averred the issuance of the cheque towards discharge of liability, its dishonour for insufficiency of funds, service of statutory notice and failure to pay within the prescribed period. These averments, supported by the cheque and bank return memo, were sufficient to attract Section 138 of the Act.
A key feature of the Judgment is its focus on Section 139 of the Negotiable Instruments Act, which statutorily presumes that a cheque is received by its holder towards the satisfaction, wholly or partially, of a legally enforceable debt or liability. The Court explained that while this presumption is not absolute, it can ordinarily be displaced only during trial by evidence adduced by the Accused.
The Supreme Court found that the High Court had exceeded its jurisdiction by conducting a “roving enquiry” into whether the cheque was issued for a legally enforceable debt. Such an exercise, the Court held, is impermissible at the pre-trial stage, particularly when the statute itself raises a presumption in favour of the Complainant. Relying on consistent precedent, the Court observed that disputed questions of fact cannot be decided in proceedings under Section 482 CrPC unless the case falls within the narrow category of exceptional circumstances where continuation of prosecution would amount to abuse of process.
By restoring the Complaint, the Court reinforced the principle that the trial court is the proper forum to evaluate the defence of the accused and determine whether the presumption under Section 139 stands rebutted.

SARTHAK KALRA
Senior Legal Associate
The Indian Lawyer & Allied Services

EDITOR’S COMMENTS
The decision in M/s Sri Om Sales v. Abhay Kumar @ Abhay Patel is a reaffirmation of judicial restraint at the pre-trial stage in cheque dishonour cases. The Supreme Court has once again cautioned High Courts against short-circuiting criminal proceedings under Section 138 of the Negotiable Instruments Act by delving into factual controversies that are statutorily presumed and evidentiary in nature.
The Judgment strengthens the legislative intent behind Sections 138 and 139 of the Act by ensuring that prosecutions are not thwarted prematurely and that accused persons are required to raise and establish their defences before the trial court. In doing so, the ruling preserves both procedural fairness and the credibility of negotiable instruments in commercial transactions.

SUSHILA RAM VARMA
Chief Legal Consultant & Advocate
The Indian Lawyer & Allied Services

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