The High Court of Punjab and Haryana at Chandigarh, presided over by Justice Manisha Batra, has dismissed a petition seeking the quashing of a cheque dishonour complaint and the consequential summoning order under Section 138 of the Negotiable Instruments Act, 1881. The Court ruled that when the drawer does not dispute the signatures on a cheque, factual defences—such as claims of the cheque being issued merely for security in a loan transaction or allegations of fraud—involve disputed questions of fact that must be adjudicated through evidence during trial and cannot be evaluated under Section 482 of the Code of Criminal Procedure.
Background of the Case
The proceedings arose from a criminal complaint filed by respondent Davinder Singh against petitioner Maninder Singh under Section 138 of the Negotiable Instruments Act before the Judicial Magistrate First Class, Amritsar. According to the complainant, the petitioner had purchased gold articles worth Rs. 20,00,000 against a valid invoice and issued a post-dated cheque for the said amount to discharge his legally enforceable liability.
Upon presentation, the cheque was returned dishonoured with the remarks “Payment stopped by drawer.” Following the issuance of a statutory legal notice, to which no reply was given, the complainant instituted the complaint. The complainant further stated that the petitioner and his wife had sold a 300-square-yard property to the complainant’s wife, with the entire consideration paid through cheques. After recording preliminary evidence where the complainant examined himself as CW-1, the Judicial Magistrate summoned the petitioner to face trial on September 14, 2021. The petitioner subsequently approached the High Court under Section 482 Cr.P.C. to quash the complaint and the summoning order.
Arguments of the Parties
Learned counsel for the petitioner submitted that he was falsely implicated and that he was engaged in the business of manufacturing and selling gold articles. He contended that he had mortgaged his property to borrow money from the respondent with an assurance of redemption, during which he was induced to sign additional documents, received cheques worth Rs. 5,75,000, and handed over one blank signed cheque as security along with two stamp papers. The petitioner alleged that the respondent fraudulently converted those papers into a sale deed, leading to a pending civil suit for declaration, and misused the security cheque without any existing legally enforceable debt.
Conversely, learned counsel for the respondent argued that the summoning order suffered from no illegality, as the cheque had been issued against a legally enforceable liability and payment was intentionally stopped. It was asserted that the Magistrate passed a well-reasoned order after reviewing preliminary evidence and that the High Court should not interfere under Section 482 Cr.P.C. in the absence of incontrovertible material showing that the petitioner had no concern with the cheque.
Court’s Analysis and Legal Precedents
Addressing the scope of inherent jurisdiction, Justice Manisha Batra observed that while petitions under Section 482 Cr.P.C. against summoning orders are maintainable as held in Bhushan Kumar and another Vs. State (NCT of Delhi) and another, (2012) 5 SCC 424, M/s. Pepsi Foods Ltd. and another v. Special Judicial Magistrate and others, (1998) 5 Supreme Court Cases 749, and Vikas Chandra Vs. State of Uttar Pradesh and another, 2024 INSC 261, such power must be exercised sparingly and with caution under the parameters established in Smt. Nagawwa Vs. Veeranna Shivalingappa Konjalzi and others, (1976) 3 SCC 736.
The Court highlighted that Section 204 Cr.P.C. requires subjective satisfaction regarding the existence of “sufficient ground for proceeding” without conducting a detailed inquiry into the merits or assessing evidence as a trial judge would, citing Mahendra K.C. Vs. State of Karnataka, (2022) 2 SCC 129.
Regarding the petitioner’s defence of a security cheque and fraudulent transactions, the Court ruled that such disputed facts cannot be tested at the threshold:
“these contentions being factual one can be ascertained only at the time of trial on thorough assessment of evidence to be adduced by the parties and this Court while exercising power under Section 482 of Cr.P.C. cannot assume the role of the trial Court and cannot suffocate proceedings by appreciating the probable defence of the petitioner at this stage.”
Relying on M/s M.M.T.C. Ltd. and another v. M/s Medchl Chemicals and Pharma P. Ltd. and another, (2002) 1 SCC 234 and HMT Watches Limited vs. M.A. Abida, (2015) 11 SCC 776, the Court noted that the burden of proving the absence of a subsisting debt rests on the accused during trial. Citing Rathish Babu Unnikrishnan Vs. State (Govt. of NCT), 2022 SCC Online SC 513, the Court noted:
“the consequences of scuttling the criminal process at a pretrial stage can be grave and irreparable. Quashing proceedings at preliminary stages will result in finality without the parties having had an opportunity to adduce evidence and the consequence then is that the proper forum i.e., the trial Court is ousted from weighing the material evidence.”
The Court also referred to Sampelly Satyanarayana Rao vs. Indian Renewable Energy Development Agency Limited, (2016) 10 SCC 458 and Rajeshbhai Muljibhai Patel v. State of Gujarat, (2020) 3 SCC 794 to reiterate that disputed factual questions bar quashing under Section 482 Cr.P.C.
Furthermore, on the claim regarding security cheques, the Court referenced Shalini Enterprise and another vs. Indiabulls Financial Services Ltd., 2013 (2) CCC 835, holding that a security cheque forms an integral part of commercial transactions and can be legally utilized to discharge liability. Under Section 139 of the Negotiable Instruments Act, the admission of signatures gives rise to a statutory presumption that the cheque was issued in discharge of a legally enforceable debt.
Decision of the Court
The High Court held that the Magistrate had taken a possible view based on preliminary evidence and that the balance of convenience lay in favour of the complainant, leaving the petitioner at liberty to rebut the statutory presumption during trial. Finding no ground to quash the complaint or the summoning order, the Court dismissed the petition, clarifying that its observations would not reflect any opinion on the merits of the case.
Case Details:
Case Title: Maninder Singh Versus Davinder Singh
Case No.: CRM-M-30215-2022 (O&M)
Bench: Justice Manisha Batra
Date: 25.08.2026
