# Naveen Saxena v. State of U.P. & Anr

- **Citation:** (2021) 9 ILRA 946
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-08-05
- **Case number:** Application U/S 482. No. 9331 of 2021
- **Bench:** Vivek Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/naveen-saxena-v-state-of-u-p-anr-47420
- **Pages:** 6

## Headnote

(A) Criminal Law - The Code of criminal
procedure, 1973 - Section 482 - extra
ordinary jurisdiction - The Negotiable
instruments Act, 1981 - Section 138 -
Dishonour of cheque for insufficiency of
funds - Section 139 - Presumption in
favour
of
holder
-
"stop
payment
instructions" - where there existed any
outstanding liability or not are questions
of facts and theses issues can only be
determined
by
the
trial
court
after
recording evidence - once a cheque is
issued and on presentation is dishonored,
penal provision is attracted as stopping of
payment will not preclude an action under
Section 138 N.I. Act. (Para - 10,11,22)

Cheque bounce - applicant lost a cheque -
lodged report with SSP - certificate issued by
the Branch Manager - applicant made request
to stop payment of cheque - criminal complaint
- summoning order- Quashing of - present
application.

HELD:-Thus, in view of the judicial scrutiny and
legal proposition of law, though the presumption
under Section 139 is rebuttable but it is for the
trial court to examine after evidence is led
before it and this is not a fit case to exercise
extra ordinary jurisdiction under Section 482
Cr.P.C.(Para - 23 )

Application u/s 482 Cr.P.C. dismissed. (E7)

List of Cases cited:-

## Text

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----------
(2021)09ILR A946
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 05.08.2021

BEFORE

THE HON'BLE VIVEK AGARWAL, J.

Application U/S 482. No. 9331 of 2021

Naveen Saxena ...Applicant
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicant:
Sri Amit Daga

Counsel for the Opposite Parties:
A.G.A.

(A) Criminal Law - The Code of criminal
procedure, 1973 - Section 482 - extra
ordinary jurisdiction - The Negotiable
instruments Act, 1981 - Section 138 -
Dishonour of cheque for insufficiency of
funds - Section 139 - Presumption in
favour
of
holder
-
"stop
payment
instructions" - where there existed any
outstanding liability or not are questions
of facts and theses issues can only be
determined
by
the
trial
court
after
recording evidence - once a cheque is
issued and on presentation is dishonored,
penal provision is attracted as stopping of
payment will not preclude an action under
Section 138 N.I. Act. (Para - 10,11,22)

Cheque bounce - applicant lost a cheque -
lodged report with SSP - certificate issued by
the Branch Manager - applicant made request
to stop payment of cheque - criminal complaint
- summoning order- Quashing of - present
application.

HELD:-Thus, in view of the judicial scrutiny and
legal proposition of law, though the presumption
under Section 139 is rebuttable but it is for the
trial court to examine after evidence is led
before it and this is not a fit case to exercise
extra ordinary jurisdiction under Section 482
Cr.P.C.(Para - 23 )

Application u/s 482 Cr.P.C. dismissed. (E7)

List of Cases cited:-

1. Amzad Pasha Vs H.N. Lakshmana, 2011 Cri.
L.J. 552

2. Raj Kumar Kh urana Vs St. of (NCT of Delhi)
& anr., (2009) 6 SCC 72

3. R. Kalyani Vs Janak C. Mehta & ors., 2009(1)
SCC 516

4. DCM Financial Services Ltd. Vs J.N. Sareen &
ors. 2008 (8) SCC 1.

5. HMT Watches Ltd.Vs M.A. Abida & anr.,
(2015) 11 SCC 776
9 All Naveen Saxena Vs. State of U.P. & Anr.
947
6. Modi Cements Ltd.Vs Kuchil Kumar Nandi,
(1998) 3 SCC 249

7. Pulsive Technologies (P) Ltd. Vs St. of Gujarat
& ors., 2014 (13) SCC 18

8. Electronics Trade & Technology Development
Corpn.
Ltd.,
Secunderabad
Vs
Indian
Technologists & Engineers (Electronics) Pvt. Ltd.
& ors. (1996) 2 SCC 739

9. K.K. Sidharthan Vs T.P. Praveena Chandran &
ors. (1996) 6 SCC 369

10. Rangappa Vs Mohan (2010) 11 SCC 441

11. Krishna Janardhan Bhat Vs Dattatraya G.
Hegde (2008) 4 SCC 54

12. Goaplast Pvt. Ltd. Vs Chico Ursula D'Souza &
ors. (2003) 3 SCC 232

13. Acer India (P) Ltd.Vs St. of Gujarat, Criminal
Misc. Application No.1757 of 2007

14. Ramswaroop Tyagi Vs Omkarnath Pandey
(2015) 4 MP LJ 237

15. M.M.T.C. Ltd. & Ors. Vs Medchl Chemicals &
Pharma (P) Ltd. & ors., (2002) 1 SCC 234

16. Deepak Goel v. St. of U.P., (2013) 82 ACC
210

(Delivered by Hon'ble Vivek Agarwal, J.)

1. Sri Amit Daga, learned counsel for
the applicant and learned AGA for the
State.

2. Learned counsel for the applicant
submits that the applicant is seeking
quashing of the criminal complaint dated
08.04.2019 as well as entire proceedings
registered in its pursuance as Criminal
Complaint Case No.927 of 2019 (Brajendra
Kumar Vyas vs. Naveen Saxena) under
Section 138 of NI Act, Police Station Sipra
Bazar,
District
Jhansi,
including
summoning order dated 15.02.2021 passed
by the learned Chief Judicial Magistrate,
Court No.2, Jhansi.

3. Grounds which have been put forth
by learned counsel for the applicant to
assail the impugned order are that applicant
has been falsely implicated in a case of
cheque bounce. It is submitted that the
applicant had lost a cheque bearing no.
740500 issued by Dena Bank, Jhansi on
account
of
applicant's
account
no.114010001415, which had slipped out
of his pocket, though it was signed but
blank alongwith a hundred rupee stamp
paper
bearing
no.
DA498435
dated
21.12.2016. Applicant had lodged a report
with the SSP, Jhansi by sending him an
application through registered post on
06.12.2017, copy of complaint is enclosed
as annexure no.8 to the application. It is
submitted that thereafter a certificate was
issued by the Branch Manager of Dena
Bank on 29.11.2018 to the affect that on
01.11.2017 on request so made by the
applicant to stop payment of cheque
no.740500 (annexure no.6) was noted. It is
submitted that on 09.02.2018 intimation in
this regard of loss of cheque was published
in Daily News Paper, copy of which has
been enclosed as annexure no.9 to the
application,
for
which
Amar
Ujala
Publications Limited issued a receipt on
07.02.2018. It is further submitted that
applicant had obtained a certificate from
the office of the Senior Post Master, Jhansi
that registered article sent on 06.12.2017
and addressed to SSP, Jhansi was delivered
on 07.12.2017. This certificate was issued
in pursuance to the complaint made by the
present applicant on 20.02.2019.

4. It is further submitted that the
complainant
lodged
a
complaint
by
misappropriating a lost cheque and filled
huge sum of Rs.80,00,000/- in the name of
948 INDIAN LAW REPORTS ALLAHABAD SERIES
money transaction made earlier whereas
according to the applicant, there was no
occasion for such huge transaction and
never ever any such amounts as have been
claimed
by
the
complainant
were
transferred to his account and, therefore, on
this ground also, complaint is liable to be
quashed.

5. Learned counsel for the applicant
has placed reliance on the judgment of
Karnataka High Court in case of Amzad
Pasha vs. H.N. Lakshmana, 2011 Cri.
L.J. 552, wherein it is held that when
complainant has not placed any evidence to
show that he had financial capacity to lend
substantial amount of Rs.4,50,000/-, and
admittedly when no document evidencing
the
loan
transaction
has
come
into
existence, then case of the complainant
becomes
highly
improbable
and
not
acceptable. It has been held that when none
of the witnesses, in the presence of whom,
loan was paid by the complainant were
examined, then adverse inference can be
drawn against the complainant and accused
is liable to be acquitted.

6. Reliance is also placed on the
judgment of Supreme Court in case of
Raj Kumar Kh urana vs. State of (NCT
of Delhi) & Another; (2009) 6 SCC 72,
wherein it is held that if cheque is
returned by Bank on ground, then report
of loss of cheque was filed by drawer,
then Section 138 of N.I. Act, is not
attracted. It is submitted that a complaint
under Section 138 of N.I. Act will be
maintainable
only
when
cheque
is
returned by the bank unpaid. Such nonpayment made either be; (i) because of
the amount of money standing to the
credit of that amount is insufficient to
honor the cheque, or (ii) it exceeds the
amount arranged to be paid from that
account by an agreement made with that
bank.

7. Applicant has also placed reliance
on the judgment of Co-ordinate Bench of
this High Court dated 22.01.2020 passed
in an application under Section 482
No.33953 of 2013, where the application
filed on behalf of applicant- Rahisuddin
Saifi, accused in the matter of Complaint
Case No.145 of 2013 (Javed Akhtor vs.
Rahisuddin Saifi), has been allowed
because it was averred before the coordinate Bench that the cheque was not
encashed on the ground that account
holder
i.e.
applicant
had
stopped
payment.

8. Learned AGA could not dispute
the proposition of law laid down in case
of Raj Kumar Khurana (supra), so also
in case of R. Kalyani vs. Janak C. Mehta
and Ors., 2009(1) SCC 516 and DCM
Financial Services Ltd. vs. J.N. Sareen
and Ors. 2008 (8) SCC 1.

9. Learned AGA for the State on the
other hand opposes the prayer made by
learned counsel for the applicant and
submits that it is matter of trial where it
will be determined that whether factual
defences
taken
by
the
present
applicant/accused are entertainable or not.

10. After hearing learned counsel for
the parties and going through the record, it
is evident that in case of HMT Watches
Limited vs. M.A. Abida and Another,
(2015) 11 SCC 776, in paragraph 14, it is
held that in case of Modi Cements Limited
vs. Kuchil Kumar Nandi, (1998) 3 SCC
249 so also in case of Pulsive Technologies
(P) Limited vs. State of Gujrat and Others,
2014 (13) SCC 18, it has been held that if a
cheque is dishonored because of stop
9 All Naveen Saxena Vs. State of U.P. & Anr.
949
payment instruction, even then the offence
punishable under Section 138 of N.I. Act
gets attracted.

11. It is further held that where there
existed any outstanding liability or not are
questions of facts and theses issues can
only be determined by the trial court after
recording evidence. High Court erred in
giving its finding on disputed questions of
fact, therefore, it is held that interference of
High Court under Section 482 Cr.P.C. is
unsustainable as the High Court travelled
beyond its jurisdiction. This aspect and the
case law on the subject has not been
considered by a co-ordinate Bench of this
Court while delivering its order in case of
Rahisuddin Saifi (supra) and, therefore, if
an order has been obtained by not
presenting the correct and up to date legal
position before the Court concerned, then
that order of Co-ordinate Bench is not
binding on this Court. Therefore, as the law
laid down in case of Rahisuddin Saifi
(supra) is contrary to the principles of law
reiterated by the Supreme Court, it is
neither a binding precedent nor binding on
a Co-ordinate Bench.

12. In fact a Three Judge Bench of
Supreme Court in case of Modi Cements
Limited (supra) has held that stop payment
instructions cannot obviate the offence
under Section 138 if otherwise made out. It
has been further held that neither the said
liability could have been avoided by giving
notice to the payee or holder in due course
prior to presentation of the cheque wherein
the payee or holder in due course was
advised not to present the same in
encashment and he thus presented it and the
cheque is returned with stop payment
instructions. It further held that the ruling
in
case
of
Electronics
Trade
and
Technology Development Corpn. Ltd.,
Secunderabad vs. Indian Technologists
and Engineers (Electronics) Pvt. Ltd. and
Ors (1996) 2 SCC 739 and followed in
K.K.
Sidharthan
vs.
T.P.
Praveena
Chandran and Ors. (1996) 6 SCC 369
being contrary to the object and purpose of
Sections 138-142 overruled.

13. It is held that presumption under
Section 139 is attracted to such situation
and this was wrongly ignored. Drawer of
the cheque will have opportunity to rebut
the presumption at the trial and, thereafter,
High Court was not justified on facts in
quashing the complaint under Section 482
Cr.P.C. at the threshold.

14. In case of Rangappa vs. Mohan
(2010) 11 SCC 441, again a Three Judge
Bench of Supreme Court held that
presumption mandated by Section 139
includes a presumption that there exists a
legally
enforceable
debt
or
liability
however such presumption is rebuttable in
nature. It outlines the manner in which
defence can be raised by accused and
further held that dishonor of post dated
cheque on account of stop payment
instructions, sent by drawer to his bank will
attract the provisions of Section 138
irrespective of insufficiency of funds in his
account.

15. This judgment of Supreme Court
overrules the judgment in case of Krishna
Janardhan Bhat vs. Dattatraya G. Hegde
(2008) 4 SCC 54 and affirmed the law laid
down in case of Goaplast Pvt. Ltd. vs. Chico
Ursula D'Souza and Ors. (2003) 3 SCC 232.
Again this issue came up for consideration
before a Division Bench of Supreme Court in
case of Pulsive Technologies Private Limited
(supra) and it is held that dishonor of cheque
on "stop payment instructions" are sufficient
to prosecute accused under Sections 138, 139
950 INDIAN LAW REPORTS ALLAHABAD SERIES
and 142 of N.I. Act. It is held that quashment
of proceedings without invoking presumption
under Section 139 ; drawing conclusions in
absence of any evidence; and on ground that
contents of reply sent by accused not pleaded
in complaint are unsustainable. It held that
High Court exercising its inherent power,
drew certain conclusions on facts and
quashed the proceedings holding that "stop
payment" instruction did not attract Section
138 N.I. Act is unsustainable. It is held that if
cheque is dishonored relying on "stop
payment"
instruction,
then
also
penal
provision under Section 138 is attracted. It
reversed the judgment in case of Acer India
(P) Limited vs. State of Gujrat, Criminal
Misc. Application No.1757 of 2007, decided
on 08.09.2011 (GUJ).

16. As discussed above, this issue again
came up before Supreme Court in case of
HMT Watches Limited (supra), where again
it is held that High Court should not exercise
its inherent powers under Section 482 Cr.P.C.
on disputed question of fact, they can be
determined only by trial court after recording
evidence. It is further held that High Court
erred in deciding validity or otherwise of
demand notice issued under Section 138 of
N.I. Act and authenticity of signature thereon.

17. Similar matter had cropped up
before of High Court of Madhya Pradesh,
Bench at Gwallior in MCRC No.247/2011,
Ramswaroop Tyagi vs. Omkarnath Pandey
(2015) 4 MP LJ 237 when drawer of the
cheque had invoked the jurisdiction of the
High Court under Section 482 Cr.P.C. to
assail the order whereby the court below had
rejected the application preferred under
Section 245 Cr.P.C. The factual backdrop of
that case is that non applicant complainant
filed a complaint under Section 138 of N.I.
Act and the cheque was returned by bank
with an endorsement that applicant had asked
for "stop payment" complainant had sent a
legal notice and ultimately filed a complaint.
Summons were issued, charges were framed.
Applicant-accused preferred an application
under Section 245 Cr.P.C. seeking dropping
of charges against him. It was averred that
applicant's cheque book was not traceable.
He had immediately informed that fact to the
police and bank authorities and had requested
for stop payment. Accordingly bank had
stopped payment on the instructions of the
applicant. In this backdrop, applicant had
placed reliance on judgment of Supreme
Court in case of Raj Kumar Khurana (supra).

18. Placing reliance on the judgment of
Supreme Court in case of Goaplast (P)
Limited (supra), learned Single Judge of
Madhya Pradesh High Court held that the
provisions of the N.I. Act were introduced in
order to discourage people from not honoring
their commitments by way of payment
through cheques and it is a trite law that
Court
should
lean
in
favour
of
an
interpretation which serves the object of the
statute. After dealing with the provisions
contained in Section 139 of N.I. Act and the
law laid down in case of M.M.T.C. Ltd. and
Ors. vs. Medchl Chemicals and Pharma (P)
Ltd. and Ors., (2002) 1 SCC 234, the Apex
Court opined that when cheque is dishonored
by reason of stop payment instructions, then
by virtue of Section 139, Court has to
presume that the cheque was received by the
holder for the discharge, in whole or in a part
of any debt or liability. Of course, this is
rebuttable presumption.

19. Reliance is also placed on the
judgment of Three Judge Bench of Supreme
Court in case of Rangappa (supra) and Pulsive
Technologies Private Limited (supra) and
HMT Watches Private Limited (supra) and
held that law laid down by a Division Bench
judgment in case of Raj Kumar Khurana
9 All Puttul Sahani Vs. State of U.P. & Anr.
951
(supra) is of no assistance to the applicant,
more so when, the view taken in MMTC
Limited (supra) and Rangappa (supra) is
consistently followed by the Supreme Court in
subsequent
judgments
vis
Pulsive
Technologies (supra) and HMT Watches
Private Limited (supra) and in this backdrop
held that since a great deal of caution is
required in its exercise of extra ordinary
jurisdiction under Section 482, a defence of an
accused although may appear to be plausible
should not be taken into consideration for
exercise of such jurisdiction.

20. In the present case, facts are similar
and, therefore, when there are judgments of
Supreme Court rendered by Three Judges in
case of Modi Cements Private Limited
(supra) and Rangappa (supra), which have
been consistently followed and Supreme
Court in case of Raj Kumar Khurana (supra)
has not taken into consideration, law laid
down in case of Modi Cements Private
Limited (supra), judgment in case of Modi
Cements Private Limited (supra) will be a
binding precedent. Therefore, law laid down
in case of Raj Kumar Khurana will be no
assistance to the applicant and similarly law
laid down by Karnatak High Court in case of
Amzad Pasha (supra) ignoring judgment of
Supreme Court in case of Rangappa (supra)
whereby
judgment
and
order
dated
16.10.2005 of the High Court Karnataka
Bengaluru has been upheld, whereby High
Court of Karnataka reversed the finding of
acquittal made by learned JMFC, judgment
of High Court passed oblivious of the law
laid down in case of Rangappa (supra), which
is a Supreme Court judgment too will be of
no assistance to the applicant.

21. Needless to say that judgment of
co-ordinate Bench in case of Rahisuddin
Saifi (supra) will also be of no assistance to
the applicant, inasmuch as, it has failed to
take into consideration law prior to and
subsequent to Raj Kumar Khurana (supra)
rendered by Three Judges' Bench of
Supreme Court having a binding precedent.

22. Allahabad High Court in case of
Deepak Goel v. State of U.P., (2013) 82
ACC 210 also held that in view of the
judgment of Supreme Court in case of
Modi Cements Private Limited (supra),
once a cheque is issued and on presentation
is dishonored, penal provision is attracted
as stopping of payment will not preclude an
action under Section 138 N.I. Act. A coordinate Bench of this Court considered
law laid down in case of Raj Kumar
Khurana (supra) and held it to be
distinguishable on facts.

23. Thus, in view of the above
judicial scrutiny and legal proposition of
law, though the presumption under Section
139 is rebuttable but it is for the trial court
to examine after evidence is led before it
and this is not a fit case to exercise extra
ordinary jurisdiction under Section 482
Cr.P.C.

24. Application fails and is dismissed.
----------

(2021)09ILR A951
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 02.09.2021

BEFORE

THE HON'BLE SHAMIM AHMED, J.

Application U/S 482. No. 10843 of 2021

Puttul Sahani ...Applicant
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicant: