Can’t seek quashing of complaints before summoning in cheque bounce case: HC

Saurabh Malik

Chandigarh, December 14

The Punjab and Haryana High Court has made it clear that a ‘proposed accused’ does not have the right to file a petition for quashing of a complaint in a cheque bounce case prior to his summoning under Section 138 of the Negotiable Instruments Act.

Dismissing a plea in one such matter, Justice Arvind Singh Sangwan described the petition as pre-mature and imposed Rs 1 lakh costs on the petitioners.

The ruling by Justice Sangwan came on a petition for quashing a complaint filed under Section 138 of the Negotiable Instruments Act with further prayer to stay the proceedings before the magistrate concerned during the petition’s pendency.

Justice Sangwan, during the course of hearing, was told that a collaboration agreement was executed between the petitioners, its associates and the respondent-complainant. Certain amount was invested as equity share by complainant and financial transactions as per the statement of account took place between the parties.

A legal notice under Section 138 of the Act was issued by the respondent to the petitioners on August 11. Among other things, it said a cheque presented on account of outstanding liability to a bank was returned with remarks “payment stopped”.

The petitioners’ counsel relied upon separate replies running into 64 pages, citing case laws by the high courts and the Supreme Court before submitting that the cheque was not issued against a legally enforceable debt or liability.

Justice Sangwan asserted the petitioners were asked whether the trial Court had issued summoning order against the petitioners after the complaint’s filing. It was stated in response to the court query that only a complaint had instituted. The summoning order had not been passed. The counsel, at the same time, insisted upon arguing the case though the matter, on the face of it, was pre-mature.

Justice Sangwan asserted the petitioners’ counsel responding to another court query neither denied the issuance of cheque, nor the signatures, on the disputed cheque. The counsel also fairly stated that the summoning order had not been passed against the petitioners to date.

Petition is pre-mature

A ‘proposed accused’ does not have the right to file a petition for quashing of a complaint in a cheque bounce case prior to his summoning under Section 138 of the Negotiable Instruments Act. The petition is pre-mature. — Justice Arvind Singh Sangwan, High Court