Court holds that factual disputes including cheque number discrepancy and timing of issuance require trial; refuses to quash complaint under Section 138 of Negotiable Instruments Act.
In a significant judgment dated September 28, 2026, the Karnataka High Court dismissed a criminal petition seeking to quash proceedings arising from a cheque bounce complaint under Section 138 of the Negotiable Instruments Act, 1881. The petitioner, Mr. Umesh K.G., challenged the issuance of summons and continuation of criminal case No. 1195/2023 before the IV Additional Civil Judge and JMFC, Shivamogga, primarily on two grounds: that the cheque in question could not have been issued when the related criminal case had already reached the stage of evidence, and that there was a material discrepancy in the cheque number mentioned in the complaint and the police statement.
The dispute originated from a chit fund scheme where the respondent, Smt. Bharathi H.N., claimed she had invested ₹1,50,000 per month for 24 months based on the petitioner's assurance of a payout of ₹40,00,000 at the end of the scheme. The respondent alleged non-payment and subsequent abuse when she sought recovery, leading to the lodging of a police complaint and subsequent criminal trial (C.C. No. 54297/2021).
During the pendency of this case, the petitioner allegedly issued a cheque dated December 13, 2022, as part of a settlement offer. The petitioner contended that since the evidence in the earlier case was recorded only much later on July 24, 2024, the cheque issuance claim was inherently improbable. Additionally, the petitioner pointed to a discrepancy: the private complaint cited cheque number 000065, whereas the police statement referred to cheque number 000068.
Justice Suraj Govindaraj, presiding over the case, analyzed the trial court's order sheets and found that the case was indeed posted for recording evidence as early as November 10, 2022, even though actual evidence was recorded only in July 2024 due to the accused's repeated absences and procedural delays. The Court held that the phrase "reached the stage of evidence" does not necessitate that evidence must have already been recorded; the posting itself suffices to show the stage.
Regarding the cheque number discrepancy, the Court observed that such factual issues require trial and cannot be resolved at the quashing stage. It emphasized that discrepancies could result from typographical or recording errors, and the trial court is better suited to examine and determine the authenticity and identity of the cheque.
The judgment reaffirmed the principle that High Courts exercising their quashing jurisdiction under Section 482 of the Code of Criminal Procedure (CrPC) must not delve into detailed factual disputes or weigh rival versions. Instead, issues involving evidence and factual controversies should be left to the trial court's adjudication.
Consequently, the Karnataka High Court refused to interfere with the trial court's order dated February 22, 2023, which had issued summons and allowed the proceedings in the cheque bounce case to continue. The petition for quashing was dismissed, thereby allowing the respondent to pursue her claim under the Negotiable Instruments Act.
This ruling underscores the judiciary's approach to balancing procedural safeguards with the need to allow factual disputes to be resolved through proper trial processes, especially in cheque bounce cases which are prevalent in commercial transactions.
Bottom Line:
Negotiable Instruments Act, 1881 - Petition for quashing complaint under Section 138 - Mere discrepancy in cheque number and contention regarding stage of evidence in earlier criminal case are disputed questions of fact - Such issues require trial and appreciation of evidence - Proceedings cannot be quashed at threshold when foundational averments of offence are pleaded.
Statutory provision(s):
Negotiable Instruments Act, 1881 Section 138, Code of Criminal Procedure, 1973 Sections 200, 482
Umesh K.G. v. Bharathi H.N., (Karnataka) : Law Finder Doc Id # 2992835
