Can Summoning Order in a Section 138 Cheque Bounce Case Be Quashed? Punjab & Haryana High Court Explains 138 Summoning Order Quashing. The Court dismissed the petition and reiterated that the High Court should exercise its inherent jurisdiction sparingly, particularly where the allegations disclose a prima facie offence and the accused’s defence involves disputed questions of fact.
The Punjab & Haryana High Court has recently examined the scope of Section 482 CrPC, corresponding to Section 528 BNSS, in a petition seeking quashing of a complaint under Section 138 of the Negotiable Instruments Act, 1881, along with the summoning order and consequential proceedings in 138 Summoning Order Quashing.
A High Court cannot quash a Section 138 Negotiable Instruments Act summoning order at the pre-trial stage by conducting a roving inquiry into disputed questions of fact regarding debt or liability. [1, 2]
138 Summoning Order Quashing
- Statutory Presumption: Under Section 139 of the NI Act, the court presumes the cheque was issued to discharge a legal debt or liability. This presumption must be rebutted during a regular trial, not during a petition to quash. [1]
- Supreme Court Precedent: The Supreme Court has repeatedly ruled that interfering with summoning orders or cutting short a cheque bounce complaint before evidence is led is an overreach of High Court jurisdiction
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- Joint Account Signatures: Complaints on joint accounts can sometimes be quashed if the cheque lacked signatures from the required account holders. [1]
Background
The complaint arose from a commercial transaction involving supply of goods. A cheque for ₹80 lakh was issued towards part payment of the outstanding liability.
The cheque was subsequently dishonoured with the remark “Account Closed.” A statutory legal notice was thereafter issued, but the payment was not made, resulting in the filing of proceedings under Section 138 of the NI Act.
The Magistrate, after considering the preliminary evidence and documents, summoned the accused.
Why Was Quashing Sought?
The petitioner approached the High Court seeking quashing of the complaint and summoning order, contending, among other things, that:
- He was neither a Director nor Managing Director of the company.
- He was not an authorised signatory.
- His name did not appear as a Director in the Ministry of Corporate Affairs records.
- He had not signed the dishonoured cheque.
- The complaint did not contain sufficient specific averments explaining his responsibility for the company’s business.
- The cheque was allegedly issued only as a security cheque.
- There were alleged inconsistencies in the complaint and bank return memo.
Section 141 NI Act: Formal Designation Is Not Everything
A significant aspect of the judgment concerns vicarious liability under Section 141 of the Negotiable Instruments Act.
The High Court observed that liability under Section 141 is not restricted only to persons formally designated as Directors or Managing Directors. The provision also covers persons who, at the relevant time, were in charge of and responsible for the conduct of the company’s business.
Therefore, merely showing that a person’s name does not appear as a Director in MCA records may not, by itself, be sufficient to obtain quashing where the complaint contains allegations that the person was actively involved in the company’s affairs.
Disputed Facts Cannot Ordinarily Be Decided in Quashing Proceedings
The Court found that there were competing claims regarding the actual role played by the petitioner in the company’s business.
While the petitioner relied upon corporate records to show that he did not hold a formal position, the complainant relied upon other material suggesting that the petitioner had represented himself as a person controlling or managing the company’s affairs.
The High Court held that determining the truth of these competing factual claims would require appreciation of documentary and potentially oral evidence.
Such disputed questions are ordinarily matters for the Trial Court, not for adjudication in a petition under Section 482 CrPC.
“Security Cheque” Is Not Automatically Outside Section 138
The Court also considered the defence that the cheque was merely a security cheque.
The High Court made an important observation: simply describing a cheque as a “security cheque” does not automatically take it outside Section 138 of the NI Act.
The relevant question is whether the underlying obligation had matured and whether the cheque was presented towards discharge of a legally enforceable liability.
The Court relied upon the Supreme Court’s decision in Sripati Singh v. State of Jharkhand and held that a security cheque may attract Section 138 if the liability for which it was issued had matured when the cheque was presented.
Defects in Notice or Return Memo Also Require Evidence
The petitioner also relied upon alleged defects in the statutory notice, inconsistencies in the bank return memo and deficiencies in the complaint.
The High Court held that these issues were intrinsically connected with the evidence and merits of the prosecution.
They could therefore be properly examined by the Trial Court and did not justify quashing at the threshold.
What Is the Test at the Summoning Stage?
The Court clarified that at the stage of issuing summons, the Magistrate is required to determine whether a prima facie case is made out.
A detailed appreciation of evidence or a mini-trial is not required at that stage.
In the present case, the Magistrate had considered the complaint, preliminary evidence and documents before finding sufficient grounds to summon the accused.
High Court Refuses to Quash the Proceedings
The High Court ultimately held that the case did not fall within the limited categories warranting interference under inherent jurisdiction.
Since the allegations, if taken at face value, disclosed a prima facie case and the petitioner’s principal contentions involved disputed questions of fact, the Court held that those matters should be tested during trial.
The petition seeking quashing was consequently dismissed.
Key Takeaways
- Quashing under Section 482 CrPC / Section 528 BNSS is an exceptional remedy.
- A person need not necessarily have the formal designation of Director for Section 141 liability to arise; the question may depend upon whether the person was actually in charge of and responsible for the company’s business.
- Disputed questions of fact ordinarily cannot be decided in quashing proceedings.
- A security cheque is not automatically immune from Section 138.
- Defects relating to notice, return memo or underlying liability may require evidence and trial.
- At the summoning stage, the Magistrate primarily examines whether a prima facie case exists.
- The High Court will ordinarily avoid conducting a mini-trial while exercising inherent jurisdiction.
Conclusion
This judgment is particularly relevant for persons arrayed as accused in company-related cheque bounce cases.
It demonstrates that a Section 482/528 petition cannot ordinarily be used to establish a disputed defence at the threshold. Where the complaint contains foundational allegations regarding the accused’s responsibility for the company’s affairs and the factual position is contested, the appropriate course may be to allow the Trial Court to examine the evidence.
At the same time, the judgment reinforces that the High Court retains inherent powers to prevent abuse of process in appropriate cases. The crucial question is whether the case falls within the exceptional circumstances warranting such interference.
Source: Punjab & Haryana High Court, judgment dated 10 August 2026, concerning quashing of a Section 138 NI Act complaint and summoning order.
By Satish Mishra, Advocate
