Cheque Issued for Enforceable Debt – Section 138 Complaint Not Quashed

Case Details: Alok Nanda vs. FIIT JEE Ltd. - [2025] 181 taxmann.com 171 (Delhi)

Judiciary and Counsel Details

Neena Bansal Krishna, J.
Nidhesh Gupta, Sr. Adv., Sanjeev Kumar Baliyan, Bikram Dwivedi, Ashwani K. Dubey, Nirbhay Sharma & Bikram Dwivedi, Advs. for the Petitioner.
Pramod Kumar Dubey, Sr. Adv., Rahul Goyal, Ms Amrita Vatsa, Rupraj Banerjee, Satyam Sharma & Raaj Malhotra, Advs. for the Respondent.

Facts of the Case

In the instant case, the complainant filed a complaint before the Trial Court against the accused company and its directors for an offence punishable under section 138 of the Negotiable Instruments Act, 1881. According to the complainant, it had granted a loan to the accused, towards repayment of which a cheque was issued. Upon presentation, the cheque was dishonoured.

Thereafter, the Trial Court took cognisance of the matter and directed issuance of summons to the accused company and all its directors, including the petitioner. The Trial Court observed that whether the cheque was dishonoured due to insufficiency of funds, or whether valid defences were available to the accused such as stop payment instructions or breach of obligations under the loan agreement, were matters to be examined during trial and could not be considered at the summoning stage. It was further observed that, prima facie, it could not be said that the cheque in question was not issued towards a legally enforceable liability.

High Court Held

The High Court held that the complaint under section 138 of the Act was not liable to be quashed on these grounds. It further noted that the complaint satisfied the statutory requirements by arraying all the accused directors and officers, with specific averments that they were in charge of and responsible for the day-to-day affairs and decision-making of the company. Accordingly, the Trial Court was justified in issuing summons to all the directors. The High Court therefore dismissed the petition seeking quashing of the complaint.