Telangana High Court
Chavan Dharmendar vs The State Of Telangana on 28 April, 2026
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IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA
CRIMINAL PETITION No.1382 OF 2019
Date: 28.04.2026
Between:
Chavan Dharmendar and others ... Petitioners/
Accused Nos.1 to 3
AND
The State of Telangana,
rep. by its Public Prosecutor,
through Senior Executive Officer,
CID, TS, Hyderabad
High Court for the state of Telangana,
Hyderabad and others ... Respondents
::ORDER:
:
This Criminal Petition is filed by the petitioners – accused
Nos.1 to 3 seeking to quash the proceedings in FIR No.01 of
2019 on the file of CID, Telangana State (TS), Hyderabad,
registered for the offences under Sections 464, 420, 120-B of IPC
and Section 3(2) of Scheduled Castes and Scheduled Tribes
(Prevention of Atrocities) Act, 1989.
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2. Brief facts of the case are that the complainant,
M/s.Hritasha Infra Projects Pvt. Limited, is a small-scale industry
predominantly promoted by SC women entrepreneurs, and it was
promoted on 13.04.2006 with six members as shareholders. The
company has been a customer of SBI since 2010, which
extended certain credit facilities against the secured mortgage of
properties valued at Rs. 7.00 crores. It is their case that, due to
volatile and highly unfavorable market conditions, the company’s
account became NPA in November 2016, and the company
became sick. The company incurred a capital loss of Rs.2.00
crores in the year 2012-13; however, it repaid a term loan of
Rs.2.90 crores without seeking a single rupee of concession or
relief from the bank. After the account of the company was
declared as NPA, the promoters paid Rs. 45 lakhs to the bank
with a view to regularizing the account. Though they had been
regularly servicing the debt from 2010 to 2017, they were
allegedly subjected to caste-based discrimination by certain bank
officials, who committed offences under the Scheduled Castes
and Scheduled Tribes (Prevention of Atrocities) Act, 1989.
Further, it is alleged that the petitioners committed offences of
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criminal breach of trust and fabrication of documents. The
petitioners/accused are stated to have furnished false and
frivolous information to higher authorities, thereby causing the
superior officers to use their lawful power to cause injury or
annoyance to the promoters of the company, thus attracting the
offence under Section Q of Chapter II of the Scheduled Castes
and Scheduled Tribes (Prevention of Atrocities) Act, 1989. It is
further alleged that the petitioners paved the way to institute false
and malicious legal proceedings on the basis of fabricated
documents, thereby attracting the ingredients under Section P of
Chapter II of the Scheduled Castes and Scheduled Tribes
(Prevention of Atrocities) Act, 1989.
3. It is also alleged that the accused imposed an economic
boycott against the entrepreneurs of small enterprises, as defined
under Section ZC of Chapter II of the Scheduled Castes and
Scheduled Tribes (Prevention of Atrocities) Act, 1989. The
promoters of the company are stated to have repeatedly
requested the bank for a period of two years and three months
(from November 2016) to implement a rehabilitation package, but
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the bank failed to consider the same, while extending such
packages to the thousands of sick units owned by higher-caste
influential entrepreneurs. It is specifically alleged that, in the
IDPL Branch of SBI, for OZONE Systems, which is owned by
higher-caste influential entrepreneurs, was extended the
rehabilitation package twice with substantial discounts,
concessions, and reliefs. It is alleged that the bank should
invariably extend the revival and rehabilitation package to sick
units in accordance with the RBI guidelines, vide Circular Nos.
RPCD.No.PLNFS.BC.57/06.04.01/2001-2002 dated 16.01.2002,
FIDD.MSME & NFS.BC.No.21/06.02.31/2015-16 dated
17.03.2016, and SBI’s internal guidelines vide Circular No.
NBG/SMEBU-MSMED ACT/99/2016-17 dated 31.03.2017.
Despite repeated requests made by the de facto complainant, the
petitioners failed to extend the rehabilitation package. It is
specifically alleged that the account of the de facto complainant
became NPA on 27.10.2016, and that, without providing an
opportunity for rehabilitation, it was transferred to the ARM
Branch, SBI, RTC X Roads, Hyderabad; thereafter to the IDPL
Branch, Kukatpally, Hyderabad; and subsequently to SARB, Koti.
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Thus, the account was not considered for rehabilitation even after
a period of two years and three months, and the sick unit was
shifted from one department to another without any steps being
taken for its rehabilitation, the petitioners have debited an amount
of Rs.1.40 crores as interest to outstanding dues, and it is alleged
that, due to the sheer high-handedness and caste-based
discrimination shown by the certain bank officials that the de facto
complainant was subjected to grave injustice and hardship.
Thus, the acts of the petitioners, particularly the Chief Manager,
IDPL; the AGM; and the Chief Manager, NPAM, caused
annoyance to the SC entrepreneurs with mala fide intention and
sheer caste based discrimination. It is also alleged that certain
bank officials, apart from not considering the complainant’s
request, fabricated the security documents, which were signed in
August 2015, thereby breaching the trust reposed in the bank. It
is also alleged that the de facto complainant approached the
National Commission for Scheduled Castes, which, in turn,
forwarded the petition to the Additional DGP, CID, for inquiry and
for taking appropriate action by registering an FIR. Thus, the
present complaint is registered against the petitioners.
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4. Heard the submissions of Sri Gandra Mohan Rao, learned
Senior Counsel representing Pearl Law Associates appearing on
behalf of the petitioners and Sri Vinod Kumar Deshpande,
learned Senior Counsel representing Sri C.Hari Preeth, learned
counsel for respondent Nos.2 and 3.
5. The learned counsel for the petitioners has submitted that
the company of the de facto complainant, i.e., M/s. Hritasha Infra
Projects Pvt. Limited, and its directors are the
borrowers/guarantors, and have executed the relevant loan
documents for duly securing the loan facilities, and have also
created mortgage charges over the secured assets. The details of
the same were duly registered with the Registrar of Companies
from time to time up to 3rd August, 2015, excepting the ad hoc
limit of Rs. 50 lakhs sanctioned on 31.03.2016. He further
submitted that the petitioners were very accommodative right
from the beginning of the loan transactions, and, as and when the
respondent No.3 company and its directors expressed their
difficulties, on account of financial strain, the creditor bank has
been pleased to extend temporary overdrafts, for tiding over the
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financial strain of the company. He further submitted that the
directors, on behalf of the company, never made any request for
rehabilitation of the unit at any point of time until 22.02.2018.
Further, the company has, time and again, reiterated that it was in
possession of work orders of substantial amounts till the date of
NPA, i.e., 27.10.2016. He further submitted that the de facto
complainant, having been successful in furnishing the requisite
details for enabling the creditor bank to examine the feasibility of
restructuring, as requested for by the defacto complainant have
chosen the novel method of submitting false complaints before
the National Commission for Scheduled Castes. He further
submitted that, apart from reiterating the ill-founded allegations
made before the National Commission for Scheduled Castes, the
de facto complainant failed to provide any evidence to establish
the ingredients of the offences alleged against the petitioners. He
further submitted that the petitioners herein are responsible
officers of the bank, discharging their duties as responsible
representatives of a bank which is a trustee of public funds, and
therefore, the complaint filed on baseless and absurd allegations
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cannot be entertained, and the proceedings are liable to be
quashed against the petitioners.
6. The learned counsel for the respondent has submitted that
the petitioners have grossly violated the guidelines issued by the
RBI by not implementing the RBI Master Directions dated
17.03.2016 and the SBI e-circular dated 31.03.2017, which were
issued in the public interest by the RBI and SBI, respectively. He
further submitted that the petitioners have resorted to forgery and
fabrication of the documents furnished by them in lieu of security,
and that the petitioners entertained a plan to deprive the MSME
of its legitimate rehabilitation scheme and acted in conspiracy.
Further, it is submitted that the petitioners have cheated the RBI,
the National Commission for Scheduled Castes, and the small
entrepreneurs by providing falsified information. He further
argued that providing such false and frivolous information
constitutes an offence under Section 2(q) of the SC/ST Act. He
further submitted that the account of the MSME was classified as
NPA on 27.10.2016, and that none of the RBI Master Directions
were followed or implemented by the petitioners. Section 21 read
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with Section 35A of the MSMED Act makes it clear that the
directions issued by the RBI to banking companies are binding on
them, and they are required to comply with such directions.
However, the same have been violated by the petitioners, and
hence, they are liable to face trial and have no grounds to seek
quashment of the proceedings. He further submitted that they
have irrefutable evidence of forgery and fabrication of security
documents committed by the petitioners, and thus, they can
establish the offences against the petitioners during the course of
trial. He therefore prayed for dismissal of the petition. The
petitioners herein are bank employees, and when they commit
offences, they are liable to be tried in the same fashion to that of
any other offenders. Learned counsel for the respondent has
narrated many instances whereunder the documents are alleged
to be forged. He has relied upon the decision of the Apex Court
in Celier LLP v. Bafna Motors (Mumbai) Pvt.Ltd., and others
(C.A.No.5542-5543/2023), wherein the Apex Court held that the
law treats everyone equally and that includes the bank and its
officers. He therefore, prayed to dismiss the petition.
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7. Perused the record.
8. The allegations in the complaint point out that the
petitioners herein have failed to implement the circulars issued by
the RBI, and that a rehabilitation opportunity was denied to the
company, i.e., the de facto complainant. Further, it is alleged that
the petitioners have resorted to forgery and fabrication of the
documents submitted as security for the loan obtained by the de
facto complainant.
9. The contention of the petitioners’ counsel is that the
documents were indeed submitted by the de facto complainant
itself, and that, by relying on the said documents, the loan was
sanctioned, therefore, the complainant cannot now allege that the
documents are forged, as they are its own documents submitted
to the higher authorities.
10. Learned counsel for the petitioners relied upon the three
Judge Bench decision of the Apex Court in K.Virupaksha and
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another v. State of Karnataka and another 1, wherein it was
held that:
“14. The issue, however is, as to whether such proceedings by the police in the present facts
and circumstances could be permitted. At the outset, the sanction of loan, creation of
mortgage and the manner in which the sanctioned loan was to be released are all contractual
matters between the parties. The complainant is an industrialist who had obtained the loan in
the name of his company and the loan account was maintained by Canara Bank in that
regard. The loan admittedly was sanctioned on 16-3-2009. When at that stage the amount
was released and if any amount was withheld, the complainant was required to take
appropriate action at that point in time and avail his remedy. On the other hand, the
complainant had proceeded with the transaction, maintained the loan account until the
account was classified as NPA on 15-1-2013. Initially, the issue raised was only with regard to
the undervaluation of the property when it was brought to sale. On that aspect, as taken note,
the writ proceedings were filed and the learned Single Judge having examined, though did not
find merit had reserved liberty to raise it before DRT, which option is also availed. It is only,
thereafter, the impugned complaint was filed on 20-5-2016.
15. The SARFAESI Act is a complete code in itself which provides the procedure to be followed
by the secured creditor and also the remedy to the aggrieved parties including the borrower.
In such circumstance, as already taken note of by the High Court in writ proceedings, if there
is any discrepancy in the manner of classifying the account of the appellants as NPA or in the
manner in which the property was valued or was auctioned, DRT is vested with the power to
set aside such auction at the stage after the secured creditor invokes the power under Section
13 of the SARFAESI Act. This view is fortified by the decision of this Court in Indian Overseas
Bank v. Ashok Saw Mill [Indian Overseas Bank v. Ashok Saw Mill, (2009) 8 SCC 366 : (2009)
3 SCC (Civ) 403] wherein it is held as hereunder : (SCC pp. 375-76, paras 34-37)“34. The provisions of Section 13 enable the secured creditors, such as banks and financial
institutions, not only to take possession of the secured assets of the borrower, but also to take
over the management of the business of the borrower, including the right to transfer by way of
lease, assignment or sale for realising secured assets, subject to the conditions indicated in
the two provisos to clause (b) of sub-section (4) of Section 13.
35. In order to prevent misuse of such wide powers and to prevent prejudice being caused to
a borrower on account of an error on the part of the banks or financial institutions, certain
checks and balances have been introduced in Section 17 which allow any person, including
the borrower, aggrieved by any of the measures referred to in sub-section (4) of Section 13
taken by the secured creditor, to make an application to the DRT having jurisdiction in the
matter within 45 days from the date of such measures having taken for the reliefs indicated in
sub-section (3) thereof.
36. The intention of the legislature is, therefore, clear that while the banks and financial
institutions have been vested with stringent powers for recovery of their dues, safeguards
have also been provided for rectifying any error or wrongful use of such powers by vesting the
DRT with authority after conducting an adjudication into the matter to declare any such action
invalid and also to restore possession even though possession may have been made over to
the transferee.
37. The consequences of the authority vested in the DRT under sub-section (3) of Section 17
necessarily implies that the DRT is entitled to question the action taken by the secured
creditor and the transactions entered into by virtue of Section 13(4) of the Act. The legislature
by including sub-section (3) in Section 17 has gone to the extent of vesting the DRT with
authority to even set aside a transaction including sale and to restore possession to the
borrower in appropriate cases. Resultantly, the submissions advanced by Mr Gopalan and Mr
Altaf Ahmed that the DRT has no jurisdiction to deal with a post-Section 13(4) situation,
cannot be accepted.”
16. We reiterate, the action taken by the Banks under the SARFAESI Act is neither
unquestionable nor treated as sacrosanct under all circumstances but if there is discrepancy
in the manner the Bank has proceeded it will always be open to assail it in the forum provided.
Though in the instant case, the application filed by the complainant before DRT has been
1
(2020) 4 Supreme Court Cases 440
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dismissed and Appeal No. 523 of 2015 filed before DRAT is also stated to be dismissed the
appellants ought to have availed the remedy diligently. In that direction, the further remedy by
approaching the High Court to assail the order of DRT and DRAT is also available in
appropriate cases. Instead the petitioner after dismissal of the application before the DRT filed
the impugned complaint which appears to be an intimidatory tactic and an afterthought which
is an abuse of the process of law. In the matter of present nature, if the grievance as put forth
is taken note of and if the same is allowed to be agitated through a complaint filed at this point
in time and if the investigation is allowed to continue it would amount to permitting the
jurisdictional police to redo the process which would be in the nature of reviewing the order
passed by the learned Single Judge and the Division Bench in the writ proceedings by the
High Court and the orders passed by the competent court under the SARFAESI Act which is
neither desirable nor permissible and the banking system cannot be allowed to be held to
ransom by such intimidation. Therefore, the present case is a fit case wherein the
extraordinary power is necessary to be invoked and exercised.
17. The appellants herein had also referred to the provision as contained in Section 32 of
the SARFAESI Act which provides for the immunity from prosecution since protection is
provided thereunder for the action taken in good faith. The learned Senior Counsel for the
complainant has in that regard referred to the decision of this Court in Army
Headquarters v. CBI [Army Headquarters v. CBI, (2012) 6 SCC 228 : (2012) 3 SCC (Cri) 88]
to contend that the defence relating to good faith and public good are questions of fact and
they are required to be proved by adducing evidence. Though on the proposition of law as
enunciated therein there could be no cavil, that aspect of the matter is also an aspect which
can be examined in the proceedings provided under the SARFAESI Act. In a circumstance,
where we have already indicated that a criminal proceeding would not be sustainable in a
matter of the present nature, exposing the appellants even on that count to the proceedings
before the investigating officer or the criminal court would not be justified.”
11. He also relied upon the decision of the Apex Court in
Ashok Kumar Jain v. State of Gujarat and another 2, wherein it
was held that:
“9. The FIR has been registered under sections 406 and 420 of the IPC. The scope and
expanse of these sections is better appreciated in the company of
sections 405 and 415 of the IPC. This court in the case of Radheyshyam v. State of
Rajasthan4, culled out the following ingredients to constitute the criminal breach of
trust:
“11. For an offence punishable under Section 406, IPC, the following ingredients must
exist:
i. The accused was entrusted with property, or entrusted with dominion over property;
ii. The accused had dishonestly misappropriated or converted to their own use that
property, or dishonestly used or disposed of that property or wilfully suffer any other
person to do so; and
iii. Such misappropriation, conversion, use or disposal should be in violation of any
direction of law prescribing the mode in which such trust is to be discharged, or of any
legal contract.”
9.1. This court, while discussing the expression “entrustment” in Rashmi
Kumar v. Mahesh Kumar Bhada5, observed that it carries with it the implication
that the person handing over any property or on whose behalf that property is handed
over to another, continues to be its owner. Entrustment is not necessarily a term of law.
It may have different implications in different contexts. In its most general
significance, all its imports is handing over the possession for some purpose which
may not imply the conferment of any proprietary right therein. The ownership or
2
2025 SCC OnLine SC 998
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beneficial interest in the property in respect of which criminal breach of trust is alleged
to have been committed, must be in some person other than the accused and the latter
must hold it on account of some person or in some way for his benefit.
9.2. Further, in Hridaya Ranjan Prasad Verma v. State of Bihar6, this court observed as
follows:
“15. In determining the question it has to be kept in mind that the distinction between
mere breach of contract and the offence of cheating is a fine one. It depends upon the
intention of the accused at the time of inducement which may be judged by his
subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of
contract cannot give rise to criminal prosecution for cheating unless fraudulent or
dishonest intention is shown right at the beginning of the transaction, that is the time
when the offence is said to have been committed. Therefore it is the intention which is
the gist of the offence. To hold a person guilty of cheating it is necessary to show that
he had fraudulent or dishonest intention at the time of making the promise. From his
mere failure to keep up promise subsequently such a culpable intention right at the
beginning, that is, when he made the promise cannot be presumed.”
(Emphasis supplied)
9.3. The ingredients to constitute an offence under sections 415 read
with 420 of IPC have been considered and laid down by this court in Prof. R.K.
Vijayasarathy v. Sudha Seetharam7, as under:
“16. The ingredients to constitute an offence of cheating are as follows:
16.1. There should be fraudulent or dishonest inducement of a person by deceiving
him:
16.1.1. The person so induced should be intentionally induced to deliver any
property to any person or to consent that any person shall retain any property, or
16.1.2. The person so induced should be intentionally induced to do or to omit to do
anything which he would not do or omit if he were not so deceived; and
16.2. In cases covered by 16.1.2. above, the act or omission should be one which
caused or is likely to cause damage or harm to the person induced in body, mind,
reputation or property.
17. A fraudulent or dishonest inducement is an essential ingredient of the offence. A
person who dishonestly induces another person to deliver any property is liable for the
offence of cheating.
18. xxx xxx xxx
19. The ingredients to constitute an offence under Section 420 are as follows:
19.1 A person must commit the offence of cheating under Section 415; and
19.2 The person cheated must be dishonestly induced to:
(a) deliver property to any person; or
(b) make, alter or destroy valuable security or anything signed or sealed and capable
of being converted into valuable security.”
(Emphasis supplied)
9.4. Put succinctly, to constitute an offence under sections 415 and 420 of the IPC, the
above ingredients are present in the FIR.
10. This court in AM Mohan v. State Represented by SHO8, has observed as follows:
“13. It could be thus seen for attracting the provision of Section 420 of IPC, the
FIR/complaint must show that the ingredients of Section 415 of IPC are made out and
the person cheated must have been dishonestly induced to deliver the property to any
person; or to make, alter or destroy valuable security or anything signed or sealed and
capable of being converted into valuable security. In other words, for attracting the
provisions of Section 420 of IPC, it must be shown that the FIR/complaint discloses:
(i) the deception of any person;
(ii) fraudulently or dishonestly inducing that person to deliver any property to any
person; and
(iii) dishonest intention of the accused at the time of making the inducement.”
(Emphasis supplied)
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12. He also relied upon the decision of the Apex Court in
Urmila Devi and others v. Balram and another 3, wherein it was
held that:
“8.8. This Court, in Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao
Angre, (1988) 1 SCC 692, (Madhavrao Jiwajirao Scindia) reasoned that the criminal
process cannot be utilized for any oblique purpose. This Court also observed that the
court should quash those criminal cases where the chances of an ultimate conviction
are bleak and no useful purpose is likely to be served by continuation of a criminal
prosecution.
8.9. In R.K. Vijayasarathy, this Court held that while exercising powers under
Section 482 of the Cr. P.C., a High Court can examine whether a matter which is
essentially of a civil nature has been given a cloak of a criminal offence. Recently,
in Vishal Noble Singh v. State of Uttar Pradesh, 2024 SCC OnLine SC 1680, this
Court held that courts have to be vigilant to ensure that the machinery of criminal
justice is not misused for achieving oblique motives and agendas. Tacitly endorsing
such misuse only unnecessarily burdens the courts and the criminal justice system.
In Anand Kumar Mohatta, this Court, whilst quashing the FIR and chargesheet therein,
highlighted the following words of this Court in State of Karnataka v. L.
Muniswamy, (1977) 2 SCC 699, that describe the fundamental principle for exercise of
powers under Section 482 of the Cr. P.C.:
“7. … In the exercise of this wholesome power, the High Court is entitled to quash
a proceeding if it comes to the conclusion that allowing the proceeding to continue
would be an abuse of the process of the Court or that the ends of justice require that the
proceeding ought to be quashed. The saving of the High Court’s inherent powers, both
in civil and criminal matters, is designed to achieve a salutary public purpose which is
that a court proceeding ought not to be permitted to degenerate into a weapon of
harassment or persecution. In a criminal case, the veiled object behind a lame
prosecution, the very nature of the material on which the structure of the prosecution
rests and the like would justify the High Court in quashing the proceeding in the
interest of justice.”
13. He also relied upon the decision of the Apex Court in
Deepak Gaba and others v. State of Uttar Pradesh and
another 4, wherein it was held that:
“34. We must also observe that the High Court, while dismissing the petition filed under Section
482 of the Code, failed to take due notice that criminal proceedings should not be allowed to be
initiated when it is manifest that these proceedings have been initiated with ulterior motive of
wreaking vengeance and with a view to spite the opposite side due to private or personal grudge.
[Birla Corpn. Ltd. [Birla Corpn. Ltd. v. Adventz Investments & Holdings Ltd., (2019) 16 SCC
610 : (2020) 2 SCC (Cri) 828 : (2020) 2 SCC (Civ) 713]; Mehmood Ul Rehman [Mehmood Ul3
2025 SCC OnLine SC 1574
4
(2023) 3 Supreme Court Cases 423
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15Rehman v. Khazir Mohammad Tunda, (2015) 12 SCC 420 : (2016) 1 SCC (Cri) 124]; R.P.
Kapur v. State of Punjab, AIR 1960 SC 866; and State of Haryana v. Bhajan Lal, 1992 Supp (1)
SCC 335 : 1992 SCC (Cri) 426.] Allegations in the complaint and the pre-summoning evidence
on record, when taken on the face value and accepted in entirety, do not constitute the offence
alleged. The inherent powers of the court can and should be exercised in such circumstances.
When the allegations in the complaint are so absurd or inherently improbable, on the basis of
which no prudent person can ever reach a just conclusion that there is sufficient wrong for
proceeding against the accused, summons should not be issued.”
14. He further relied upon the decision of the Apex Court in
Mitesh Kumar J.Sha v. State of Karnataka and others 5,
wherein it was held that:
“44. Moreover, this Court has at innumerable instances expressed its disapproval for imparting
criminal colour to a civil dispute, made merely to take advantage of a relatively quick relief
granted in a criminal case in contrast to a civil dispute. Such an exercise is nothing but an abuse
of the process of law which must be discouraged in its entirety.”
15. He also relied upon the decision of the Apex Court in
K.Ramesh v. K.Kothandaraman6, wherein it was held that:
“4. In this regard our attention was drawn to paras 32, 33, 34 and 36 of the judgment in Bir
Singh [Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197 : (2019) 2 SCC (Civ) 309 : (2019) 2 SCC
(Cri) 40 : (2019) 5 Comp Cas-OL 560] , wherein it has been observed that even if a blank cheque
leaf is voluntarily signed and handed over by the accused towards some payment would attract
the presumption under Section 139 of the Act and in the absence of any cogent evidence to show
that the cheque was not issued in discharge of the debt, the presumption would hold good. The
said paras are extracted below: (SCC pp. 208-209, paras 32-34 & 36)“32. The proposition of law which emerges from the judgments referred to above is that the onus
to rebut the presumption under Section 139 that the cheque has been issued in discharge of a debt
or liability is on the accused and the fact that the cheque might be post-dated does not absolve the
drawer of a cheque of the penal consequences of Section 138 of the Negotiable Instruments Act.
33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in
particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and
makes it over to the payee remains liable unless he adduces evidence to rebut the presumption
that the cheque had been issued for payment of a debt or in discharge of a liability. It is
immaterial that the cheque may have been filled in by any person other than the drawer, if the
cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of
Section 138 would be attracted.
34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the
payee may fill up the amount and other particulars. This in itself would not invalidate the cheque.
The onus would still be on the accused to prove that the cheque was not in discharge of a debt or
liability by adducing evidence.
***
5
(2022) 14 Supreme Court Cases 572
6
(2024) 12 SCC 82
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36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is
towards some payment, would attract presumption under Section 139 of the Negotiable
Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in
discharge of a debt.”
5. It is not in dispute that in the instant case, the accused has signed the cheque. The only dispute
is with regard to the age of the ink used in making the signature on the cheque and the age of the
signature and contents of the cheque.
6. We find that the application filed by the accused before the trial court was wholly frivolous
and that the trial court had rightly rejected the said application. But in our view, the High Court
ought not to have allowed the said application and thereby allowed the revision petition of the
respondent-accused.”
16. However, the contention of the respondents counsel is that
genuine documents were originally submitted, but were
subsequently forged and then furnished to the higher authorities.
The said contention is thus a triable issue. He relied upon the
decision of the Apex Court in Pro Knits v. Board of Directors of
Canara Bank and others 7, wherein it was held that:
“21. It is also pertinent to note that sufficient safeguards have been provided under the said
Chapter for safeguarding the interest of the defaulters-borrowers for giving them opportunities to
discharge their debt. However, if at the stage of classification of the loan account of the borrower
as NPA, the borrower does not bring to the notice of the bank/creditor concerned that it is a
Micro, Small or Medium Enterprise under the MSMED Act and if such an Enterprise allows the
entire process for enforcement of security interest under the SARFAESI Act to be over, or it having
challenged such action of the bank/creditor concerned in the court of law/tribunal and having
failed, such an Enterprise could not be permitted to misuse the process of law for thwarting the
actions taken under the SARFAESI Act by raising the plea of being an MSME at a belated
stage. Suffice it to say, when it is mandatory or obligatory on the part of the Banks to follow the
Instructions/Directions issued by the Central Government and the Reserve Bank of India with
regard to the Framework for Revival and Rehabilitation of MSMEs, it would be equally
incumbent on the part of the MSMEs concerned to be vigilant enough to follow the process laid
down under the said Framework, and bring to the notice of the Banks concerned, by producing
authenticated and verifiable documents/material to show its eligibility to get the benefit of the
said Framework.”
17. Thus, a duty is cast upon the petitioners to follow the
directions issued by the Central Government and RBI with regard
7
(2024) 10 SCC 292
ETD,J
Crl.P.No.1382_2019
17
to the frame work for revival and rehabilitation of MSMEs. It is
alleged that the petitioners failed to follow the said directions,
which needs further investigation.
18. It is pertinent to take note of a fact that the stay was granted
by this Court on 11.03.2019, pursuant to which the investigation
is at halt. The nature of the other allegations, pointing out forgery
and fabrication of documents, also requires further investigation.
Unless the investigation is completed, the truth cannot be
unraveled. Thus, in the circumstances, it is deemed appropriate
to direct the police to complete the investigation strictly in
accordance with law.
19. Accordingly, this Criminal Petition is disposed of directing
the police concerned to complete the investigation strictly in
accordance with law.
Miscellaneous applications pending, if any, shall stand
closed.
___________________________
JUSTICE TIRUMALA DEVI EADA
Date: 28.04.2026
ns
