Orissa High Court
M/S. Sag Projects Pvt. Ltd. And Another vs M/S. Siddhartha Engineering Pvt. Ltd on 30 July, 2026
THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.2471 of 2022
CRLMC No.2481 of 2022
CRLMC No.3244 of 2023
&
CRLMC No.3285 of 2023
CNR No. ODHC010589752022
(In the matter of an applications under Section 482 of the Criminal
Procedure Code, 1973)
CRLMC No.2471 of 2022
M/s. Sag Projects Pvt. Ltd. and another ....... Petitioners
-Versus-
M/s. Siddhartha Engineering Pvt. Ltd. ....... Opp. Party
For the Petitioners : Mr. Devashis Panda, Advocate
For the Opposite Party : Mr. Laxmidhar Pangari, Senior Advocate
Mr. Kishore Chandra Kar, Advocate
CRLMC No.2481 of 2022
M/s. Sag Projects Pvt. Ltd. and another ....... Petitioners
-Versus-
M/s. Siddhartha Engineering Pvt. Ltd. ....... Opp. Party
For the Petitioners : Mr. Devashis Panda, Advocate
For the Opposite Party : Mr. Laxmidhar Pangari, Senior Advocate
Mr. Kishore Chandra Kar, Advocate
CRLMC No.3244 of 2023
M/s. Sag Projects Pvt. Ltd. and another ....... Petitioners
-Versus-
M/s. Siddhartha Engineering Pvt. Ltd. ....... Opp. Party
For the Petitioners : Mr. Devashis Panda, Advocate
For the Opposite Party : Mr. Laxmidhar Pangari, Senior Advocate
Mr. Kishore Chandra Kar, Advocate
CRLMC No.3285 of 2023
M/s. Sag Projects Pvt. Ltd. and another ....... Petitioners
-Versus-
M/s. Siddhartha Engineering Pvt. Ltd. ....... Opp. Party
For the Petitioners : Mr. Devashis Panda, Advocate
For the Opposite Party : Mr. Laxmidhar Pangari, Senior Advocate
Mr. Kishore Chandra Kar, Advocate
CORAM:
THE HONOURABLE SHRI JUSTICE SIBO SANKAR MISHRA
Date of Hearing: 09.07.2026 :: Date of Judgment: 30.07.2026
S.S. Mishra, J. Since all the above CRLMCs arise out of the same
Memorandum of Understanding (MoU) executed between the same
parties and involve common questions of fact and law, they were heard
analogously and are being disposed of by this common judgment.
2. The complainant-opposite party has initiated four complaint cases,
namely, I.C.C. Case No.929 of 2022, I.C.C. Case No.2035 of 2022,
I.C.C. Case No.4155 of 2022 and I.C.C. Case No.6069 of 2022 for the
Page 2 of 22
alleged commission of an offence under Section 138 of the Negotiable
Instruments Act on account of dishonour of cheques issued by the
petitioner-company. Upon consideration of the materials on record, the
learned trial Court, vide orders dated 18.02.2022, 08.04.2022,
09.08.2022 and 15.11.2022 respectively, took cognizance of the offence
under Section 138 of the N.I. Act against the petitioners. Aggrieved by
the aforesaid orders taking cognizance of the offence, the petitioners
have preferred the present petitions seeking quashing of the said orders
as well as the entire criminal proceedings initiated against them in the
aforesaid complaint cases.
3. Heard Mr. Devashis Panda, learned counsel appearing for the
petitioners and Mr. Laxmidhar Pangari, learned Senior Counsel
appearing for the opposite party.
4. The prosecution case, in brief, is that petitioner No.1-Company,
represented through its Director (petitioner No.2), approached the
opposite party-company seeking its technical qualifying credentials for
participating in the bid floated by U.P. Power Transmission Corporation
Ltd. (UPPTCL) for the project titled "Construction of 220/33 KV GIS
Page 3 of 22
Substation, Khorabar (Gorakhpur) with SAS on turnkey basis." Pursuant
thereto, the parties executed a Memorandum of Understanding (MoU)
dated 10.06.2021, whereunder the opposite party agreed to provide
technical services to the petitioner-company in consideration of technical
service fees at the rate of 1.8% of the total contract value, amounting to
Rs.69,18,480/-, payable in four instalments in terms of Clause 2.5 of the
MoU. It is further alleged that, in terms of Clause 2.5(g) of the MoU, the
petitioners issued four security cheques in favour of the opposite party,
though according to the complainant, the cheque particulars were
subsequently filled up in accordance with the understanding between the
parties.
It is the further case of the complainant that upon award of the
contract by UPPTCL and the respective milestones contemplated under
the MoU having been achieved, the instalments of the technical service
fees became due and payable. Despite repeated demands, the petitioners
allegedly failed to make payment, whereupon petitioner No.2 requested
the complainant to present the respective cheques towards discharge of
the outstanding liability. Accordingly, cheque No.013442 dated
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30.10.2021 for Rs.29,54,700/-, cheque No.013441 dated 30.01.2022 for
Rs.9,84,900/-, cheque No.013444 dated 30.04.2022 for Rs.9,84,900/-,
and cheque No.013445 dated 30.07.2022 for Rs.9,84,900/- were
presented for encashment on different dates. The said cheques, however,
were dishonoured by the drawee bank with the endorsements "Funds
Insufficient", "Account Blocked" and "Account Closed". In respect of
cheque No.013442, the cheque was initially dishonoured upon its
presentation and on the request of petitioner No.2, was presented again,
but was once again returned unpaid.
Thereafter, separate statutory demand notices were issued in
respect of each dishonoured cheque through registered post, courier and,
wherever applicable, by e-mail. As the petitioners allegedly failed to
make payment of the cheque amounts within the prescribed statutory
period despite receipt or deemed service of the notices, four separate
complaints under Section 138 of the Negotiable Instruments Act came to
be instituted before the learned S.D.J.M., Bhubaneswar, being I.C.C.
Case Nos.929 of 2022, 2035 of 2022, 4155 of 2022 and 6069 of 2022.
Upon consideration of the complaint petitions, the initial statements and
Page 5 of 22
the documents filed in support thereof, the learned Magistrate took
cognizance of the alleged offence and issued process against the
petitioners.
5. The petitioners in these petitions have contended that in the MoU
at Clause-2.5(g), it is stipulated that the complainant is entitled to be paid
the technical service fee of 1.8% of the total contract value in five
instalments. First instalment of 0.9% of the estimated cost of
Rs.29,54,700/- was only payable on issuance of LOA to the opposite
party/complainant by UPPTCL with three instalments from out of the
remaining four being payable @ 0.3% of the estimated cost i.e.
Rs.9,84,900/- within three months from the payment of the first, second
and third instalments respectively and towards the fifth instalment, after
the award of the project work. The final award cost was to be finally
computed and any further technical service fees payable was to be paid
separately through a cheque to be issued after the completion of
payments by SAG projects or within one month from the date of fourth
instalment.
Page 6 of 22
It is the case of the petitioners that Letter of Intent (LOI) was
issued on 03.09.2021 by UPPTCL and immediately thereafter on
04.11.2021, 31.01.2022, 26.05.2022 and on 05.09.2022, the cheques
were deposited and in the year 2022, the complaint cases were initiated.
The Letter of Acceptance (LOA) was only issued by the UPPTCL on
22.03.2022. Therefore, the attempt made by the complainant to encash
the cheque prior to issuance of LOA is in violation of the condition of
MoU.
6. Mr. Panda, learned counsel appearing for the petitioners by
extensively referring to the terms and conditions of the MoU, submitted
that the complainant had prematurely deposited the cheques for
encashment before its due dates. By drawing attention of this Court to
Clause-2.5(g) of the MoU, he further contended that the complainant had
fraudulently incorporated the particulars of the cheque in the MoU prior
to the due dates. According to him, the relevant entries in the MoU were
made in handwriting and were not authenticated by the signatures or
countersignatures of both the parties. Therefore, he submitted that the
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prosecution lodged against his clients is vitiated because of the fraud
committed by the complainant.
Mr. Panda, learned counsel further drawing the attention of this
Court to the cognizance orders and the complaint petitions submitted that
the accused persons are permanent residents of Aligarh, Uttar Pradesh.
He contended that while taking cognizance of the offence under Section
138 of the N.I. Act, the learned trial Court failed to comply with the
mandatory requirements of Sections 200 and 202 of Cr.P.C. He
submitted that it was obligatory on the part of the Magistrate to defer the
issuance of summons and enter into an enquiry contemplated under
Section 202 of Cr.P.C. since the accused persons reside beyond the
jurisdiction of the Court. In the absence of the mandatory procedural
requirement followed by the learned trial Court, the cognizance order is
bad in law. To substantiate his argument, he has relied upon the
judgment of the Constitution Bench of the Hon'ble Supreme Court
reported in (2021) 16 SCC 116 in Suo Motu Writ Petition (Crl.) No.2 of
2020; In Re Expeditious Trial of Cases Under Section 138 of NI
Page 8 of 22
Act,1881. He has empathetically relied upon paragraphs-11, 12 and 24 of
the said judgment, which read as under:-
"11. The learned Amici Curiae referred to a judgment of this
Court in K.S. Joseph v. Philips Carbon Black Ltd. [K.S.
Joseph v. Philips Carbon Black Ltd., (2016) 11 SCC 105 :
(2016) 4 SCC (Civ) 616 : (2017) 1 SCC (Cri) 270] where there
was a discussion about the requirement of inquiry under Section
202 of the Code in relation to complaints filed under Section
138 but the question of law was left open. In view of the
judgments of this Court in Vijay Dhanuka [Vijay
Dhanuka v. Najima Mamtaj, (2014) 14 SCC 638 : (2015) 1 SCC
(Cri) 479] , Abhijit Pawar [Abhijit Pawar v. Hemant Madhukar
Nimbalkar, (2017) 3 SCC 528 : (2017) 2 SCC (Cri) 192]
and Birla Corpn. [Birla Corpn. Ltd. v. Adventz Investments &
Holdings Ltd., (2019) 16 SCC 610 : (2020) 2 SCC (Civ) 713 :
(2020) 2 SCC (Cri) 828] , the inquiry to be held by the
Magistrate before issuance of summons to the accused residing
outside the jurisdiction of the court cannot be dispensed with.
The learned Amici Curiae recommended that the Magistrate
should come to a conclusion after holding an inquiry that there
are sufficient grounds to proceed against the accused. We are in
agreement with the learned Amicus Curiae.
12. Another point that has been brought to our notice relates to
the interpretation of Section 202(2) which stipulates that the
Magistrate shall take evidence of the witness on oath in an
inquiry conducted under Section 202(1) for the purpose of
issuance of process. Section 145 of the Act provides that the
evidence of the complainant may be given by him on affidavit,
which shall be read in evidence in any inquiry, trial or other
proceeding, notwithstanding anything contained in the Code.
Section 145(2) of the Act enables the court to summon and
examine any person giving evidence on affidavit as to the facts
contained therein, on an application of the prosecution or the
accused. It is contended by the learned Amicus Curiae that
though there is no specific provision permitting the examination
of witnesses on affidavit, Section 145 permits the complainant to
be examined by way of an affidavit for the purpose of inquiry
under Section 202. He suggested that Section 202(2) should be
Page 9 of 22
read along with Section 145 and in respect of complaints under
Section 138, the examination of witnesses also should be
permitted on affidavit. Only in exceptional cases, the Magistrate
may examine the witnesses personally. Section 145 of the Act is
an exception to Section 202 in respect of examination of the
complainant by way of an affidavit. There is no specific
provision in relation to examination of the witnesses also on
affidavit in Section 145. It becomes clear that Section 145 had
been inserted in the Act, with effect from the year 2003, with the
laudable object of speeding up trials in complaints filed under
Section 138. If the evidence of the complainant may be given by
him on affidavit, there is no reason for insisting on the evidence
of the witnesses to be taken on oath. On a holistic reading of
Section 145 along with Section 202, we hold that Section 202(2)
of the Code is inapplicable to complaints under Section 138 in
respect of examination of witnesses on oath. The evidence of
witnesses on behalf of the complainant shall be permitted on
affidavit. If the Magistrate holds an inquiry himself, it is not
compulsory that he should examine witnesses. In suitable cases,
the Magistrate can examine documents for satisfaction as to the
sufficiency of grounds for proceeding under Section 202.
xxxxx xxxxx xxxxx
xxxxx xxxxx xxxxx
24. The upshot of the above discussion leads us to the following
conclusions:
24.1. The High Courts are requested to issue practice directions
to the Magistrates to record reasons before converting trial of
complaints under Section 138 of the Act from summary trial to
summons trial.
24.2. Inquiry shall be conducted on receipt of complaints under
Section 138 of the Act to arrive at sufficient grounds to proceed
against the accused, when such accused resides beyond the
territorial jurisdiction of the court.
24.3. For the conduct of inquiry under Section 202 of the
Code, evidence of witnesses on behalf of the complainant shall
be permitted to be taken on affidavit. In suitable cases, the
Magistrate can restrict the inquiry to examination of
documents without insisting for examination of witnesses.
24.4. We recommend that suitable amendments be made to the
Act for provision of one trial against a person for multiple
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offences under Section 138 of the Act committed within a period
of 12 months, notwithstanding the restriction in Section 219 of
the Code.
24.5. The High Courts are requested to issue practice directions
to the trial courts to treat service of summons in one complaint
under Section 138 forming part of a transaction, as deemed
service in respect of all the complaints filed before the same
court relating to dishonour of cheques issued as part of the said
transaction.
24.6. The judgments of this Court in Adalat Prasad [Adalat
Prasad v. Rooplal Jindal, (2004) 7 SCC 338 : 2004 SCC (Cri)
1927] and Subramanium Sethuraman [Subramanium
Sethuraman v. State of Maharashtra, (2004) 13 SCC 324 : 2005
SCC (Cri) 242] have interpreted the law correctly and we
reiterate that there is no inherent power of trial courts to review
or recall the issue of summons. This does not affect the power of
the trial court under Section 322 of the Code to revisit the order
of issue of process in case it is brought to the court's notice that
it lacks jurisdiction to try the complaint.
24.7. Section 258 of the Code is not applicable to complaints
under Section 138 of the Act and findings to the contrary
in Meters & Instruments [Meters & Instruments (P)
Ltd. v. Kanchan Mehta, (2018) 1 SCC 560 : (2018) 1 SCC (Civ)
405 : (2018) 1 SCC (Cri) 477] do not lay down correct law. To
conclusively deal with this aspect, amendment to the Act
empowering the trial courts to reconsider/recall summons in
respect of complaints under Section 138 shall be considered by
the Committee constituted by an order of this Court dated 10-3-
2021 [Expeditious Trial of Cases Under Section 138 of NI Act
1881, In re, 2021 SCC OnLine SC 354] .
24.8. All other points, which have been raised by the Amici
Curiae in their preliminary report and written submissions and
not considered herein, shall be the subject-matter of
deliberation by the aforementioned Committee. Any other issue
relating to expeditious disposal of complaints under Section 138
of the Act shall also be considered by the Committee."
7. In nutshell, Mr. Panda, learned counsel for the petitioners
submitted that the complaint is liable to fail both on merits and on
Page 11 of 22
technical grounds as well. On merits, he contended that the cheques in
question were presented before the due date of payable and the
complainant with a fraudulent intention has initiated the present cases
against the petitioners. He further submitted that, apart from the merits of
the case, the complaint is also legally unsustainable as the mandatory
procedure prescribed under the Code prior to issuance of process has not
been complied with by the learned Magistrate. Hence, the order of
cognizance is itself riddled with illegality.
8. On the other hand, Mr. Pangari, learned Senior Counsel appearing
for the opposite party submitted that once the accused persons have
admittedly issued the cheques in question, the statutory presumption
under Section 139 read with Section 118 of the N.I. Act operates against
the petitioners. According to him, such presumption, though rebuttable,
can only be displaced by the accused during the course of trial by leading
appropriate evidence. He contended that the grounds urged by the
petitioners in the present petitions under Section 482 Cr.P.C. involve
disputed questions of fact, cannot be adjudicated while exercising the
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inherent jurisdiction by this Court and that could only be threshed out in
the trial. Therefore, as per his submission, this Court is forbidden to enter
into merits of the case at this stage by scuttling the expected trial.
Mr. Pangari, learned Senior Counsel further submitted that the
present petitions are pending since the year 2022/2023 and by virtue of
the interim order dated 09.09.2022 and 04.08.2023, further proceedings
in the complaint cases have remained stayed causing delay in the trial.
He further submitted that under Section 143(3) of the N.I. Act, the
statute mandates that the cases of the present nature needs to be
concluded as expeditiously as possible preferably within a period of six
months from the date of filing of the complaint. In support of his
submissions, he has placed reliance upon the decisions of the Hon'ble
Supreme Court in Manik B. vrs. Kadapala Sreyes Reddy and Another,
reported in 2023 LiveLaw (SC) 642, and Sri Om Sales v. Abhaya
Kumar and Others reported in MANU/SC/1715/2025. By specifically
relying upon paragraphs 12 to 18 of the judgment in Sri Om Sales
(supra), he submitted that the Hon'ble Supreme Court has held as
follows:-
Page 13 of 22
"12. In the instant case, the complaint clearly spells out the
necessary ingredients for commission of an offence punishable
Under Section 138 of the N.I. Act. It is also alleged in the
complaint that the cheque was issued in the discharge of
liability qua goods supplied by the complainant. The cheque was
brought on record along with the dishonor memo of the bank
concerned which indicated that it was returned unpaid for
insufficient funds in the drawer's account. The complaint also
indicated that complainant had served notice of demand within
the specified period and despite service of notice of demand, no
payment was made. In such circumstances, the necessary
ingredients of an offence punishable Under Section 138 of N.I.
Act were disclosed by the complaint warranting issuance of
process to the Accused (i.e., the first Respondent).
13. However, the High Court, in its jurisdiction Under Section
482, proceeded to test whether the cheque was issued for the
discharge, in whole or in part, of any debt or other liability. In
our view, such an exercise was unwarranted because, Under
Section 139 of the N.I. Act, there is a presumption that the
holder of a cheque received the cheque of the nature referred to
in Section 138 for the discharge, in whole or in part, of any debt
or other liability. This presumption can be rebutted by evidence
led in trial. A fortiori, the said issue can appropriately be
decided either at the trial, or later, upon conclusion of trial, by
the appellate/ revisional court.
14. In Maruti Udyog Ltd. v. Narender and Ors.
MANU/SC/0803/1999 : (1999) 1 SCC 113, this Court held that
a presumption must be drawn that the holder of the cheque
received the cheque of the nature referred to in Section 138, for
the discharge of any debt or other liability unless the contrary is
proved and, therefore, the High Court was not justified in
entertaining and accepting the plea of the Accused at the initial
stage of the proceedings and quash the complaint.
15. Likewise, in Rangappa v. Sri Mohan MANU/SC/0376/2010
: 2010:INSC:289 : (2010) 11 SCC 441, it was held that the
presumption mandated by Section 139 of the N.I. Act includes
the existence of a legally enforceable debt or liability. It was
observed that such a presumption is rebuttable, and the Accused
must raise its defense in the trial.
16. In Rajeshbhai Muljibhai Patel v. State of Gujarat
MANU/SC/0155/2020 : 2020:INSC:160 : (2020) 3 SCC 794, it
Page 14 of 22
was held that the High Court should not quash the criminal
complaint Under Section 138 of N.I. Act by going into disputed
questions of fact regarding the cheque in question being issued
for the discharge of debt or liability. Moreso, when Section 139
of the N.I. Act raises a statutory presumption as regards the
cheque being issued for discharge of debt or liability.
17. In Rathish Babu Unnikrishnan v. State (NCT of Delhi)
MANU/SC/0542/2022 : 2022:INSC:480 : (2022) 20 SCC 661,
this Court held that when there is a legal presumption Under
Section 139 of N.I. Act, it would not be judicious to carry out a
detailed enquiry on a disputed question of fact at a pre-trial
stage to quash the complaint. The relevant observations in the
judgment are extracted below:
17. The proposition of law as set out above makes
it abundantly clear that the court should be slow
to grant the relief of quashing a complaint at a
pre-trial stage, when the factual controversy is in
the realm of possibility particularly because of
the legal presumption, as in this matter. What is
also of note is that the factual defense without
having to adduce any evidence need to be of an
unimpeachable quality, so as to altogether
disprove the allegations made in the complaint.
18. The consequences of scuttling the criminal
process at a pretrial stage can be grave and
irreparable. Quashing proceedings at
preliminary stages will result in finality without
the parties having had an opportunity to adduce
evidence and the consequence then is that the
proper forum i.e., the trial court is ousted from
weighing the material evidence. If this is allowed,
the Accused may be given an unmerited
advantage in the criminal process. Also, because
of the legal presumption, when the cheque and
the signature are not disputed by the Appellant,
the balance of convenience at this stage is in
favor of the complainant/prosecution, as the
Accused will have the opportunity to adduce
defense evidence during the trial, to rebut the
presumption.
Page 15 of 22
19. Situated thus, to non-suit the complainant, at
the stage of the summoning order, when the
factual controversy is yet to be canvassed and
considered by the trial court will not in our
opinion be judicious. Based upon a prima facie
impression, an element of criminality cannot
entirely be ruled out here subject to the
determination by the trial court. Therefore, when
the proceedings are at a nascent stage, scuttling
of the criminal process is not merited.
18. Having regard to the aforesaid decisions of this Court as
also the provisions of Section 139 of the N.I. Act, we are of the
considered view that the High Court committed an error by
conducting a roving enquiry, at the pre-trial stage, as regards
the cheque being issued for the discharge of debt or liability.
Such an exercise, in our view, was not merited in exercise of
power Under Section 482 of the Code more so when the
complaint allegations disclosed that the cheque was issued for
discharge of liability. As fulfillment of the necessary ingredients
of Section 138 N.I. Act are prima facie made out from the
complaint allegations, in our view, neither the summoning order
nor the complaint could have been quashed by the High Court at
the pre-trial stage.”
9. I have carefully perused the materials available on record,
including the documents placed by both the parties, and have considered
the rival submissions advanced by the learned counsel appearing for the
respective parties. The first contention of Mr. Panda, learned counsel for
the petitioners was regarding the non-compliance with the mandatory
procedural requirements contemplated under Sections 200 and 202 of the
Cr.P.C. In order to appreciate the aforesaid contention, it is apposite to
Page 16 of 22
refer to the order dated 18.02.2022 passed by the learned S.D.J.M.,
Bhubaneswar in I.C.C. Case No.929 of 2022 (in CRLMC No.2471 of
2022), whereby cognizance of the offence punishable under Section 138
of the Negotiable Instruments Act was taken. The order reads thus:-
“Perused the complaint, initial statement of the
complainant on affidavit, original cheque, intimation
slip, postal receipt, postal A.D. and the pleader notice.
From the above documents, I am satisfied that prima
facie of the offence U/s.138 of N.I. Act is well made out
against the accused persons. Hence, cognizance of
offence U/s. 138 of N.I. Act is taken.”
Reading of the above passage of the impugned order reveals that
learned trial Court had, in fact, conducted the requisite inquiry before
taking cognizance of the offence. The complainant was directed to
adduce pre-summoning evidence, which was furnished by way of an
affidavit. Besides the said affidavit, the learned trial Court has also taken
note of the averments made in the complaint petition and statutory
demand notice issued under Section 138(b) of the N.I. Act as well as
other documents filed by the complainant in support thereof. It is also
seen from the record that the complainant along with the complaint have
filed the original dishonour of cheque, returning memos, statutory
Page 17 of 22
demand notice, copy of the MoU and other relevant doucments. The
documents placed on record coupled with pre-summoning evidence
adduced by the complainant by way of affidavit, which was relied upon
by the trial Court while taking cognizance of the offence satisfies the
procedural requirements contemplated under Section 200/202 of Cr.P.C.
Therefore, the submission advanced by Mr. Panda, learned counsel for
the petitioner, based on the Constitution Bench decision in Suo Motu
Writ Petition (Crl.) No. 2 of 2020 (supra) is misconceived on the facts of
the present case. The Constitution Bench of the Hon’ble Supreme Court
has categorically held that, at the stage of inquiry under Section 202 of
the Code, it is open to the Magistrate either to conduct the inquiry
himself or to direct an investigation. It is held that in suitable cases, the
Magistrate can examine the documents for satisfaction as to the
sufficiency of grounds for proceeding under Section 202 of Cr.P.C. The
Magistrate in the instant case has exactly done the same thing. He has
not only relied upon the pleadings but also taken into account the
documents placed before him as well as the pre-summoning evidence
lead by the complainant by way of affidavit. Therefore, the procedural
Page 18 of 22
requirement contemplated under Section 202 of the Cr.P.C. stands duly
complied with. Hence, the contention raised by Mr. Panda, challenging
the cognizance order on the ground of non-compliance of Section 202 of
Cr.P.C. has no merit and liable to be rejected. In so far as the other points
raised by Mr. Panda, on merits of the cases are concerned, the same also
do not hold any water in view of the settled provision of law that once
the cheque is admittedly issued by the accused and even after issuance of
statutory notice under Section 138(b) of N.I. Act, the amount is not paid,
the presumption under Section 139 read with Section 118 of N.I. Act
operates. The petitioner being the accused is at liberty to revert the same
by bringing adequate evidence in the trial.
In this context, the recent decision of the Hon’ble Supreme Court
in Sanjabij Tari v. Kishore S. Borcar and Others, reported in
MANU/SC/1336/2025, assumes significance. In the aforesaid decision,
the Hon’ble Supreme Court emphasized the mandatory nature of the
statutory presumptions under Sections 118 and 139 of the N.I. Act, and
deprecated any approach inconsistent with the settled legal position
governing prosecutions under Section 138 of the Act. In the present case,
Page 19 of 22
it is an admitted position that the statutory notice under Section 138(b) of
the N.I. Act was duly issued and received by the petitioners. Despite
receipt of the notice, the petitioners neither replied to the same nor
complied with the demand made therein by making payment of the
cheque amount. Therefore, the statutory presumption under Sections 118
and 139 of the N.I. Act operates against them. The relevant observations
of the Hon’ble Supreme Court in Sanjabij Tari (supra), particularly
paragraphs 15 to 18 thereof, reinforce the aforesaid legal position, which
reads as under:-
“ONCE EXECUTION OF CHEQUE IS ADMITTED,
PRESUMPTIONS UNDER SECTIONS 118 AND 139 OF THE
NI ACT ARISE
15. In the present case, the cheque in question has admittedly
been signed by the Respondent No.1-Accused . This Court is of
the view that once the execution of the cheque is admitted, the
presumption under Section 118 of the NI Act that the cheque in
question was drawn for consideration and the presumption
under Section 139 of the NI Act that the holder of the cheque
received the said cheque in discharge of a legally enforceable
debt or liability arises against the accused. It is pertinent to
mention that observations to the contrary by a two Judges
Bench in Krishna Janardhan Bhat vs. Dattatraya G. Hegde,
(2008) 4 SCC 54 have been set aside by a three Judges Bench
in Rangappa (supra).
16. This Court is further of the view that by creating this
presumption, the law reinforces the reliability of cheques as a
mode of payment in commercial transactions.
17. Needless to mention that the presumption contemplated
under Section 139 of the NI Act, is a rebuttable presumption.
Page 20 of 22
However, the initial onus of proving that the cheque is not in
discharge of any debt or other liability is on the accused/drawer
of the cheque [See: Bir Singh vs. Mukesh Kumar, (2019) 4 SCC
197].
18. The judgment of this Court in APS Forex Services Private
Limited (supra) relied upon by learned counsel for the
Respondent No.1-Accused only says that presumption under
Section 139 of the NI Act is rebuttable and when the same is
rebutted, the onus would shift back to the complainant to prove
his financial capacity, more particularly, when it is a case of
giving loan by cash. This judgment nowhere states, as was
sought to be contended by learned counsel for the Respondent
No.1-Accused, that in cases of dishonour of cheques, in lieu of
cash loans, the presumption under Section 139 of the NI Act
does not arise.”
10. On the face of the averments made in the complaint and the
materials placed on record, this Court finds that the accused-petitioners
have no escape except to face the trial and rebut the presumption
operating against them. Mr. Pangari, learned Senior Counsel appearing
for the opposite party, has also placed reliance on several decisions of
the Hon’ble Supreme Court, including Maruti Udyog Ltd. v. Narender
and Others, (1999) 1 SCC 113; Rangappa v. Sri Mohan, (2010) 11
SCC 441; Rajeshbhai Muljibhai Patel v. State of Gujarat, (2020) 3
SCC 794; and Rathish Babu Unnikrishnan v. State (NCT of Delhi),
(2022) 20 SCC 661, all of which reiterate the same settled principles.
The decision in Sanjabij Tari (supra) has considered the aforesaid
Page 21 of 22
precedents and has also laid down guidelines to facilitate the expeditious
disposal of cheque dishonour cases. It may not be necessary to elaborate
all the issues raised by both the counsels which according to this Court
are ancillary issue that could only be answered at the end of the trial. All
the contentions of both the parties are, therefore, left open to be urged
before the trial Court at the appropriate stage. This Court is not inclined
to entertain the present petitions invoking its inherent jurisdiction under
Section 482 of the Cr.P.C.. Though the jurisdiction under Section 482
Cr.P.C. is wide and inherent, it is equally well settled that the same is
required to be exercised sparingly, with circumspection, and only in
exceptional cases. The Hon’ble Supreme Court has reiterated the said
principle in Sanjabij Tari (supra).
11. Accordingly, the CRLMCs stand dismissed. The learned trial
Court is directed to proceed with the trial of the cases without further
delay keeping in mind the provision of Section 143(3) of the N.I. Act.
(S.S. Mishra)
Judge
Signature Not Verified
The High Court of Orissa, Cuttack.
Dated the 30th July, 2026/ Swarna
Digitally Signed
Signed by: SWARNAPRAVA DASH
Designation: Senior Stenographer
Reason: Authentication
Location: High Court of Orissa
Date: 30-Jul-2026 13:53:31 Page 22 of 22
