Case Note & Summary
The High Court of Bombay heard three consolidated criminal applications challenging the dismissal of revision applications against issuance of process for offences under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The applicants contended that the cheques were invalid as they were drawn on State Bank of Patiala, which had amalgamated with State Bank of India on 1st April, 2017, while the cheques were presented for encashment on 17th March, 2021. The Court examined the complaint allegations- Denial to quash the complaints
Headnote
Criminal Law-- Code of criminal Procedure, 1973-- Section 482 -- Negotiable Instruments Act, 1881- Sections 138 and 141 -- Dishonour of cheques-- Complaints u/s 138 and 141 of NI Act-- Issuance of process to applicants/accused-- Challenged to the order of issuance of process before session court-- Dismissal of revisions by session court-- Aggrieved-- Challenged by applicants/accused u/s 482 of CRPC-- Advancement of loan by complainant-- Cheques were drawn in favour of firm-- Dishonour of cheques with endorsement of "Insufficient funds''- Subject cheques became invalid due to amalgamation and merger of bank-- Satisfaction of condition of Section 138 of NI Act as cheques were presented within stipulated time period -- Valid presentation of cheques-- Expression "within the period of its validity"-- Cases referred-- Object of section 138 of NI Act discussed-- Invalidation of cheque on account of merger with another bank-- Question as to whether the drawee bank could have honoured the cheque as it was rendered invalid, would warrant adjudication at the time of trial-- High court declined to quash the complaints-- Applications dismissed
Para-- 19, 20, 21, 26, 35, 36, 38, 40, 41
Issue of Consideration
The Issue of Consideration was whether the cheques in question were valid instruments on the date of presentation for encashment as required under clause (a) of proviso to Section 138 of the Negotiable Instruments Act, 1881
Final Decision
The High Court allowed the applications and quashed the criminal proceedings against the applicants, holding that the cheques were invalid instruments as they were drawn on a bank that did not exist on the date of presentation, and no offence under Section 138 of Negotiable Instruments Act, 1881 was made out prima facie
Law Points
- Section 482 of the Code of Criminal Procedure
- 1973 empowers High Court to quash proceedings to prevent abuse of process
- Clause (a) of proviso to Section 138 of Negotiable Instruments Act
- 1881 requires cheque to be drawn on a bank account existing on date of presentation
- Invalid cheque cannot form basis for offence under Section 138 of Negotiable Instruments Act
- 1881
- Inherent jurisdiction can be exercised when prima facie case is not made out from complaint allegations
Case Details
2026 LawText (BOM) (02) 51
Criminal Application No. 940 of 2024, Criminal Application No. 946 of 2024, Criminal Application No. 947 of 2024
Mr. Mahendra Svar, Ms. Prachi Patel for Applicants, Mr. Jatin Karia (Shah), Ms. Snehankita Munj, Ms. Shraddha Kamble, Ms. Dipti J. Karia for Respondents
Chetan Sunderji Bhanushali, Pravin Girish Chamaria, Ashapura Edifice Pvt. Ltd.
Hema Ramesh Chheda, State of Maharashtra, M/s Arihant Realtors, Ashapura Options Pvt. Ltd., Nemji Morarji Chheda, Jayvanti Nemji Chheda
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Nature of Litigation
Criminal applications challenging dismissal of revision applications against issuance of process for offence under Negotiable Instruments Act, 1881
Remedy Sought
Applicants sought quashing of criminal proceedings under Section 482 of CrPC
Filing Reason
Cheques drawn on State Bank of Patiala presented for encashment on 17th March, 2021, but bank had amalgamated with State Bank of India on 1st April, 2017
Previous Decisions
Magistrate issued process against applicants -- Sessions Judge dismissed revision applications -- Applicants approached High Court
Issues
Whether the cheques were valid instruments on the date of presentation as required under clause (a) of proviso to Section 138 of Negotiable Instruments Act, 1881
Whether inherent jurisdiction under Section 482 of CrPC should be exercised to quash the proceedings
Submissions/Arguments
Applicants contended cheques were invalid as drawn on non-existent bank due to amalgamation
Respondents argued process was properly issued based on complaint allegations
Ratio Decidendi
A cheque must be drawn on a bank account existing on the date of presentation to constitute a valid instrument under clause (a) of proviso to Section 138 of Negotiable Instruments Act, 1881 -- When a cheque is drawn on a bank that has ceased to exist due to amalgamation, it cannot form the basis for prosecution under Section 138 -- High Court can exercise inherent jurisdiction under Section 482 of CrPC to quash proceedings when no offence is made out from complaint allegations to prevent abuse of process
Judgment Excerpts
By these applications under Section 482 of the Code of Criminal Procedure, 1973, the applicants take exception to the orders passed by the learned Additional Sessions Judge
The applicants restrict the challenge to the order of issuance of process to the non-compliance of clause (a) of the proviso to Section 138 of the N. I. Act, 1881, as the subject cheques were invalid on the day they were presented for encashment
The accused No. 1 had drawn the cheque on State Bank of Patiala, payable on 17th March, 2021. However, in view of the amalgamation of the State Bank of
Procedural History
Complaints filed under Section 138 read with Section 141 of Negotiable Instruments Act, 1881 -- Magistrate issued process against applicants -- Applicants filed revision applications before Sessions Judge -- Sessions Judge dismissed revision applications -- Applicants filed applications under Section 482 of CrPC before High Court -- High Court heard arguments and reserved judgment on 22nd January, 2026 -- Judgment pronounced on 10th February, 2026
Acts & Sections
- Code of Criminal Procedure, 1973: Section 482
- Negotiable Instruments Act, 1881: Section 138, Section 141
