Case Note & Summary
The petitioner, Sashidhar Jagdishan, an individual aged 79 years and an executive at HDFC Bank, filed a criminal writ petition under Article 226 of the Constitution read with Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of FIR No. 123/2025 registered at Bandra Police Station, Mumbai, and the consequent criminal proceedings arising out of a cheque dishonour complaint under Section 138 of the Negotiable Instruments Act, 1881. The respondent, Lilavati Kirtilal Mehta Medical Trust, represented by Prashant Kishor Mehta, alleged that the petitioner had issued a cheque of Rs. 5 crores towards a donation to the trust, which was dishonoured upon presentation. The petitioner contended that the cheque was issued as a mere promise of donation without any existing liability, and that the donation was conditional and never materialized. The court examined the legal position regarding the enforceability of a donation as a debt under Section 138 NI Act. It noted that for an offence under Section 138, the cheque must have been issued in discharge of a legally enforceable debt or liability. A donation, being a gratuitous transfer without consideration, does not create a legally enforceable obligation. The presumption under Section 139 NI Act that the cheque was issued for a debt or liability is rebuttable, and the petitioner successfully rebutted it by demonstrating the absence of any existing liability. The court held that continuing criminal proceedings would be an abuse of process and quashed the FIR and all consequential proceedings.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Legally Enforceable Debt - Section 138 NI Act - The petitioner issued a cheque of Rs. 5 crores to the respondent trust as a donation. The cheque was dishonoured. The court held that a donation, being a gratuitous promise without consideration, does not constitute a legally enforceable debt or liability under Section 138 NI Act. The presumption under Section 139 NI Act is rebuttable and was rebutted by the petitioner showing the absence of any existing liability. (Paras 10-15) B) Criminal Procedure Code - Quashing of FIR - Abuse of Process - Section 482 CrPC - The court held that continuing criminal proceedings based on a cheque issued without a legally enforceable debt would be an abuse of process of law. The FIR and complaint were quashed to prevent miscarriage of justice. (Paras 16-20)
Issue of Consideration
Whether the issuance of a cheque by the petitioner towards a donation to a trust constitutes a legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act, 1881, and whether the FIR and criminal proceedings are liable to be quashed.
Final Decision
The court allowed the criminal writ petition and quashed FIR No. 123/2025 registered at Bandra Police Station and all consequential proceedings arising therefrom.
Law Points
- Section 138 Negotiable Instruments Act
- 1881
- legally enforceable debt
- presumption under Section 139 NI Act
- rebuttal of presumption
- quashing of FIR under Section 482 CrPC
