Section 138 NI Act | Accused Cannot Seek Complainant's Income Tax Returns In Routine Or Roving Manner Without Establishing Specific Relevance: Rajasthan High Court

"The power to summon documents cannot be invoked in a routine or roving manner, nor can the process of trial be permitted to be enlarged by requiring the production of documents whose relevance has not been satisfactorily established." The Rajasthan High Court has ruled that an accused in a cheque dishonour trial under Section 138 of the Negotiable Instruments Act, 1881 cannot routinely compel the production of the complainant's Income Tax Returns and financial statements without demonstrating their specific relevance. Justice Sunil Beniwal held on October 27, 2026 that the power to summon documents under criminal procedure must be exercised judicially and cannot be converted into a roving or fishing inquiry that broadens the scope of trial and stalls proceedings.

The petitioner, facing trial under Section 138 of the Negotiable Instruments Act, challenged an order of the Special Judicial Magistrate (N.I. Act Cases) No. 1, Udaipur, which rejected his application to summon the complainant's Income Tax Returns for assessment years 2011–12 to 2013–14 alongside bank and loan records spanning from 2005 to 2015. The petitioner contended that these financial disclosures were vital to test the complainant's financial capacity to advance the alleged underlying loan. The Magistrate dismissed the plea on the ground that the petitioner failed to demonstrate any nexus or necessity for calling decade-old records.

Whether an accused facing prosecution under Section 138 of the Negotiable Instruments Act, 1881 has an unbridled right to summon the complainant’s Income Tax Returns and extensive banking records without demonstrating their specific relevance to the dispute?

Whether the rejection of a roving application seeking third-party financial records amounts to an impermissible curtailment of the accused's statutory right to lead a defence?

Summoning power must be exercised judicially and requires proof of specific necessity

The High Court observed that while criminal courts hold the statutory discretion to summon documents at any stage of proceedings, such power must be strictly tethered to the demonstrated relevance and necessity of the documents for resolving the controversy. The Court underscored that the mere existence of records in the hands of a party or third person does not automatically create an entitlement for their production in court.

Justice Beniwal emphasized: "The mere fact that certain documents may be available with a party or a third person does not, by itself, furnish sufficient ground for directing their production unless the party seeking such production is able to demonstrate their specific relevance to the issues arising for consideration in the proceedings."

Complainant's financial capacity cannot create a blanket presumption of document relevance

Examining the petitioner's argument regarding the complainant's financial capacity to lend the disputed sum, the Court clarified that although financial capacity remains a permissible line of inquiry under Section 138 of the NI Act, the burden rests squarely on the applicant to establish why specific historical tax returns are indispensable.

The Court observed: "This Court is of the opinion that although the financial capacity of the complainant may be a relevant consideration in proceedings under Section 138 of the Negotiable Instruments Act, 1881, however, the burden is upon the party to demonstrate the necessity and relevance of the particular documents sought to be summoned. The relevance of such evidence cannot be presumed merely because the proceedings arise out of a complaint under Section 138 of the Negotiable Instruments Act, 1881."

Right to fair defence does not permit roving inquiries that stall old proceedings

The Court firmly rejected the proposition that declining such an expansive discovery application violates the accused’s right to a fair trial. The bench observed that the procedural entitlement to lead a defence cannot exempt a party from showing that the material sought has an authentic bearing on the lis.

The bench held: "The requirement of a fair opportunity to defend oneself does not dispense with the obligation of the applicant to demonstrate that the material sought to be brought on record has a legitimate bearing on the questions involved in the proceedings. In the absence of the same, the rejection of the application cannot be construed as curtailing the petitioner's right to lead a defence, rather, it represents an exercise of judicial discretion based upon the material placed before the learned trial Court."

Tax violations attract statutory penalties but do not render underlying debts unenforceable

The High Court approved the trial court's reliance on Coordinate Bench precedents and the Delhi High Court's ruling in Guddo Devi @ Guddi v. Bhupendra Kumar, noting that an inquiry into the complainant's source of funds or tax compliance is collateral. The Court noted that even if an individual contravenes provisions of the Income Tax Act, 1961, such infractions trigger statutory penalties under tax law but do not render an underlying commercial debt legally unenforceable under Section 138 of the NI Act.

Holding that the trial court committed no illegality or jurisdictional error, and highlighting that the complaint had been pending trial since 2015, the High Court declined to exercise its inherent jurisdiction under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 and dismissed the miscellaneous petition.

Date of Decision: October 27, 2026