U/S 138 N.I. Act: Continuation of Proceedings Would Constitute Misuse of Legal Process: High Court in Cheque Dishonour Case

In a significant ruling, the Punjab and Haryana High Court has quashed the criminal complaint and subsequent proceedings in a cheque dishonour case involving M/s Realtech Developments and Infrastructure (India) Pvt. Ltd and others against Ranbir Singh. The case, presided over by Hon’ble Mr. Justice Deepak Gupta, centered on a cheque for ₹36,76,234 issued by the petitioners, which exceeded the actual agreed refund amount of ₹23,54,573 to the respondent.

The complaint, initially filed under Sections 138/141/142 of the Negotiable Instruments Act, sought prosecution of the petitioners following the dishonour of the cheque. The cheque in question was issued as part of a refund for a flat booking made by the respondent with the petitioners. However, due to a recession in the real estate market, the respondent requested a refund, leading to the disputed transaction.

In his judgement, Justice Gupta noted, “Having regard to all the afore-said facts and circumstances, continuation of the proceedings in the complaint will be misuse of the process of law.” This observation underlines the court’s stance on the misuse of legal proceedings in cases where the facts and intentions are clear and undisputed.

The court recognized that the petitioners had already refunded the agreed amount of ₹23,54,573 to the complainant. It was established that the issuance of a cheque for an inflated amount was a mistake, and not an intentional act of fraud or deceit.

Furthermore, the court noted that the respondent’s calculation sheet, which suggested a higher refund amount, was prepared independently and was neither executed nor agreed upon by the petitioners.

 Date of Decision: 12 January 2024

 M/s Realtech Developments and Infrastructure (India) Pvt. Ltd and others VS Ranbir Singh