M/S Sanity Life Sciences and Another Vs M/S Jmm Laboratories

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2026:HHC:16299

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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Cr.MMO No.526 of 2024

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Date of Decision: 12.05.2026

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____________________________________ M/s Sanity Life Sciences & Anr. Versus	___________________ …….Petitioners
M/s JMM Laboratories	… Respondent
____________________________________ Coram:	___________________

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Hon’ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting?¹ Yes.

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For the Petitioners : Mr. Jeevan Kumar, Advocate. For the Respondent : Mr. Ashok Kumar Tyagi, Advocate. _______________________________________________________ Sandeep Sharma, Judge (oral):

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Through, instant petition filed under Section 482 of Cr.P.C, prayer has been made on behalf of the petitioner for quashing of criminal complaint filed at the behest of the respondent under Section 138 of the Negotiable Instruments Act (for short the ‘Act’) as well as order dated 13.01.2022, passed by learned Judicial Magistrate, First Class, Nahan, District Sirmour, Himachal Pradesh, whereby the petitioner-accused has been ordered to be summoned in the aforesaid proceedings.

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In nutshell, the grouse of the petitioner, as has been highlighted in the petition and further canvassed by Mr. Jeevan Kumar, learned counsel for the petitioner, is that complaint sought to be quashed is not maintainable for the reason that amount claimed

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1 Whether the reporters of the local papers may be allowed to see the judgment?

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2026:HHC:16299

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through aforesaid complaint already stands paid to the complainant. While referring to communication dated 18.09.2015 (Annexure P-1), learned counsel for the petitioner argued that petitioner-accused had issued instructions to its banker to stop the payment on the ground that money demanded through cheque already stands paid, but despite that complainant failed to return the cheque in question. Learned counsel for the petitioner further submitted that since complaint filed by the complainant is otherwise bound to fail on aforesaid grounds, no fruitful purpose would be served in case complaint, sought to be quashed, is permitted to sustain, rather that would unnecessary put the petitioner-accused to the ordeal of the protected trial, which is otherwise bound to fail.

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Pursuant to the notice issued in the instant proceedings, respondent has filed reply, praying therein for dismissal of the petition on the ground of maintainability It has been submitted in the reply that cheque in question, which is subject matter of the proceedings under Section 138 of the Act, was issued by the petitioner towards discharge of legally enforceable liability on account of cost of the medicines and freight charges etc., but since cheque was dishonoured with the remarks ‘payment stopped’, complainant had no option, but to institute proceedings under Section 138 of the Act, which is still pending adjudication before the learned court below.

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4. Learned counsel representing the respondent, while

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referring to the pleadings adduced on record, especially ground (D) of the petition, argued that liability to the extent of Rs. 26, 990/- stands duly admitted by the petitioner-accused. Besides above, he also admitted factum of issuance of cheque as well as signature thereupon and as such, mere issuance of letter, if any, at the behest of the petitioner to the bank to stop the payment may not be a ground to quash the complaint, rather same is required to be decided in totality of pleadings as well as evidence led on record by the respective parties. Learned counsel for the respondent further argued that complaint under Section 138 of the Act was filed in the year 2022, but till date, court below has not been able to decide the same on account of stay granted by this Court in the instant proceedings.

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Having heard learned counsel representing the parties and perused the material available on record, this Court finds that factum with regard to purchase of medicines by the petitioneraccused from the respondent/complainant is not in dispute. Cheque, which is the subject matter of the proceedings under Section 138 of the Act in the competent court of law, was allegedly issued towards discharge of lawful liability. However, before the same could be encashed, communication Ex. P-1 came to be sent to the bank concerned by the petitioner-accused, thereby requesting to stop the

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2026:HHC:16299

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payment, as a result thereof, cheque issued towards lawful liability was dishonoured.

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In nutshell, case of the petitioner, as has been highlighted in the petition and further canvassed by learned counsel for the petitioner, is that once the petitioner-accused vide communication dated 16.07.2020 (Annexure P-3) had specifically denied the liability sought to be enforced through cheque in question, coupled with the fact that prior to encashment of the cheque, letter was issued to the bank concerned to stop the payment, there was no occasion for the complainant to institute proceedings under Section 138 of the Act, which on account of facts, as detailed hereinabove, as well as given in communication dated 16.07.2020 is bound to fail.

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Having noticed the ground taken in the instant petition, wherein factum with regard to issuance of cheque as well as signatures thereupon has been admitted and there is no specific denial to the liability to the certain extent, this Court is not persuaded to agree with learned counsel for the petitioner that complaint instituted at the behest of the respondent/complainant deserves to be quashed.

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Once the petitioner has admitted factum with regard to his having issued cheque as well as signatures thereupon, coupled with the fact that there is ample material adduced on record suggestive of the fact that there was a business transaction interse

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2026:HHC:16299

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parties and dispute, if any, is only with regard to quantum of amount, this Court is not persuaded to agree with the contention of learned counsel for the petitioner that complaint, being totally frivolous, deserves to be quashed and set-aside by this Court while exercising power under Section 482 Cr.P.C, rather on account of admission at the behest of the petitioner with regard to issuance of cheque as well as signatures thereupon, complaint filed by the respondent/complainant requires full-fledged trial. Whether petitioner had any liability to pay the amount, as is being demanded through cheque, is a question to be decided by learned trial Court in totality of evidence to be led on record by the respective parties, but certainly such questions cannot be gone in the instant proceedings filed under Section 482 Cr.P.C.

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Reliance is also placed upon judgment passed in Criminal Appeal No. 5588 of 2025, decided on 19.12.2025, titled as M/s Sri Om Sales v. Abhay Kumar @ Abhay Patel and Anr ., wherein Hon’ble Apex Court has held that when there is a legal presumption under Section 139 of Negotiable Instruments 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. While setting aside order passed by the High Court in exercise of power under Section 482 CrPC, Hon’ble Apex Court held that when a complaint prima-facie discloses necessary ingredients of offence

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2026:HHC:16299

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under Section 138 of the Act, it cannot be scuttled at threshold.

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Relevant paras of the afore judgment read as under:

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“11. The law is well settled that while considering a prayer to quash the criminal complaint and the consequential proceedings at the threshold, the Court is required to examine whether the allegations made in the complaint along with materials in support thereof make out a prima facie case to proceed against the accused or not. If upon reading the complaint allegations and perusing the materials filed in support thereof, a prima facie case is made out to proceed against the accused, the complaint cannot be quashed, particularly, by appreciating the evidence/ materials on record because the stage for such appreciation is at the trial. No doubt, in exceptional circumstances, the Court may take notice of attending circumstances to conclude that continuance of the proceedings would amount to an abuse of the process of the Court, or where quashing of the proceedings is necessary to secure the ends of justice.

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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).

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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.

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2026:HHC:16299

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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.

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In Maruti Udyog Ltd. v. Narender and others (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.

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Likewise, in Rangappa v. Sri Mohan (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.

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In Rajeshbhai Muljibhai Patel v. State of Gujarat (2020) 3 SCC 794, it 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.

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In Rathish Babu Unnikrishnan v. State (NCT of Delhi) (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:

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“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

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2026:HHC:16299

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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.

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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.

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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.”

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Having perused the material adduced on record, especially the reply filed by the respondent/complainant, this Court is of the view that a prima-facie case exists in favour of the complainant and as such, case at hand is not one of those where the complaint/proceedings can be quashed by this Court while exercising power under Section 482 Cr.P.C. Mere issuance of

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2026:HHC:16299

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communication denying liability to pay the amount may not be sufficient to absolve the petitioner from its liability, if any, arising on account of issuance of cheque, rather for such purpose, petitioneraccused is under obligation to prove before the competent court of law that cheque in question was never issued towards discharge of lawful liability, rather same has been misused by the complainant.

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In view of the detailed discussion made hereinabove, this Court finds no merit in the present petition and accordingly, same is dismissed being devoid of any merit. Interim order, if any, is vacated. Record of learned Court below be returned back forthwith. Pending applications, if any, also stand disposed of.

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The parties through their respective counsel are directed to appear before the learned Court below on 16.06.2026 , enabling it to proceed with the matter.

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(Sandeep Sharma), Judge

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May 12, 2026 (shankar)

M/S Sanity Life Sciences and Another v. M/S Jmm Laboratories

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M/S Sanity Life Sciences and Another v. M/S Jmm Laboratories

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