In a significant ruling on cheque bounce prosecutions, the Supreme Court of India has restored a criminal complaint that was earlier quashed by the Delhi High Court, holding that the dishonour of separate cheques - even if issued for the same transaction - can give rise to independent criminal cases under the law.
The judgment clarifies how courts should approach multiple cheque dishonour complaints arising from one commercial deal, especially at the stage of quashing proceedings.
Background of the Case
The dispute arose from a 2016 agreement to sell three commercial units in Ghaziabad. The buyer, Sumit Bansal, paid over ₹1.72 crore to MGI Developers and Promoters. When the sale deeds were not executed by the agreed deadline, the developer and its proprietor issued several cheques - both from the firm’s account and personal accounts - towards refund of the principal amount and an agreed appreciation sum.
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These cheques were presented on different dates between 2018 and 2019 and were repeatedly returned unpaid, with bank remarks such as “funds insufficient” and “exceeds arrangement.” Following statutory notices and non-payment, the buyer filed multiple complaints under Section 138 of the Negotiable Instruments Act.
The Delhi High Court later quashed one of these complaints, reasoning that two cases could not proceed simultaneously for the same underlying liability. That decision was challenged before the Supreme Court
What the High Court Had Held
The High Court viewed the firm’s cheques and the proprietor’s personal cheques as alternative instruments for the same debt. It concluded that once the complainant chose to act on the personal cheques, pursuing a separate case on the firm’s cheques amounted to parallel prosecution and abuse of process.
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Based on this reasoning, one complaint was quashed, though other later complaints were allowed to continue.
Supreme Court’s Observations
A Bench led by Justice Prashant Kumar Mishra disagreed with this approach and cautioned against deciding disputed facts at the quashing stage.
“The fact that multiple cheques arise from one transaction does not merge them into a single cause of action,” the Court observed.
The Bench underlined that under cheque bounce law, each dishonour - if followed by proper notice and non-payment - creates a separate offence. Whether the cheques were meant to be alternatives or substitutes, the Court said, is a factual question that can only be decided during trial.
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Importantly, the judges stressed that High Courts should not conduct a “mini trial” while exercising inherent powers to quash criminal proceedings.
On Presumption of Liability
The Court also highlighted the statutory presumption in favour of the complainant once a cheque is issued and dishonoured.
“At this stage, the court cannot examine whether the debt actually existed or whether payment was already made. These are matters of evidence,” the Bench noted, adding that the accused has the opportunity to rebut the presumption during trial.
Final Decision
Allowing the buyer’s appeal, the Supreme Court set aside the Delhi High Court’s order that had quashed one of the cheque bounce complaints. The restored complaint will now proceed before the trial court.
At the same time, the Court dismissed appeals filed by the accused seeking to quash other pending cheque dishonour cases, holding that they also disclose prima facie offences and must go to trial.
“All contentions are left open,” the Bench clarified, directing that the trial court decide the cases independently, without being influenced by observations made at this stage.
Case Title:- Sumit Bansal v. M/s MGI Developers and Promoters & Another
