Kiran Raj

The Supreme Court Division Bench of Justice Sanjay Karol and Prashant Kumar Mishra has held that the dishonour of multiple cheques issued in connection with the same underlying transaction may still generate separate causes of action under the cheque bounce law, and that criminal complaints cannot be terminated at the outset merely because more than one prosecution is launched. The case arose from allegations that, after a property transaction fell through, the buyer was handed different sets of cheques, including cheques drawn on the firm’s account and others issued personally as security for repayment, which were presented on different dates and returned unpaid. Setting aside the Delhi High Court’s order that had quashed one set of complaints as impermissible parallel prosecution, the Court restored the quashed complaint for trial and declined to interfere with the remaining prosecutions.

The dispute arose from an Agreement to Sell executed between the parties in November 2016 for three commercial units in a project located in Ghaziabad, Uttar Pradesh. The complainant paid the entire sale consideration agreed under the contract. As per the agreement, the vendor was required to execute and register the sale deeds by a stipulated date, failing which the amount received was liable to be refunded along with an agreed appreciation amount.

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Upon failure to execute the sale deeds within the agreed timeline, the proprietor of the developer firm issued multiple cheques—some drawn on the firm’s account and others from his personal account—towards refund of the principal amount and the appreciation component. These cheques were presented on different dates and were dishonoured on separate occasions for insufficiency of funds or exceeding arrangement. Statutory notices were issued after each dishonour, followed by the filing of multiple complaints under the Negotiable Instruments Act.

The accused approached the High Court seeking quashing of these complaints on the ground that they arose from the same underlying transaction and constituted parallel prosecutions. The High Court partly accepted this contention by quashing one complaint while permitting others to proceed. This led to cross appeals before the Supreme Court by both sides.

The Supreme Court examined the scope of inherent jurisdiction under Section 482 of the Code of Criminal Procedure and reiterated that such power must be exercised with restraint. Referring to settled precedent, the Court “emphasised that the High Court must avoid usurping the function of a Trial Court or conducting a mini trial when disputed factual questions attend the maintainability of a complaint.”

On the issue of multiple complaints arising from cheques issued in connection with the same transaction, the Court recorded that “under Section 138 of the NI Act, a separate cause of action arises upon each dishonour of a cheque provided the statutory sequence of presentation, dishonour, notice, and failure to pay is complete.” It further noted that “the fact that multiple cheques arise from one transaction will not merge them into a single cause of action.”

Disagreeing with the High Court’s approach, the Court observed that the cheques in question were “distinct instruments drawn on different accounts, presented on different dates, dishonoured separately, and followed by independent statutory notices.” It held that such circumstances could not justify quashing at the threshold.

Addressing the defence that certain cheques were issued as alternatives or substitutions, the Court stated that “whether those cheques were issued as alternative or supplementary instruments… are mixed questions of fact” and “cannot be resolved at the threshold.”

With respect to the presumption of liability, the Court recorded that “once a cheque is issued in discharge of liability and dishonoured, a presumption of liability in favour of the complainant arises.” It clarified that “the burden of proving whether there exists any debt or liability is something which must be discharged in trial.”

The Court therefore concluded that premature interference by the High Court amounted to exceeding its jurisdiction.

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The Supreme Court directed that “the Appeal arising out of SLP (Crl.) No. 10770 of 2025 preferred by the complainant is allowed. The judgment of the High Court dated 17.04.2025 passed in Crl.MC No. 8002 of 2023 quashing Complaint Case No. 3298 of 2019 and the summoning order dated 06.03.2019, is set aside. Complaint Case No. 3298 of 2019 shall stand restored for trial before the concerned Trial Court. The Appeals arising out of SLP (Crl.) Nos. 11262 of 2025, 11647 of 2025 and 11787 of 2025 preferred by Respondent No. 2 are dismissed.”

“All contentions of the parties are left open, which shall be decided by the Trial Court on its own merits and in accordance with law.” It clarified that “none of the observations contained herein shall have a bearing on the main trial. The Trial Court shall independently arrive at its conclusion based on the evidence tendered before it.”

Advocates Representing the Parties

For the Appellant: Senior Advocate Harshvir Pratap Sharma, AORs Namit Suri, Tejas Patel, Advocates Sameer Rohatgi, Rameezudin Raja, Pepakayala Geetanjali, Anish Singh, Akul Krishnan, Sakshi Apurva, Akul Krishnan, and Sakshi Apurva.

Case Title: Sumit Bansal v. M/s MGI Developers and Promoters & Anr.
Neutral Citation: 2026 INSC 40
Case Number: Criminal Appeal No. 141 of 2026 with connected appeals
Bench: Justice Sanjay Karol, Justice Prashant Kumar Mishra