Supreme Court Quashes Criminal Complaint, Calls It "Abuse of Process" for Suppressing Key Replies: Notes Accused Had "No Opportunity to Respond Without Documents"
Kiran Raj
In a significant judgement, the Supreme Court of India set aside the criminal proceedings initiated under Section 138 of the Negotiable Instruments Act, 1881, against the appellant by a co-operative credit society. The decision was rendered by a Division Bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan. The court quashed the criminal complaint and the order issuing process, citing abuse of process due to suppression of material facts by the complainant.
The apex court held that the respondent had failed to disclose critical correspondence that could have materially influenced the issuance of process. The judgment noted that the complaint was filed despite the appellant’s documented efforts to obtain supporting loan documents necessary to respond to the statutory demand notice, and that these efforts were not disclosed in the complaint.
The appellant was the accused in Criminal Case No. 648 of 2016, filed before the Judicial Magistrate First Class, Kalwan. The case was initiated based on the dishonour of a cheque allegedly issued by the appellant in favour of the respondent, Saptashrungi Mahila Nagari Sahkari Patsansta Ltd., a credit co-operative society. The respondent claimed the cheque was issued to discharge a debt arising from an overdraft facility availed by the appellant.
According to the respondent, the appellant initially obtained a loan of Rs. 3,50,000 on 3 July 2006 and issued two security cheques. Upon default, one of these cheques was deposited, leading to a criminal complaint under Section 138, which was eventually withdrawn after the appellant paid the amount in court.
Subsequently, the respondent alleged that the appellant was granted a further overdraft of Rs. 11,97,000 on 25 July 2008. When repayment allegedly defaulted, the second security cheque, dated 3 October 2016, for Rs. 27,27,460 was presented and dishonoured on 14 October 2016. A statutory notice under Section 138 was issued on 11 November 2016.
The appellant responded through her advocate on 28 November 2016, denying the allegations and requesting the relevant loan documents. A follow-up letter dated 13 December 2016 reiterated the non-receipt of documents. The respondent filed the complaint on 15 December 2016 without referring to these letters.
The appellant challenged the issuance of process by filing a Criminal Writ Petition before the Bombay High Court, which was dismissed on 18 December 2023. The High Court held that the contentions raised could be decided only at trial.
Before the Supreme Court, the appellant submitted that she had repaid the initial loan and that the second cheque was misused. She argued that the complaint suppressed material letters and misrepresented facts, constituting an abuse of the legal process.
In reply, the respondent relied on the presumption under Section 139 of the NI Act and asserted that documents were supplied pursuant to a letter from the appellant dated 29 November 2016, with alleged acknowledgment through signatures. However, this claim was introduced only in an additional affidavit filed in January 2025.
The Bench extensively discussed the procedural requirements under Section 138 of the NI Act and the corresponding provisions of the Code of Criminal Procedure, 1973. It was observed:
“Recording the complainant’s statement on oath under Section 200 of the CrPC is not an empty formality. The object of recording the complainant’s statement and witnesses, if any, is to ascertain the truth.”
It further stated:
“Setting criminal law in motion is a serious matter. The accused faces serious consequences in the sense that he has to defend himself in the trial.”
The court found that the letters dated 28 November 2016 and 13 December 2016 were not disclosed in the complaint or supporting affidavit. The judgment recorded:
“The respondent made out a false case that the appellant did not reply to the demand notice.”
It further noted:
“If these two letters were disclosed in the complaint, the learned Magistrate while recording the statement under Section 200 of CrPC, could have always questioned the respondent on the supply of documents to the appellant.”
The court rejected the belated claim in the additional affidavit regarding the alleged supply of documents, stating:
“The stand taken in January 2025 that the statement of accounts was supplied on 29th November 2016 is clearly an afterthought.”
Citing the decision in S.P. Chengalvaraya Naidu v. Jagannath, the court observed:
“One who comes to the court, must come with clean hands… We have no hesitation to say that a person, whose case is based on falsehood, has no right to approach the court.”
The Bench concluded:
“Setting criminal law in motion by suppressing material facts and documents is nothing but an abuse of the process of law.”
The Supreme Court quashed the impugned order of the High Court dated 18 December 2023, the complaint bearing Criminal Case No. 648 of 2016 pending before the Judicial Magistrate First Class, Kalwan, and the order issuing process dated 2 March 2017.
The court directed:
“The complaint bearing S.C. No. 648 of 2016 pending in the court of the learned Judicial Magistrate First Class at Kalwan and the order of cognizance dated 2nd March 2017 are hereby quashed and set aside.”
It further clarified:
“The other remedies of the respondent to file proceedings for recovery of the amount allegedly due and payable by the appellant in accordance with law will remain open.”
Advocates Representing the Parties
For the Appellant: Advocate Sachin. Patil.
For the Respondent: Advocate Vaibhav Yeshwant Kulkarni.
Case Title: Rekha Sharad Ushir vs Saptashrungi Mahila Nagari Sahkari Patsansta Ltd.
Neutral Citation: 2025 INSC 399
Case Number: Criminal Appeal No. 724 of 2025
Bench: Justice Abhay S. Oka and Justice Ujjal Bhuyan
[Read/Download order]
