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TMI BlogComplaint under section 138 of the negotiable instruments act, 1881 cannot be filed if there is suppression of material facts and documents.X X X X Extracts X X X X X X X X Extracts X X X X ..... Complaint under section 138 of the negotiable instruments act, 1881 cannot be filed if there is suppression of material facts and documents. X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, as detailed below- * The cheque has been presented to the bank within a period of 6 months from the date on which it is drawn or within the period of its validity, whichever is earlier. * If a cheque is returned by the bank unpaid, the payee or the holder in due course must make a demand for payment of the amount of money covered by the cheque by issuing a notice in writing within 30 days of receipt of information from the bank regarding the return of the cheque as unpaid. * The drawer of the cheque must fail to make payment of the amount covered by the cheque within 15 days of the receipt of the notice. If a litigant, in the process of the criminal complaint, suppresses material facts or makes a false statement, which may have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing on the decision making, he cannot seek justice from the Court. In S.P. Chengalvaraya Naidu v. Jagannath and others - 1993 (10) TMI 315 - SUPREME COURT - in which the Supreme Court held that the Supreme Court would have no hesitation to say that a person, whose case is based on falsehood, has no right to approach the Court. He can be thrown out summarily at any stage of the litigation. In 'Rekha Sharad Ushir v. Sapthasrungi Mahila Nagari Sahkari Patsansta Limited' - 2025 (3) TMI 1339 - SUPREME COURT, the appellant obtained a loan by overdraft facility of Rs. 3.5 lakhs on 03.07.2006 from the respondent co-operative society in which the appellant was a member. At that time, the appellant issued two security cheques to the respondent. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The respondent deposited the first cheque drawn on 10.02.2007 for Rs. 3,75,976/-. The said cheque was dishonoured. The respondent issued a legal notice. Since the appellant did not repay the amount, the respondent filed a criminal complaint against the appellant on 04.04.2007. The appellant paid the said amount on 23.09.2016. Therefore, the respondent withdrew the case. The appellant was granted another loan by the respondent Rs. 11.97 lakhs on 25.07.2008. Since the appellant did not pay the said outstanding loan along with accruing interest, the respondent deposited the second cheque drawn on 03.10.2016 for Rs. 27.27 lakhs. The second cheque was dishonoured on 14.10.2016. Therefore, the respondent issued a legal notice to the appellant 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.11.2016. To the said notice the appellant sent a letter to the respondent on 28.11.2016 requesting the respondent to supply some copies of documents so that she could file reply to the legal notice issued to her. Since no reply was received from the respondent, the appellant again sent a letter on 13.12.2016 informing the respondent that she did not receive the copies of documents as she sought for. Without giving reply to the letters sent by the appellant, the respondent filed a criminal complaint alleging the commission of an offence under Section 138 of the Act, on 15.12.2016. The appellant filed a criminal writ petition against the initiation of criminal case before the Trial Court before the High Court. The High Court dismissed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petition on 18.12.2023. Against this order of High Court, the appellant filed the present appeal before the Supreme Court. Before the Supreme Court, the appellant submitted the following- * The appellant paid the first loan on 30.03.2007. Despite this the respondent forced her to prosecution and forced to repay the entire loan. * Despite her request for copies of documents for filing reply to the notice issued by the respondent, the same have not been furnished and also no reply has been received from the respondent to her letters with the request to provide copies of documents. * Despite having full knowledge of the first payment made by the appellant, the respondent misused the second cheque to initiate the criminal proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s against the appellant. * Such an act amount to a clear abuse of the process of law. * While filing the complaint the respondent suppressed the fact of the letters dated 28.11.2016 and 13.12.2016 sent by the appellant to the respondent requesting the respondent to supply the copies of the documents. * The copies of the documents have not been furnished by the respondent and thus there is an abuse process of law. The respondent submitted the following before the Supreme Court- * There exists a presumption under Section 139 of the Act in favour of the cheque holder. * It shall be presumed that the respondent received the cheque for the discharge of debt by the appellant, and this presumption can only be rebutted by adducing eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce during the trial. * the complaint contained all the essential ingredients and that there was no suppression of material facts warranting dismissal of the complaint. * There is no provision in the Act mandatorily to provide documents relied on by the respondent in the notice. * The two letters issued by the appellant is not a material for establishing a prima facie case for issuing the process. The Supreme Court considered the submissions put forth by the appellant and the respondent. The Supreme Court analysed the provisions of Section 138 of the Act. The Supreme Court observed that a court of the Judicial Magistrate can take cognizance of an offence punishable under Section 138 of the Act based on a complaint filed under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 200 of the Cr.PC (corresponding Section 223 of BSNA). After filing a complaint, the Court shall the Court is to examine on oath and witnesses present, if any and reduce the same in writing. The same is to be signed by the complainant and witness, if any. The Supreme Court further observed that the recording of the complainant's statement is an empty formality. It is to ascertain the truth. The Magistrate is to put questions on the complainant to elicit the truth. The Court is to satisfy itself as to the continuation of the criminal proceedings against the accused. Then the court may issue the process under section 204 (1) of the Cr.PC (corresponding Section 226 of BNSS). The Supreme Court observed that the respondent, in this case, issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a notice to the appellant for making the payment for the cheque issued by her was dishonoured. On receipt of the said notice the appellant replied the respondent with the request to give copies of documents relied on by the respondent in the notice so as to give reply to the notice issued by the respondent. But the documents have not been furnished to the appellant by the respondent. Even no reply has been given by the respondent. Instead, the respondent filed a criminal complaint against the appellant. A counter to the appeal was filed by the respondent on 07.08.2024. Another affidavit was filed by the respondent on 09.01.2025 in which it was mentioned that statements of loan account sought by the appellant were furnished to her and her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signature appears on the statements. The Supreme Court observed that no date is mentioned below the signatures. The stand taken in January 2025 that the statement of accounts was supplied on 29.11.2016 is clearly an afterthought. The Supreme Court observed that in the complaint, the respondent has suppressed the reply dated 28.11.2016 and the letter dated 13.12.2016 sent by the appellant's advocate. The same have also been suppressed in the statement on oath. The respondent made out a false case that the appellant did not reply to the demand notice. Moreover, the case that the documents as demanded were supplied is not pleaded in the complaint and statement under Section 200 of CrPC. It was the respondent's duty to supply documents to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant or her advocate to enable the appellant to reply to the demand notice. At least, the inspection of documents could have been provided to the appellant. In the statement on oath, the respondent-complainant vaguely referred to a 'false notice reply', but a copy of the reply was not produced by the respondent along with the complaint. Since the complaint was filed suppressing the material fact, the High Court ought to set aside the complaint. The Supreme Court set aside the order of the High Court and also quashed the complaint filed before the Trial Court. The Supreme Court further held that the other remedies of the respondent to file proceedings for recovery of the amount allegedly due and payable by the appellant in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with law will remain open. The Supreme Court allowed the appeal. X X X X Extracts X X X X X X X X Extracts X X X X
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