REKHA SHARAD USHIRversusSAPTASHRUNGI MAHILA NAGARI SAHKARI PATSANSTA LTD.

                 [2025] 3 S.C.R. 1189 : 2025 INSC 399

                     Rekha Sharad Ushir
                              v.
       Saptashrungi Mahila Nagari Sahkari Patsansta Ltd.
                     (Criminal Appeal No. 724 of 2025)
                                26 March 2025
               [Abhay S. Oka* and Ujjal Bhuyan, JJ.]


                            Issue for Consideration
       Whether the complaint filed by the respondent-Credit Co-operative
       Society under Section 138 of the Negotiable Instruments Act,
       1881 for dishonour of a cheque allegedly issued by the appellant
       in favour of the respondent, ought to be quashed.

                                   Headnotes†
       Abuse of process of law – Suppression of material facts and
       documents – When – Negotiable Instruments Act, 1881 – s.138 –
       Code of Criminal Procedure, 1973 – s.200 – Security cheque
       issued in lieu of the loan allegedly taken by the appellant from
       the respondent-Credit Co-operative Society, dishonoured –
       Notice u/s.138 issued by the respondent – Appellant wrote
       letters seeking loan documents to enable her to reply statutory
       notice, which was not supplied to her – Respondent filed
       complaint, process u/s.138 issued – Challenged, High Court
       dismissed the petition – Interference with:
       Held: A litigant who suppresses material facts or makes a false
       statement cannot seek justice from the court – Respondent
       filed complaint suppressing the reply and the letter sent by the
       appellant’s advocate seeking the documents relied upon in the
       notice – These two documents were also suppressed in the
       statement on oath u/s.200, CrPC – Respondent made out a false
       case that the appellant did not reply to the demand notice – If these
       two letters were disclosed in the complaint, the Magistrate while
       recording the statement u/s.200, CrPC, could have questioned
       the respondent on the supply of documents to the appellant and
       after noticing that notwithstanding service of two letters written
       by the appellant, relied upon documents were not provided to


* Author
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    the appellant, he could have dismissed the complaint – Setting
    criminal law in motion by suppressing material facts and documents
    is an abuse of the process of law – Impugned order set aside –
    Complaint and the order of cognizance are quashed and set aside.
    [Paras 13, 14, 22]

    Criminal Procedure Code, 1973 – s.200 – Examination of
    complainant – Bhartiya Nagarik Suraksha Sanhita, 2023 –
    s.223 – Complainant’s statement on oath – Object – Duty of
    Magistrate:
    Held: Recording the complainant's statement on oath u/s.200 is
    not an empty formality – The object of recording the complainant's
    statement and witnesses, if any, is to ascertain the truth – Magistrate
    is duty-bound to put questions to the complainant to elicit the
    truth – The examination is necessary to enable the Court to satisfy
    itself whether there are sufficient grounds to proceed against the
    accused – After considering the complaint, the documents produced
    along with the complaint, and the statements of the complainant
    and witnesses, if any, the Magistrate has to apply his mind to
    ascertain whether there is sufficient ground for proceeding against
    the accused – If he is satisfied that there is sufficient ground to
    proceed against the accused, then he has to issue a process in
    terms of s.204(1), CrPC. [Para 10]

                              Case Law Cited
    S.P. Chengalvaraya Naidu v. Jagannath & Ors. [1993] Supp. 3
    SCR 422 : (1994) 1 SCC 1 – relied on.

                                List of Acts
    Negotiable Instruments Act, 1881; Code of Criminal Procedure,
    1973; Bhartiya Nagarik Suraksha Sanhita, 2023.

                             List of Keywords
    Dishonour of cheque; Suppression of material facts and documents;
    Very material documents suppressed; Abuse of the process of
    law; Supply of documents; Relied upon documents not provided;
    False case; Default in repayment of the loan; Loan documents;
    Statement on oath; Statutory notice; Demand notice; Issue of
    process; False statement; Credit Co-operative society; Overdraft;
    Security cheques; Legal notice; Discharge of debt.
[2025] 3 S.C.R.                                                       1191

                       Rekha Sharad Ushir v.
          Saptashrungi Mahila Nagari Sahkari Patsansta Ltd.

                           Case Arising From
     CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
     724 of 2025
     From the Judgment and Order dated 18.12.2023 of the High Court
     of Judicature at Bombay in CRLWP No. 2316 of 2017

                        Appearances for Parties
     Advs. for the Appellant:
     Sachin Patil, Geo Joseph, Risvi Muhammed, Rishabh Agarwal.
     Advs. for the Respondent:
     Abhay Anil Anturkar, Vaibhav Yeshwant Kulkarni, Dhruv Tank,
     Aniruddha Awalgaokar, Ms. Subhi Pastor, Bhagwant Deshpande.

                Judgment / Order of the Supreme Court

                                Judgment

     Abhay S. Oka, J.

     FACTUAL ASPECTS
1.   The Appellant is the accused in Criminal Case No. 648 of 2016
     pending before the Judicial Magistrate First Class, Kalwan (for short,
     ‘the JMFC’). The complaint was filed by the respondent before the
     JMFC alleging the commission of an offence punishable under
     Section 138 of the Negotiable Instruments Act, 1881 (for short,
     ‘the NI Act’) on the basis of the dishonour of a cheque, which was
     allegedly issued by the appellant in favour of the respondent, a Credit
     Co-Operative Society.
2.   It is alleged by the respondent that the appellant had obtained a loan
     of Rs. 3,50,000/- from the respondent on 3rd July 2006 through an
     overdraft facility. At the time of obtaining the loan, she issued two
     security cheques bearing Nos. 010721 and 010722. Due to a default
     in repayment, the respondent deposited the first cheque (No.010721)
     drawn on 10th February 2007 for the amount of Rs.3,75,976/-,
     which was dishonoured. Following a legal demand notice from the
     respondent’s advocate, the respondent filed Criminal Case No.
     135 of 2007 under Section 138 of the NI Act on 4th April 2007. The
     appellant paid the cheque amount before the JMFC, Kalwan Court,
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     on 23rd September 2016, following which the respondent withdrew
     the prosecution, and the appellant was acquitted on the same date.
3.   In the interregnum, the appellant was allegedly granted another loan
     of Rs. 11,97,000/- on 25th July 2008 by the respondent. Due to an
     alleged default in repayment of the loan amount and interest accrued
     thereon, the respondent deposited the second cheque (No. 010722)
     drawn on 3rd October 2016 for the amount of Rs. 27,27,460/- which
     was dishonoured on 14th October 2016. The respondent issued a
     legal notice dated 11th November 2016, claiming that the cheque was
     issued towards repayment of an overdraft facility of Rs.11,97,000/-
     allegedly taken by the appellant on 25th July 2008.
4.   While disputing the case made out in the demand notice, through her
     advocate’s reply on 28th November 2016, the appellant sought the
     supply of the loan documents from the respondent to enable her to
     give a reply to the statutory notice. By writing another letter through
     her advocate on 13th December 2016, she informed the advocate
     for the respondent that the documents had not been supplied to her.
5.   The respondent filed the complaint bearing Criminal Case No. 648 of
     2016 before JMFC, Kalwan, alleging the commission of an offence
     punishable under Section 138 of the NI Act on 15th December 2016
     in relation to dishonoured Cheque No.010722. The JMFC issued the
     process on 2nd March 2017. Challenging the issuance of process,
     the appellant filed a Criminal Writ Petition No. 2316 of 2017 before
     the Hon’ble High Court of Bombay, which was dismissed by the
     impugned order dated 18th December 2023. The High Court found
     no infirmities in the order of the JMFC issuing process and held that
     the contentions raised by the appellant could only be decided at trial.

     SUBMISSIONS
6.   The learned counsel appearing for the appellant submitted that
     she had already paid the first loan of Rs. 3,88,077/- on 30th March
     2007, and the said loan account was subsequently closed. Yet, the
     respondent chose to prosecute her wrongly and was forced to repay
     the entire loan again as she did not have the loan statement then
     and could not prove her earlier payment. It was further contended
     that the respondent, despite having full knowledge of the repayment,
     maliciously misused the second security cheque (No. 010722) to
     initiate false proceedings by depositing the said cheque within 10 days
[2025] 3 S.C.R.                                                           1193

                       Rekha Sharad Ushir v.
          Saptashrungi Mahila Nagari Sahkari Patsansta Ltd.

     after the appellant had paid the entire amount pertaining to the first
     loan. The learned counsel emphasized that such an act amounted
     to a clear abuse of the process of law. The learned counsel pointed
     out that while filing the complaint, the respondent suppressed the
     most material letters dated 28th November 2016 and 13th December
     2016 addressed by the advocate for the appellant to the advocate for
     the respondent and the fact that the copies of the documents were
     demanded by the appellant were not furnished by the respondent.
     Therefore, the complaint is an abuse of the process of law.
7.   The learned counsel appearing for the respondent submitted that
     there exists a presumption under Section 139 of the NI Act in favour
     of the cheque holder. Thus, 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 evidence during
     the trial. He contended that the complaint contained all the essential
     ingredients and that there was no suppression of material facts
     warranting dismissal of the complaint. No provision of Chapter XVII
     of the NI Act mandates the supply of the documents relied upon in
     the demand notice. Additionally, he submitted that the replies of the
     appellant to the respondent dated 15th November 2016 and 28th
     November 2016 were not material for establishing a prima facie case
     for issuing the process. The counsel for the respondent also filed an
     additional counter-affidavit, producing a letter dated 29th November
     2016, written by the appellant to the respondent, seeking copies
     of the statements of various loan accounts maintained by her and
     her husband, which were duly provided. It was submitted that the
     appellant acknowledged receipt of the same by affixing her signature
     thereon. It was submitted that the appellant failed to disclose the
     same in the memorandum of her Special Leave Petition.

     CONSIDERATION OF SUBMISSIONS
8.   Section 138 of the NI Act reads thus:
           “138. Dishonour of cheque for insufficiency, etc., of
           funds in the account.—Where any cheque drawn by a
           person on an account maintained by him with a banker
           for payment of any amount of money to another person
           from out of that account for the discharge, in whole or in
           part, of any debt or other liability, is returned by the bank
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          unpaid, either because of the amount of money standing
          to the credit of that account is insufficient to honour the
          cheque or that it exceeds the amount arranged to be paid
          from that account by an agreement made with that bank,
          such person shall be deemed to have committed an offence
          and shall, without prejudice to any other provision of this
          Act, be punished with imprisonment for a term which may
          extend to two years, or with fine which may extend to twice
          the amount of the cheque, or with both:
          Provided that nothing contained in this section shall apply
          unless—
          (a) the cheque has been presented to the bank within a
          period of six months from the date on which it is drawn or
          within the period of its validity, whichever is earlier;
          (b) the payee or the holder in due course of the cheque,
          as the case may be, makes a demand for the payment of
          the said amount of money by giving a notice in writing, to
          the drawer of the cheque, within thirty days of the receipt
          of information by him from the bank regarding the return
          of the cheque as unpaid; and
          (c) the drawer of such cheque fails to make the payment
          of the said amount of money to the payee or as the case
          may be, to the holder in due course of the cheque within
          fifteen days of the receipt of the said notice.
          Explanation.—For the purposes of this section, “debt or
          other liability” means a legally enforceable debt or other
          liability.”
9.   A court of the Judicial Magistrate can take cognizance of an offence
     punishable under Section 138 of the NI Act based on a complaint
     filed under Section 200 of the Code of Criminal Procedure, 1973 (for
     short, ‘the CrPC’). The corresponding provision under the Bhartiya
     Nagarik Suraksha Sanhita, 2023 (for short, ‘the BNSS’) is Section
     223. After a complaint is filed under Section 200 of the CrPC, the
     learned Magistrate is duty-bound to examine the complainant on oath
     and witnesses, if any, present and reduce the substance of such
     examination into writing. What is reduced into writing is required to
     be signed by the complainant and witnesses, if any.
[2025] 3 S.C.R.                                                              1195

                         Rekha Sharad Ushir v.
            Saptashrungi Mahila Nagari Sahkari Patsansta Ltd.

10. 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. The learned Magistrate is duty-bound to put questions to the
    complainant to elicit the truth. The examination is necessary to
    enable the Court to satisfy itself whether there are sufficient grounds
    to proceed against the accused. After considering the complaint, the
    documents produced along with the complaint, and the statements
    of the complainant and witnesses, if any, the learned Magistrate
    has to apply his mind to ascertain whether there is sufficient ground
    for proceeding against the accused. If he is satisfied that there is
    sufficient ground to proceed against the accused, then the learned
    Magistrate has to issue a process in terms of sub-Section (1) of
    Section 204 of the CrPC. The corresponding provision under the
    BNSS is Section 227. 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.
11. It is settled law that a litigant who, while filing proceedings in the
    court, suppresses material facts or makes a false statement, cannot
    seek justice from the court. The facts suppressed must be material
    and relevant to the controversy, which may have a bearing on the
    decision making. Cases of those litigants who have no regard for
    the truth and those who indulge in suppressing material facts need
    to be thrown out of the court. In paragraph 5 of the decision of this
    Court in the case of S.P. Chengalvaraya Naidu v. Jagannath &
    Ors.1, it is held thus:
            “5. The High Court, in our view, fell into patent error.
            The short question before the High Court was whether
            in the facts and circumstances of this case, Jagannath
            obtained the preliminary decree by playing fraud on the
            court. The High Court, however, went haywire and made
            observations which are wholly perverse. We do not agree
            with the High Court that “there is no legal duty cast upon
            the plaintiff to come to court with a true case and prove
            it by true evidence”. The principle of “finality of litigation”
            cannot be pressed to the extent of such an absurdity that


1   (1994) 1 SCC 1
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           it becomes an engine of fraud in the hands of dishonest
           litigants. The courts of law are meant for imparting justice
           between the parties. One who comes to the court, must
           come with clean hands. We are constrained to say that
           more often than not, process of the court is being abused.
           Property-grabbers, tax-evaders, bank-loan-dodgers and
           other unscrupulous persons from all walks of life find the
           court-process a convenient lever to retain the illegal gains
           indefinitely. We have no hesitation to say that a person,
           who’s case is based on falsehood, has no right to
           approach the court. He can be summarily thrown out
           at any stage of the litigation.”
                                                     (emphasis added)

12. Section 138 of the NI Act has three conditions incorporated in clauses
    (a) to (c) of the proviso. Firstly, the cheque has been presented to
    the bank within a period of six months from the date on which it is
    drawn or within the period of its validity, whichever is earlier. Secondly,
    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 third condition is that 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.
13. In the present case, a statutory notice under Section 138 of the NI
    Act was issued by the advocate for the respondent on 11th November
    2016 to the appellant. The notice proceeds on the footing that the
    respondent, a Co-operative Credit Society, is providing financial
    assistance to its members and is also carrying on banking business.
    The allegation in the notice served to the appellant is that the
    appellant was a member of the credit society and had taken an
    overdraft facility from the respondent in the sum of Rs.11,97,000/-.
    Paragraph 1 of the notice specifically relies upon the fact that the
    appellant has executed necessary documents and that the appellant
    has agreed and acknowledged to make repayment of the amount
    advanced with interest. Thereafter, the notice proceeds to describe
    how the cheque issued by the appellant in the sum of Rs.27,27,460/-
    was returned unpaid.
[2025] 3 S.C.R.                                                        1197

                       Rekha Sharad Ushir v.
          Saptashrungi Mahila Nagari Sahkari Patsansta Ltd.

14. Within a few days of receiving the notice, on 28th November 2016,
    the appellant replied to the notice through her advocate in which it
    was mentioned that after receiving the notice, a written application
    had been made by the applicant to the respondent calling upon the
    respondent to provide documents relied upon in the notice. The
    appellant stated that the said documents had not been provided
    and that she would reply to the demand notice after receiving the
    documents. In the reply, she denied the claim of the respondent. On
    13th December 2016, the appellant’s advocate addressed a letter to
    the respondent reiterating that though the appellant had demanded
    the documents from the respondent, the same had not been provided.
    Thereafter, the respondent filed a complaint on 15th December 2016
    before JMFC, Kalwan. The statement of the respondent-complainant
    in the form of an affidavit was filed on the same day.
15. It is pertinent to note that in the counter to the present appeal,
    the respondent has not denied the receipt of the letters dated
    28th November 2016 and 13th December 2016. The complaint and
    affidavit in support of the complaint only refer to the notice dated
    15th November 2016 issued by the advocate for the appellant to the
    respondent. What is stated in the complaint reads thus:
           “……………………………………………………..
           [D] The notice sent on the first address has been received
           on 15.11.2016. However, from the second address,
           envelope has been returned on 15.11.2016 with the postal
           remark as ‘left’.”
     However, the respondent suppressed the letters dated 28th November
     2016 and 13th December 2016 in the complaint and its statement
     on oath. Now, by filing an additional affidavit, it is contended by the
     respondent that certain documents were supplied to the appellant. A
     copy of the application dated 29th November 2016, submitted by the
     appellant to the respondent’s manager, is placed on record seeking
     loan account statements. Accordingly, certain account statements
     bearing the appellant’s signature have been produced. The signatures
     on the account statements do not bear any date.
16. It is pertinent to note that in the notice under Section 138 of the NI
    Act, in paragraph 1, the respondent specifically relied upon documents
    executed by the appellant and the acknowledgment of the loan
    made by the appellant. By a reply dated 28th November 2016, the
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     appellant informed the respondent that by filing a written application,
     the appellant had demanded certain documents, which had not been
     provided. What is pertinent to note is that the respondent does not
     deny the receipt of the reply dated 28th November 2016. No reply
     was sent by the respondent pointing out that the documents were
     supplied. Even in the letter dated 13th December 2016, the appellant
     made the same grievance regarding the non-supply of the documents
     relied upon in the demand notice. Before filing the complaint, the
     respondent failed to respond to the said letter.
17. A counter to this appeal was filed by the respondent on 7th August
    2024, in which it is not even a case made out that requisite documents,
    as demanded by the appellant, were handed over to her on
    29th November 2016. A case was belatedly made out for the first time
    by filing an additional affidavit on 9th January 2025 that statements
    of loan account sought by the appellant were furnished to her and
    her signature appears on the statements. As stated earlier, though
    it is claimed that the appellant’s signatures appear on the said
    documents acknowledging the receipt, no date is mentioned below
    the signatures. In the additional affidavit, the respondent alleged
    that by a letter dated 29th November 2016, the appellant had called
    upon the respondent to provide the loan account statements of the
    six loan accounts mentioned in the said letter. Therefore, the stand
    taken in January 2025 that the statement of accounts was supplied
    on 29th November 2016 is clearly an afterthought.
18. The fact remains that in the complaint, the respondent has suppressed
    the reply dated 28th November 2016 and the letter dated 13th December
    2016 sent by the appellant’s advocate. These two documents 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.
19. 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. What is important is that in the reply
    dated 28th November 2016, the appellant had reserved her right to
    give a reply to the demand notice after receiving the documents.
    It was the respondent’s duty to supply documents to the appellant or
[2025] 3 S.C.R.                                                      1199

                       Rekha Sharad Ushir v.
          Saptashrungi Mahila Nagari Sahkari Patsansta Ltd.

     her advocate to enable the appellant to properly reply to the demand
     notice. At least, the inspection of documents could have been provided
     to the appellant. After noticing the fact that notwithstanding service
     of two letters written by the appellant, relied upon documents were
     not provided to the appellant, the learned Magistrate could have
     dismissed the complaint by exercising power under Section 203 of
     CrPC, as the appellant could not have replied to the statutory notice
     without looking at the documents relied upon.
20. Thus, this was a case where very material documents in the form
    of two letters addressed by the appellant were suppressed in the
    complaint and the statement on oath under Section 200. 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.
21. While filing a complaint under Section 200 of CrPC and recording his
    statement on oath in support of the complaint, as the complainant
    suppresses material facts and documents, he cannot be allowed to
    set criminal law in motion based on the complaint. Setting criminal
    law in motion by suppressing material facts and documents is nothing
    but an abuse of the process of law.
22. Hence, the High Court ought to have interfered and quashed the
    complaint. Accordingly, the impugned order of the High Court is set
    aside. 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.
23. We make it clear that 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.
24. The appeal is, accordingly, allowed.

     Result of the case: Appeal allowed.




     Headnotes prepared by: Divya Pandey