Quashing court must be 'slow' to grant relief at pre-trial stage: Supreme Court

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The Supreme Court on Wednesday held that a Court should be slow to grant the relief of quashing a complaint at a pre-trial stage, when the factual controversy is in the realm of possibility, particularly because of the legal presumption.

"What is also of note is that the factual defence without having to adduce any evidence need to be of an unimpeachable quality, so as to altogether disprove the allegations made in the complaint", added a bench of Justices KM Joseph and Hrishikesh Roy.

While refusing to set aside an order of the Delhi High Court whereby it had disallowed an application filed under Section 482 of the Code of Criminal Procedure, 1973, the top court held that the consequences of scuttling the criminal process at a pre-trial stage can be grave and irreparable.

"Quashing proceedings at preliminary stages will result in finality without the parties having had an opportunity to adduce evidence and the consequence then is that the proper forum i.e., the trial Court is ousted from weighing the material evidence. If this is allowed, the accused may be given an un-merited advantage in the criminal process....", added the division bench.

Rathish Babu Unnikrishnan approached the top court challenging a Delhi High Court order dismissing his application under Section 482 Cr.P.C for quashing of the summoning order and the order framing notice, issued against him under Section 138 of the Negotiable Instruments Act, 1881.

A criminal complaint was filed by Satish Gupta who had invested a substantial sum in Unnikrishnan's company. After a dispute arose amongst them, it was decided that the invested money would be returned to Gupta and the shares allotted to him will be proportionately transferred to Unnikrishnan.

With such understanding, the four cheques were issued. When one of those cheques was presented, the same was dishonoured by the bank with the endorsement, “fund insufficient”.

It was found that the High Court kept in mind the scope of limited enquiry in the jurisdiction by referring to the ratio in HMT Watches Limited vs. M.A. Abida & Anr and in Rajiv Thapar & Ors. vs. Madan Lal Kapoor and opined that the exercise of powers by the High Court under Section 482 Cr.P.C, would negate the complainant’s case without allowing the complainant to lead evidence.

The Supreme Court further noted that the burden of proving that there is no existing debt or liability, was to be discharged in the trial.

"On careful reading of the complaint and the order passed by the Magistrate, what is discernible is that a possible view is taken that the cheques drawn were, in discharge of a debt for purchase of shares. In any case, when there is legal presumption, it would not be judicious for the quashing Court to carry out a detailed enquiry on the facts alleged, without first permitting the trial Court to evaluate the evidence of the parties."

Also, as the cheque and the signature were not disputed by Unnikrishnan, It was held that balance of convenience at this stage was in favour of the complainant, as Unnikrishnan would have due opportunity to adduce defence evidence during the trial, to rebut the presumption.

Case Title: Rathish Babu Unnikrishnan vs. The State (Govt. of NCT of Delhi)