Telangana High Court
Sri Sutrave Krishna Mohan vs The State Of Telangana on 10 April, 2026
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA
CRIMINAL PETITION Nos.4271 AND 4565 OF 2023
DATE: 10-04-2026
Between:
Sri Sutrave Krishna Mohan and others
... Petitioners
And
The State of Telangana,
Rep. by its Public Prosecutor,
Hon'ble Telangana High Court,
Hyderabad, Telangana and others
... Respondents
COMMON ORDER:
Since the issue involved in both these Criminal Petitions is one and the same, both these Criminal Petitions are heard together and disposed of by way of this common order.
2. Seeking to quash the proceedings in S.T.C.NI.No.558 of 2023 on the file of learned V Metropolitan Magistrate, Hyderabad, ETD,J 2 Crl.P.No.4271 of 2023 & batch registered for the offence under Section 138 read with 141 of the Negotiable Instruments Act, 1881 (for short, 'N.I. Act'), Crl.P.No.4271 of 2023 is filed by accused Nos.4 to 8 and Crl.P.No.4565 of 2023 is filed by accused Nos.1 to 3.
3. Heard Sri R. Anurag, learned counsel for the petitioners in Crl.P.No.4271 of 2023, Sri M. Pratheek Reddy, learned counsel for the petitioners in Crl.P.No.4565 of 2023 and Sri Sushil K. Tekriwal, learned counsel representing Sri M. Bhaskar, learned counsel for respondent No.2.
4. For the sake of convenience, the parties are hereinafter referred to as they were arrayed in the complaint.
5. The case of the complainant is that he is into real estate business. His wife, Mrs. Sushma Khandelwal, who has now since expired on 02.12.2022, is represented through her legal heir Manoj Khandelwal, who is the complainant herein. The deceased has bequeathed her share of the subject property to the complainant herein by virtue of a Will, dated 26.09.2021. The case of the complainant is that he purchased agricultural dry land admeasuring ETD,J 3 Crl.P.No.4271 of 2023 & batch Ac.26-20 guntas in Survey Nos.1276 and 1281 situated at Nandigama Village of Mahabubnagar District from Venkat Rao Memorial Trust vide registered Sale Deed bearing document No.5855 of 2005, dated 01.12.2005. Similarly, late Sushma Khandelwal, during her lifetime, purchased agricultural dry land admeasuring Ac.24-34 guntas in Survey Nos.1272 and 1275 situated at Nandigama Village from the said Trust vide registered Sale Deed bearing document No.5858 of 2005, dated 01.12.2005. It is his case that in both the Sale Deeds, the Trust and the trustees commonly represented that it is resolved to sell the subject lands on their part to the intending purchasers for the benefit of the school, since no income was accrued from the Trust lands; that the Trust is the sole and absolute owner and possessor of the subject lands; that the school run by the Trust requires lot of funds to run the school; and that the funds were also required to further develop the school to provide sufficient accommodation. The complainant further submits that himself and late Sushma Khandelwal have paid the entire sale consideration of Rs.10,36,250/- and Rs.9,73,690/- respectively. Consequently, they became the absolute owners and possessors of the subject lands and all the documents relating to the ETD,J 4 Crl.P.No.4271 of 2023 & batch subject lands were handed over to them and the sale consideration paid under the said sale transactions is also declared in the Income Tax returns. Thus, the sales are legally valid.
6. It is the further case of the complainant that similarly he has paid the entire sale consideration from his own account for two more subject properties i.e., agricultural dry land admeasuring Ac.25-21 guntas in Survey Nos.1271 and 1274, situated at Nandigama Village vide registered Sale Deed bearing document No.5856 of 2005, dated 01.12.2005, executed by the trustees, namely, Dr. T.V. Narayana, late B. Madhava Reddy and P. Brahmananda Chary, in the name of one A. Praveena, and agricultural dry land admeasuring Ac.25-17 guntas in Survey Nos.1270 and 1282 situated at Nandigama Village, Mahabubnagar District, vide registered Sale Deed bearing document No.5857 of 2005, dated 01.12.2005, executed by the trustees, namely Dr. T.V. Narayana, late B. Madhava Reddy and P. Brahmananda Chary, in the name of one A. Keshav Reddy. It is his further case that the understanding between him, A. Praveena and A. Keshav Reddy is that A. Praveena and A. Keshav Reddy shall return back the consideration at market ETD,J 5 Crl.P.No.4271 of 2023 & batch price subsequently, with all consequential claims, since they were not having the arrangement for payment of the entire consideration at the relevant time, and as long as the same is not being affected, they shall hold on to the subject properties merely as custodians of the complainant without having any rights, obligations and entitlements in any manner upon the subject properties accruing from the Sale Deeds. The status of both of them was merely of a curator and keeper and nothing more than the same. Subsequently, over a period of 16 years, there was a complete failure on the part of A. Praveena and A. Keshav Reddy to repay the consideration on the market price. Therefore, the complainant has resumed and reoccupied the said properties existing in the name of A. Praveen and A. Keshav Reddy, and to set the same into motion with immediate effect, he has sent legal notices to that effect to A. Praveena and A. Keshava Reddy. It is his case that the payment was made exclusively from his account and hence, he is legally entitled to resume his rights over the said properties. Thereafter, the complainant has sent statutory notice in the capacity of absolute owner of the entire Ac.100-00 of land along with his spouse, late Sushma Khandelwal, to the accused. Subsequently, all the disputes ETD,J 6 Crl.P.No.4271 of 2023 & batch that arose between the parties was amicably settled by way of a Settlement Deed executed on 02.05.2013, whereby it was settled that all the parties thereto have agreed to settle all the existing issues in respect of the subject properties and also agreed to put the subject properties to sell and share the consideration in equal proportion. It was also agreed upon that the dispute arising if any out of the Settlement Deed shall be adjudicated by way of arbitration.
7. Subsequently, when accused Nos.5, 6, 9, 10, 11 and 12 have refused to perform their part of obligation, the complainant has filed an Arbitration Application vide A.A.No.137 of 2021 before this Court on 22.09.2021, under Section 11(6) of the Arbitration and Conciliation Act, for appointment of an Arbitrator. In the interregnum, accused Nos.5, 6, 9, 10, 11 and 12 reconstituted the Venkat Rao Memorial Trust and there were several changes in the incoming and outgoing members of the Trust and the new office bearers are accused Nos.5, 6, 7 and 8. It is submitted by the complainant that accused Nos.4 to 12 allegedly collaborated with the third party investors being accused Nos.1 to 3 and further, accused ETD,J 7 Crl.P.No.4271 of 2023 & batch Nos.1 to 3 along with accused Nos.4 to 8 approached the complainant for settlement and thus, a Tripartite Settlement Agreement was executed on 06.05.2022. The main terms of the said settlement are as follows:
"(a) Complainants herein have agreed to sell and Accused Nos.1 to 3 have agreed to purchase the subject land as defined in the schedule therein.
(b)The instant settlement agreement is executed to give rest to all the contentions arose post settlement agreement dated
08.05.2013.
(c) The instant settlement agreement is executed because of the initiatives of Accused Nos.1 to 3 and also at the behest of and in concurrence and confirmation, ratification & attestation of the Accused Nos.4 to 8.
(d) All the parties hence are significant and important and thus qualified and competent to execute the instant agreement.
(e) Accused Nos.1 to 3 have agreed to pay to the complainants herein a total consideration of Rs.12 Crores against which Rs.25 Lakhs was paid on 06.05.2022 vide cheque.
(f) Remaining balance of Rs.11.75 Crores was agreed to be paid by the Accused Nos.1 to 3 to the complainants herein ETD,J 8 Crl.P.No.4271 of 2023 & batch on or before 25.08.2022. This balance could be made in proportion but not beyond 25.08.2022.
(g) That time and timely payment shall be the essence of this agreement.
(h) That Accused Nos.4 to 8 shall endeavour all assistance and cooperation to the Accused Nos.1 to 3 as well as complainants herein in making the agreement executed in its real and true spirit.
(i) That any extension of time for making the balance payment shall be only and only with written concurrence of the parties hereto.
(j) That Accused Nos.4 to 8 are the real beneficiaries of the agreement therein and hence having no objection to the agreement and have given their consent and concurrence to the fullest.
(k) That any dispute arising from the present indenture shall be adjudicated by way of arbitration by a sole arbitrator to be appointed by all the parties in mutual consent failing which the same shall be by way of legal course. The place of Arbitrator and courts of jurisdiction shall be Hyderabad only. The seat and venue of Arbitration also shall be Hyderabad only."
8. Subsequently, accused Nos.1 to 8 realizing that they would not be in a position to make the balance payment of Rs.11.75 crores ETD,J 9 Crl.P.No.4271 of 2023 & batch to the complainant by 25.08.2022, they approached the complainant for extension of time in making the payment of balance amount of Rs.11.75 crores. Thereafter, a Supplementary Agreement, dated 21.08.2022, was entered into and an amount of Rs.25 lakhs was paid by a cheque. Again there arose a situation that accused Nos.1 to 8 could not comply with the payment of balance amount of Rs.11.50 crores to the complainant by 15.10.2022. Therefore, a Second Supplementary Agreement, dated 12.10.2022, was entered into. Thus, accused Nos.1 to 3 and 4 to 8 have agreed to make payment of Rs.3 crores in consent and issued a cheque, dated 25.10.2022, with an undertaking that the same shall be honoured. Thereafter, the subject cheque given by accused Nos.1 to 3 in consent and concurrence at the behest of accused Nos.4 to 8, towards part balance payment against the total sale consideration of Rs.12 crores, was dishonoured on 25.10.2022. It is submitted that the complainant has brought the same to the notice of this Court in the pending Arbitration Application by filing an additional affidavit and subsequently, the same was withdrawn by the complainant after the leave being granted by this Court with a liberty for taking appropriate action as per law.
ETD,J 10 Crl.P.No.4271 of 2023 & batch
9. The case of the complainant is that the dishonor of cheque has resulted in huge loss to the complainant and hence, he along with late Sushma Khandelwal got issued notice to the accused on 09.11.2022 for dishonor of cheque bearing No.533023, for an amount of Rs.3 crores, on 25.10.2022. Since, the accused failed to comply with the payment within a period of 15 days from the date of receipt of notice, the complaint was filed on 27.12.2022 and the same was numbered as S.T.C.NI.No.558 of 2023. The present Criminal Petition is filed seeking to quash the proceedings in the said S.T.C.NI.No.558 of 2023 pending on the file of learned V Metropolitan Magistrate, Hyderabad.
10. Learned counsel for the petitioners submitted that the case vide S.T.C.NI.No.558 of 2023 is not maintainable, as there is no legally enforceable debt to be paid by the petitioners herein to respondent No.2-complainant, which is palpable from the language of the complaint and the notice issued under Section 138 of the N.I. Act. He has argued that Clause 26(A) in the notice issued under Section 138 of the N.I. Act clearly envisages that if the cheque is dishonoured, it shall make the Second Supplementary Agreement ETD,J 11 Crl.P.No.4271 of 2023 & batch null and void and ineffective. Therefore, the only effect of dishonouring the subject cheque is that the agreement entered into between the parties would lapse. Thus, it does not constitute any legally enforceable debt on the part of the petitioners. He further submitted that respondent No.2 is merely using the above case as a tool to blackmail and harass the petitioners by involving them in criminal proceedings. He further submitted that accused No.3 is not at all involved in the affairs of accused No.1- Company and that he is merely a name lender to most of the contracts and agreements that the Company enters into, as he is the son of accused No.2. He further submitted that only the person who issued the cheque drawn on an account maintained by him can be prosecuted for an offence under Section 138 of the N.I. Act and that accused No.3 has not signed on the cheque and the account on which the cheque is drawn also does not belong to accused No.3. He further submitted that the proceedings under Section 138 of the N.I. Act cannot be merely used as a tool for extracting money from the accused. Thus, there is no obligation on the part of the petitioners to pay the amount to respondent No.2 and therefore, prayed to quash the proceedings against the petitioners. Learned counsel for the petitioners has relied ETD,J 12 Crl.P.No.4271 of 2023 & batch upon Nusun Genetic Research Limited and others v. The State of Telangana and another 1 and Anand Kumar Mohatta and another v. State (NCT of Delhi), Department of Home and another 2.
11. Learned counsel for respondent No.2 has submitted that the power under Section 482 Cr.P.C. cannot be invoked when a remedy is available under Section 239 Cr.P.C., as it is an extraordinary and inherent jurisdiction of the High Court and must be exercised sparingly and with great circumspection. Thus, the present Criminal Petitions are not maintainable, as it is impermissible and would amount to abuse of process of law. When an adequate statutory remedy is available under Section 239 Cr.P.C., invoking the power under Section 482 Cr.P.C. is not justified. He further submitted that the multi-tiered collaborative arrangement involving multiple stake holders with distinct but interlocking obligations between the parties establishes that the dishonoured cheque bearing No.533023, dated 25.10.2022, for an amount of Rs.3 crores, was issued as a part payment of sale consideration and not as a security cheque. 1 2015 SCC OnLineHyd 571 2 (2019) 11 SCC 706 ETD,J 13 Crl.P.No.4271 of 2023 & batch Therefore, the attempt of the petitioners to characterize the subject cheque as a security instrument is legally untenable and factually incorrect. He further argued that the Clause in the Second Supplementary Agreement that the dishonor of the cheque would render the entire agreement null and void and ineffective, clearly establishes that the cheque was the life and breathe of the payment obligation and not a collateral security. He further submitted that subsequent to filing the present Criminal Petitions, a fresh settlement agreement in respect of same subject matter was executed between the same parties in June, 2025, which demonstrates that the parties themselves have moved beyond the dispute underlying S.T.C.NI.No.558 of 2023. The original Tripartite Settlement Agreement, dated 06.05.2022, and its supplementary agreements, which form the very foundation of the cheuqe dishonor complaint, stand novated and replaced by the fresh settlement arrangement. Thus, the cause of action that animated the complaint namely the breach of payment obligation under the Second Supplementary Agreement, dated 12.10.2022, has been subsumed within the new supplementary framework. Therefore, because of novation of contract, the Criminal Petitions seeking quashment become ETD,J 14 Crl.P.No.4271 of 2023 & batch infructuous, since there is no longer a live dispute requiring adjudication by this Court.
12. He further submitted that late Smt. Sushma Khandelwal (respondent No.3 in Crl.P.No.4271 of 2023), who is the wife of the complainant, expired on 02.12.2022, which is admitted by the complainant himself at paragraph No.5 of his affidavit, and Crl.P.No.4271 of 2023 is filed before this Court on 24.04.2023, after five months following the death of Smt. Sushma Khandelwal, despite which the petitioners have arrayed the deceased Smt. Sushma Khandelwal as a living respondent without disclosing her death, thereby suppressing the material facts from this Court. Thus, the suppression of material facts affects the maintainability of Crl.P.No.4271 of 2023 and that the jurisdiction under Section 482 Cr.P.C. has to be exercised only in favour of those who disclose all the relevant facts truthfully and completely. He further submitted that the death of Smt. Sushma Khandelwal does not extinguish the complaint or the other criminal proceedings initiated in respect of the dishonoured cheque, as the complainant has stated in his affidavit that Smt. Sushma Khandelwal has bequeathed her property to him ETD,J 15 Crl.P.No.4271 of 2023 & batch by virtue of a Will, dated 26.09.2021, and that he represents her estate as a legal heir. He, therefore, prayed to dismiss the Criminal Petitions.
13. Learned counsel for respondent No.2 has relied upon the judgment of the Honourable Apex Court in Madhu Limaye v. State of Maharashtra 3 , and contended that the foundational principle governing the exercise of inherent powers under Section 482 Cr.P.C. was laid down by the Honourable Apex Court holding that the inherent powers cannot be invoked when other remedies are expressly provided for in the code itself. He has submitted that Section 482 Cr.P.C. does not confer any new power on the High Court but only saves the pre-existing inherent powers, and such powers must yield to express statutory remedies wherever they are available. He has also relied upon R.P. Kapur v. State of Punjab 4 and contended that in the said case, the Honourable Apex Court delineated the categories in which the High Court may exercise inherent jurisdiction to quash criminal proceedings. The Honourable Apex Court emphasized that where the accused has adequate and 3 (1977) 4 SCC 551 4 AIR 1960 SC 866 ETD,J 16 Crl.P.No.4271 of 2023 & batch alternative remedies available at the stage of trial, the High Court should refrain from exercising its extraordinary jurisdiction. He has also relied upon State of Haryana v. Bhajan Lal 5, and contended that the Honourable Apex Court, while recognizing the inherent jurisdiction of the High Court, cautioned that such power should not be exercised as a matter of course. It was held that it would be improper to quash the proceedings at a nascent stage when disputed questions of fact fall for consideration, which may be properly examined by the trial Court at the stage of discharge or framing of charges. He has also relied upon Amrutbhai Shambhubhai Patel v. Sumanbhai Kantibhai Patel and others 6 and contended that the Honourable Apex Court has held that when an application for discharge under Section 239 Cr.P.C. is pending before the trial Court, it is not open to the accused to simultaneously or alternatively invoke the jurisdiction of the High Court under Section 482 Cr.P.C. The Court observed that permitting a parallel challenge would cause multiplicity of proceedings and undermine the authority of the trial Court. He has also relied upon Neeharika 5 1992 Supp. (1) SCC 335 6 (2017) 4 SCC 177 ETD,J 17 Crl.P.No.4271 of 2023 & batch Infrastructure Private Limited v. State of Maharashtra and others 7, and contended that a Constitution Bench of the Honourable Apex Court held that the Courts should be extremely circumspect in staying or quashing the criminal proceedings, especially at a preliminary stage. The inherent power under Section 482 Cr.P.C. is not to be exercised to stifle the legitimate prosecution or to circumvent statutory remedies expressly provided by the Code of Criminal Procedure.
14. He has also relied upon Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited 8 , wherein it was held by the Honourable Apex Court that where a cheque is issued as part of a payment obligation or towards discharge of an existing liability under an agreement, it cannot be characterized as a security cheque, and dishonor of such cheque attracts full penal consequences under Section 138 of the N.I. Act. The Court drew a categorical distinction between a cheque issued "in discharge of a debt or liability" and one issued "as security", holding that the former squarely attracts Section 138 of the N.I. Act. 7 (2021) 19 SCC 401 8 (2016) 10 SCC 458 ETD,J 18 Crl.P.No.4271 of 2023 & batch The contention of the learned counsel for respondent No.2 is that the cheque in the present cases is issued towards part of the balance sale consideration payable under the Second Supplementary Agreement, dated 12.10.2022, and that the agreement further records that the dishonour of the cheque would render the entire agreement null and void and ineffective, clearly establishing that the cheque was the very life and breathe of the payment obligation and not a collateral security.
15. Learned counsel for respondent No.2 has also relied upon Aparna A. Shah v. Sheth Developers Private Limited 9, wherein the Honourable Apex Court held that the collaborative settlement arrangements involving multiple parties where obligations are interdependent, all the parties who are privy to and beneficiaries of the arrangement can be proceeded against when the payment obligation is breached.
16. Perused the record.
9 (2013) 8 SCC 71 ETD,J 19 Crl.P.No.4271 of 2023 & batch
17. The petitioners are seeking quashment of the proceedings in S.T.C.NI.No.558 of 2023 on the file of learned V Metropolitan Magistrate, Hyderabad. The said case was filed as the cheque bearing No.533023, which was issued by accused No.2, was dishonoured and it is alleged that the accused failed to make the payment in spite of receiving the statutory notice. It is borne out by record that since there were disputes among three parties i.e., the Trust, the complainant and the petitioners herein, a Tripartite Agreement was entered into on 06.05.2022 to resolve the disputes. The said terms could not be complied with and therefore, a Supplementary Agreement was executed on 21.08.2022 and even then, the terms could not be settled amicably. Therefore, a Second Supplementary Agreement, dated 12.10.2022, got executed between the parties. In pursuance of the Second Supplementary Agreement, the subject cheque, dated 25.10.2022, was alleged to have been issued by accused No.2 in favour of the complainant and the said cheque was dishonoured. The contention of the petitioners' counsel is that the cheque is not issued towards a legally enforceable debt and that the very Clause in the Second Supplementary Agreement stating that the dishonour of cheque ETD,J 20 Crl.P.No.4271 of 2023 & batch under any circumstances would nullify the Second Supplementary Agreement, makes it clear that it would fall back on the original agreement and thus, it cannot assume the status of legally enforceable debt. While the contention of learned counsel for respondent No.2 is that the inclusion of said Clause in the Second Supplementary Agreement makes it all the more important that the payment obligation is a must by the accused and that it is not a collateral security. For the sake of reference, the said Clause in the Second Supplementary Agreement is extracted hereunder:
"A. Noticees/respondents No.1 to 3 are making a payment of Rs.3 crores in consent and concurrence and at the behest of Noticees/respondents No.4 to 8 as agreed towards balance payment of Rs.11.50 Crores by way of cheque dated 25.10.2022 with an undertaking that the same shall be honoured or substituted by any other mode of payment and the dishonour of subject cheque shall make the instant Second Supplementary Agreement to Agreement dated 06.05.2022 and to First Supplementary Agreement dated 21.08.2022 null and void and ineffective."
18. It is further brought to the notice of this Court that subsequently a Release Deed was executed between the parties on 04.06.2025, which happens to be the most recent and latest one. A ETD,J 21 Crl.P.No.4271 of 2023 & batch perusal of the terms under the said Release Deed makes it clear that with a view to settle the dispute, the releasor approached the releasee to explore the ways and means to resolve all the issues and therefore, the releasee agreed to purchase the subject properties from the releasor and finally resolved to get all the contentious issues resolved and that the releasee being the absolute owner has also resolved to come forward to settle all the disputes and get a registered Release Deed from the releasor for the subject properties subsequently through the SRO, Shadnagar, or MRO, Nandigama or through Lok Adalat. Accordingly, the releasor has agreed to cooperate with the releasee. The releasor is the complainant herein i.e., Manoj Khandelwal. The releasee is the Ventak Rao Memorial Trust, represented through its trustees and President i.e., Nishit Harwalkar, President; S. Krishha Mohan, Trustee and S. Mohinder, S/o. S. Krishna Mohan. It was agreed upon that the releasee shall pay the consideration amount of Rs.10 crores as per the payment schedule i.e., Rs.3 crores by way of cheque bearing No.734644 and the remaining balance amount of Rs.7 crores will be paid in installments as mutually agreed by both the parties and that the installments shall begin as soon as the land ETD,J 22 Crl.P.No.4271 of 2023 & batch conversion and relevant permissions are obtained from the Government authorities/agencies, such as HUDA or HMDA. However, the entire balance amount of Rs.7 crores irrespective of the said obtainments shall be made in toto in an outer limit time of 9 months i.e., by 03.03.2026. It was also agreed that on receipt of the advance amount, all the arbitration cases, including A.A.No.35 of 2023, with respect to the scheduled properties shall be withdrawn, including all the connected claims, applications etc., pending before the Arbitrator and also the releasor shall withdraw the criminal case filed by them vide STC.NI.No.558 of 2023 against all the accused and the releasee shall withdraw their cases pending before this Court vide Crl.P.Nos.4271 and 4565 of 2023.
19. A Receipt is also executed by the complainant-Manoj Khandelwal and a copy of the said receipt is also filed along with the Release Deed into the Court vide Memo of Additional Material Papers, dated 14.11.2025. The said Receipt is signed by Manoj Khandelwal for having received from M/s. Venkat Rao Memorial Trust an amount of Rs.2,82,00,000/- through RTGS bearing UTR.No.CNRBR52025061358934997, in Savings Account bearing ETD,J 23 Crl.P.No.4271 of 2023 & batch No.50100220776390, HDFC Bank Limited, Attapur, Rajendranagar, and balance amount in cash after deducting 1% Income Tax at source i.e., Rs.3 lakhs against cheque bearing No.734644, Canara Bank, Shah Ali Banda Branch, Hyderabad, dated 06.06.2025, mentioned in the Release Deed, dated 04.06.2025. Thus, the Release Deed amply clarifies the position that there is another agreement entered into between the parties and as per the said agreement, once the payment is realized, they shall withdraw the case vide STC.NI.No.558 of 2023. In that backdrop, if examined, the recitals of the Second Supplementary Agreement and the Clause mentioned therein would clarify that in case if the amount is not paid under the cheque, then it would nullify the Second Supplementary Agreement and it would fall back on to the original agreement.
20. The main ingredient of the offence under Section 138 of the N.I. Act is the existence of a legally enforceable debt. The above said Clause clearly discloses that the amount alleged to be paid by the accused does not fall under the term 'legally enforceable debt'. The cheque was issued pursuant to the Second Supplementary ETD,J 24 Crl.P.No.4271 of 2023 & batch Agreement and it was agreed upon by both the parties that in case if the cheque is dishonoured, it would not create any legal obligation but it would nullify the Second Supplementary Agreement giving effect to the original agreement. Therefore, it cannot be held that the subject cheque is issued towards any legally enforceable debt. The argument of the learned counsel for respondent No.2 that the said Clause is introduced to give undue importance to the Second Supplementary Agreement and to resolve the entire dispute among the parties, cannot be sustained. It is a fact borne out by record that there has been a long drawn litigation between the parties and that there are inter se disputes among the parties and there have been many agreements that have been entered into from time to time. A perusal of the subject cheque reveals that it is signed by accused No.2-Ch.Shyam Sunder Reddy issued to the complainant-Manoj Khandelwal for an amount of Rs.3 crores. The account appears to have been held by both Ch. Shyam Sunder Reddy and Mrs. Ch. Vijaya. Accused No.3-Ch. Vikas Reddy is not at all a signatory to the subject cheque, but he is also arrayed as an accused. The account also does not pertain to accused No.3. The ETD,J 25 Crl.P.No.4271 of 2023 & batch entire litigation discussed in the preceding paragraphs is purely civil in nature.
21. In Nusun Genetic Research Limited's case (supra 1), it was held that:
"16. Here importantly, besides the terms of the one time settlement speak the payment schedule when due and not for the payment schedule due the cheques issued of respective dates but in the event of non-adhering to the payment schedule, to recover; leave about the earlier two complaint cases not even withdrawn as still pending and continuing and what the remedy reserved by para-4 of the memorandum of understanding is in the event of non- adhering to payment schedule and dishonour of cheques, not reserved any criminal liability, leave about whether a waiver operates as estoppel to enforce against the accused even such a reserve of a criminal liability to take away the statutory right not a germane here to go into with reference to Section 115 of the Evidence Act; once the one time settlement is arrived and recovery process is envisaged and one time settlement itself stipulates if payment not made as stipulated to go back and recover the original amount and for the original amounts covered by the cheques already prosecution is pending and sustainable as answered supra; it is for the one time settlement that was committed breach even for the civil remedy is elsewhere. Leave about the civil liability as per Section 131 r/w 117 of the Act to recover the ETD,J 26 Crl.P.No.4271 of 2023 & batch amount with interest @18% p.a. so far as criminal liability concerned within the meaning of Section 138 of the Act it can be clearly said that there is no any legally enforceable debt or other liability for want of independent or fresh consideration as what is required is not only of giving of cheque from the account maintained by the accused/drawer and its presentation within validity time and its dishonour and giving of statutory notice within the statutory time and from service or deemed service after statutory waiting from accrual of cause of action under Section 142 of the Act and filing of complaint within the time stipulated or by application for extension of time if at all extended to take cognizance with reference to Section 190 Cr.P.C. r/w 142 and 138 of the Negotiable Instruments Act; but what is further prerequisite from Sangeetaben Mahendrabhai Patel v. State of Gujarat there must be legally enforceable debt or other liability; when that is also the crux here and when there is no independent debt or liability and so far as the existing one concerned already the cheque dishonour cases are pending not even withdrawn thereby suffice to say the prosecution so far as criminal complaint covered by C.C. Nos. 314 (renumbered as C.C. No. 171 of 2015 on the file of XI Special Magistrate covered by Crl.P. No. 4126 of 2015) and 315 of 2013 (renumbered as 170 of 2015 on the file of XI Special Magistrate covered by Crl.P. No. 4124 of 2015), the quash petitions are to be allowed by quashing the proceedings. When there is no legally enforceable debt or other liability, ETD,J 27 Crl.P.No.4271 of 2023 & batch the prosecution won't survive (a case of time barred debt) is the expression in Gerard Kollian v. Wies Electronics.
19. The other submission by the learned counsel is these are the disputed questions to be agitated before trial Court to decide as to whether there is a legally enforceable debt or other liability or not, for which once cheque is rooted from the account of the accused, admittedly issued when not in dispute and from presumptions under Sections 139 and 118 of the Act apply, the matter has to be left to be decided by the trial Court and not a fit case to quash the proceedings for allowing the accused to discharge the burden before the trial Court. For that placed reliance upon the Apex Courts three judges Bench expression, on burden of accused under reverse onus clause in Rangappa v. Mohan. Here, as discussed supra, when the facts are clear and not in complication and when the clear facts on hand no way complicates to the conclusion that there is no legally enforceable debt or other liability, within explanation of 138 of the Act, the contention cannot be accepted to leave it to the wisdom of the trial Court, when any continuation of the proceedings when not sustainable no way sub-serves the ends of justice and it is not the spirit of law to put the accused unnecessary ordeal to face trial with no purpose, apart from that tantamounts to abuse of purpose for which the Courts power under Section 482 Cr.P.C. is not meant and there is nothing to abdicate the responsibility of this Court in this matter from what is discussed and concluded supra."
ETD,J 28 Crl.P.No.4271 of 2023 & batch
22. In Anand Kumar Mohatta's case (supra 2), it was held that:
"15. Even otherwise it must be remembered that the provision invoked by the accused before the High Court is Section 482 CrPC and that this Court is hearing an appeal from an order under Section 482 CrPC. Section 482 CrPC reads as follows:
"482. Saving of inherent powers of the High Court. - Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any court or otherwise to secure the ends of justice."
16. There is nothing in the words of this section which restricts the exercise of the power of the Court to prevent the abuse of process of court or miscarriage of justice only to the stage of the FIR. It is settled principle of law that the High Court can exercise jurisdiction under Section 482 CrPC even when the discharge application is pending with the trial court. Indeed, it would be a travesty to hold that proceedings initiated against a person can be interfered with at the stage of FIR but not if it has advanced and the allegations have materialized into a charge-sheet. On the contrary it could be said that the abuse of process caused by FIR stands aggravated if the FIR has taken the form of a charge-sheet after investigation. The power is undoubtedly conferred to prevent abuse of process of power of any court."
ETD,J 29 Crl.P.No.4271 of 2023 & batch
23. The contention of the learned counsel for respondent No.2 is that the petition filed under Section 482 Cr.P.C. cannot be entertained, while the petition under Section 239 Cr.P.C. is pending before the trial Court. But, in the light of the principle laid down by the Honourable Apex Court in Anand Kumar Mohatta's case (supra
2), the present Criminal Petitions are very much maintainable.
24. In Nusun Genetic Research Limited's case (supra 1), it was held that when the facts on hand concludes that there is no legally enforceable debt, continuation of proceedings would be an abuse of process of law. In the present case also, there is no legally enforceable debt when the facts of the case are looked into. In the absence of legally enforceable debt continuation of proceedings against the petitioners would be an abuse of process of law. Therefore, in view of the principle laid down by the Honourable Apex Court in Bhajan Lal's case (supra 5), when no prima facie case is made out against the petitioners, the proceedings should not be allowed to continue. Therefore, since there is no legally enforceable debt, the complaint under Section 138 of the N.I. Act is not maintainable and no purpose would be served, even if the ETD,J 30 Crl.P.No.4271 of 2023 & batch proceedings are continued, since the ingredients of Section 138 of the N.I. Act cannot be satisfied. Therefore, it is opined that the proceedings in S.T.C.NI.No.558 of 2023 before the trial Court deserve to be quashed.
25. Accordingly, the Criminal Petitions are allowed and the proceedings against the petitioners in S.T.C.NI.No.558 of 2023 on the file of learned V Metropolitan Magistrate, Hyderabad, are hereby quashed Miscellaneous Petitions pending, if any, shall stand closed.
____________________________ JUSTICE TIRUMALA DEVI EADA Date: 10.04.2026.
MD