Gujarat High Court
Sudhir Kumar Sharma vs State Of Gujarat on 23 September, 2025
NEUTRAL CITATION
R/CR.MA/18957/2021 ORDER DATED: 23/09/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 18957 of 2021
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SUDHIR KUMAR SHARMA
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR PRAVIN GONDALIYA(1974) for the Applicant(s) No. 1
MR MANAN A SHAH(5412) for the Respondent(s) No. 2
MR. ROHAN RAVAL , APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 23/09/2025
ORAL ORDER
1. By way of the present application under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the Code"), the petitioner has prayed for quashing and setting aside Criminal Case No. 21329 of 2021 pending before the Court of the learned 4th Additional Chief Judicial Magistrate, Surat.
2. I have heard the learned advocate appearing for the petitioner, the learned advocate representing the private respondent, as well as the learned Additional Public Prosecutor appearing for the respondent-State.
3. In the peculiar factual matrix of the present case, wherein the State Bank of India has been arrayed as an accused for an alleged printing error in Demand Draft No. 320438, it has been canvassed on behalf of the petitioner that the issuance of process under Sections 131, 131A, 138, and 142 of the Negotiable Instruments Act, 1881 is wholly misconceived and amounts to a patent error on the Page 1 of 8 Uploaded by MANISH MISHRA(HC01776) on Fri Sep 26 2025 Downloaded on : Sat Sep 27 01:41:06 IST 2025 NEUTRAL CITATION R/CR.MA/18957/2021 ORDER DATED: 23/09/2025 undefined part of the learned trial Court.
4. Adverting to the factual backdrop, it has been submitted that the complainant, Shri Kishorbhai Buddhdev, a practicing advocate and legal advisor of Essar Steel India Ltd., Hazira (now taken over by ArcelorMittal Nippon Steel India Ltd.), was entitled to legal fees of ₹96,662/- (Rupees Ninety-Six Thousand Six Hundred and Sixty- Two only). Towards this liability, ArcelorMittal Nippon Steel India Ltd. approached the State Bank of India, Hazira Branch, and procured a demand draft of the said amount on 20.01.2021 vide Demand Draft No. 320438. However, upon presentation, the said demand draft was dishonoured with the endorsement "reason code 20 - mismatch in the demand draft number."
5. Learned counsel would submit that the dishonour was occasioned solely due to an inadvertent printing error in the demand draft number, which led to its rejection. It is further pointed out that the entire amount of the demand draft has, thereafter, been duly paid to the complainant, and, in fact, even an additional sum was remitted by the State Bank of India.
6. On the aforesaid premises, it is the emphatic submission of learned counsel for the petitioner that continuance of the criminal proceedings would amount to sheer abuse of the process of law, and accordingly, he has fervently prayed for quashing of the impugned complaint and the consequential proceedings.
7. Per contra, learned advocate appearing for respondent No.2 has placed reliance upon the judgment of the Himachal Pradesh High Court in Himani v. Rakesh Kumar (Cr. MMO No.817 of Page 2 of 8 Uploaded by MANISH MISHRA(HC01776) on Fri Sep 26 2025 Downloaded on : Sat Sep 27 01:41:06 IST 2025 NEUTRAL CITATION R/CR.MA/18957/2021 ORDER DATED: 23/09/2025 undefined 2025) as well as the judgment of the Hon'ble Supreme Court in Punjab and Sind Bank v. Vinkar Sahakari Bank Ltd., AIR 2001 SC 3641, and submitted that the contentions canvassed by the petitioner-State Bank of India involve disputed questions of fact which can appropriately be adjudicated only in the course of trial. It is, therefore, urged that this Court ought not to exercise its inherent jurisdiction and that the petition be dismissed in limine.
8. Learned Additional Public Prosecutor has adopted the submissions advanced by learned advocate for respondent No.2 and has also prayed for dismissal of the petition.
9. I have given my thoughtful consideration to the rival submissions advanced at the Bar and have meticulously perused the material placed on record. Upon such consideration, I find myself constrained to observe that the order passed by the learned 4th Additional Chief Judicial Magistrate, Surat in Criminal Case No.21329 of 2021 is indeed uncalled for. The factual substratum, as borne out from the record, reveals that a demand draft was purchased by ArcelorMittal Nippon Steel India Ltd., Hazira Branch, in favour of the complainant-Kishorbhai Buddhdev, which upon presentation came to be returned solely on account of a mismatch in the demand draft number arising out of a printing error.
10. The Court is at a complete loss to comprehend as to how such a factual scenario could, by any stretch of legal imagination, attract the penal provisions embodied under Sections 131, 131A, 138, and 142 of the Negotiable Instruments Act, 1881. The petitioner herein, i.e., the State Bank of India, being merely a banker that issued the demand draft purchased by its customer, cannot be fastened with Page 3 of 8 Uploaded by MANISH MISHRA(HC01776) on Fri Sep 26 2025 Downloaded on : Sat Sep 27 01:41:06 IST 2025 NEUTRAL CITATION R/CR.MA/18957/2021 ORDER DATED: 23/09/2025 undefined criminal liability for an inadvertent clerical or printing error in the instrument. Even assuming arguendo that such a factual assertion is taken at its highest, the same would still fall short of satisfying the essential ingredients required to constitute the offences alleged.
11. At this juncture, I may refer to Section 138 of the Negotiable Instruments Act, 1881 which states:-
"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 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 provisions of this Act, be punished with imprisonment for a term which may be extended 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 Page 4 of 8 Uploaded by MANISH MISHRA(HC01776) on Fri Sep 26 2025 Downloaded on : Sat Sep 27 01:41:06 IST 2025 NEUTRAL CITATION R/CR.MA/18957/2021 ORDER DATED: 23/09/2025 undefined days of the receipt of the said notice."
12. The expression "cheque" stands defined under Section 6 of the Negotiable Instruments Act, 1881, while "bill of exchange" finds its definition in Section 5 thereof. Likewise, the concepts of drawer and drawee are delineated under Section 7. Upon a conjoint reading of the aforesaid provisions vis-à-vis the case on hand, it becomes manifest that a demand draft does not fall within the statutory contours of either a cheque or a bill of exchange. The demand draft in question was issued by the State Bank of India, upon being purchased by ArcelorMittal Nippon Steel India Ltd. Ergo, the State Bank of India cannot, by any legal stretch, be brought within the definition of a "drawer". The factual conspectus of the case makes it manifestly clear that there exists no relationship of drawer and drawee between the complainant and the State Bank of India--an indispensable prerequisite for invocation of Section 138 of the Negotiable Instruments Act, 1881. In the absence of such relationship, or in the absence of any cheque drawn by the State Bank of India on an account maintained by it with another banker towards discharge of any legally enforceable debt or liability, the very question of invoking Section 138 of the Act does not arise.
13. Learned Advocate for the private respondent, at this juncture, has placed reliance upon the proposition enunciated in Punjab and Sind Bank (supra). There can indeed be no cavil to the legal proposition canvassed; however, there exists a stark distinction between a demand draft and a pay order.
14. A demand draft, popularly known as a "DD", is a form of pre- paid negotiable instrument wherein the drawee bank itself Page 5 of 8 Uploaded by MANISH MISHRA(HC01776) on Fri Sep 26 2025 Downloaded on : Sat Sep 27 01:41:06 IST 2025 NEUTRAL CITATION R/CR.MA/18957/2021 ORDER DATED: 23/09/2025 undefined undertakes the role of guarantor and is obliged to make payment in full upon presentation of the instrument. The quintessential feature of a demand draft is that the amount is paid in advance, thereby eliminating the possibility of dishonour on grounds of insufficiency of funds.
15. A pay order, on the other hand--commonly referred to as a banker's cheque--is also a pre-paid instrument, albeit of a different character. It is issued by the bank on behalf of its customer, directing payment of a specified sum to a named beneficiary within the same city. Unlike a demand draft, a pay order is non-negotiable, and clearance is restricted to the very branch of the bank which issues it. Thus, while both instruments share the feature of being pre-paid, the demand draft is payable at any branch of the issuing bank, whereas the pay order is confined to the local branch. To equate a demand draft with a pay order would, therefore, be a misstatement of law and fact.
16. Moreover, the alleged dishonour in the present case is attributed to a mere printing error in the serial number "20." Such a ground, by no legal yardstick, can attract the rigours of Section 138 of the Negotiable Instruments Act, which contemplates dishonour of a cheque solely on account of insufficiency of funds or the cheque exceeding the arrangement made with the bank. A printing error, ex facie, falls beyond the statutory contemplation of Section 138 and, ergo, cannot sustain the continuation of criminal proceedings under the said provision.
17. Since the essential legal requisites of Section 138 of the Negotiable Instruments Act, 1881, stand unfulfilled in the case on Page 6 of 8 Uploaded by MANISH MISHRA(HC01776) on Fri Sep 26 2025 Downloaded on : Sat Sep 27 01:41:06 IST 2025 NEUTRAL CITATION R/CR.MA/18957/2021 ORDER DATED: 23/09/2025 undefined hand, the issuance of process under the said provision against the banker, predicated upon the return of a demand draft on account of a mere printing error in the draft number, is ex facie unsustainable and bad in law.
18. The reliance placed by the learned Advocate for respondent No.2 on the judgment of the Hon'ble Supreme Court in Punjab and Sind Bank (supra) is wholly misplaced. Undoubtedly, in the said decision, the Apex Court held that a pay order is to be construed as a cheque within the meaning of Section 138 of the Negotiable Instruments Act, and further, that in view of Section 85-A of the Act, a draft drawn by one branch of a bank upon another branch of the same bank would partake the character of a bill of exchange.
19. However, the peculiar factual milieu obtaining in the present case stands on an entirely different footing. The controversy herein revolves around a demand draft returned solely due to a printing discrepancy in its serial number. Such a circumstance does not fall within the statutory sweep of Section 138. Ergo, the dictum of Punjab and Sind Bank (supra), though authoritative in its own factual setting, cannot be pressed into service to sustain the impugned proceedings in the present matter.
20. In such a factual backdrop, initiation of proceedings under Section 138 of the Negotiable Instruments Act, 1881, is wholly impermissible in law. Upon a meticulous perusal of the order passed by the learned Trial Court issuing process, it is apparent that the same has been rendered in a wholly mechanical manner, bereft of any judicious application of mind.
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21. In view of the aforesaid analysis, this Court is of the considered view that continuance of the impugned proceedings against the present petitioner would tantamount to an abuse of the process of law and result in manifest injustice.
22. Decisions relied by learned advocate for the private respondent has different factual and legal background. Hence, they are of no assistance.
23. Resultantly, the petition succeeds and is hereby allowed. The impugned private complaint being Criminal Case No. 21329 of 2021, together with all consequential proceedings arising therefrom qua the present petitioner, stands quashed and set aside. Rule is made absolute to the aforesaid extent. Direct service is permitted.
(J. C. DOSHI,J) MANISH MISHRA Page 8 of 8 Uploaded by MANISH MISHRA(HC01776) on Fri Sep 26 2025 Downloaded on : Sat Sep 27 01:41:06 IST 2025