Cheque Number Discrepancy Must Be Examined At Trial, Not Quashing Stage: Karnataka High Court

The Karnataka High Court on 28 September held that a discrepancy in the cheque number mentioned in a Section 138 Negotiable Instruments Act complaint and the complainant's subsequent police statement is a factual issue that cannot be decided at the stage of quashing the prosecution.

Justice Suraj Govindaraj dismissed Umesh K.G.'s petition seeking to quash the proceedings initiated by Bharathi H.N. over an alleged failure to honour a cheque for Rs. 40 lakh. The Bench observed:

“The discrepancy is a matter which would require appreciation of the material on record and, if necessary, examination of the parties and the relevant documents during the course of trial.”

Bharathi had invested Rs. 1.50 lakh per month for 24 months in Umesh's chit fund scheme, allegedly on the assurance that she would receive Rs. 40 lakh upon its completion. The scheme ended on 5 December 2018, but the amount was allegedly not paid.

Subsequently, Bharathi approached Umesh seeking payment and allegedly faced verbal abuse. She then lodged a police complaint, leading to registration of a crime. Following investigation and filing of a charge sheet, a criminal case was registered against Umesh.

According to her, when the earlier proceedings had reached the stage of evidence, Umesh offered to pay Rs. 40 lakh and issued Cheque No. 000065 dated 13 December 2022, drawn on HDFC Bank. She thereafter filed the Section 138 complaint alleging that the cheque was not honoured.

Umesh contended that the earlier criminal case had not reached the evidence stage when the cheque was issued. He pointed out that evidence of a complainant witness was recorded only on 24 July 2024.

He also pointed to a discrepancy in the cheque number. While Bharathi's private complaint referred to Cheque No. 000065, her statement to the police referred to Cheque No. 000068. He argued that the Section 138 proceedings could therefore not be sustained in respect of Cheque No. 000065.

The Court examined the order sheet and noted that the matter had already been posted for recording CW1's evidence on 10 November 2022, although the actual evidence was recorded only on 24 July 2024.

It held that the statement that the matter had “reached the stage of evidence” did not necessarily mean that evidence had already been recorded. The fact that CW1's evidence was recorded later did not make it impossible for Umesh to have approached Bharathi for settlement and issued the cheque on 13 December 2022. It observed:

“At this stage, this Court cannot conclusively determine whether the discrepancy is attributable to a typographical or inadvertent error, an error in recording the statement, or whether it relates to the actual identity of the cheque said to have been issued. These are matters of fact which cannot appropriately be adjudicated in proceedings seeking quashing of the complaint.”

Further, the Bench held that the discrepancy, by itself, was insufficient to quash the complaint, particularly as Bharathi had specifically alleged the issuance of Cheque No. 000065 and pleaded the other essential facts constituting the offence.

It observed that “the evidentiary effect of the discrepancy, if any, is a matter to be considered by the trial Court upon appreciation of the evidence.” It also reiterated that, at the quashing stage, it cannot undertake an in-depth examination of disputed factual issues or assess the credibility of competing versions.

Accordingly, the High Court found no ground to interfere with the order issuing process, and dismissed the petition.

For Petitioner: Advocate K. Chandrakanth Ariga

For Respondent: Advocate K Vishwanatha