Sumit Bansal v. MGI Developers and Promoters 2026 INSC 40 - NI Act - Cheque Bounce -Multiple Cheques

Negotiable Instruments Act 1881- Section 138 - A separate cause of action arises upon each dishonour of a cheque provided the statutory sequence of presentation, dishonour, notice, and failure to pay is complete. The fact that multiple cheques arise from one transaction will not merge them into a single cause of action- [Context: In this case, the cheques forming the subject of the two complaints were distinct instruments drawn on different accounts, presented on different dates, dishonoured separately, and followed by independent statutory notices - SC held: The scheme of Section 138 of the NI Act does not bar prosecution in such circumstances.  Whether those cheques were issued as alternative or supplementary instruments, or represented fresh undertakings, is a disputed question of fact requiring evidence at the time of trial and cannot be resolved at the threshold.]

Code of Criminal Procedure 1973 - Section 482 ; Negotiable Instruments Act 1881- Section 139 -The statutory presumption attached to the issuance of a cheque, being one made in discharge of a legally enforceable debt or liability, is required to be accorded due weight. Therefore, in circumstances where the accused approaches the Court seeking quashing of proceedings even before the commencement of trial, the Court must exercise circumspection and refrain from prematurely stifling the prosecution at the threshold, particularly by overlooking the legal presumption that operates in favour of the complainant. (Para 43) Whether those cheques were issued as alternative or supplementary instruments, or represented fresh undertakings, is a disputed question of fact requiring evidence at the time of trial and cannot be resolved at the threshold. Questions such as whether the firm’s cheques were issued in substitution of the personal cheques, whether the parties treated them as alternative securities, and whether both were intended to be simultaneously enforceable, are all mixed questions of fact. The inherent jurisdiction of the High Court under Section 482 of the Cr.PC cannot be used to decide such disputed issues. (Para 34)

Negotiable Instruments Act 1881- Section 139- The burden of proving whether there exists any debt or liability is something which must be discharged in trial. A bare perusal of Section 139 of the NI Act would indicate that once a cheque is issued in discharge of liability and dishonoured, a presumption of liability in favour of the complainant arises. The accused person is then required to rebut the presumption by raising facts that either there was no debt or liability when the cheque was drawn, or the cheque was not drawn in discharge of liability, or notice was not served in time. (Para 42)

Code of Criminal Procedure 1973 - Section 482 - Even though the powers under Section 482 of the Cr.PC are very wide, its conferment requires the High Court to be more cautious and diligent. While examining any complaint or FIR, the High Court exercising its power under this provision cannot go embarking upon the genuineness of the allegations made. The Court must only consider whether there exists any sufficient material to proceed against the accused or not. (Para 28)

Summary: The Supreme Court addressed multiple Section 138 NI Act complaints arising from dishonoured cheques linked to a 2016 Agreement to Sell, where MGI Developers failed to execute sale deeds and issued both firm and personal cheques that were later returned unpaid. It held that each dishonour created a distinct cause of action, set aside the High Court’s quashing of Complaint Case No. 3298/2019, and allowed that case to proceed, while upholding the refusal to quash Complaint Case Nos. 2823/2019, 13508/2019, and 743/2020. The Court emphasized that disputed factual issues and the statutory presumption under Section 139 must be tested at trial, leaving all contentions open.