Authority: High Court of Karnataka at Bengaluru

Order Date: 17 October 2026

Case Overview

  • Petitioners: M/S. Kumar Enterprises (partnership firm) represented by partner R. Shivakumar, and Shri Shivakumar R (managing partner).
  • Respondent: V.S.L. Mining Company Private Limited, now called A H L Mining Company Private Limited, represented by alleged director Shri Anil Lad.
  • Criminal Petition No. 5684 of 2019 filed under Section 482 of the Criminal Procedure Code seeking to quash Private Complaint (PCR No.3113/2019) and the order dated 26‑06‑2019 passed by the IV Additional and XXX ACMM, Bengaluru, as well as the proceeding in C.C. No.3471/2019.
  • The underlying complaint alleged that the petitioner issued a non‑CTS cheque dated 20‑02‑2019 for Rs 6 crore without sufficient balance, which was dishonoured. The cheque was purportedly issued to discharge an existing liability.
  • Documents produced by the complainant included the cheque, endorsement, legal notice, postal receipts, acknowledgement, and reply notice.
  • The trial court had taken cognizance, finding prima facie offence under Section 138 of the Negotiable Instruments Act.
  • Petitioners argued that the cheque, being a non‑CTS instrument, could not be presented to a different bank (it was presented to Kotak Bank) and that RBI circulars limited presentation to the issuing bank. They cited notices dated 27‑12‑2018 (Annexure‑G), 27‑12‑2018 (Annexure‑H) and 29‑01‑2019 (Annexure‑J), and claimed the cheque was discontinued as of 18‑12‑2018 and a stop‑payment had been issued.
  • Petitioners relied on several judgments: 2025 SCC ONLINE SC 641 (Rekha Sharad Ushir v. Saptashrungi Mahila Nagari Sahakari Patsansata Ltd), (2001) 3 SCC 609 (Shri Ishan Alloy Steels Ltd v. Jayaswala Neco Ltd), (2009) 6 SCC 72 (Raj Kumar Khurana v. State of NCT of Delhi), Crl.A.No.1132/2014 (02‑02‑2024), 2026 SCC ONLINE KAR 865 (ND Developers Pvt Ltd v. Ritesh Raushan), and Madras High Court order CRL.OP No.13954/2023 dated 28‑04‑2026 holding a non‑CTS cheque cannot attract Section 138.
  • Respondent’s counsel contended that payment of Rs 13.05 crore had been made and that there was no allegation of forced signature or police complaint.
  • The court noted that the issues raised—validity of presentation, notice of stop‑payment, and applicability of RBI circular—are matters for the trial court to consider on merits, not for interlocutory exercise of power under Section 482.
  • The court also referenced its own earlier order Crl.P.No.95/2019 (23‑09‑2023) and the pending Supreme Court stay (Special Leave Petition No.49247/2024, order dated 18‑08‑2025), emphasizing that Section 482 must be exercised sparingly.
  • The court reiterated that non‑CTS cheques, although discontinued for CTS clearing from 31‑12‑2018, remain valid negotiable instruments, and the RBI circular merely advises banks to withdraw them, not to render them invalid.
  • Consequently, the court found no ground to entertain the petition under Section 482 and held that the petitioners’ contentions could be raised before the trial court as a defence.

Final Outcome

  • The petition under Section 482 is dismissed. The original private complaint and the criminal proceedings under Section 138 NI Act remain in force.

Topics: Cheque Law, Section 138 NI Act