26 September 2025 Legal Updates

NO NEED FOR PRE-COGNIZANCE SUMMONS TO ACCUSED IN S.138 NI ACT CASE: SUPREME COURT ISSUES DIRECTIONS FOR SPEEDY TRIAL OF CHEQUE BOUNCE CASES

(a) Case Title:

• Sanjabij Tari v. Kishore S. Borcar & Anr.

(b) Court:

• Supreme Court of India

(c) Date of Decision:

• September 25, 2025

(d) Bench:

• Justice Manmohan and Justice N.V. Anjaria

Key Facts

• The appellant (complainant) had filed a case under Section 138 of the Negotiable Instruments Act, 1881 against the respondent for a dishonoured cheque of Rs. 6,00,000/-
• Both the Trial Court and Sessions Court convicted the accused. The High Court of Bombay at Goa acquitted the accused in an ex-parte judgment. The accused's defense was that he had given a blank signed cheque to help the complainant obtain a bank loan.

Major Legal Issues

• When do presumptions under Sections 118 and 139 arise?
• Can an accused challenge the complainant's financial capacity to advance loans?
• Who bears the burden when financial capacity is questioned?
• Can concurrent findings be overturned without perversity?

Supreme Court's Key Holdings

• Presumptions are Mandatory: Once execution of a cheque is admitted, presumptions under Sections 118 (consideration) and 139 (legally enforceable debt) automatically arise. Courts cannot treat NI Act proceedings as civil recovery cases. The initial burden to rebut these presumptions lies on the accused.
• Cash Transactions Above Rs. 20,000: Violation of Section 269SS of Income Tax Act (cash transactions above Rs. 20,000) does not make the debt "legally unenforceable". Such violations only attract penalties under Section 271D of IT Act.
• Financial Incapacity Defense: Accused must produce independent evidence (documents, witnesses) to prove complainant's financial incapacity. Mere allegations without evidence are insufficient. Non-reply to statutory notice creates adverse inference.
• Revisional Jurisdiction Limits: High Courts cannot upset concurrent factual findings without perversity. Revisional courts should not re-analyze evidence.

Important Guidelines for NI Act Cases

• Service of Summons (New Directions): Summons must be served through multiple modes including dasti service by complainant. Electronic service through email, WhatsApp, mobile numbers is also permitted. Complainant must file affidavit of service.
• Fast-Track Disposal Measures: Dedicated online payment facilities through QR codes/UPI. No pre-cognizance summons required under Section 223 BNSS. Mandatory synopsis format for all complaints. Standard questions for accused under Section 274 BNSS that the accused must answer.

Revised Compounding Guidelines

The Court modified the 2010 Damodar S. Prabhu guidelines:

• Before defense evidence: Compounding without any additional cost
• After defense evidence but before judgment: Additional 5% penalty
• Before Sessions/High Court: 7.5% penalty
• Before Supreme Court: 10% penalty

OFFENCES OF 'CHEATING' & 'CRIMINAL BREACH OF TRUST' CANNOT CO-EXIST ON SAME ALLEGATIONS: SUPREME COURT

(a) Case Title:

• Arshad Neyaz Khan v. State of Jharkhand & Another

(b) Court:

• Supreme Court of India

(c) Date of Decision:

• September 24, 2025

(d) Bench:

• Justice B.V. Nagarathna and Justice R. Mahadevan

Brief Facts

The appellant (Arshad Neyaz Khan) owned property and had entered into an agreement for sale in 2013 with the complainant (Md. Mustafa) for ₹43 lakhs. The complainant paid ₹20 lakhs as advance but the property was never transferred. After 8 years, in 2021, the complainant filed a criminal complaint alleging offences under Sections 406 (criminal breach of trust), 420 (cheating), and 120B (criminal conspiracy) of the IPC.

Key Legal Issues

• Whether the allegations in the complaint constitute offences under Sections 406, 420, and 120B IPC?
• Whether criminal proceedings can continue when ingredients of the alleged offences are not made out?
• Whether both cheating (Section 420) and criminal breach of trust (Section 406) can co-exist in the same set of facts?

Supreme Court's Decision

• On Section 420 IPC (Cheating): The Court held that for cheating, there must be fraudulent or dishonest intention at the time of making the promise. Mere failure to fulfil a promise later cannot establish culpable intention from the beginning. No evidence of intentional deception or misrepresentation was found
• On Section 406 IPC (Criminal Breach of Trust): The complainant failed to show how property was "entrusted" to the appellant. No evidence of dishonest misappropriation or conversion for personal use. The essential ingredients of the offence were not established.

Key Legal Principle

The Court clarified that cheating and criminal breach of trust cannot co-exist simultaneously in the same facts as they are antithetical:

• Cheating: Criminal intention required from inception when making false representation
• Criminal Breach of Trust: Lawful entrustment followed by dishonest misappropriation

Important Observations

• 8-year delay in filing complaint raised suspicions about bona fides
• Criminal law should not become a platform for vindictive proceedings or settling personal scores
• Alternative civil remedy was available but not pursued
• Courts must prevent misuse of criminal justice machinery for vested interests

Final Order

The Supreme Court quashed the complaint case and FIR, allowing the appeal and setting aside the High Court's order.

MAINTENANCE & WELFARE OF SENIOR CITIZENS ACT | AGE TO BE DETERMINED BASED ON DATE OF APPLICATION: SUPREME COURT

(a) Case Title:

• Kamalakant Mishra v. Additional Collector & Ors.

(b) Court:

• Supreme Court of India

(c) Date of Decision:

• September 12, 2025

(d) Bench:

• Justice Vikram Nath and Justice Sandeep Mehta

Facts of the Case

An 80-year-old senior citizen (appellant) and his 78-year-old wife owned two properties in Mumbai. They had three children, including their eldest son (respondent no. 3) who was financially stable and ran a business. The elderly couple had moved to U.P., leaving their children in the Mumbai properties. However, the eldest son took possession of both properties and refused to allow his elderly parents to reside there.

Legal Proceedings

• Maintenance Tribunal (June 5, 2024): The elderly parents filed an application under Sections 22, 23, and 24 of the Maintenance and Welfare of Senior Citizens Act, 2007. The Tribunal ordered the son to hand over possession of both properties and pay ₹3,000 per month as maintenance.
• Appellate Tribunal (September 11, 2024): The son's appeal was dismissed.
• Bombay High Court (April 25, 2025): The High Court allowed the son's writ petition, setting aside the eviction order on the ground that the Tribunal lacked jurisdiction to pass eviction orders against another senior citizen (the son had turned 60 by then).
• Supreme Court (September 12, 2025): The Supreme Court reversed the High Court's decision.

Main Issue

Whether a Maintenance Tribunal can order eviction of a child from a senior citizen's property when the child is also a senior citizen.

Supreme Court's Findings

• Relevant Date for Age Calculation: The Court held that the son's age should be calculated as of the date when the application was filed before the Tribunal (July 12, 2023), not at the time of the High Court judgment. At the time of filing, the son was 59 years old, not a senior citizen.
• Liberal Interpretation of Welfare Legislation: The Court emphasized that the Maintenance and Welfare of Senior Citizens Act, 2007 is welfare legislation that should be interpreted liberally to advance its beneficent purpose of protecting elderly persons.
• Tribunal's Powers: The Court reaffirmed that Maintenance Tribunals have the power to order eviction of children or relatives from a senior citizen's property when there is a breach of the obligation to maintain the senior citizen.

Legal Principles Established

• The relevant date for determining a person's status under the Act is the date of filing the application, not subsequent dates
• Welfare legislation should be interpreted liberally to protect the intended beneficiaries
• Financial stability of a child does not excuse the breach of statutory obligations toward elderly parents
• Tribunals under the Act have jurisdiction to order eviction to ensure compliance with maintenance obligations

Outcome

The Supreme Court allowed the appeal, set aside the High Court judgment, and dismissed the writ petition. The son was given two weeks to file an undertaking to vacate the premises by November 30, 2025, failing which the Tribunal's order could be executed immediately.