M/s. Naresh Potteries Vs. M/s. Aarti Industries and Anr. [Criminal Appeal No._______ of 2025 arising out of SLP (Crl.) No. 8659 of 2023]
- ByPravleen Kaur --
- 15 Jun 2025 --
- 0 Comments
The Supreme Court of India, in M/s Naresh Potteries vs. M/s Aarti Industries and Anr. [Criminal Appeal No. _______ of 2025 arising out of SLP (Crl.) No. 8659 of 2023], delivered its judgment on January 2, 2025, restoring the complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), and setting aside the High Court’s order quashing the summoning order and the entire proceedings.
Facts and Background
M/s Naresh Potteries, through its manager and power of attorney holder Neeraj Kumar, filed a complaint under Section 138 NI Act against M/s Aarti Industries, represented by its sole proprietor Sunita Devi, for dishonour of a cheque amounting to Rs. 1,79,46,314/-. The cheque was issued by Aarti Industries towards payment for polymer insulators scrap purchased from Naresh Potteries. The cheque was dishonoured due to “exceeds arrangement” and returned unpaid.
The trial court issued a summoning order against the accused. However, M/s Aarti Industries filed a Criminal Miscellaneous Application before the Allahabad High Court challenging the complaint’s maintainability on the ground that the complaint filed by Neeraj Kumar lacked specific averments regarding his personal knowledge of the transaction, which is a requirement under Section 200 CrPC and Section 138 NI Act. The High Court quashed the summoning order and the complaint proceedings, holding that the complaint was defective.
Legal Issues
The Supreme Court examined:
Whether a complaint under Section 138 NI Act filed by a power of attorney holder and manager of a firm is maintainable.
The necessity of specific averments regarding the complainant’s personal knowledge of the facts.
The scope of Section 142 of the NI Act requiring the complaint to be filed by the payee or holder of the cheque.
The correctness of the High Court’s quashing of the complaint on procedural grounds.
Court’s Analysis and Findings
The Supreme Court, through Justice B.R. Gavai and Justice K.V. Viswanathan, held that the complaint filed by Neeraj Kumar, who was duly authorized by the sole proprietor of Naresh Potteries through a Letter of Authority, was maintainable. The Letter of Authority clearly stated that Neeraj Kumar was well conversant with the firm’s affairs, including financial transactions and sales.
The Court observed that Section 142 NI Act requires the complaint to be filed by the payee or holder of the cheque, and here the complaint was filed in the name of the firm through its authorized manager, satisfying the statutory requirements. The verifying affidavit and affidavit of evidence affirmed Neeraj Kumar’s personal knowledge of the facts.
The Court distinguished the present case from precedents where complaints were quashed due to lack of personal knowledge or authorization. It held that the High Court erred in quashing the complaint solely on the ground of absence of specific pleading of personal knowledge when the authorization and affidavits were on record.
Conclusion
The Supreme Court allowed the appeal, set aside the High Court’s order, and restored the complaint and summoning order issued by the trial court. The judgment clarifies that:
A complaint under Section 138 NI Act filed by a power of attorney holder or authorized manager of the firm is maintainable if proper authorization and personal knowledge are shown.
The statutory requirements under Sections 138 and 142 NI Act and Section 200 CrPC must be read harmoniously.
Courts should not mechanically quash complaints on procedural technicalities when substantive authorization and knowledge exist.
This ruling strengthens the procedural safeguards for complainants in cheque bounce cases and ensures that genuine grievances are not dismissed on formalistic grounds.
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