Distinction between 'delivery' and 'presentation' illustrated - Supreme Court distinguished delivery (Section 46 NI Act) from presentment (Section 64 NI Act) - Held that delivery involves the drawer handing the cheque to the payee, and, in case of account-payee cheques, the payee delivering it to his own bank - This stage is covered by Section 142(2)(a) - Presentment is the act...
Distinction between 'delivery' and 'presentation' illustrated - Supreme Court distinguished delivery (Section 46 NI Act) from presentment (Section 64 NI Act) - Held that delivery involves the drawer handing the cheque to the payee, and, in case of account-payee cheques, the payee delivering it to his own bank - This stage is covered by Section 142(2)(a) - Presentment is the act of presenting the cheque to the drawee bank for payment; this stage is relevant for Section 142(2)(b). [Relied on Bijoy Kumar Moni v. Paresh Manna 2024 SCC OnLine SC 3833; Paras 42-50] Jai Balaji Industries Ltd. v. Heg Ltd., 2025 LiveLaw (SC) 1149 : 2025 INSC 1362
Promissory Note - Suit of Recovery of amount - Onus of Proof - Supreme Court set aside a High Court order that reduced the amount recoverable under a promissory note from Rs. 35,29,690 to Rs. 22,00,000 and restored the Trial Court's decree - High Court reduced the amount citing a lack of documentary proof for the cash portion of the loan – Held, once a promissory note is accepted, the onus is on the respondent to disprove the debt, not on the appellant to provide documentary evidence for cash payments - It is not uncommon for money transactions to include a cash component and that the absence of a receipt or bank transaction is not sufficient to negate the payment, especially when a promissory note exists - Initial presumption of legally enforceable debt comes from NI Act - High Court's view was erroneous and unsustainable - Appeal allowed. Georgekutty Chacko v. M.N. Saji, 2025 LiveLaw (SC) 878
Section 138, 142(2) & 142A — Territorial Jurisdiction — Transfer of Pending Cases — Effect of Amendment Act, 2015 - Jurisdiction Post-2015 Amendment - Held that Supreme Court reiterates that the jurisdiction to try a complaint under Section 138 of the NI Act is vested in the court within whose local jurisdiction the bank where the payee or holder in due course maintains an account (and where the cheque is delivered for collection) is situated. [Para 76] Jai Balaji Industries Ltd. v. Heg Ltd., 2025 LiveLaw (SC) 1149 : 2025 INSC 1362
Section 138, proviso to section 142 - Supreme Court quashed complaint, citing that there cannot be an 'automatic or presumed condonation' of a complaint filed beyond the statutory time limit - When a complaint is filed beyond the mandatory time limit, a proper application or affidavit must be filed by complainant disclosing the reasons for delay - Held that the High Court's opinion that a separate application for condonation of delay is not a 'statutory mandate' under Section 142(b) of the Act was also erroneous - Court is obligated to take note of a complaint being filed beyond the limitation period, consider the reasons disclosed for the delay, and come to a 'judicious conclusion' that condonation is justified before taking cognizance and issuing summons. [Paras 6-9] H.S. Oberoi Buildtech Pvt. Ltd. v. MSN Woodtech, 2025 LiveLaw (SC) 889
Section 138 and 142 (2) - Petitioner sought the transfer of a criminal complaint filed under Section 138 of the N.I. Act by Kotak Mahindra Bank Ltd. from the Judicial Magistrate First Class, Chandigarh, to the Metropolitan Magistrate, Coimbatore, Tamil Nadu. The petitioner argued that the entire transaction, including the loan processing, EMI deductions, and SARFAESI proceedings, occurred in Coimbatore, and no cause of action arose in Chandigarh. The petitioner also cited inconvenience, language barriers, and harassment as grounds for transfer. The Supreme Court reiterated that under Section 142(2) of the N.I. Act, as amended in 2015, the jurisdiction for complaints under Section 138 lies with the court where the cheque is delivered for collection through the payee's bank account. The court in Chandigarh had jurisdiction as the cheque was presented for collection there, even if the transaction occurred in Coimbatore. The petitioner's grievances did not meet the threshold for transfer, as the Chandigarh court had valid jurisdiction under Section 142(2) of the N.I. Act. The Supreme Court dismissed the transfer petition, holding that no case was made out for transferring the proceedings from Chandigarh to Coimbatore. It is always open for the petitioner accused to pray for 2 exemption from personal appearance or request the Court that he may be permitted to join the proceedings online. (Para 65) Shri Sendhuragro and Oil Industries v. Kotak Mahindra Bank, 2025 LiveLaw (SC) 292 : 2025 INSC 328
Section 138 and 142 (2) - Petitioner sought the transfer of a criminal complaint filed under Section 138 of the N.I. Act by Kotak Mahindra Bank Ltd. from the Judicial Magistrate First Class, Chandigarh, to the Metropolitan Magistrate, Coimbatore, Tamil Nadu. The petitioner argued that the entire transaction, including the loan processing, EMI deductions, and SARFAESI proceedings, occurred in Coimbatore, and no cause of action arose in Chandigarh. The petitioner also cited inconvenience, language barriers, and harassment as grounds for transfer. The Supreme Court reiterated that under Section 142(2) of the N.I. Act, as amended in 2015, the jurisdiction for complaints under Section 138 lies with the court where the cheque is delivered for collection through the payee's bank account. The court in Chandigarh had jurisdiction as the cheque was presented for collection there, even if the transaction occurred in Coimbatore. The petitioner's grievances did not meet the threshold for transfer, as the Chandigarh court had valid jurisdiction under Section 142(2) of the N.I. Act. The Supreme Court dismissed the transfer petition, holding that no case was made out for transferring the proceedings from Chandigarh to Coimbatore. It is always open for the petitioner accused to pray for exemption from personal appearance or request the Court that he may be permitted to join the proceedings online. (Para 65) Shri Sendhuragro and Oil Industries v. Kotak Mahindra Bank, 2025 LiveLaw (SC) 292 : 2025 INSC 328
Section 138 - Application of Res Judicata in Criminal Proceedings - The principle of res judicata applies to criminal proceedings, barring re-litigation of issues conclusively determined in earlier proceedings. Factual findings by a criminal court are binding on both parties in subsequent proceedings involving the same issue. However, res judicata does not apply to proceedings dismissed as withdrawn or not decided on merits. The Court quashed subsequent cheating case under Section 420 IPC, as prior proceedings under the NI Act established that demand drafts were issued for distinct liabilities, unrelated to the dishonoured cheques, rendering the new prosecution an abuse of process. [Paras 19 & 20] S.C. Garg v. State of Uttar Pradesh, 2025 LiveLaw (SC) 436 : 2025 INSC 493
Section 138 - Code of Criminal Procedure, 1973 - Sections 2(wa), 372, 378 (4), 378 (6) - Dishonour of Cheque - Special Leave to Appeal - Appeal against order of acquittal – Victim's right to appeal - Whether an appeal would be maintainable under the proviso to section 372 of CrPC against an order of acquittal passed in a case instituted upon a private complaint under section 138 by treating complainant in such a proceeding as a victim under section 2(wa) CrPC – Held, a complainant in a cheque dishonour case for the offence under section 138 of Negotiable Instrument Act is a “victim” within the meaning of section 2(wa) of CrPC. The complainant can proceed as per the proviso to section 372 CrPC. Complainant need not invoke section 378(4) CrPC and could file appeal as 'victim' as per section 372 proviso. (Para 7.11) Celestium Financial v. A Gnanasekaran, 2025 LiveLaw (SC) 666 : 2025 INSC 804
Section 138 - Complainant has no onus to prove financial capacity at the threshold. Once the drawer admits to signing the cheque, the presumption under Section 139 of the NI Act cannot be rebutted merely by questioning the complainant's debt-giving capacity, especially when such a defence was not raised in the reply notice by the accused. The High Court wrongly imposed an initial burden on the complainant to prove financial capacity and loan details. (Para 21 & 22) Ashok Singh v. State of Uttar Pradesh, 2025 LiveLaw (SC) 383 : 2025 INSC 427 : AIR 2025 SC 1931
Section 138 - dishonour of cheque - 141- offence by companies - Code of Criminal Procedure, 1973 - Quashing of an FIR – Issue - Whether compliant under section 138 NI Act maintainable if only partners of firm are arrayed as accused and partnership firm itself is not arrayed - High Court quashed complaint citing non arraignment of partnership firm as an accused – Held, Section 141 is a deeming provision and a firm without reference to its partners has no juristic identity by law - Partnership firm is not distinct from partners who comprise partnership - if the complainant had proceeded only against partnership firm and not the partners it possibly could have been held that the partnership firm in absence of its partner is not a complete juristic entity and cannot be proceeded against. [Para 6.9] Dhanasingh Prabhu v. Chandrasekar, 2025 LiveLaw (SC) 708 : 2025 INSC 831
Section 138 – Dishonour of cheque – Liability of Director – Resignation before issuance of cheque – Quashing of complaint – Held, where the appellant had resigned from the post of Director prior to the issuance of post-dated cheques by the company, and the cheques were signed by another competent person, the appellant could not be held liable under Section 138 of the Negotiable Instruments Act. It was undisputed that the appellant resigned on 21.06.2019 and the resignation was acknowledged by the Registrar of Companies on 26.06.2019, whereas the cheques were issued on 12.07.2019. Therefore, the appellant was not in charge of or responsible for the affairs of the company at the relevant time. The judgment of Malva Cotton and Spinning Mills Ltd. v. Virsa Singh Sidhu (2008) 17 SCC 147 was distinguished on facts, as in that case, the resignation was submitted after the issuance of the cheques. The appeals were allowed, and the impugned order of the High Court dismissing the petitions under Section 482 Cr.P.C. was set aside. The complaints under Section 138 NI Act against the appellant were quashed. Appeals Allowed. Adhiraj Singh v. Yograj Singh, 2025 LiveLaw (SC) 75
Section 138 – Dishonour of Cheque – Settlement at Revisional Stage – Acquittal subject to condition of depositing cost with Legal Services Authority – Held, the direction imposing costs on the appellant, to be paid to the Legal Services Authority, cannot be sustained in the eye of law, particularly when the complainant does not want any further amount, and the appellant has expressed inability to comply with the same, which is not in dispute - Held that the case Damodar S. Prabhu v. Sayed Babalal H. [(2010) 5 SCC 663 which provide for imposition of costs in NI Act depending on at which stage the case was compounded, could not be treated as binding. [Para 5-7] Rajeev Khandelwal v. State of Maharashtra, 2025 LiveLaw (SC) 1103
Section 138 - Dishonour of Cheque - Special Leave to Appeal - Appeal against order of acquittal – Victim's right to appeal - Whether an appeal would be maintainable under the proviso to section 372 of CrPC against an order of acquittal passed in a case instituted upon a private complaint under section 138 by treating complainant in such a proceeding as a victim under section 2(wa) CrPC – Held, a complainant in a cheque dishonour case for the offence under section 138 of Negotiable Instrument Act is a “victim” within the meaning of section 2(wa) of CrPC. The complainant can proceed as per the proviso to section 372 CrPC. Complainant need not invoke section 378(4) CrPC and could file appeal as 'victim' as per section 372 proviso. (Para 7.11) Celestium Financial v. A Gnanasekaran, 2025 LiveLaw (SC) 666 : 2025 INSC 804
Section 138 - Income Tax Act, 1961 (IT Act) - Supreme Court set aside the order of High Court wherein it was held that a debt created by a cash transaction above Rs. 20,000 in violation of the IT Act, cannot be considered as a 'legally enforceable debt' under Section 138 NI Act - Held that an accused need not be heard at the pre-cognizance stage of complaints filed for dishonour of cheque as per section 138 of NI Act - Noted that the massive backlog of cheque bouncing cases and the fact that service of summons on the accused in a complaint filed under section 138 NI Act continues to be one of the main reasons for the delay in disposal of the complaints as well as the fact that punishment under NI Act is not a means of seeking retribution but is more a means to ensure payment of money and to promote credibility of cheques as a trustworthy substitute for cash payment - Held that approach of some courts below to not give effect to the presumptions under section 118 and 139 of NI Act is contrary to mandate of Parliament - Appeal allowed. [Relied on Indian Bank Association vs. Union of India, (2014) 5 SCC 59; Damodar S. Prabhu vs. Sayed Babalal H., (2010) 5 SCC 663; Paras 15-18, 22-24] Sanjabij Tari v. Kishore S. Borcar, 2025 LiveLaw (SC) 952 : 2025 INSC 1158
Section 138 – Insolvency and Bankruptcy Code, 2016; Section 14 & 17 - Where the cause of action for an offence under Section 138 NI Act arises after the imposition of a moratorium under Section 14 IBC, proceedings under Section 138 of the NI Act cannot be initiated against the Director of the Corporate Debtor. Upon the imposition of a moratorium and the appointment of an Interim Resolution Professional (IRP) under Section 17 of the IBC, the management of the Corporate Debtor vests in the IRP, and the powers of the Board of Directors are suspended. Consequently, the Director lacks the capacity to fulfil the demand raised by a notice under Section 138 NI Act. The judgment in P. Mohan Raj v. M/s Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258 is distinguishable, as in that case, the cause of action under Section 138 NI Act arose before the imposition of the moratorium. Proceedings under section 138 of the NI Act are quashed, when the cause of action arises after the imposition of moratorium, and the director of the company has been suspended from his duties, and the IRP has taken over the management of the company. (Para 11 - 13) Vishnoo Mittal v. Shakti Trading Company, 2025 LiveLaw (SC) 314 : 2025 INSC 346 : AIR 2025 SC 1741 : (2025) 9 SCC 417
Section 138 Proviso (b) - Principle of strict construction of penal statutes - Whether notice is valid where demanded amount differs from the cheque amount – Held, compliant under Section 138 is not maintainable if demand notice didn't mention exact cheque amount and typo error cannot be a defence - If the amount mentioned in the demand notice varies from the cheque amount, then the complaint is not maintainable - The notice in terms of proviso being a provision in penal statute and a condition for the offence, it has to be precise while mentioning of the amount of the cheque which is dishonoured - Quashed complaint filed under Section 138 of NI Act on the above ground as the amount mentioned in the notice was not same as per the cheque - Even if the cheque number mentioned in the notice was correct but amount was different, it created an ambiguity and differentiation about the 'said amount' - Notice stood bad in law - Section 138 being penal, must be strictly construed, no leniency allowed for errors in amount mentioned in legal notice as the offence is technical and procedural compliance is mandatory. [Paras 5-8] Kaveri Plastics v. Mahdoom Bawa Bahruden Noorul, 2025 LiveLaw (SC) 927 : 2025 INSC 1133
Section 138 r/w. 141 – Vicarious Liability of NonExecutive Directors – Quashing of Criminal Proceedings – Held, Non-executive and independent directors cannot be held vicariously liable under Section 141 of the NI Act for dishonor of cheques unless specific allegations demonstrate their direct involvement in the company's affairs at the relevant time. Mere designation as a director or attendance at board meetings does not create automatic liability. The complaint must contain specific averments establishing a direct nexus between the directors and the financial transactions in question. In the absence of such specific allegations and where records confirm a non-executive role without financial decision-making authority, criminal proceedings under Section 138 read with Section 141 of the NI Act against non-signatory, non-executive directors are liable to be quashed. (Para 16 & 18) K.S. Mehta v. Morgan Securities and Credits Pvt. Ltd., 2025 LiveLaw (SC) 286 : 2025 INSC 315 : AIR 2025 SC 1607 : (2025) 7 SCC 615
Section 138 - Reply to the Statutory Notice - This was a case where very material documents in the form of two letters addressed by the appellant were suppressed in the complaint and the statement on oath under Section 200. In the statement on oath, the respondent-complainant vaguely referred to a 'false notice reply', but a copy of the reply was not produced by the respondent along with the complaint. Setting criminal law in motion by suppressing material facts and documents is nothing but an abuse of the process of law. Hence, the High Court ought to have interfered and quashed the complaint. Complaint and cognizance order set aside, leaving civil remedies open. (Para 20 - 23) Rekha Sharad Ushir v. Saptashrungi Mahila Nagari Sahkari Patsansta Ltd., 2025 LiveLaw (SC) 355 : 2025 INSC 399 : AIR 2025 SC 1857
Section 138 - Reply to the Statutory Notice - This was a case where very material documents in the form of two letters addressed by the appellant were suppressed in the complaint and the statement on oath under Section 200. In the statement on oath, the respondent-complainant vaguely referred to a 'false notice reply', but a copy of the reply was not produced by the respondent along with the complaint. Setting criminal law in motion by suppressing material facts and documents is nothing but an abuse of the process of law. Hence, the High Court ought to have interfered and quashed the complaint. Complaint and cognizance order set aside, leaving civil remedies open. (Para 20 - 23) Rekha Sharad Ushir v. Saptashrungi Mahila Nagari Sahkari Patsansta Ltd., 2025 LiveLaw (SC) 355 : AIR 2025 SC 1857 : 2025 INSC 399
Section 138 - Representation of the People Act, 1951 - Section 100(1)(d)(i) & (iv) - Constitution of India - Article 19(1)(a) & Article 136 – Held, candidate convicted under Section 138 of the N.I. Act, 1881, and sentenced to one year's rigorous imprisonment - Failed to disclose this conviction in the affidavit filed along with the nomination form as mandated by Rule 24-A(1) of the Rules of 1994 - Rule 24-A(1) mandates every candidate to furnish information regarding "any disposed criminal case in which he has been convicted" - The format of the affidavit requires disclosure of conviction and sentence of imprisonment for a duration of one year or more - Failure to furnish such information results in non-compliance with the Rules - The requirement to furnish information, including criminal antecedents, is in furtherance of the electorate's right to information under Article 19(1)(a) of the Constitution of India - Non-disclosure or suppression of material information deprives voters of making an informed and advised choice - By failing to disclose the conviction, the candidate furnished false and incorrect information, making the acceptance of the nomination form improper - This constitutes a breach of Rule 24-A of the Rules of 1994 and attracts the ground under Section 22(1)(d)(iii) of the Act of 1961 for declaring the election void - When there is non-disclosure of criminal antecedents, the question of whether the election was materially affected does not arise, as such non-disclosure amounts to undue influence - The wrongful acceptance of the nomination form of the returned candidate renders the election void and, by itself, indicates the result was materially affected - In the absence of a provision in the Rules to condone such non-compliance, adopting such a course would do violence to the Act of 1961 and the Rules of 1994 - The eligibility of a candidate is determined as on the date of submission of the nomination form; thus, the subsequent acquittal in appeal after the election was of no consequence - Petition dismissed. [Relied on Krishnamoorthy Vs. Shivakumar and others 2015 INSC 960; Kisan Shankar Kathore vs. Arun Dattatray Sawant & Others 2014 INSC 384; Paras 22-25] Poonam v. Dule Singh, 2025 LiveLaw (SC) 1068 : 2025 INSC 1284
Section 138 – Return of a dishonoured cheque simpliciter does not create an offence under Section 138 NI Act. The cause of action arises only when a demand notice is served and payment is not made within the stipulated fifteen-day period. (Para 9) Vishnoo Mittal v. Shakti Trading Company, 2025 LiveLaw (SC) 314 : 2025 INSC 346 : AIR 2025 SC 1741 : (2025) 9 SCC 417
Section 138 - Territorial Jurisdiction - Transfer Petition – Maintainability - The issue of lack of territorial jurisdiction in complaints filed under Section 138 of the N.I. Act is a matter to be raised before the Trial Court. The Magistrate has the power to return the complaint for presentation to the proper court if satisfied that the court lacks territorial jurisdiction. Therefore, the issue of territorial jurisdiction cannot be adjudicated in a transfer petition. (Para 2 & 3) Kamal Enterprises v. A. K. Constructions Co, 2025 LiveLaw (SC) 289
Section 138 - Transfer of Trial – Principles - Whether the Supreme Court can transfer a case under Section 406 Cr.P.C. if the court where the complaint is filed lacks territorial jurisdiction? Held, lack of territorial jurisdiction alone not sufficient ground. Broad factors to be considered include: (i) Prosecution acting in collusion with the accused. (ii) Likelihood of accused influencing witnesses or causing harm to complainant. (iii) Comparative inconvenience and hardship to parties and witnesses. (iv) Communally surcharged atmosphere affecting fair trial. (v) Hostile persons interfering with the course of justice. These factors are illustrative, not exhaustive. Ensuring a fair trial is the paramount consideration. (Para 49) Shri Sendhuragro and Oil Industries v. Kotak Mahindra Bank, 2025 LiveLaw (SC) 292 : 2025 INSC 328
Section 138 - Whether a complaint under Section 138 of the N.I. Act can be transferred under Section 406 Cr.P.C. on grounds of lack of territorial jurisdiction? Held, a complaint under Section 138 of the N.I. Act cannot be transferred under Section 406 Cr.P.C. for lack of territorial jurisdiction. Power to transfer cases under Section 406 Cr.P.C. is discretionary and must be exercised sparingly. Mere inconvenience or hardship to the accused, such as travel or language barriers, does not justify transfer unless there is a reasonable apprehension of injustice. (Para 49 & 65) Shri Sendhuragro and Oil Industries v. Kotak Mahindra Bank, 2025 LiveLaw (SC) 292 : 2025 INSC 328
Section 138 - Whether a complaint under Section 138 of the N.I. Act can be transferred under Section 406 Cr.P.C. on grounds of lack of territorial jurisdiction? Held, a complaint under Section 138 of the N.I. Act cannot be transferred under Section 406 Cr.P.C. for lack of territorial jurisdiction. Power to transfer cases under Section 406 Cr.P.C. is discretionary and must be exercised sparingly. Mere inconvenience or hardship to the accused, such as travel or language barriers, does not justify transfer unless there is a reasonable apprehension of injustice. (Para 49 & 65) Shri Sendhuragro and Oil Industries v. Kotak Mahindra Bank, 2025 LiveLaw (SC) 292 : 2025 INSC 328
Section 138 - Whether the phrase “expedient for the ends of justice” in Section 406 Cr.P.C. encompasses cases where the court lacks territorial jurisdiction under Section 138 of the N.I. Act? Held, the phrase “expedient for the ends of justice” in Section 406 Cr.P.C. does not include cases where the court lacks territorial jurisdiction. (Para 65) Shri Sendhuragro and Oil Industries v. Kotak Mahindra Bank, 2025 LiveLaw (SC) 292 : 2025 INSC 328
Section 138 - Whether the phrase “expedient for the ends of justice” in Section 406 Cr.P.C. encompasses cases where the court lacks territorial jurisdiction under Section 138 of the N.I. Act? Held, the phrase “expedient for the ends of justice” in Section 406 Cr.P.C. does not include cases where the court lacks territorial jurisdiction. (Para 65) Shri Sendhuragro and Oil Industries v. Kotak Mahindra Bank, 2025 LiveLaw (SC) 292 : 2025 INSC 328
Section 141 - A signatory of a cheque, if in charge of a firm's affairs, can be prosecuted without impleading the firm. Since the accused was the signatory and a partner in charge, the complaint was maintainable without impleading the firm. (Para 19 & 20) Ashok Singh v. State of Uttar Pradesh, 2025 LiveLaw (SC) 383 : 2025 INSC 427 : AIR 2025 SC 1931
Section 141 – Dishonour of Cheque – Liability of Company Directors – Held, a complaint under Section 141(1) does not require specifying the precise administrative role of directors to establish liability for cheque dishonour. General averments that a director was "in charge of and responsible for" the company's business are sufficient at the complaint stage, without needing verbatim statutory language. The complainant must only plead the accused's role generally, as specific administrative details are within the special knowledge of the company or director. The burden lies on the director to prove they were not in charge during the trial. Magistrate's order issuing process upheld; High Court's order quashing proceedings set aside. [Paras 34–38] HDFC Bank Ltd. v. State of Maharashtra, 2025 LiveLaw (SC) 624 : 2025 INSC 759 : AIR 2025 SC 2707 : (2025) 9 SCC 653
Section 141 - Vicarious Liability of Directors - Twin Requirements for Prosecution – Held, for an offence under Section 141 of the N.I. Act, 1881, involving dishonour of a cheque by a company, the complaint must allege that the accused person was both in charge of and responsible to the company for the conduct of its business. These are distinct requirements, and both must be explicitly stated in the complaint. Only the signatory of the cheque can be held liable, and in the absence of allegations that the appellant was in charge of the company's business, prosecution under Section 141(1) cannot be sustained. The Court set aside the High Court's order dismissing the appellant's plea to quash the complaint and allowed the appeal, without commenting on the merits of the case against other accused. (Para 5) Hitesh Verma v. Health Care at Home India Pvt. Ltd;, 2025 LiveLaw (SC) 176 : (2025) 7 SCC 623
Section 142 - Whether the High Court was justified in quashing the complaint under Section 138 NI Act on the ground of lack of specific averments regarding the personal knowledge of the power of attorney holder in the complaint and supporting documents. The High Court relied on the decision in A.C. Narayanan v. State of Maharashtra, (2014) 11 SCC 790 to hold that the power of attorney holder lacked personal knowledge of the facts giving rise to the proceedings, as there were no specific pleadings to that effect in the Letter of Authority or affidavits. However, a conjoint reading of the Letter of Authority, the verifying affidavit, and the affidavit of evidence under Section 200 of the Cr.P.C. demonstrated that the manager and power of attorney holder of the appellant-firm, had personal knowledge of the transactions and was duly authorized to file the complaint. The complaint satisfied the requirements of Section 142 of the NI Act as it was filed by the payee through its authorized representative. The High Court's reliance on inherent powers under Section 482 of the Cr.P.C. to quash the complaint was unwarranted and contrary to the settled principle that such powers should be exercised sparingly and not interfere with a fair trial. The High Court erred in quashing the complaint based on incorrect reasoning and lack of due consideration. The appeal was allowed, and the complaint was restored to the file of the Additional Chief Judicial Magistrate for adjudication on merits. Appeal allowed. Judgment and order of the High Court quashed and set aside. Complaint restored for fresh adjudication. Naresh Potteries v. Aarti Industries, 2025 LiveLaw (SC) 1 : 2025 INSC 1 : AIR 2025 SC 886
Sections 138, 141 - Criminal Liability - Maintainability of Complaint without arraying Trust as Accused - Indian Trusts Act, 1882 - Sections 3, 13 - Issue - Whether a criminal complaint under Section 138 of the NI Act is maintainable against the Chairman/a Trustee of a Trust, who signed the dishonoured cheque on behalf of the Trust, without arraying the Trust itself as an accused – Held, cheque dishonour complaint maintainable against trustee without arraying trust as accused- Trust is not a Legal Entity/Juristic Person - A 'Trust' under the Indian Trusts Act, 1882, is defined as an obligation annexed to the ownership of property, and not a legal entity with a separate existence capable of suing or being sued - It is the Trustee(s) who are legally bound to maintain and defend all suits for the preservation of the trust property- Therefore, a Trust is not like a corporation or 'body corporate' - Liability of Cheque Signatory - Held that the signatory of a cheque that is dishonoured is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141 (by analogy to a company officer) - For such a person, there is no need to make a specific averment that he was in charge of and responsible to the entity for the conduct of its business - Appeal allowed. [Relied on SMS Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89; K K Ahuja v. V K Vora, (2009) 10 SCC 48; Paras 18, 22, 23, 25- 27] Sankar Padam Thapa v. Vijaykumar Dineshchandra Agarwal, 2025 LiveLaw (SC) 991 : 2025 INSC 1210
Sections 138, 142(2)(a) - Criminal Procedure Code, 1973 - Section 200, 482 - Territorial Jurisdiction - Dishonour of Cheque - Place of filing complaint – Held, Section 142(2)(a) which was amended in 2015, specifies that an offence under Section 138 should be inquired into and tried by a Court within whose local jurisdiction 'if the cheque is delivered for collection through an account, the branch of the bank where payee maintains the account is situated”- Jurisdiction vests in Court where the payee maintains their account and the cheques delivered for collection - Set aside High Court's Order - Appeals allowed. [Paras 7-9] Prakash Chimanlal Sheth v. Jagruti Keyur Rajpopat, 2025 LiveLaw (SC) 769 : 2025 INSC 897
The Supreme Court issued guidelines for speedy trial of cheque bounce cases - i. Summons shall not only be served by the usual prescribed modes but also dasti; ii. Electronic service of summons via email, mobile, WhatsApp is mandated under the Bhartiya Nagarik Suraksha Sanhita, 2023 (BNSS); iii. District Courts must operationalize secure online payment options (QR codes/UPI links) so accused can pay cheque amount immediately at the early stage; iv. Courts shall provide directions for release of the money received and may pass compounding orders accordingly; v. Complainant must file an affidavit of service; false affidavits invite action; vi. Courts should conduct summary trials unless cogent reasons for summary trial conversion to summons trial are recorded; vii. Courts may ask accused pertinent questions on cheque ownership, signature, liability, and defence at initial post-cognizance stage - Responses should be recorded on the order sheet visibly; viii. Powers to order interim deposits early must be exercised - Post service of summons, cases to be listed before physical courts (pre-service may be digital); ix. Dedicated dashboards for pendency, disposal, settlements, adjournments to be maintained - Monthly reviews by District and Sessions Judges - Quarterly consolidated reports to High Courts; x. Various graded cost regimes depending on stage of compounding application and timely payment of cheque amount - Courts may suggest Probation of Offenders Act relief or acceptance of guilty plea to facilitate early closure. [Relied on P. Mohanraj vs. Shah Brothers Ispat Pvt Ltd., (2021) 6 SCC 258; Para 33-39] Sanjabij Tari v. Kishore S. Borcar, 2025 LiveLaw (SC) 952 : 2025 INSC 1158
Transfer of Cases where Evidence Commenced (Section 145(2) Stage) - Held that a complaint which was originally filed in a court (MM, Kolkata) that later lacked jurisdiction due to the 2015 Amendment, but had already reached the stage of recording of evidence under Section 145(2) of the Act before it was returned, should be transferred back to that original court - Allowing the parties to contest the complaint afresh in the court of proper jurisdiction (JMFC, Bhopal) would amount to a procedural impropriety detrimental to the accused - The Supreme Court applies the exception carved out in Dashrath Rupsingh Rathod Case; principle laid down in paragraph 22 of this judgment, which allowed cases that had reached the stage of Section 145(2) or beyond to continue in the court where they were pending, is applied to meet the ends of justice - Held that cases where the trial had reached the stage of summoning, appearance of the accused, and the recording of evidence had commenced as per Section 145(2) Negotiable Instruments Act, 1881, should continue in the same court where the trial was ongoing - Petition is allowed. [Relied on Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 12; Paras 76-82] Jai Balaji Industries Ltd. v. Heg Ltd., 2025 LiveLaw (SC) 1149 : 2025 INSC 1362
Transfer of Section 138 - Negotiable Instruments Act, 1881 (NI Act) Cases – "David versus Goliath" Battle – Comparative Inconvenience vs. Statutory Jurisdiction — The Supreme Court observed that the power to transfer criminal cases under Section 406 CrPC (now Section 446 BNSS) remains intact notwithstanding the non-obstante clause in Section 142 of the N.I. Act - While Section 142(2) facilitates the payee's convenience by locating jurisdiction at their bank, this statutory inclination does not override the Court's duty to ensure a "level-playing field" and prevent an "unfair battle" between unequal parties - Spatial distance is not merely about physical exertion; it involves the potential "eclipse of fair trial rights," including the right to legal representation and the preparation of a defense - noted that for a small borrower to traverse over 1,000 km to defend a case instituted by a large corporation with nationwide branches impacts the fundamental right to adequate legal assistance - Supreme Court differed from the view in Shri Sendhur Agro & Oil Industries vs. Kotak Mahindra Bank Ltd., which held that "mere inconvenience" is insufficient for transfer - Considering the "comparative inconvenience" and the "relative status and wherewithal of parties," the matter is referred to a Larger Bench for a definitive opinion - held that notwithstanding the specific jurisdictional mandates of Section 142(2) N.I. Act, the Supreme Court's power to transfer cases under Section 406 CrPC remains intact if expedient for the ends of justice - Shifting the situs of a trial in a quasi-criminal case (Section 138) may be judged primarily on the relative convenience of the parties - When a large bank sues a small-time borrower, a transfer to secure adequate legal representation for the accused hardly impacts the corporation's right to access justice - Noted that Section 139 N.I. Act creates a statutory presumption against the accused, while Sections 145 and 146 give an "evidentiary head start" to the complainant - Held that this makes the task of an accused defending themselves in a far-off court even more "herculean”. [Relied on Yogesh Upadhyay v. Atlanta Ltd. (2023) 19 SCC 404; Dashrath Rupsingh Rathod v. State of Maharashtra (2014) 9 SCC 129; Nahar Singh Yadav v. Union of India (2011) 1 SCC 307; Paras 16-19, 22-24] Golla Naraesh Kumar Yadav v. Kotak Mahindra Bank, 2025 LiveLaw (SC) 1172 : 2025 INSC 1387
Whether a compromise reached between parties in a case under Section 138 of NI Act can be a basis for setting aside a conviction, especially after the matter has been upheld by multiple courts – Held, the offence under Section 138 of the NI Act is 'mainly civil wrong' and is specifically made compoundable under Section 147 of NI Act - A settlement, once voluntarily entered into by the parties, allows them to save themselves from the litigation process, and courts should not override such a compromise - The compromise deed dt. April 6, 2025 and an affidavit from respondent confirmed that a settlement had been reached - Respondent had accepted payment in full and final settlement of debt - Since a voluntary compromise was reached, the proceedings under Section 138 of NI Act could no longer be sustained and conviction had to be set aside - Set aside High Court's order. Appeal allowed. [Paras 6-12] Gian Chand Garg v. Harpal Singh, 2025 LiveLaw (SC) 865