2024 (12) TMI 1090 - SC - Indian Laws

Dishonor of Cheque - Seeking quashment of summoning orders - crux of the contention is that the complaint lacks the mandatorily required averment to maintain a complaint for commission of offence under Section 138 of the NI Act - HELD THAT - The law enunciated in the decision in Ashok Shewakramani s case 2023 (8) TMI 599 - SUPREME COURT is that to maintain a complaint and to frame a charge under Section 138 of the NI Act, there must be a specific averment against the person concerned that he was in-charge of, and responsible for the company concerned in the matter of conduct of its business. This position is now well settled and is being followed with alacrity. Though, the learned counsel appearing for the second-respondent in all these cases, took pains to convince that the complaint concerned carried necessary averments required statutorily to maintain them however, on perusing the said complaints, there are no hesitation to hold that the aforesaid mandatorily required averments to attract an offence under Section 138 of the NI Act are conspicuously absent in all the complaint(s). To make the appellant to stand the trial, in such circumstances, would be nothing but abuse of the process of the Court. When that be the position, they are liable to be set aside in the light of Ashok Shewakramani s case. The appellant has made out a case warranting quashment of the common order - appeal allowed.

Summary

Issues:
Appeal against dismissal of Criminal Miscellaneous Cases seeking quashment of summoning orders in complaint cases under NI Act.

Analysis:
The Supreme Court heard quintuplet appeals arising from a common judgment of the High Court of Delhi dismissing Criminal Miscellaneous Cases filed by the appellant seeking quashment of summoning orders in complaint cases under the Negotiable Instruments Act. The appellant was the authorized signatory of a company involved in loan transactions leading to dishonored cheques, prompting the complaint cases. The Court noted that the complaints lacked essential averments required for maintaining an offense under Section 138 of the NI Act, following the precedent set by a previous case. The appellant argued that the complaints did not specify the individual's responsibility for the company's conduct, a crucial requirement for framing charges under Section 138. The Court agreed that the complaints did not contain the necessary averments, making it an abuse of the court's process to proceed with the trial. Therefore, the Court held in favor of the appellant, quashing the High Court's order and setting aside all related proceedings and summoning orders in the complaint cases.

In light of the absence of mandatory averments in the complaints to sustain a charge under Section 138 of the NI Act, the Supreme Court found that the appellant had a valid case for quashing the High Court's order. The Court emphasized the importance of specific averments against the accused regarding their role in the company's business conduct to maintain a complaint under Section 138. Relying on established legal principles, the Court concluded that proceeding with the trial based on deficient complaints would amount to an abuse of the court's process. Consequently, the Court allowed the appeals, setting aside the impugned order and quashing all proceedings and summoning orders related to the complaint cases filed by the respondent company against the appellant.

The Supreme Court's decision was based on the lack of essential averments in the complaints to sustain a charge under Section 138 of the NI Act. The Court referenced a previous case to highlight the necessity of specific averments against the accused regarding their involvement in the company's business conduct. Despite arguments from the respondent's counsel asserting the sufficiency of the complaints, the Court found the mandatory averments conspicuously absent. Given this deficiency, the Court deemed it inappropriate to subject the appellant to trial, as it would constitute an abuse of the court's process. Consequently, the Court ruled in favor of the appellant, quashing the High Court's order and setting aside all proceedings and summoning orders in the complaint cases instituted by the respondent company.