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(2025) 256 Comp Cas 606 : 2025 SCC OnLine SC 18

In the Supreme Court of India

(BEFORE B.R. GAVAI AND K.V. VISWANATHAN, JJ.)

1
Naresh Potteries … Appellant;
Versus
Aarti Industries and another … Respondent.
Criminal Appeal No. 7 of 2025
Decided on January 2, 2025
Advocates who appeared in this case:
Navin Pahwa, Senior Advocate, (Ms. Vak Rohini Wagh, Aditya
Shukla, Anuj Tiwari, Saurabh Mishra and Bharat Thakorlal Manubarwala,
Advocates with him) for the appellant.
Shailesh Sharma, Dr. Vijendra Singh, Ms. Shweta Yadav, Ms. Apurva
Mahndiyan and Kumar Abhinandan, for the respondents.

Page: 609

The Judgment of the Court was delivered by

B.R. GAVAI, J.:— Leave granted.
2. This appeal challenges the judgment and final order dated April
12, 20232 passed by the learned Single Judge of the High Court of
Judicature at Allahabad in Criminal Miscellaneous Application No. 29906
of 2022. The learned single judge allowed the criminal miscellaneous
application filed by M/s. Aarti Industries, respondent No. 1 herein and
quashed the summoning order dated November 22, 2021 passed by
3
the Additional Chief Judicial Magistrate, Khurja, Bulandshahar in
Complaint Case No. 701 of 2021, as well as the entire proceedings
arising from the said complaint case filed by the present appellant
under section 138 of the Negotiable Instruments Act, 18814, pending
before the trial court in C.N. R. No. UPBU160012972021.
3. The facts giving rise to the present appeal are as follows:
3.1. M/s. Naresh Properties through its Manager Neeraj Kumar,
appellant herein, deals in the manufacture and sale of crockeries,
insulators, polymer insulators and other such hardware fittings.
3.2. Between the period from June 18, 2021 to July 2, 2021, M/s.
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Aarti Industries represented by its sole proprietor Sunita Devi,

respondent No. 1 herein, had purchased polymer insulators scrap
rejected material, worth Rs.1,70,46,314 from the present appellant.
After the materials were supplied to respondent No. 1, the appellant
raised several bills/invoices seeking payment for the supplied goods.
3.3. Subsequently, on July 12, 2021, the appellant was given a
cheque issued in its favour by respondent No. 1 for a sum of Rs.
1,70,46,314. The said cheque bearing No. 086295 dated July 10,
2021 had been drawn on the A/c. No. 3640670725 belonging to M/s.
Aarti Industries at the Central Bank of India, Branch Khurja.
3.4. Upon receiving the said cheque, the appellant deposited it in
its A/c. No. 07382560000285 at HDFC Bank, Branch Khurja on July
12, 2021 for encashment. However, the cheque came to be
dishonoured and on July 13, 2021, the cheque was returned to the
appellant with a return memo which stated that the cheque amount
“exceeds arrangement”.
3.5. Aggrieved thereby, on behalf of Smt. Shakti Khanna, the
owner/proprietor of the appellant-firm, a legal notice dated July 15,
2021 was

Page: 610

issued to respondent No. 1 through its sole proprietor, Sunita Devi

under the Negotiable Instruments Act. According to the legal notice,
respondent No. 1 was to pay the cheque amount of Rs. 1,70,46,314
within a period of 15 days of receiving the notice, failing which the
offence punishable under section 138 of the Negotiable Instruments Act
was liable to be attracted.

3.6. Immediately thereafter, on July 16, 2021, as a counter blast

to the legal notice, Angad the son of the sole proprietor of
respondent No. 1 lodged a first information report under sections
420, 467, 468 and 471 of the Penal Code, 1860 against 7 accused
persons. It was alleged that Ashish Khanna, the owner of the
appellant-firm, the staff of the appellant-firm and the branch
manager of the Central Bank of India, Branch Khurja had colluded
together to obtain a cheque book in the name of M/s. Aarti
Industries by forging the signature of Sunita Devi. It was further
alleged that the said cheque book containing cheques from SI Nos.
86281 to 86380 was thereafter used by the appellant-firm to issue
two cheques-first, cheque No. 086291 dated July 10, 2021 for a sum
of Rs. 1,62,28,445 issued in favour of Shakti Ceramics and second,
cheque No. 086295 dated July 10, 2021 for a sum of Rs.
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1,70,46,314 issued in favour of the present appellant.

3.7. Subsequently, on August 31, 2021, Smt. Shakti Khanna
being the sole proprietor of the appellant-firm issued a letter of
authority thereby authorising Sh. Neeraj Kumar, the manager and
caretaker of the appellant-firm to file a complaint and take all such
necessary steps in the matter of the dishonour of the cheque.
3.8. Upon being so authorised, Sh. Neeraj Kumar in the name of
M/s. Naresh Potteries, filed a complaint being complaint No. 701 of
2021 under section 138 of the Negotiable Instruments Act on
September 8, 2021 against respondent No. 1 before the trial court.
Being the deponent in the aforesaid complaint, Sh. Neeraj Kumar
also filed an affidavit solemnly affirming that he was well-conversant
with the facts and circumstances of the facts leading to the
complaint and as such was competent to file the said affidavit.
3.9. Subsequently, on October 22, 2021, Sh. Neeraj Kumar filed
an affidavit of evidence under section 200 of the Criminal Procedure
Code, 19735, before the trial court wherein he reiterated the facts of
the complaint case and once again, affirmed that he was well-
conversant with the facts and circumstances of the case, being the
manager of the appellant-firm.
3.10. On November 22, 2021, on the basis of the evidence in the
form of the aforesaid examination under section 200 of the Code of
Criminal

Page: 611

Procedure and the documentary evidence adduced, the trial court found
that there was sufficient ground to issue summons to Sunita Devi, the
sole owner/proprietor of respondent No. 1-firm for the offence
punishable under section 138 of the Negotiable Instruments Act.
Accordingly, an order was passed thereby summoning Sunita Devi to
face trial for the aforesaid offence.

3.11. Aggrieved thereby, respondent No. 1 preferred a criminal

miscellaneous application under section 482 of the Code of Criminal
Procedure to quash the aforesaid summoning order as well as the
entire proceedings of the complaint case pending before the trial
court.
3.12. The High Court by the impugned judgment and order
allowed the criminal miscellaneous application.
3.13. Being aggrieved thereby, the present appeal.
4. We have heard Mr. Navin Pahwa, learned senior counsel,
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appearing on behalf of the appellant and Mr. Shailesh Sharma, learned

counsel, appearing on behalf of respondent No. 2.
5. In spite of being duly served, none appeared for respondent No.
1.
6. Mr. Navin Pahwa, learned senior counsel, submitted that the High
Court had quashed the complaint case on an incorrect assumption of
fact as well as an incorrect interpretation of the law laid down by this
court in TRL Krosaki Refractories Ltd. v. SMS Asia P. Ltd.6
7. Mr. Navin Pahwa further submitted that the High Court had
quashed the criminal case on the simple ground that from a conjoint
reading of the averments made in the letter of authority and the
affidavit of evidence under section 200 of the Code of Criminal
Procedure, Sh. Neeraj Kumar, the power of attorney holder was found
to have no personal knowledge of the facts and circumstances of the
case. He submitted that the only purpose of a sworn statement under
section 200 of the Code of Criminal Procedure by the power of attorney
holder who has knowledge of the facts stated in the complaint is to
satisfy the court of the prima facie existence of an offence which is to
be tried and the final outcome of the trial would be determined on the
basis of the evidence. He submitted that, if necessary, the complainant
could be called at a later stage for further examination and cross-
examination. He submitted that this was beside the fact that the power
of attorney holder in the present matter had on three separate
occasions clearly stated that he had personal knowledge of the facts of
the complaint case.

Page: 612

8. Mr. Navin Pahwa placed reliance on the judgments of this court in

the cases of Shankar Finance and Investments v. State of Andhra
7 8
Pradesh , Praveen v. Mohd. Tajuddin , A.C. Narayanan v. State of
Maharashtra9 and Vinita S. Rao v. Essen Corporate Services P. Ltd.10 He
submitted that in view of the material placed on record and the
authorities cited, the appeal deserves to be allowed and the impugned
judgment and order deserves to be quashed and set aside.
9. On behalf of respondent No. 2, Mr. Shailesh Sharma, learned
counsel, has submitted that the present matter is essentially a dispute
between private parties. He has adopted the submissions of the
appellant and has prayed that the appeal may be allowed.
10. We have considered the rival submissions and perused the
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material placed on record.

11. The solitary question that we are called upon to answer is as to
whether the complaint filed by the appellant herein under section 138
of the Negotiable Instruments Act is in accordance with the
requirement under section 142 of the Negotiable Instruments Act.
12. The relevant provision of the Negotiable Instruments Act that
falls for our consideration is as follows:
“142. Cognizance of offences.—(1) Notwithstanding anything
contained in the Criminal Procedure Code, 1973 (2 of 1974),—
(a) no court shall take cognizance of any offence punishable
under section 138 except upon a complaint, in writing, made by
the payee or, as the case may be, the holder in due course of the
cheque;…”
13. Ordinarily, under section 190 of the Code of Criminal Procedure,
a Magistrate is empowered to take cognizance of an offence upon
receiving a complaint of facts which constitute such offence. Prior to
taking such cognizance, in accordance with and as provided by section
200 of the Code of Criminal Procedure, the Magistrate is required to
examine upon oath the complainant and witness present, if any.
However, section 142 of the Negotiable Instruments Act creates a legal
bar on the court from taking cognizance of any offence punishable
under section 138 of the Negotiable

Page: 613

Instruments Act except upon a complaint, in writing, made by the

payee, or as the case may be, the holder in due course of the cheque.

14. The law on the subject-matter at hand is no longer res integra

and has been well-settled by a series of judgments passed by this
court.
15. This court in the case of National Small Industries Corporation
11
Ltd.v. State (NCT of Delhi) had an occasion to consider the validity of
a complaint under section 138 of the Negotiable Instruments Act and
the satisfaction of the requirement under section 142 thereof, as well as
to determine as to who could be considered to be the
complainant/representative in a case where the complaint is to be filed
by an incorporated body. This court held as follows12:
“The term ‘complainant’ is not defined under the Code. Section
142 of the Negotiable Instruments Act requires a complaint under
section 138 of that Act to be made by the payee (or by the holder in
due course). It is thus evident that in a complaint relating to
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dishonour of a cheque (which has not been endorsed by the payee in

favour of anyone), it is the payee alone who can be the complainant.
The Negotiable Instruments Act only provides that dishonour of a
cheque would be an offence and the manner of taking cognizance of
offences punishable under section 138 of that Act. However, the
procedure relating to initiation of proceedings, trial and disposal of
such complaints, is governed by the Code. Section 200 of the Code
requires that the Magistrate, on taking cognizance of an offence on
complaint, shall examine upon oath the complainant and the
witnesses present and the substance of such examination shall be
reduced to writing and shall be signed by the complainant and the
witnesses. The requirement of section 142 of the Negotiable
Instruments Act that the payee should be the complainant, is met if
the complaint is in the name of the payee. If the payee is a
company, necessarily the complaint should be filed in the name of
the company. Section 142 of the Negotiable Instruments Act does
not specify who should represent the company, if a company is the
complainant. A company can be represented by an employee or even
by a non-employee authorised and empowered to represent the
company either by a resolution or by a power of attorney…
Resultantly, when in a complaint in regard to dishonour of a
cheque issued in favour of a company or corporation, for the purpose
of section 142 of the Negotiable Instruments Act, the company will
be

Page: 614

the complainant, and for purposes of section 200 of the Code, its
employee who represents the company or corporation, will be the de
facto complainant. In such a complaint, the de jure complainant,
namely, the company or corporation will remain the same but the de
facto complainant (employee) representing such de jure complainant
can change, from time to time. And if the de facto complainant is a
public servant, the benefit of exemption under clause (a) of the proviso
to section 200 of the Code will be available, even though the complaint
is made in the name of a company or corporation.”

(emphasis supplied)
16. While this court was primarily concerned with the issue relating
to the exemption available against examining a public servant in view
of section 200(a) of the Code of Criminal Procedure, this court
nevertheless clarified that the requirement of section 142 of the
Negotiable Instruments Act that the payee should be the complainant
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would be met if the complaint is in the name of the payee. Where the
payee is a company, this court observed that the complaint should
necessarily be filed in the name of the company, if the company is the
complainant. In such cases, this court held that a company can be
represented by an employee or even a non-employee authorised and
empowered to represent the company either by a resolution or by a
power of attorney. As a consequence of the aforesaid discussion, this
court concluded that for the purposes of section 142 of the Negotiable
Instruments Act, the company will be the complainant and for the
purposes of section 200 of the Code of Criminal Procedure, its employee
who represents the company, will be the de facto complainant while the
company will remain the de jure complainant, regardless of any change
in the de facto complainant.
17. Having discussed as to who could file a complaint on behalf of an
incorporated body, it would be apposite to consider the legal validity of
a complaint by the power of attorney holder of such an incorporated
body. Athree-judge Bench of this court in the case of A.C. Narayanan13
was called upon to answer a reference with regard to the conflicting
decisions delivered by two Division Benches of this court in M.M. T.C.
14
Ltd. v. Medchl Chemicals and Pharma P. Ltd. and Janki Vashdeo
15
Bhojwani v. IndusInd Bank Ltd.

Page: 615

While answering the reference, what fell for consideration before

this court was the maintainability of a complaint under section 138
of the Negotiable Instruments Act filed by the power of attorney
holder on behalf of the original complainant and the necessity of
specific averments as to the knowledge of the power of attorney
holder with respect to the facts and circumstances leading to the
dishonour of the cheque(s) and the preference of the criminal
proceedings. This court held as follows16:
“In terms of the reference order, the following questions have to
be decided by this Bench:
Whether a power of attorney holder can sign and file a
complaint petition on behalf of the complainant ?/whether the
eligibility criteria prescribed by section 142(a) of the Negotiable
Instruments Act would stand satisfied if the complaint petition
itself is filed in the name of the payee or the holder in due course
of the cheque ?
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Whether a power of attorney holder can be verified on oath

under section 200 of the Code ?
Whether specific averments as to the knowledge of the power
of attorney holder in the impugned transaction must be explicitly
asserted in the complaint ?
If the power of attorney holder fails to assert explicitly his
knowledge in the complaint then can the power of attorney holder
verify the complaint on oath on such presumption of knowledge ?
Whether the proceedings contemplated under section 200 of
the Code can be dispensed with in the light of section 145 of the
Negotiable Instruments Act which was introduced by an
amendment in the year 2002 ?…
The power of attorney holder is the agent of the grantor. When
the grantor authorises the attorney holder to initiate legal
proceedings and the attorney holder accordingly initiates such legal
proceedings, he does so as the agent of the grantor and the initiation
is by the grantor represented by his attorney holder and not by the
attorney holder in his personal capacity. Therefore, where the payee
is a proprietary concern, the complaint can be filed by the proprietor
of the proprietary concern, describing himself as the sole proprietor
of the payee, the proprietary concern, describing itself as a sole
proprietary concern, represented by its sole proprietor, and the
proprietor or the proprietary concern represented by the attorney
holder under a power of attorney executed by the sole proprietor.
However, we make it clear that the power of attorney holder cannot
file a complaint in his own

Page: 616

name as if he was the complainant. In other words, he can initiate

criminal proceedings on behalf of the principal.

From a conjoint reading of sections 138, 142 and 145 of the

Negotiable Instruments Act as well as section 200 of the Code, it is
clear that it is open to the Magistrate to issue process on the basis of
the contents of the complaint, documents in support thereof and the
affidavit submitted by the complainant in support of the complaint.
Once the complainant files an affidavit in support of the complaint
before issuance of the process under section 200 of the Code, it is
thereafter open to the Magistrate, if he thinks fit, to call upon the
complainant to remain present and to examine him as to the facts
contained in the affidavit submitted by the complainant in support of
his complaint. However, it is a matter of discretion and the
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Magistrate is not bound to call upon the complainant to remain

present before the court and to examine him upon oath for taking
decision whether or not to issue process on the complaint under
section 138 of the Negotiable Instruments Act. For the purpose of
issuing process under section 200 of the Code, it is open to the
Magistrate to rely upon the verification in the form of affidavit filed
by the complainant in support of the complaint under section 138 of
the Negotiable Instruments Act. It is only if and where the
Magistrate, after considering the complaint under section 138 of the
Negotiable Instruments Act, documents produced in support thereof
and the verification in the form of affidavit of the complainant, is of
the view that examination of the complainant or his witness(s) is
required, the Magistrate may call upon the complainant to remain
present before the court and examine the complainant and/or his
witness upon oath for taking a decision whether or not to issue
process on the complaint under section 138 of the Negotiable
Instruments Act…
While holding that there is no serious conflict between the
decisions in M.M. T.C. Ltd. v. Medchl Chemicals and Pharma P. Ltd.17
18
and Janki Vashdeo Bhojwani v. IndusInd Bank Ltd. , we clarify the
position and answer the questions in the following manner:
Filing of complaint petition under section 138 of the Negotiable
Instruments Act through power of attorney is perfectly legal and
competent.

Page: 617

The power of attorney holder can depose and verify on oath

before the court in order to prove the contents of the complaint.
However, the power of attorney holder must have witnessed the
transaction as an agent of the payee/holder in due course or
possess due knowledge regarding the said transactions.
It is required by the complainant to make specific assertion as
to the knowledge of the power of attorney holder in the said
transaction explicitly in the complaint and the power of attorney
holder who has no knowledge regarding the transactions cannot
be examined as a witness in the case.
In the light of section 145 of the Negotiable Instruments Act, it
is open to the Magistrate to rely upon the verification in the form
of affidavit filed by the complainant in support of the complaint
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under section 138 of the Negotiable Instruments Act and the

Magistrate is neither mandatorily obliged to call upon the
complainant to remain present before the court, nor to examine
the complainant of his witness upon oath for taking the decision
whether or not to issue process on the complaint under section
138 of the Negotiable Instruments Act.
The functions under the general power of attorney cannot be
delegated to another person without specific clause permitting the
same in the power of attorney. Nevertheless, the general power of
attorney itself can be cancelled and be given to another person.
We answer the reference on the above terms and remit the matter
to the appropriate Bench for deciding the case on merits.”
(emphasis supplied)
18. This court while answering the reference has thoroughly
considered the scope and requirement of section 142(1)(a) of the
Negotiable Instruments Act. This court held that from a conjoint
reading of sections 138, 142 and 145 of the Negotiable Instruments Act
as well as section 200 of the Code of Criminal Procedure, it is clear that
calling upon the complainant to remain present and to examine him as
to the facts contained in the affidavit submitted by the complainant to
support his complaint, is a matter of discretion on the part of the
Magistrate. This court clarified that it is only if and where the
Magistrate, after considering all the relevant documents, is of the view
that examination of the complainant or his witness(s) is required, the
Magistrate may call upon the complainant to remain present before the
court and examine the complainant and/or his witness upon

Page: 618

oath for taking a decision whether or not to issue process on the

complaint under section 138 of the Negotiable Instruments Act.

19. After discussing the discretionary powers of the Magistrate, this

court went on to hold that the power of attorney holder may be allowed
to file, appear and depose for the purpose of issue of process for the
offence punishable under section 138 of the Negotiable Instruments
Act. This court, however, cautioned that an exception to the above
would be when the power of attorney holder does not have a personal
knowledge about the transactions, in which case, he cannot be
examined. Nevertheless, this court clarified that where the power of
attorney holder of the complainant is in charge of the business of the
complainant payee and the power of attorney holder alone is personally
aware of the transactions, there is no reason why he cannot depose as a
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witness, however, such personal knowledge must be explicitly asserted

in the complaint and a power of attorney holder who has no personal
knowledge of the transactions cannot be examined as a witness in the
case.
19
20. More recently, in the case of TRL Krosaki Refractories Ltd.
similar facts as the present matter arose for consideration by this court.
In the said case, a complaint came to be filed by the payee company
through its general manager (accounting) under sections 138 and 142
of the Negotiable Instruments Act. The complaint was registered based
on the affidavit filed on behalf of the complainant, in lieu of an oral
sworn statement. Upon being satisfied that there was sufficient
material and the complaint under section 138 of the Negotiable
Instruments Act against the accused was in accordance with law, the
SDJM took cognizance of the complaint and issued summons to the
accused-firm therein. Assailing the summoning order, the accused-firm
filed a petition before the High Court under section 482 of the Code of
Criminal Procedure for quashing of the summoning order, being
aggrieved by the fact that the complaint had been filed by an
incompetent person inasmuch as the complainant neither had
knowledge about the alleged transaction, nor had he witnessed the
same, nor was there any averment in the complaint that the
complainant had been duly authorised by the payee-firm to initiate
criminal proceedings on its behalf. The High Court had allowed the
petition under section 482 of the Code of Criminal Procedure and set
aside the summoning order, which led to an appeal being filed before
this court. A three-judge Bench of this court upon a thorough
consideration of the judgments of this court by which the law

Page: 619

on the subject matter at hand has been crystallised, allowed the appeal
and set aside the judgment of the High Court. This court held as
follows20:

“21. A meaningful reading of the above would indicate that the

company having authorised the general manager (accounting) and
the general manager (accounting) having personal knowledge had in
fact been clearly averred. What can be treated as an explicit
averment, cannot be put in a straitjacket but will have to be
gathered from the circumstance and the manner in which it has been
averred and conveyed, based on the facts of each case. The manner
in which a complaint is drafted may vary from case to case and
would also depend on the skills of the person drafting the same
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which by itself, cannot defeat a substantive right. However, what is

necessary to be taken note of is as to whether the contents as
available in the pleading would convey the meaning to the effect
that the person who has filed the complaint, is stated to be
authorised and claims to have knowledge of the same. In addition,
the supporting documents which were available on the record by
themselves demonstrate the fact that an authorised person, being a
witness to the transaction and having knowledge of the case had
instituted the complaint on behalf of the ‘payee’ company and
therefore, the requirement of section 142 of the Negotiable
Instruments Act was satisfied. In Vinita S. Rao v. Essen Corporate
Services P. Ltd.21, to which one of us (the hon'ble CJI) was a
member of the Bench has accepted the pleading of such a nature to
indicate the power to prosecute the complaint and knowledge of the
transaction as sufficient to maintain the complaint.
22. Despite our conclusion that the documents available on record
would on facts satisfy the requirement relating to delegation of
power and also knowledge of the transaction by the person
representing the company in the instant case, it is also necessary for
us to keep in perspective that though the case in A.C. Narayanan v.
22
State of Maharashtra has taken the centre stage of consideration,
the facts involved therein were in the background of the complainant
being an individual and the complaint filed was based on the power
of attorney issued by the ‘payee’ who was also an individual. In such
an event, the manner in which the power was being exercised was to
be explicitly stated so as to establish the right of the person
prosecuting the complaint, to

Page: 620

represent the payee, i.e., the complainant. The position that would
emerge when the complainant is a company or a corporate entity will
have to be viewed from a different standpoint.

23. In this regard in Samrat Shipping Co. P. Ltd. v. Dolly

23
George , while disapproving the manner in which cognizance was
refused to be taken and the complaint had been dismissed by the
learned Magistrate at the threshold, this court has held as
hereunder : (SCC page 456, paragraph 3)
‘3. Having heard both sides we find it difficult to support the
orders challenged before us. A company can file a complaint only
through human agency. The person who presented the complaint
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on behalf of the company claimed that he is the authorised

representative of the company. Prima facie, the trial court should
have accepted it at the time when a complaint was presented. If
it is a matter of evidence when the accused disputed the authority
of the said individual to present the complaint, opportunity should
have been given to the complainant to prove the same, but that
opportunity need be given only when the trial commences. The
dismissal of the complaint at the threshold on the premise that
the individual has not produced certified copy of the resolution
appears to be too hasty an action. We, therefore, set aside the
impugned orders and direct the trial court to proceed with the
trial and dispose of it in accordance with law. Parties are directed
to appear before the trial court on January 31, 2000.’…
25. In that view, the position that would emerge is that when a
company is the payee of the cheque based on which a complaint is
filed under section 138 of the Negotiable Instruments Act, the
complainant necessarily should be the company which would be
represented by an employee who is authorised. Prima facie, in such a
situation the indication in the complaint and the sworn statement
(either orally or by affidavit) to the effect that the complainant
(company) is represented by an authorised person who has
knowledge, would be sufficient. The employment of the terms
‘specific assertion as to the knowledge of the power of attorney
holder’ and such assertion about knowledge should be ‘said
24
explicitly’ as stated in A.C. Narayanan v. State of Maharashtra ,
cannot be understood to mean that the assertion should be in any
particular manner, much less only in the manner understood by the
accused in the case. All that is necessary is to demonstrate before

Page: 621

the learned Magistrate that the complaint filed is in the name of the
‘payee’ and if the person who is prosecuting the complaint is different
from the payee, the authorisation therefor and that the contents of the
complaint are within his knowledge. When, the complainant/payee is a
company, an authorised employee can represent the company. Such
averment and prima facie material is sufficient for the learned
Magistrate to take cognizance and issue process. If at all, there is any
serious dispute with regard to the person prosecuting the complaint not
being authorised or if it is to be demonstrated that the person who filed
the complaint has no knowledge of the transaction and, as such that
person could not have instituted and prosecuted the complaint, it would
be open for the accused to dispute the position and establish the same
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during the course of the trial. As noted in Samrat Shipping Co. P. Ltd.
v. Dolly George25, dismissal of a complaint at the threshold by the
Magistrate on the question of authorisation, would not be justified.
Similarly, we are of the view that in such circumstances entertaining a
petition under section 482 to quash the order taking cognizance by the
Magistrate would be unjustified when the issue of proper authorisation
and knowledge can only be an issue for trial.

26. In that view of the matter, we are of the opinion that the High
Court was not justified in entertaining the petition filed under section
482 of the Code of Criminal Procedure and quashing the order dated
November 5, 2015, taking cognizance of the complaint filed by the
appellant.”
(emphasis supplied)
21. It could thus be seen that this court distinguished the position of
a complainant filing a complaint on behalf of an individual from the
position of a complainant filing a complaint on behalf of a company.
This court clarified that although the decision in the case of A.C.
Narayanan26 had taken centre stage, the facts involved in that case
were in the background that the complaint filed was based on the
power of attorney issued by the “payee” who was also an individual. In
such cases, the manner in which the power was being exercised had to
be explicitly stated. However, this court clarified that the position that
would emerge when the complainant is a company or a corporate entity
will have to be viewed from a different standpoint. This court held that
when the company is the payee of the

Page: 622

cheque based on which a complaint is filed under section 138 of the

Negotiable Instruments Act, the complainant should necessarily be the
company which is to be represented by an authorised employee and in
such a situation, the indication in the complaint and the sworn
statement, oral or by affidavit, to the effect that complainant is
represented by an authorised person who has knowledge, would be
sufficient. Drawing a distinction from the “specific assertion as to the
knowledge of the power of attorney holder” which is to be “stated
27
explicitly” as categorically laid down in A.C. Narayanan , this court
held that in cases where the payee/complainant is the company, all
that is necessary to be demonstrated before the Magistrate is that the
complaint is filed in the name of the payee and if the complaint is being
prosecuted by someone other than the payee, he has knowledge of the
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contents of the complaint and he is duly authorised to prosecute the

complaint. This court further clarified that if there is any dispute with
regard to the person prosecuting the complaint not being authorised or
it is to be demonstrated that the complainant had no knowledge of the
transaction, and as such could not have instituted and prosecuted the
complaint, it would be open for the accused person to dispute the
position and establish the same during the course of the trial. However,
dismissal or quashing of the complaint at the threshold would not be
justified. It was held that the issue of proper authorisation and
knowledge can only be an issue for trial.

22. Having discussed the law on the subject, we now proceed to

consider the facts of the present case.
23. As we have noted earlier, despite being duly served, none
appeared for respondent No. 1.
24. From a perusal of the impugned order, we find that the issue
raised by respondent No. 1 before the High Court is that complaint filed
by Sh. Neeraj Kumar on behalf of the appellant-firm has been rendered
defective as there is no specific averment with regard to his knowledge
about the transaction in the relevant documents. To buttress its
submission, reliance was placed on the decision in the case of A.C.
Narayanan27.
25. We find that judgment passed by the High Court is entirely
27
based on the guidelines laid down in A.C. Narayanan . Although the
High Court took note of the decision in TRL Krosaki Refractories Ltd.28,
the sole reason on which it passed the impugned order was that there
was no specific

Page: 623

pleading in the letter of authority or the affidavit of the power of

attorney holder under section 200 of the Code of Criminal Procedure to
the effect that he had personal knowledge of the facts giving rise to the
proceedings under section 138 of the Negotiable Instruments Act and
further that complaint was totally silent as to any such personal
knowledge.

26. A perusal of the complaint (annexure P18) would reveal that

complaint No. 701 of 2021 has been filed in the name of M/s. Naresh
Potteries through Neeraj Kumar (manager and authority-letter holder).
Further, a perusal of the cheque which is the subject matter of the
complaint would reveal that it has been issued in the name of Naresh
Potteries. As aforementioned, section 142 of the Negotiable
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Instruments Act contemplates that the complaint filed under section

138 of the Negotiable Instruments Act should be in writing and should
be filed by the payee or the holder of the cheque. Therefore, it is
abundantly clear that the complaint in the present matter satisfies the
requirements of section 142 of the Negotiable Instruments Act.
27. Further, a cumulative study of the relevant material being the
letter of authority (annexure P9), the affidavit in support of the
complaint (annexure P10) and the affidavit of evidence under section
200 of the Code of Criminal Procedure (annexure P11) would reveal that
Sh. Neeraj Kumar, the power of attorney holder being the manager of
the appellant-firm and the caretaker of its day-to-day business, was
well-conversant with the transactions which led to the issuance of the
cheque to the appellant-firm and which eventually led to the initiation
of the criminal proceedings against respondent No. 1.
28. Since the High Court has quashed the summoning order on a
categorical finding that the power of attorney holder did not have
personal knowledge of the facts giving rise to the criminal proceedings
as there was no specific pleading to that effect in the letter of authority
and the affidavit of the power of attorney holder under section 200 of
the Code of Criminal Procedure, we find it apposite to reproduce the
relevant portions of the aforesaid documents which contain averments
regarding authorisation in favour of and knowledge on the part of Sh.
Neeraj Kumar.
29. The letter of authority dated August 31, 2021 issued by the sole
proprietor of the appellant-firm reads as under:
“Certified that I, Smt. Shakti Khanna, aged 72 years, w/o of Sh.
Subhash Chand Khanna of M/s. Naresh Potteries, G.T. Road, Khurja
203 131 (UP) in the capacity of sole proprietor of the above firm,
authorise Sh. Neeraj Kumar s/o Sh. Suraj Narain, aged 42 years r/o
H. No. 934, Chandralok Colony, Street No. 4, Khurja PS, Khurja

Page: 624

Nagar, District Bulandshahar, who is manager of the above firm and

takes care of general and day-to-day managerial business of the firm
and is very well conversant with everyday affairs, financial transactions
and sale purchase of the firm, to file a complaint in the matter of
dishonouring of cheque (No. 086295/July 10, 2021 for a sum of
Rs.1,79,46,314) against M/s. Aarti Industries, Khurja in a competent
the hon'ble court on behalf of M/s. Naresh Potteries. Khurja. Sh, Neeraj
is well aware of this case and is given necessary instructions also.”

30. The verifying affidavit filed on behalf of Sh. Neeraj Kumar in

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support of his complaint reads as under:

“2. Deponent is applicant in this case who is posted as manager in
complainant firm M/s. Naresh Potteries, G.T. Road, Khurja and holds
authority letter of the firm issued by the owner/proprietor Smt.
Shakti Khanna and is well conversant with the facts and
circumstances of the case. Thus, deponent is competent to file this
affidavit.”
31. Further, the affidavit of evidence under section 200 of the Code
of Criminal Procedure filed by Sh. Neeraj Kumar in lieu of the oral sworn
statement before the trial court on the basis of which the trial court
took cognizance of the complaint, reads thus:
“2. Deponent is applicant in this case who is posted as manager in
complainant firm M/s. Naresh Potteries, G.T. Road, Khurja and holds
authority letter of the firm issued by the owner Smt. Shakti Khanna
and is well conversant with the facts and circumstance of the case.
Thus, deponent is competent to file this affidavit.”
32. A conjoint reading of the above would make it clear that it had
been categorically averred that the sole proprietor of the appellant-firm
had duly authorised Sh. Neeraj Kumar to act on its behalf in view of the
fact that Sh. Neeraj Kumar was incharge of the day-to-day affairs of the
appellant-firm and as such had personal knowledge of the facts of the
matter.
29
33. As referred to above, this court in TRL Krosaki Refractories Ltd.
had come to a categorical finding that what can be treated as an
explicit averment, cannot be put in a straightjacket but will have to be
gathered from the circumstance and manner in which it has been
averred and conveyed, based on the facts of each case. The relevant
portion of the said decision has already been extracted above. In the
instant matter, the averments made in the documents referred to
above, make it wholly clear that

Page: 625

Sh. Neeraj Kumar possessed personal knowledge of the facts of the

matter at hand and was well-equipped and duly authorised to initiate
criminal proceedings against respondent No. 1. That beside the fact
that it would always be open for the trial court to call upon the
complainant for examination and cross-examination, if and when
necessary, during the course of the trial. As such, a peremptory
quashing of the complaint case by the High Court is completely
unwarranted and that too on an incorrect factual basis.
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34. Apart from that, this court has repeatedly cautioned that the
inherent powers under section 482 of the Code of Criminal Procedure
should be exercised sparingly and with great caution and further that
inherent powers should not be used to interfere with the jurisdiction of
the lower courts or to scuttle a fair investigation or prosecution. In light
of the well-settled law on the subject, we do not find that the instant
matter called for any interference by the High Court in exercise of its
discretionary powers under section 482 of the Code of Criminal
Procedure.
35. In that view of the matter, we are of the considered view that
the High Court has passed the impugned judgment and order on a
completely perfunctory and erroneous reasoning which depicts absence
of careful consideration. That being the case, we are inclined to allow
the appeal.
36. In the result, we pass the following order:
(i) The present appeal is allowed;
(ii) The final judgment and order dated April 12, 2023 passed by the
learned Single Judge of the High Court of Judicature at Allahabad
in Criminal Miscellaneous Application No. 29906 of 2022 is
quashed and set aside; and
(iii) Complaint No. 701 of 2021 is restored to the file of the
Additional Chief Judicial Magistrate, Khurja, Bulandshahar to be
heard and decided on its own merits.
37. Pending application(s), if any, shall stand disposed of.
———
1
2025 SCC OnLine SC 18.

2
Aarti Industries v. State of U.P., (2025) 256 Comp Cas 593 (All); 2023 SCC OnLine All 5359.

3
Hereinafter referred to as “trial court”.

4
For short “NI Act”.

5
For short “Cr.P.C.”

6
(2022) 7 SCC 612; (2022) 3 SCC (Cri) 224; (2022) 3 SCC (Civ) 782; 2022 SCC OnLine SC
217; [2022] INSC 214.

7
(2008) 8 SCC 536; (2008) 3 SCC (Cri) 558; 2008 SCC OnLine SC 997; [2008] INSC 763.

8
(2009) 12 SCC 706; (2009) 4 SCC (Civ) 822; (2010) 1 SCC (Cri) 699; 2009 SCC OnLine SC
866.

9
(2013) 180 Comp Cas 258 (SC); (2014) 11 SCC 790; (2014) 4 SCC (Civ) 343; 2013 SCC
OnLine SC 839; [2015] INSC 69.
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10
(2015) 1 SCC 527; (2015) 1 SCC (Cri) 726; (2015) 1 SCC (Civ) 558; 2014 SCC OnLine SC
731; [2014] INSC 643.

11
(2009) 147 Comp Cas 11 (SC); (2009) 1 SCC 407; (2009) 1 SCC (Civ) 192; (2009) 1 SCC
(Cri) 513; 2008 SCC OnLine SC 1710; [2008] INSC 1308.

12
See page 18 of 147 Comp Cas.

13
A.C. Narayanan v. State of Maharashtra, (2013) 180 Comp Cas 258 (SC); (2014) 11 SCC
790; (2014) 4 SCC (Civ) 343; 2013 SCC OnLine SC 839; [2015] INSC 69.

14
(2002) 108 Comp Cas 48 (SC); (2002) 1 SCC 234; 2002 SCC (Cri) 121; 2001 SCC OnLine
SC 1364; [2001] INSC 572.

15
(2005) 123 Comp Cas 154 (SC); (2005) 2 SCC 217; 2004 SCC OnLine SC 1538; [2004]
INSC 695.

16
See page 269 of 180 Comp Cas.

17
(2002) 108 Comp Cas 48 (SC); (2002) 1 SCC 234; 2002 SCC (Cri) 121; 2001 SCC OnLine
SC 1364; [2001] INSC 572.

18
(2005) 123 Comp Cas 154 (SC); (2005) 2 SCC 217; 2004 SCC OnLine SC 1538; [2004]
INSC 695.

19
TRL Krosaki Refractories Ltd. v. SMS Asia P. Ltd., (2022) 7 SCC 612; (2022) 3 SCC (Cri)
224; (2022) 3 SCC (Civ) 782; 2022 SCC OnLine SC 217.

20
See page 623 of (2022) 7 SCC.

21
(2015) 1 SCC 527; (2015) 1 SCC (Cri) 726; (2015) 1 SCC (Civ) 558; 2014 SCC OnLine SC
731.

22
(2013) 180 Comp Cas 258 (SC); (2014) 11 SCC 790; (2014) 4 SCC (Civ) 343; 2013 SCC
OnLine SC 839; [2015] INSC 69.

23
(2002) 9 SCC 455; 2003 SCC (Cri) 1224; 1999 SCC OnLine SC 1309.

24
(2013) 180 Comp Cas 258 (SC); (2014) 11 SCC 790; (2014) 4 SCC (Civ) 343; 2013 SCC
OnLine SC 839; [2015] INSC 69.

25
(2002) 9 SCC 455; 2003 SCC (Cri) 1224; 1999 SCC OnLine SC 1309.

26
A.C. Narayanan v. State of Maharashtra, (2013) 180 Comp Cas 258 (SC); (2014) 11 SCC
790; (2014) 4 SCC (Civ) 343; 2013 SCC OnLine SC 839; [2015] INSC 69.

27
A.C. Narayanan v. State of Maharashtra, (2013) 180 Comp Cas 258 (SC); (2014) 11 SCC
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790; (2014) 4 SCC (Civ) 343; 2013 SCC OnLine SC 839; [2015] INSC 69.

28
TRL Krosaki Refractories Ltd. v. SMS Asia P. Ltd., (2022) 7 SCC 612; (2022) 3 SCC (Cri)
224; (2022) 3 SCC (Civ) 782; 2022 SCC OnLine SC 217.

29
TRL Krosaki Refractories Ltd. v. SMS Asia P. Ltd., (2022) 7 SCC 612; (2022) 3 SCC (Cri)
224; (2022) 3 SCC (Civ) 782; 2022 SCC OnLine SC 217.

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