Wed. Feb 12th, 2025

 

In the case of Ravi Dhingra v. State of NCT of Delhi & Anr. (Criminal Appeal No. 5479/2024), the Supreme Court of India addressed the necessity of specific averments in complaints filed under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).

Brief Facts:

  • Parties Involved: The appellant, Ravi Dhingra, was the authorized signatory of M/s Silverstar Fashions Private Limited, a company engaged in manufacturing and exporting ready-made garments. The respondent, M/s Pinnacle Capital Solution Pvt. Ltd., is a Non-Banking Financial Company (NBFC) providing financial services.
  • Transaction Background: M/s Silverstar Fashions Pvt. Ltd. obtained loans from the respondent. Subsequently, cheques issued by the appellant’s company towards repayment were dishonoured upon presentation.
  • Legal Proceedings: The respondent filed five complaint cases under Sections 138 and 142 of the NI Act against the appellant and his company, alleging cheque dishonour. The Metropolitan Magistrate, New Delhi, took cognizance and issued summoning orders. The appellant sought quashing of these proceedings before the Delhi High Court, which dismissed his petitions. Consequently, the appellant approached the Supreme Court.

Supreme Court’s Analysis and Judgment:

  • Requirement of Specific Averments: The Court emphasized that to sustain a complaint under Section 138 of the NI Act against a person associated with a company, there must be specific averments indicating that the individual was in charge of and responsible for the conduct of the company’s business at the time of the offence. This principle was reinforced by the Court’s earlier decision in Ashok Shewakramani & Ors. v. State of Andhra Pradesh & Anr. (2023).
  • Examination of Complaints: Upon reviewing the complaints filed by the respondent, the Court found that they lacked the mandatory specific averments against the appellant, failing to indicate his role in the conduct of the company’s business concerning the alleged offence.
  • Conclusion: The absence of such essential averments rendered the complaints defective. The Court held that subjecting the appellant to trial under these circumstances would amount to an abuse of the judicial process.
  • Final Judgment: The Supreme Court allowed the appeals, setting aside the Delhi High Court’s judgment and quashing the complaint cases and all subsequent proceedings against the appellant.

This judgment underscores the imperative of including specific allegations in complaints under Section 138 of the NI Act, particularly when the accused is associated with a company, to establish their responsibility in the conduct of the company’s business at the time of the alleged offence.