M/S NARESH POTTERIES versus M/S AARTI INDUSTRIES AND ANOTHER

Citation: [2025] 1 S.C.R. 40 · Decided: 01-01-2025 · Supreme Court of India · Bench: BHUSHAN RAMKRISHNA GAVAI · Disposal: Appeal(s) allowed
cites 4 · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

[2025] 1 S.C.R. 40 : 2025 INSC 1
M/s Naresh Potteries  
v. 
M/s Aarti Industries and Another
(Criminal Appeal No. 07 of 2025) 
02 January 2025
[B.R. Gavai* and K.V. Viswanathan, JJ.]
Issue for Consideration
Issue arose as regards whether the complaint filed by the appellant 
u/s. 138 of the Negotiable Instruments Act, 1881 is in accordance 
with the requirement u/s.142 of the NI Act.
Headnotes†
Negotiable Instruments Act, 1881 – ss.138, 142 – Code of 
Criminal Procedure, 1973 – ss.190, 200 – Cognizance of 
offence – Complaint filed by the appellant-power of attorney 
holder and manager of the appellant-firm u/s.138 against 
respondent no.1 – Order passed to summon, the sole 
owner of respondent no.1 – Application u/s.482 Cr.P.C. by 
respondent no.1 seeking quashing of the summoning order 
as well as the entire proceedings of the complaint case on 
the ground that complaint filed by Manager on behalf of the  
appellant-firm rendered defective as there was no specific 
averment with regard to his knowledge about the transaction 
in the relevant documents – Application allowed by the High 
Court – Correctness:
Held: Ordinarily, u/s. 190 Cr.P.C., 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, as 
provided by s. 200 Cr.P.C., the Magistrate is required to examine 
upon oath the complainant and witness present, if any – However, 
s.142 creates a legal bar on the court from taking cognizance of 
any offence punishable u/s. 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 – On facts, the perusal of the complaint would reveal 
that complaint has been filed in the name of the firm through Manager 
* Author
[2025] 1 S.C.R. 
41
M/s Naresh Potteries v. M/s Aarti Industries and Another
and Authority-letter holder, and the cheque, was issued in the name 
of the firm – Complaint satisfied the requirements of s.142 – Letter 
of Authority, the affidavit in support of the complaint and the affidavit 
of evidence u/s.200 Cr.P.C. reveal that 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 – Sole proprietor of the appellant-firm had 
duly authorized the Manager to act on its behalf – 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 – Averments made in the documents make it wholly 
clear that the Manager 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– As such, 
peremptory quashing of complaint case by High Court completely 
unwarranted and that too on incorrect factual basis, on completely 
perfunctory and erroneous reasoning depicting absence of careful 
consideration – Interference by the High Court in exercise of its 
discretionary powers u/s.482 Cr.P.C. not called for – Judgment and 
order passed by the High Court quashed and set aside – Complaint 
restored to the file. [Paras 13, 16, 24-28, 32-36]
Case Law Cited
TRL Krosaki Refractories Limited v. SMS Asia Private Limited and 
Another 2022 INSC 214 : [2022] 2 SCR 268 : (2022) 7 SCC 612; 
Shankar Finance and Investments v. State of Andhra Pradesh and 
Ors. 2008 INSC 763 : [2008] 10 SCR 905 : (2008) 8 SCC 536; 
Praveen v. Mohd. Tajuddin (2009) 12 SCC 706; A.C. Narayanan 
v. State of Maharashtra and Another 2015 INSC 69 : [2015] 11 
SCR 1016 : (2014) 11 SCC 790; Vinita S. Rao v. Essen Corporate 
Services Private Limited and Another, 2014 INSC 643 : (2015) 1 
SCC 527; National Small Industries Corporation Limited v. State 
(NCT of Delhi) and Others 2008 INSC 1308 : [2008] 16 SCR 83 : 
(2009) 1 SCC 407; M.M.T.C. Ltd. and Another v. Medchl Chemicals 
& Pharma P. Limited and Another 2001 INSC 572 : [2001] Supp. 
5 SCR 265 : (2002) 1 SCC 234; Janki Vashdeo Bhojwani and 
Another v. IndusInd Bank Limited and Others 2004 INSC 695 : 
[2004] Supp. 6 SCR 681 : (2005) 2 SCC 217 – referred to.
42
[2025] 1 S.C.R.
Digital Supreme Court Reports
List of Acts
Negotiabl
Excerpt shown. Read the full judgment & AI analysis in Lexace.