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Legal Case Shots

Court judgements broken down into the case type, how the decision played out, and the lesson worth remembering, with the full judgement available as a PDF.

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Legal Case Shots is a searchable database of Supreme Court of India judgments, each broken down into the case type, the court's key holding, and a practical lesson learnt, with the full judgment available as a PDF for citation or deeper reading.

Criminal LawSupreme Court of India

Ashutosh Ashok Parasrampuriya v. M/s. Gharrkul Industries Pvt. Ltd.

Criminal Appeal · 2021 INSC 646Decided 8 Oct 2021
Criminal Appeal No. 1206 of 2021
Justice Ajay Rastogi · Justice Abhay S. Oka

Background

Directors of a company were summoned to face trial under Section 138 of the Negotiable Instruments Act after cheques issued to M/s. Gharrkul Industries Pvt. Ltd. bounced due to insufficient funds. The accused directors approached the Bombay High Court under Section 482 CrPC to quash the complaint, arguing they were non-executive directors not responsible for the company's day-to-day affairs, but the High Court dismissed their petitions.

Decision Breakdown

The Supreme Court held that whether the appellants were genuinely non-executive directors uninvolved in the company's affairs was a factual question to be tested at trial, not one to be resolved by quashing the complaint at the threshold: documentary material (Form 32 filed with the Registrar of Companies) showed them as directors, leaving the issue open for trial. Finding no error in the High Court's refusal to quash the proceedings, the Court dismissed the appeals, while also directing that the related long-pending cheque-dishonour cases involving the same parties be clubbed together and disposed of expeditiously within six months.

Lesson Learnt

A director's claim of being merely "non-executive" and uninvolved in company affairs is a defence to be proved during trial in a cheque-bounce case, not a ground for having the criminal complaint quashed before trial even begins.

Ashutosh Ashok Parasrampuriya v. M/s. Gharrkul Industries Pvt. Ltd. – Legal Case Shots | LegalAware