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M/S Naresh Potteries v. M/S Aarti Industries

Criminal Appeal · 2025 INSC 1Decided 2 Jan 2025
Crl.A. No.-000007-000007 - 2025 (arising out of SLP (Crl.) No. 8659 of 2023)
Justice B.R. Gavai · Justice K.V. Viswanathan

Background

M/s Naresh Potteries supplied polymer insulator scrap material worth over Rs. 1.7 crore to M/s Aarti Industries, which issued a cheque for Rs. 1.7 crore-odd that was later dishonoured. Naresh Potteries filed a criminal complaint under Section 138 of the Negotiable Instruments Act, which was initially admitted and a summoning order was issued by the Magistrate at Khurja, Bulandshahar. Aarti Industries approached the Allahabad High Court, which quashed the entire complaint and summoning order under its inherent powers, prompting Naresh Potteries to appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that the High Court's quashing was based on a "completely perfunctory and erroneous" appreciation of facts, noting that the complainant was well within its rights to initiate criminal proceedings and that any factual disputes (such as whether the transaction and cheque were genuine) could and should be tested through examination and cross-examination during trial, not short-circuited at the threshold. The Court reiterated the settled principle that inherent powers under Section 482 CrPC must be exercised sparingly and with great caution, and should not be used to scuttle a fair investigation or trial merely because a High Court forms its own view of disputed facts. It accordingly quashed the High Court's order and restored the complaint for trial on merits.

Lesson Learnt

High Courts should not use their inherent power to quash criminal complaints, especially cheque-bounce cases, merely by re-appreciating disputed facts at an early stage; genuine factual disputes must be tested through a full trial, not shut out before it begins.

Official source (sci.gov.in)View Judgment (PDF)

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