M/S NARESH POTTERIESversusM/S AARTI INDUSTRIES AND ANOTHER

                    [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.
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                                 List of Acts
      Negotiable Instruments Act, 1881; Code of Criminal Procedure,
      1973, Penal Code, 1860.

                              List of Keywords
      Cognizance of offence; Power of attorney holder; Summoning
      order; Specific pleading in Letter of Authority; Affidavit of power
      of attorney holder u/s.200 Cr.P.C.; Personal knowledge of facts;
      De jure complainant; De facto complainant; Payee or holder of
      cheque; Affidavit of evidence u/s.200 Cr.P.C.; Inherent powers
      u/s.482 Cr.P.C.; Fair investigation or prosecution; Discretionary
      powers u/s.482 Cr.P.C.

                             Case Arising From
      CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
      No. 7 of 2025
      From the Judgment and Order dated 12.04.2023 of the High Court
      of Judicature at Allahabad in A482 No. 29906 of 2022

                          Appearances for Parties
      Navin Pahwa, Sr. Adv., Ms. Vak Rohini Wagh, Aditya Shukla, Anuj
      Tiwari, Saurabh Mishra, Bharat Thakorlal Manubarwala, Advs. for
      the Appellant.
      Shailesh Sharma, Dr. Vijendra Singh, Ms. Shweta Yadav,
      Ms. Apurva Mahndiyan, Kumar Abhinandan, Advs. for the
      Respondents.

                 Judgment / Order of the Supreme Court

                                 Judgment

      B.R. Gavai, J.

1.    Leave granted.
2.    This appeal challenges the judgment and final order dated 12th
      April 2023 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
[2025] 1 S.C.R.                                                               43

          M/s Naresh Potteries v. M/s Aarti Industries and Another



      No. 1 herein and quashed the summoning order dated 22nd November
      2021 passed by the Additional Chief Judicial Magistrate, Khurja,
      Bulandshahar1 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, 18812,
      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 18th June 2021 to 2nd July 2021,
           M/s 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 12th July 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
           10th July 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
           12th July 2021 for encashment. However, the cheque came
           to be dishonoured and on 13th July 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
           15th July 2021 was issued to Respondent No.1 through its sole
           proprietor, Sunita Devi under the NI Act. According to the legal
           notice, Respondent No.1 was to pay the cheque amount of


1    Hereinafter referred to as ‘trial court’.
2    For short ‘NI Act’
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                 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 NI Act was liable to be attracted.
       3.6. Immediately thereafter, on 16th July 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 Indian 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 No. 86281 to 86380 was thereafter used by the
            appellant-firm to issue two cheques - first, cheque No. 086291
            dated 10th July 2021 for a sum of Rs. 1,62,28,445/- issued in
            favour of Shakti Ceramics and second, cheque No. 086295
            dated 10th July 2021 for a sum of Rs. 1,70,46,314/- issued in
            favour of the present appellant.
       3.7. Subsequently, on 31st August 2021, Smt. Shakti Khanna being
            the sole proprietor of the appellant-firm issued a Letter of
            Authority thereby authorizing 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 authorized, 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 NI Act on 8th September
            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 22nd October 2021, Sh. Neeraj Kumar filed an
            Affidavit of Evidence under Section 200 of the Code of Criminal
            Procedure, 19733, before the trial court wherein he reiterated


3     For short ‘Cr.P.C.’
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          M/s Naresh Potteries v. M/s Aarti Industries and Another


               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 22nd November 2021, on the basis of the evidence in the
            form of the aforesaid examination under Section 200 of the
            Cr.P.C. 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 NI 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 Cr.P.C.
            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, 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 Limited v. SMS Asia
      Private Limited and Another4.
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 Cr.P.C., 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 Cr.P.C. by


4    2022 INSC 214 : [2022] 2 SCR 268 : (2022) 7 SCC 612
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       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.
8.     Mr. Navin Pahwa placed reliance on the judgments of this Court in
       the cases of Shankar Finance and Investments v. State of Andhra
       Pradesh and Ors.,5 Praveen v. Mohd. Tajuddin,6 A.C. Narayanan
       v. State of Maharashtra and Another7 and Vinita S. Rao v. Essen
       Corporate Services Private Limited and Another.8 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 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 NI Act is in accordance with the requirement under Section 142
    of the NI Act.
12. The relevant provision of the NI Act that falls for our consideration
    is as follows:
              “142. Cognizance of offences.—(1) Notwithstanding
              anything contained in the Code of Criminal Procedure,
              1973 (2 of 1974),—


5     2008 INSC 763 : [2008] 10 SCR 905 : (2008) 8 SCC 536
6     (2009) 12 SCC 706
7     2015 INSC 69 : [2015] 11 SCR 1016 : (2014) 11 SCC 790
8     2014 INSC 643 : (2015) 1 SCC 527
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         M/s Naresh Potteries v. M/s Aarti Industries and Another


            (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 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, in accordance with and as provided by Section 200 of
    the Cr.P.C., the Magistrate is required to examine upon oath the
    complainant and witness present, if any. However, Section 142 of
    the NI Act creates a legal bar on the court from taking cognizance
    of any offence punishable under Section 138 of the NI 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
    Limited v. State (NCT of Delhi) and Others9 had an occasion to
    consider the validity of a complaint under Section 138 of the NI 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 follows:
            “14. The term “complainant” is not defined under the
            Code. Section 142 of the NI 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 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 NI
            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


9   2008 INSC 1308 : [2008] 16 SCR 83 : (2009) 1 SCC 407
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          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
          NI 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 NI 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.
          …..
          19. 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 NI Act, the company
          will be 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 Cr.P.C., this Court nevertheless clarified that
    the requirement of Section 142 of the NI Act that the payee should
    be the complainant would be met if the complaint is in the name
    of the payee. Where the payee is a company, this Court observed
[2025] 1 S.C.R.                                                             49

          M/s Naresh Potteries v. M/s Aarti Industries and Another


      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 NI Act, the company will be
      the complainant and for the purposes of Section 200 of the Cr.P.C.,
      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. A three-Judge Bench of this Court in the case of
    A.C. Narayanan (supra) 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. Ltd. and Another v. Medchl Chemicals &
    Pharma P. Limited and Another10 and Janki Vashdeo Bhojwani and
    Another v. IndusInd Bank Limited and Others.11 While answering
    the reference, what fell for consideration before this Court was the
    maintainability of a complaint under Section 138 of the NI 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 follows:
             “21. In terms of the reference order, the following questions
             have to be decided by this Bench:
             21.1. 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 NI 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?


10   2001 INSC 572 : [2001] Supp. 5 SCR 265 : (2002) 1 SCC 234
11   2004 INSC 695 : [2004] Supp. 6 SCR 681 : (2005) 2 SCC 217
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      21.2. Whether a power-of-attorney holder can be verified
      on oath under Section 200 of the Code?
      21.3. Whether specific averments as to the knowledge of
      the power-of-attorney holder in the impugned transaction
      must be explicitly asserted in the complaint?
      21.4. 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?
      21.5. Whether the proceedings contemplated under Section
      200 of the Code can be dispensed with in the light of
      Section 145 of the NI Act which was introduced by an
      amendment in the year 2002?
      ….
      28. 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 name as if
      he was the complainant. In other words, he can initiate
      criminal proceedings on behalf of the principal.
      29. From a conjoint reading of Sections 138, 142 and 145 of
      the NI 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
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        M/s Naresh Potteries v. M/s Aarti Industries and Another


           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
           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 NI 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 NI Act. It is only if
           and where the Magistrate, after considering the complaint
           under Section 138 of the NI 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 NI Act.
           ….
           33. While holding that there is no serious conflict between
           the decisions in M.M.T.C. [M.M.T.C. Ltd. v. Medchl
           Chemicals and Pharma (P) Ltd. (2002) 1 SCC 234 :
           2002 SCC (Cri) 121] and Janki Vashdeo Bhojwani [Janki
           Vashdeo Bhojwani v. IndusInd Bank Ltd. (2005) 2 SCC
           217], we clarify the position and answer the questions in
           the following manner:
           33.1. Filing of complaint petition under Section 138
           of the NI Act through power of attorney is perfectly
           legal and competent.
           33.2. The power-of-attorney holder can depose and
           verify on oath before the court in order to prove the
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          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.
          33.3. 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.
          33.4. In the light of Section 145 of the NI 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
          under Section 138 of the NI 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 NI Act.
          33.5. 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.
          34. 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 NI Act. This
    Court held that from a conjoint reading of Sections 138, 142 and 145
    of the NI Act as well as Section 200 of the Cr.P.C., 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
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        M/s Naresh Potteries v. M/s Aarti Industries and Another


     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 NI 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 NI 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 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.
20. More recently, in the case of TRL Krosaki Refractories Limited
    (supra) 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 NI 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 NI 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 Cr.P.C. 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 authorized by the payee-firm
    to initiate criminal proceedings on its behalf. The High Court had
    allowed the petition under Section 482 of the Cr.P.C. and set aside the
54                                                         [2025] 1 S.C.R.

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      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 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 follows:
           “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 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 NI Act
           was satisfied. In Vinita S. Rao v. Essen Corporate Services
           (P) Ltd. [Vinita S. Rao v. Essen Corporate Services (P)
           Ltd., (2015) 1 SCC 527 : (2015) 1 SCC (Civ) 558 : (2015)
           1 SCC (Cri) 726], 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,
[2025] 1 S.C.R.                                                      55

        M/s Naresh Potteries v. M/s Aarti Industries and Another


           it is also necessary for us to keep in perspective that
           though the case in A.C. Narayanan [A.C. Narayanan v.
           State of Maharashtra (2014) 11 SCC 790 : (2014) 4 SCC
           (Civ) 343] 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 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 George [Samrat Shipping Co. (P) Ltd. v. Dolly
           George (2002) 9 SCC 455 : 2003 SCC (Cri) 1224], 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 p. 456, para 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 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
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           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 31-1-2000.”
      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 NI 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 explicitly” as stated in A.C. Narayanan [A.C.
      Narayanan v. State of Maharashtra (2014) 11 SCC
      790 : (2014) 4 SCC (Civ) 343] 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 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
[2025] 1 S.C.R.                                                           57

        M/s Naresh Potteries v. M/s Aarti Industries and Another


           same during the course of the trial. As noted in Samrat
           Shipping Co. [Samrat Shipping Co. (P) Ltd. v. Dolly George
           (2002) 9 SCC 455 : 2003 SCC (Cri) 1224], 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 CrPC and quashing the order
           dated 5-11-2015, 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.
    Narayanan (supra) 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 cheque
    based on which a complaint is filed under Section 138 of the NI 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 explicitly” as categorically laid down
    in A.C. Narayanan (supra), this Court held that in cases where
    the payee/complainant is the company, all that is necessary to be
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      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 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. Narayanan (supra).
25. We find that judgment passed by the High Court is entirely based on
    the guidelines laid down in A.C. Narayanan (supra). Although the
    High Court took note of the decision in TRL Krosaki Refractories
    Limited (supra), the sole reason on which it passed the impugned
    order was that there was no specific pleading in the Letter of Authority
    or the affidavit of the power of attorney holder under Section 200
    of the Cr.P.C. to the effect that he had personal knowledge of the
    facts giving rise to the proceedings under Section 138 of the NI Act
    and further that complaint was totally silent as to any such personal
    knowledge.
26. A perusal of the complaint (Annexure P-18) 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).
[2025] 1 S.C.R.                                                            59

        M/s Naresh Potteries v. M/s Aarti Industries and Another


     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 NI Act contemplates
     that the complaint filed under Section 138 of the NI 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 NI Act.
27. Further, a cumulative study of the relevant material being the Letter
    of Authority (Annexure P-9), the affidavit in support of the complaint
    (Annexure P-10) and the affidavit of evidence under Section 200 of
    the Cr.P.C. (Annexure P-11) 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 Cr.P.C., 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 31st August 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 203131 (UP) in the capacity of sole proprietor
           of the above firm, authorize Sh. NEERAJ KUMAR s/o Sh.
           Suraj Narain, aged 42 years r/o H.No. 934, Chandralok
           Colony, Street No.4, Khurja PS, Khurja Nagar, District
           Bulandshahr, 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
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          (No.086295 /10.07.2021 for a sum of Rs.1,79,46,3141-)
          against M/s. Arti Industries, Khurja in a competent 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 support
    of his complaint reads as under:
          “02. Deponent is applicant in this case who is posted as
          manager in complainant firm M/s. Naresh Potteries, GT
          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 Cr.P.C.
    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:
          “02. Deponent is applicant in this case who is posted
          as manager in complainant firm M/s. Naresh Potteries,
          GT 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 authorized Sh. Neeraj Kumar to act on its behalf in view
    of the fact that Sh. Neeraj Kumar was in-charge of the day-to-day
    affairs of the appellant-firm and as such had personal knowledge of
    the facts of the matter.
33. As referred to above, this Court in TRL Krosaki Refractories
    Limited (supra) 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 Sh. Neeraj
[2025] 1 S.C.R.                                                          61

            M/s Naresh Potteries v. M/s Aarti Industries and Another


     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.
34. Apart from that, this Court has repeatedly cautioned that the inherent
    powers under Section 482 of the Cr.P.C. 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 Cr.P.C.
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 12th April 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.     The 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.

     Result of the case: Appeal allowed.



     †
         Headnotes prepared by: Nidhi Jain