Holding

A complaint under the Negotiable Instruments Act for a dishonoured cheque is maintainable against the trustee who signed it even if the trust itself is not made an accused, because a trust is not a legal entity and liability rests solely with its trustees.

Summary

The appellant, a liaison for a private university, was issued a cheque of Rs.5 crore by the respondent, who was the Chairman and authorized signatory of Orion Education Trust, but the cheque was dishonoured. The appellant filed a criminal complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881 and Section 420 of the IPC against the respondent, while the trust itself was not named as an accused. The respondent sought quashing of the complaint on the ground that a trust, being a juristic entity, must be joined as a party. The High Court quashed the complaint, but the Supreme Court held that a trust is not a legal entity capable of being sued or suing; liability rests solely with its trustees, and a complaint is maintainable against the trustee who signed the cheque without naming the trust. The Court relied on Sections 3 and 13 of the Trusts Act, 1882 and precedent such as Pratibha Pratisthan and K P Shibu, concluding that no specific averments of day‑to‑day responsibility are required. Consequently, the appeal was allowed and the criminal proceedings were restored.

Issues considered

Whether a trust can be sued or be made an accused in a criminal complaint under the Negotiable Instruments Act, 1881.
Whether a complaint for dishonour of a cheque is maintainable against a trustee/chairman when the trust is not named as an accused.
Whether specific averments of the trustee's responsibility for the day‑to‑day affairs of the trust are required in the complaint.
Whether the legal status of a trust under the Trusts Act, 1882 affects liability under the NI Act.

Legislation cited

Code of Criminal Procedure, 1973s. 482
Indian Penal Code, 1860s. 420
Negotiable Instruments Act, 1881s. 138, s. 141, s. 142
Trusts Act, 1882s. 13, s. 3

Headnote

Issue for Consideration Whether in the absence of a Trust being made an accused in a complaint under the Negotiable Instruments Act, 1881, when a Cheque has been issued on behalf of a Trust, the said complaint would be maintainable against the Chairman/a Trustee of the Act, 1881 – Trusts Act, 1882 – Cheque issued in favour of the Appellant under the signature of the Respondent-Chairman of the Trust as authorized signatory of the Trust, was dishonoured – Appellant filed complaint against the Respondent for offences u/ss.138 and 142, NI Act

Subjects

Trust not made accused in complaint under Negotiable Instruments Act, 1881Cheque issued on behalf of TrustMaintainability of complaint against Chairman of TrustMaintainability of complaint against a Trustee of TrustComplaint under NI Act maintainable against Trustee who signed the chequeNo requirement to array Trust as an accusedAuthorized signatory of TrustTrust not a legal entity or juristic personTrust cannot sue or be suedDay-to-day business of the TrustTrustTrusteeNegotiable Instruments Act, 1881Trusts Act, 1882

Judgment

[2025] 11 S.C.R. 197 : 2025 INSC 1210

Sankar Padam Thapa
v.
Vijaykumar Dineshchandra Agarwal
(Criminal Appeal No. 4402 of 2025)
09 October 2025
[Ahsanuddin Amanullah* and
Prashant Kumar Mishra, JJ.]

Issue for Consideration
Whether in the absence of a Trust being made an accused in a
complaint under the Negotiable Instruments Act, 1881, when a
Cheque has been issued on behalf of a Trust, the said complaint
would be maintainable against the Chairman/a Trustee of the
said Trust.

Headnotes†
Negotiable Instruments Act, 1881 – Trusts Act, 1882 – Cheque
issued in favour of the Appellant under the signature of the
Respondent-Chairman of the Trust as authorized signatory
of the Trust, was dishonoured – Appellant filed complaint
against the Respondent for offences u/ss.138 and 142, NI Act
as well as u/s.420, IPC – Respondent sought quashing of the
complaint on the ground that the Trust being a juristic entity
and a necessary party not having been added as a party, the
complaint was not maintainable – Complaint quashed by High
Court – Sustainability:
Held: Impugned judgment unsustainable, quashed – A Trust is not
a ‘legal entity’ or ‘juristic person’ – It is incapable of suing or being
sued – There is no legal requirement for a Trust to be made a party
in a proceeding before a Court of law since it is only a/the Trustee(s)
who are liable and answerable for acts done or alleged to have been
done for and on behalf of the said Trust – In the present case, in
Orion’s Deed of Trust, of which the Respondent is the Chairman/
Authorized Signatory, the relevant clauses deal with the Trustee
insofar as administering and holding the funds and properties of
the Trust are concerned – The Trust (i.e., Orion) operates only

* Author
198 [2025] 11 S.C.R.

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through the Trustee(s) and the objects thereof were for charitable
purposes – The Deed of Trust also provides for permitting one or
more Trustees to operate a bank account – Thus, it is the Trustees
alone, through whom the Trust funds/property(ies) are managed
and dealt with – The Trust itself is without any independent legal
status – When a cause of action arises due to an alleged dishonour
of cheque and a complaint is initiated under the NI Act, the same
is maintainable against the Trustee who has signed the cheque,
without the requirement to array the Trust also as an accused – It
was not mandatory to make substantive averments pertaining to
the responsibility of the Respondent in the conduct of the day-to-
day business of the Trust – Proceedings restored – Trusts Act,
1882. [Paras 26, 29, 17, 40]

Trusts Act, 1882 – ss.3, 13 – Negotiable Instruments Act,
1881 – Whether a Trust can sue or be sued on its own – Issue
examined in the context of the NI Act alone, in praesenti:
Held: Only a Trustee has the obligation to file, maintain and
defend any suit on behalf of the Trust – A Trust does not have a
separate legal existence of its own, making it incapable of suing or
being sued – A Trust is not a ‘legal entity’ or ‘juristic person’ – It is
also not like a corporation which has a legal existence of its own
and therefore can appoint an agent – A Trust operates through
its Trustees, who are legal entities – Though, a Trust may act or
even be treated as an entity for certain legal purposes and not all
legal purposes, a Trust is an obligation imposed on the ostensible
owner of the property to use the same for a particular object- for
the benefit of a named beneficiary or charity, and it is the Trustee(s)
who are bound to maintain and defend all suits and to take such
other steps with regard to the nature, land or the value of the Trust
property, that may be reasonably required for the preservation of
the Trust property, and the assertion of protection of title thereto,
subject to the provisions of the instructions of Trust to take such
other steps. [Paras 23, 25, 26]

Judicial Precedents – Following of – Matter referred to Larger
Bench, reference pending – Effect – Pratibha Pratisthan
doubted and referred to a Larger Bench in Tara Bai Desai
Charitable Opthalmic Trust Hospital v Supreme Elevators
India (P) Ltd., Special Leave Petition (Civil) No.18636/2019
– Reference pending:
[2025] 11 S.C.R. 199

Sankar Padam Thapa v. Vijaykumar Dineshchandra Agarwal

Held: Till the reference is decided one way or the other, the
law declared in Pratibha Pratisthan continues to hold the field
as no order has been passed in Special Leave Petition (Civil)
No.18636/2019 requesting other Benches to await the outcome
thereof – On the facts of a case, it is always open to a Court to
follow the most applicable precedent, as per its understanding yet,
the principle is settled that for questions of law, in the case of a
conflict between equal Bench-strength judgments, the earlier view
alone should be followed. [Para 44]

Trusts Act, 1882 – Legal status of a ‘company’ cannot be
imported to a Trust:
Held: Mukund does not lay down the correct position of law
having wrongly assigned equivalence between a ‘company’ and
a Trust, besides running counter to the exposition of this Court
qua ss.3 and 13 of the Trusts Act – The legal status accorded to
a ‘company’ cannot be imported to a Trust, in the eyes of law, in
the case at hand. [Para 36]

Case Law Cited
Aparna A Shah v. Sheth Developers Private Limited [2013] 7 SCR
69 : (2013) 8 SCC 71; Dilip Hariramani v. Bank of Baroda [2022] 4
SCR 615 : 2022 SCC OnLine SC 579; Pawan Kumar Goel v. State
of Uttar Pradesh [2022] 10 SCR 102 : 2022 SCC OnLine SC 1598;
National Small Industries Corporation Limited v. Harmeet Singh
Paintal [2010] 2 SCR 805 : (2010) 3 SCC 330 – distinguished.
SMS Pharmaceuticals Ltd. v. Neeta Bhalla [2005] Supp. 3 SCR
371 : (2005) 8 SCC 89; K K Ahuja v. V K Vora [2009] 9 SCR :
(2009) 10 SCC 48 – relied on.
Pratibha Pratisthan v. Manager, Canara Bank (2017) 3 SCC 712;
Sunita Palita v. Panchami Stone Quarry [2022] 14 SCR 458 :
(2022) 10 SCC 152; D Purushotama Reddy v. K Sateesh [2008]
11 SCR 738 : (2008) 8 SCC 505; A Raja v. D Kumar, 2025 SCC
OnLine SC 1033; National Insurance Company Limited v. Pranay
Sethi [2017] 13 SCR 100 : (2017) 16 SCC 680; Union Territory
of Ladakh v. Jammu and Kashmir National Conference [2023] 12
SCR 68 : 2023 SCC OnLine SC 1140; Tara Bai Desai Charitable
Opthalmic Trust Hospital v. Supreme Elevators India (P) Ltd. (2025)
3 SCC 80; A P Electrical Equipment Corporation v. Tahsildar [2025]
200 [2025] 11 S.C.R.

Supreme Court Reports

2 SCR 1625 : 2025 SCC OnLine SC 447; S P Mani and Mohan
Dairy v. Dr Snehalatha Elangovan [2022] 9 SCR 634 : (2023) 10
SCC 685; Tata Engineering and Locomotive Co. Ltd. v. State of
Bihar [1964] 6 SCR 885 : (1964) 34 COMP CAS 458 – referred to.
K P Shibu v. State of Kerala, 2019 SCC OnLine Ker 7585; K R
Rajan v. Cherian K Cherian, 2019 SCC OnLine Ker 4699; Duli
Chand v. M/s M P T C Charitable Trust, 1983 SCC OnLine Del
270; V Chandrasekaran v. Venkatanaicker Trust, 2016 SCC OnLine
Mad 33745; Narayana Iyer v. Anandammal Adheena Trust (2021)
3 CTC 776; Abdulrehman Sadruddin v. Trustees of the Maniar
Jamat Ahmedabad, AIR 1968 Guj 184; Vijay Sports Club v. State of
Bengal, 2019 SCC OnLine Cal 2331; Chikkamuniyappa Memorial
Trust v. State, ILR 1997 Kar 2460 – approved.
Prana Educational and Charitable Trust v. State of Kerala, 2023 SCC
OnLine Ker 8449; Dadasaheb Rawal Co-op. Bank of Dondaicha
Ltd. v. Ramesh s/o Jawrilal Jain, 2008 SCC OnLine Bom 794;
Mukund s/o Manohar Wazalwar v. Eknath s/o Bajirao Hatwar
(Dead) through his L.R. Durwas Eknath Hatwar, 2023 SCC OnLine
Bom 3015; Bijaya Manjari Satpathy v. State of Orissa, 2022 SCC
OnLine Ori 4092; Abraham Memorial Educational Trust v. Suresh
Babu, 2012 SCC OnLine Mad 2986 – overruled.
Pranab Jyoti Dutta v. Chief Branch Manager, SBI, 2023 SCC
OnLine Gau 243 – referred to.
Salomon v. A Salomon and Co. Ltd. [1897] AC 22 – referred to.

List of Acts
Negotiable Instruments Act, 1881; Trusts Act, 1882; Penal Code,
1860.

List of Keywords
Trust not made accused in complaint under Negotiable Instruments
Act, 1881; Cheque issued on behalf of Trust; Maintainability of
complaint against Chairman of Trust; Maintainability of complaint
against a Trustee of Trust; Complaint under NI Act maintainable
against Trustee who signed the cheque; No requirement to array
Trust as an accused; Authorized signatory of Trust; Trust not a ‘legal
entity’ or ‘juristic person’; Trust cannot sue or be sued; Day-to-day
business of the Trust; Trust; Trustee; Negotiable Instruments Act,
1881; Trusts Act, 1882.
[2025] 11 S.C.R. 201

Sankar Padam Thapa v. Vijaykumar Dineshchandra Agarwal

Case Arising From
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
4402 of 2025
From the Judgment and Order dated 21.11.2022 of the High Court
of Meghalya at Shilong in CRLP No. 31 of 2019

Appearances for Parties
Advs. for the Appellant:
Aditya Singh, Shubham Singh, Kamal Kishor.
Advs. for the Respondent:
Ardhendumauli Prasad, Sr. Adv., Dinesh Gangwani, Ms. Anusha
Rathore, Amjid Maqbool, Ms. Pallavi Pratap.

Judgment / Order of the Supreme Court

Judgment

Ahsanuddin Amanullah, J.

Leave granted.
2. The question for consideration in the instant appeal is as to whether
in the absence of a Trust being made an accused in a complaint
under the Negotiable Instruments Act, 1881 (hereinafter referred to as
the ‘NI Act’), when a Cheque has been issued on behalf of a Trust,
the said complaint would be maintainable against the Chairman/a
Trustee of the said Trust?

THE IMPUGNED JUDGMENT:
3. The instant appeal arises from the Final Judgment and Order dated
21.11.2022 (hereinafter referred to as the ‘Impugned Judgment’) [2022
SCC OnLine Megh 624 | (2023) 1 GLT 344], passed by a learned
Single Judge of the High Court of Meghalaya, Shillong (hereinafter
referred to as the ‘High Court’) in Criminal Petition No.31/2019,
wherein the High Court quashed and set aside the proceedings
in Criminal Case No.44(S)/2019 pending before the Court of the
learned Judicial Magistrate, Shillong (hereinafter referred to as the
‘Trial Court’) and the Summoning Order dated 11.02.2019 passed
against the Respondent.
202 [2025] 11 S.C.R.

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4. The William Carey University (hereinafter referred to as the
‘University’), a recognized Private University, owned and sponsored
by the Agriculture Crafts Trades and Studies Group of Institutions
(hereinafter referred to as the ‘ACTS Group’), was facing a severe
financial crisis. The ACTS Group entered into a Memorandum of
Understanding with Orion Education Trust (hereinafter referred
to as ‘Orion’) on 12.10.2017 to hand over the management and
administration of the University to Orion. The Respondent is the
Chairman of Orion. As Chairman of Orion, the Respondent issued
authorization letters to all concerned, duly entrusting the Appellant with
the task of liaisoning with governmental authorities and to undertake
such activities to facilitate the effective transition of all administrative
control of the University from the hands of the ACTS Group to Orion.
5. The Appellant alleged that pursuant to the above, upon such transition
being effected, the Respondent issued a Cheque dated 13.10.2018,
bearing number 000013 for Rs.5,00,00,000/- (Rupees Five Crores
Only), drawn on Kotak Mahindra Bank, Vadodara Branch in his
favour for the services rendered by him under the signature of the
Respondent as authorized signatory of Orion. When presented by
the Appellant at his ICICI Bank Branch at Laitumkhrah, Shillong,
East Khasi Hills on 07.12.2018, the Cheque was dishonoured with
the endorsement ‘insufficient funds’.
6. Notice under Section 138 of the NI Act was addressed by the
Appellant to the Respondent on 19.12.2018, which was received
by the Respondent on 27.12.2018. Response thereto was sent by
the Respondent vide Letter dated 28.12.2018. Subsequently, the
Appellant filed a complaint case No.44(S)/2019 before the Trial Court
against the Respondent for offences under Sections 138 and 142 of
the NI Act as well as under Section 420 of the Indian Penal Code,
1860. On receipt of summons, as per the Trial Court’s Order dated
11.02.2019, the Respondent entered appearance and challenged
the complaint case on the issue of maintainability for non-joinder of
necessary parties.
7. The Respondent, thereafter, preferred Criminal Petition No.31/2019
under Section 482 of the Code of Criminal Procedure, 1973
(hereinafter referred to as the ‘Code’) before the High Court seeking
to quash the complaint case and the proceedings before the Trial
Court, on the ground, inter alia, that Orion - a juristic entity and a
[2025] 11 S.C.R. 203

Sankar Padam Thapa v. Vijaykumar Dineshchandra Agarwal

necessary party being a Trust - not having been added as a party,
the complaint case was non-maintainable, and consequently, no
vicarious liability could be placed on the Respondent.
8. Allowing the Criminal Petition in the Respondent’s favour, the High
Court has, by way of the Impugned Judgment, quashed the complaint
case and the Summoning Order dated 11.02.2019 passed by the Trial
Court. Assailing the same, the present appeal has been preferred
by the Appellant.

APPELLANT’S SUBMISSIONS:
9. The arguments put forth by the learned counsel for the Appellant
were basically two-fold – (i) the ineligibility of a Trust to be sued,
and; (ii) no mandate to make specific averments with regard to the
accused’s responsibility in conducting the day-to-day business of
the Trust. For the first proposition, learned counsel placed reliance
on the decision of this Court in Pratibha Pratisthan v Manager,
Canara Bank, (2017) 3 SCC 712, where, in the context of the
Consumer Protection Act, 1986 (hereinafter referred to as the
‘Consumer Protection Act’), it was held that a Trust is not a person
and therefore, could not be a consumer.
10. Next, in support of his argument that a Trust is not capable of being
sued or suing in a court of law, learned counsel drew the attention
of this Court to the decision of the Kerala High Court in K P Shibu v
State of Kerala, 2019 SCC OnLine Ker 7585, holding that in the
context of the NI Act, it is the Trustees who can maintain and defend
a suit to protect the Trust property, and the Trust itself cannot sue or
be sued in a court of law, therefore, a Trust is not a juristic person or
a legal entity, as a juristic person has a legal existence of its own and
hence is capable of suing and being sued in a court of law. It was
further held that a Trust would not fall within the term ‘association
of individuals’ as used in the NI Act. The High Court held that since
Trustees do not join together for a common action to achieve some
common benefit for themselves as Trustees, a Trust cannot be said
to be an ‘association of persons/body of individuals’.
11. Learned counsel for the Appellant submitted that a Trust, as defined
under the Indian Trusts Act, 1882 (hereinafter referred to as the
‘Trusts Act’), is an obligation and not a legal entity. Learned counsel
for the Appellant placed reliance on the decision of the Kerala High
204 [2025] 11 S.C.R.

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Court in K R Rajan v Cherian K Cherian, 2019 SCC OnLine Ker
4699; the decision of the Delhi High Court in Duli Chand v M/s M P
T C Charitable Trust, 1983 SCC OnLine Del 270; decisions by the
Madras High Court in V Chandrasekaran v Venkatanaicker Trust,
2016 SCC OnLine Mad 33745 and Narayana Iyer v Anandammal
Adheena Trust, (2021) 3 CTC 776; decision of the Gujarat High
Court in Kansara Abdulrehman Sadruddin v Trustees of the
Maniar Jamat Ahmedabad, AIR 1968 Guj 184 and; the decision
by the Calcutta High Court in Vijay Sports Club v State of Bengal,
2019 SCC OnLine Cal 2331.
12. With regard to the second limb of his argument, learned counsel
submitted that in the case at hand, the Respondent, being the
Chairman/Authorized Representative of Orion, had signed the
cheque in question and thus, it was prima facie evident that he was
responsible for the day-to-day business of the Trust. To support his
contention, learned counsel relied upon the decision of this Court
in SMS Pharmaceuticals Ltd. v Neeta Bhalla, (2005) 8 SCC 89
[3-Judge Bench], wherein it was held that a position of a Managing
Director would suggest responsibility of the person holding the said
position, in the day-to-day affairs of the Company, which in the present
case, urged learned counsel, is akin to the position of the Chairman/
Authorized Representative of the Trust viz. Orion. The relevant portion
from SMS Pharmaceuticals Ltd. (supra) is quoted below:
‘19. In view of the above discussion, our answers to the
questions posed in the reference are as under:
(a) It is necessary to specifically aver in a complaint
under Section 141 that at the time the offence was
committed, the person accused was in charge of,
and responsible for the conduct of business of the
company. This averment is an essential requirement
of Section 141 and has to be made in a complaint.
Without this averment being made in a complaint,
the requirements of Section 141 cannot be said to
be satisfied.
(b) The answer to the question posed in sub-para (b)
has to be in the negative. Merely being a director
of a company is not sufficient to make the person
liable under Section 141 of the Act. A director in a
[2025] 11 S.C.R. 205

Sankar Padam Thapa v. Vijaykumar Dineshchandra Agarwal

company cannot be deemed to be in charge of and
responsible to the company for the conduct of its
business. The requirement of Section 141 is that the
person sought to be made liable should be in charge
of and responsible for the conduct of the business
of the company at the relevant time. This has to be
averred as a fact as there is no deemed liability of
a director in such cases.
(c) The answer to Question (c) has to be in the affirmative.
The question notes that the managing director or joint
managing director would be admittedly in charge of
the company and responsible to the company for the
conduct of its business. When that is so, holders of
such positions in a company become liable under
Section 141 of the Act. By virtue of the office they
hold as managing director or joint managing director,
these persons are in charge of and responsible for the
conduct of business of the company. Therefore, they
get covered under Section 141. So far as the signatory
of a cheque which is dishonoured is concerned, he is
clearly responsible for the incriminating act and will
be covered under sub-section (2) of Section 141.’
(emphasis supplied)

13. To further support his contentions, learned counsel for the Appellant
placed reliance on the decision of this Court in K K Ahuja v V K
Vora, (2009) 10 SCC 48; Sunita Palita v Panchami Stone Quarry,
(2022) 10 SCC 152; D Purushotama Reddy v K Sateesh, (2008)
8 SCC 505 and the decision of the Gauhati High Court in Pranab
Jyoti Dutta v Chief Branch Manager, SBI, 2023 SCC OnLine Gau
243. It was urged that the appeal deserved to be allowed.

RESPONDENT’S SUBMISSIONS:
14. Au contraire, learned senior counsel for the Respondent submitted
that a Trust is a juristic person, capable of suing and being sued in
a court of law. He placed reliance on the decision of the High Court
of Kerala in Prana Educational and Charitable Trust v State of
Kerala, 2023 SCC OnLine Ker 8449, where it was held that the
expression ‘company’ used in sub-clause (a) of the Explanation to
206 [2025] 11 S.C.R.

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Section 141 of the NI Act includes ‘any body corporate’ or ‘other
association of individuals’, and the said term, by applying the principle
of ejusdem generis would include a club, a Trust (emphasised by
learned senior counsel), and a Hindu Undivided Family within the
expression ‘company’ or ‘firm’. The High Court further held that a
Trust, either private or public/charitable is a juristic person liable to
prosecute or be prosecuted for the offence punishable under Section
138 of the NI Act. In this regard, reliance was also placed on the
decisions of the Bombay High Court in Dadasaheb Rawal Co-op.
Bank of Dondaicha Ltd. v Ramesh s/o Jawrilal Jain, 2008 SCC
OnLine Bom 794 and Mukund s/o Manohar Wazalwar v Eknath s/o
Bajirao Hatwar (Dead) through his L.R. Durwas Eknath Hatwar,
2023 SCC OnLine Bom 3015 and the decision by the Orissa High
Court in Bijaya Manjari Satpathy v State of Orissa, 2022 SCC
OnLine Ori 4092. Attention was also drawn to a decision of the
High Court of Madras in Abraham Memorial Educational Trust v
Suresh Babu, 2012 SCC OnLine Mad 2986, where that High Court
held that a Trust is a juristic person which can sue or be sued for
offence punishable under the NI Act.
15. Learned senior counsel supported the Impugned Judgment, submitted
that the appeal merited dismissal and advanced that the High Court
had not erred.

ANALYSIS, REASONING AND CONCLUSION:
16. We have heard respective learned counsel for the parties and perused
the materials on record. The question for consideration, as indicated
in Paragraph 2 supra, is as to whether in the absence of a Trust being
made an accused in a complaint under the NI Act, when a cheque
has been issued on behalf of the Trust, the said complaint would
be maintainable against the Chairman/a Trustee of the said Trust?
17. On the issue that it is not mandatory to make substantive averments
pertaining to the responsibility of the Respondent in the conduct of the
day-to-day business of the Trust, reliance was rightly placed on the
decision of a 3-Judge Bench of this Court in SMS Pharmaceuticals
Ltd. (supra) by learned counsel for the Appellant.
18. We need only reiterate the view espoused by this Court in SMS
Pharmaceuticals Ltd. (supra) and K K Ahuja (supra). As such,
a person designated as ‘Managing Director’ or ‘Joint Managing
[2025] 11 S.C.R. 207

Sankar Padam Thapa v. Vijaykumar Dineshchandra Agarwal

Director’, by virtue of the office held, would be in charge of and
responsible for the daily conduct or business of the company, and
thus, be covered under Section 141 of the NI Act. Further, as far as
the signatory of a cheque which is dishonoured be concerned, he
is responsible for the incriminating act and will be covered under
Section 141 of the NI Act. Support for the above from K K Ahuja
(supra) can be traced as under:
‘22. Section 141 uses the words “was in charge of, and
was responsible to the company for the conduct of the
business of the company”. (emphasis supplied) It is
evident that a person who can be made vicariously liable
under sub-section (1) of Section 141 is a person who is
responsible to the company for the conduct of the business
of the company and in addition is also in charge of the
business of the company. There may be many Directors
and secretaries who are not in charge of the business of
the company at all. The meaning of the words “person in
charge of the business of the company” was considered by
this Court in Girdhari Lal Gupta v. D.H. Mehta [(1971) 3 SCC
189: 1971 SCC (Cri) 279] followed in State of Karnataka v.
Pratap Chand [(1981) 2 SCC 335: 1981 SCC (Cri) 453]
and Katta Sujatha v. Fertilizers & Chemicals Travancore
Ltd. [(2002) 7 SCC 655: 2003 SCC (Cri) 151] This Court
held that the words refer to a person who is in overall
control of the day-to-day business of the company. This
Court pointed out that a person may be a Director and
thus belongs to the group of persons making the policy
followed by the company, but yet may not be in charge
of the business of the company; that a person may be a
manager who is in charge of the business but may not
be in overall charge of the business; and that a person
may be an officer who may be in charge of only some
part of the business.
xxx
27. The position under Section 141 of the Act can be
summarised thus:
(i) If the accused is the Managing Director or a Joint
Managing Director, it is not necessary to make an averment
208 [2025] 11 S.C.R.

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in the complaint that he is in charge of, and is responsible
to the company, for the conduct of the business of the
company. It is sufficient if an averment is made that the
accused was the Managing Director or Joint Managing
Director at the relevant time. This is because the prefix
“Managing” to the word “Director” makes it clear that they
were in charge of and are responsible to the company, for
the conduct of the business of the company.
(ii) In the case of a Director or an officer of the company
who signed the cheque on behalf of the company, there is
no need to make a specific averment that he was in charge
of and was responsible to the company, for the conduct
of the business of the company or make any specific
allegation about consent, connivance or negligence. The
very fact that the dishonoured cheque was signed by him
on behalf of the company, would give rise to responsibility
under sub-section (2) of Section 141.
(iii) In the case of a Director, secretary or manager [as
defined in Section 2(24) of the Companies Act] or a
person referred to in clauses (e) and (f) of Section 5
of the Companies Act, an averment in the complaint
that he was in charge of, and was responsible to the
company, for the conduct of the business of the company
is necessary to bring the case under Section 141(1) of
the Act. No further averment would be necessary in the
complaint, though some particulars will be desirable. They
can also be made liable under Section 141(2) by making
necessary averments relating to consent and connivance
or negligence, in the complaint, to bring the matter under
that sub-section.
(iv) Other officers of a company cannot be made liable
under sub-section (1) of Section 141. Other officers of a
company can be made liable only under sub-section (2)
of Section 141, by averring in the complaint their position
and duties in the company and their role in regard to the
issue and dishonour of the cheque, disclosing consent,
connivance or negligence.’
(emphasis supplied)
[2025] 11 S.C.R. 209

Sankar Padam Thapa v. Vijaykumar Dineshchandra Agarwal

19. The position in law was further elucidated in Sunita Palita (supra),
where the following was observed:
‘36. The High Court also rightly held that the Managing
Director or Joint Managing Director would admittedly be in
charge of the company and responsible to the company for
the conduct of its business by virtue of the office they hold
as Managing Director or Joint Managing Director. These
persons are in charge of and responsible for the conduct
of the business of the company and they get covered
under Section 141 of the NI Act. A signatory of a cheque
is clearly liable under Sections 138/141 of the NI Act.’
(emphasis supplied)

20. Further, in S P Mani and Mohan Dairy v Dr Snehalatha Elangovan,
(2023) 10 SCC 685, it was laid down that for an accused to escape
criminal liability, the accused would have to demonstrate that he/she
was not in charge or in control, as under:
‘58. Our final conclusions may be summarised as under:
58.1. The primary responsibility of the complainant is to
make specific averments in the complaint so as to make
the accused vicariously liable. For fastening the criminal
liability, there is no legal requirement for the complainant
to show that the accused partner of the firm was aware
about each and every transaction. On the other hand, the
first proviso to sub-section (1) of Section 141 of the Act
clearly lays down that if the accused is able to prove to the
satisfaction of the Court that the offence was committed
without his/her knowledge or he/she had exercised due
diligence to prevent the commission of such offence, he/
she will not be liable of punishment.
58.2. The complainant is supposed to know only generally
as to who were in charge of the affairs of the company or
firm, as the case may be. The other administrative matters
would be within the special knowledge of the company
or the firm and those who are in charge of it. In such
circumstances, the complainant is expected to allege that
the persons named in the complaint are in charge of the
affairs of the company/firm. It is only the Directors of the
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company or the partners of the firm, as the case may be,
who have the special knowledge about the role they had
played in the company or the partners in a firm to show
before the Court that at the relevant point of time they were
not in charge of the affairs of the company. Advertence
to Sections 138 and Section 141, respectively, of the NI
Act shows that on the other elements of an offence under
Section 138 being satisfied, the burden is on the Board
of Directors or the officers in charge of the affairs of the
company/partners of a firm to show that they were not liable
to be convicted. The existence of any special circumstance
that makes them not liable is something that is peculiarly
within their knowledge and it is for them to establish at
the trial to show that at the relevant time they were not in
charge of the affairs of the company or the firm.
58.3. Needless to say, the final judgment and order would
depend on the evidence adduced. Criminal liability is
attracted only on those, who at the time of commission
of the offence, were in charge of and were responsible
for the conduct of the business of the firm. But vicarious
criminal liability can be inferred against the partners of a
firm when it is specifically averred in the complaint about
the status of the partners “qua” the firm. This would make
them liable to face the prosecution but it does not lead
to automatic conviction. Hence, they are not adversely
prejudiced if they are eventually found to be not guilty,
as a necessary consequence thereof would be acquittal.
58.4. If any Director wants the process to be quashed
by filing a petition under Section 482 of the Code on the
ground that only a bald averment is made in the complaint
and that he/she is really not concerned with the issuance
of the cheque, he/she must in order to persuade the High
Court to quash the process either furnish some sterling
incontrovertible material or acceptable circumstances to
substantiate his/her contention. He/she must make out
a case that making him/her stand the trial would be an
abuse of process of Court.’
(emphasis supplied)
[2025] 11 S.C.R. 211

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21. On the issue of whether a Trust is capable of suing or being sued,
though in the context of the Consumer Protection Act, in Pratibha
Pratisthan (supra), it was observed that a Trust is not a ‘person’ and
‘therefore not a consumer’. The Court went on to hold that a Trust
‘cannot be a complainant and cannot file a consumer dispute under
the provisions’ of the Consumer Protection Act, as it would not fall
under the definition of ‘person’ as per Section 2(m) of the Consumer
Protection Act. Referring to the said provision from the Consumer
Protection Act, in Pratibha Pratisthan (supra), the Court opined:
‘4. A reading of the definition of the words “complaint”,
“complainant” and “consumer” makes it clear that a trust
cannot invoke the provisions of the Act in respect of any
allegation on the basis of which a complaint could be
made. To put this beyond any doubt, the word “person” has
also been defined in the Act and Section 2(1)(m) thereof
defines a “person” as follows:
“2. (1)(m) “person” includes—
(i) a firm whether registered or not;
(ii) a Hindu undivided family;
(iii) a cooperative society;
(iv) every other association of persons whether
registered under the Societies Registration Act,
1860 (21 of 1860) or not;”
5. On a plain and simple reading of all the above provisions
of the Act it is clear that a trust is not a person and therefore
not a consumer. Consequently, it cannot be a complainant
and cannot file a consumer dispute under the provisions
of the Act.’
(emphasis supplied)

22. Sections 3 and 13 of the Trusts Act read thus:
‘3. Interpretation-clause—“Trust”.—A “trust” is an
obligation annexed to the ownership of property, and
arising out of a confidence reposed in and accepted by the
owner, or declared and accepted by him, for the benefit
of another, or of another and the owner;
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the person who reposes or declares the confidence is
called the “author of the trust”; the person who accepts
the confidence is called the “trustee”; the person for
whose benefit the confidence is accepted is called the
“beneficiary”; the subject-matter of the trust is called
“trust-property” or “trust money”; the “beneficial interest” or
“interest” of the beneficiary is his right against the trustee
as owner of the trust-property; and the instrument, if any,
by which the trust is declared is called the “instrument of
trust”;
a breach of any duty imposed on a trustee, as such, by any
law for the time being in force, is called a “breach of trust”;
and in this Act, unless there be something repugnant
in the subject or context, “registered” means registered
under the law for the registration of documents for the
time being in force; a person is said to have “notice” of a
fact either when he actually knows that fact, or when, but
for wilful abstention from inquiry or gross negligence, he
would have known it, or when information of the fact is
given to or obtained by his agent, under the circumstances
mentioned in the Indian Contract Act, 1872, Section 229;
and all expressions used herein and defined in the Indian
Contract Act, 1872, shall be deemed to have the meanings
respectively attributed to them by that Act.
xxx
13. Trustee to protect title to trust-property.—A trustee is
bound to maintain and defend all such suits, and (subject
to the provisions of the instrument of trust) to take such
other steps as, regard being had to the nature and amount
or value of the trust-property, may be reasonably requisite
for the preservation of the trust-property and the assertion
or protection of the title thereto.’
(emphasis supplied)

23. To our mind, the above-extracted Sections of the Trusts Act would
also favour the view we are taking, as the obligation to ‘maintain
and defend’ suits is placed on the shoulders of a Trustee and not
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the Trust itself. It is clear that only a Trustee has the obligation to
file, maintain and defend any suit on behalf of the Trust. Meaning
thereby, that a Trust does not have a separate legal existence of its
own, making it incapable of suing or being sued. A learned Single
Judge of the Kerala High Court, relying on Pratibha Pratisthan
(supra), in K P Shibu (supra), noted:
‘16. Thus, it is clear from the above provisions that all
the trustees are the owners of the property, but they
are obliged to use the same in a particular manner. If a
number of trustees exist, they are the joint owners of the
property. The trustees are bound to maintain and defend
all suits, for the preservation of the trust-property and the
assertion or protection of the title thereto. Thus, it appears
that the “Trust” is not capable of suing and being sued in
a court of law, even though the trustees can maintain and
defend suits for the preservation and protection of the trust-
property. Therefore, a “Trust” is not a juristic person or a
legal entity, as the juristic person has a legal existence of
its own and hence it is capable of suing and being sued
in a court of law. Thus, it appears that a “Trust” is not like
a body corporate, which has a legal existence of its own
and therefore can appoint an agent. The above discussion
would make it clear that a “Trust” is not a body corporate.’
(emphasis supplied)

24. The same proposition has been reiterated by the Delhi High Court in
Duli Chand (supra), the Madras High Court in V Chandrasekaran
(supra) and Narayana Iyer (supra), the Gujarat High Court in
Kansara Abdulrehman Sadruddin (supra), the Calcutta High
Court in Vijay Sports Club (supra) and the Karnataka High Court
in Chikkamuniyappa Memorial Trust v State, ILR 1997 Kar 2460.
25. We find substance in the reasoning assigned by the High Courts of
Kerala, Delhi, Madras, Gujarat, Calcutta and Karnataka that a Trust
is not a ‘legal entity’ or ‘juristic person’. A Trust is also not like a
corporation which has a legal existence of its own and therefore can
appoint an agent. A Trust operates through its Trustees, who are legal
entities. We may gainfully refer to the decision of the Kerala High
Court in K R Rajan (supra), where the said Court has rightly held:
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‘7. The legal status of a trust, is thus well discernible. Trust
not being a legal person, and the Code of Civil Procedure
not providing any enabling provision for the Trust to sue
or for being sued in its name, there is no merit in the
contention that the Trust is to be arrayed as a co-nominee
party. The arraying of the trust in its own name is otiose
or redundant. It is the trustees who are to be impleaded
to represent the trust. Therefore, the contention of the
petitioner on the ground of non-joinder, also fails.’
(emphasis supplied)

26. Ergo, it is clear that though a Trust may act or even be treated as an
entity for certain legal purposes and not all legal purposes, a Trust
is an obligation imposed on the ostensible owner of the property
to use the same for a particular object - for the benefit of a named
beneficiary or charity, and it is the Trustee(s) who are bound to
maintain and defend all suits and to take such other steps with regard
to the nature, land or the value of the Trust property, that may be
reasonably required for the preservation of the Trust property, and
the assertion of protection of title thereto, subject to the provisions
of the instructions of Trust to take such other steps.
27. There exists no ambiguity about there being no legal requirement
for a Trust to be made a party in a proceeding before a Court of
Law since it is only a/the Trustee(s) who are liable and answerable
for acts done or alleged to have been done for and on behalf of
the said Trust. From a perusal of Orion’s Deed of Trust, of which
the Respondent is the Chairman/Authorized Signatory, it emerges
clearly that the relevant clauses deal with the Trustee insofar as
administering and holding the funds and properties of the Trust
are concerned. Which is to say that the Trust (i.e., Orion) operates
only through the Trustee(s) and that the objects thereof were for
charitable purposes. The Deed of Trust also provides for permitting
one or more Trustees to operate a bank account. It becomes all the
more apparent that it is the Trustees alone, through whom the Trust
funds/property(ies) are managed and dealt with. The Trust itself is
without any independent legal status.
28. Though we have delved into the issue of whether a Trust can sue
or be sued on its own, we would make it amply clear (and as would
also become evident from what follows infra) on this point, that our
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view is confined to examination of the subject in the context of the
NI Act alone, in praesenti. We were called upon to consider only as
to whether without making a Trust an accused, a complaint would
be maintainable against a Trustee in the eye of law under the NI Act.
29. Hence, the question posed is answered in the affirmative. When a
cause of action arises due to an alleged dishonour of cheque and
a complaint is initiated under the NI Act, the same is maintainable
against the Trustee who has signed the cheque, without the
requirement to array the Trust also as an accused.
30. As far as the judgments pressed into service by the Respondent be
concerned, we have bestowed thoughtful consideration thereto. We
are unable to concur with the propositions they purport to propound.
31. In Prana Educational and Charitable Trust (supra), a learned
Single Judge of the Kerala High Court held:
‘20. Analyzing the decision rendered by the Madras High
Court, it could be gathered that after elaborately considering
the relevant statutory provisions, the learned Single Judge
held as above. The High Courts of Bombay and Gujarat
interpreted the explanation appended to Section 141 of the
N.I. Act with reference to “inclusive of any body corporate”
or “other association of individuals” and construed the
above terms by applying the principle of ejusdem generis
and held that the term “association of individuals” will
include club, trust, Hindu Undivided Family Business.
21. Coming to K.P. Shibu’s case (supra), it is discernible that
the said decision is not so elaborative and the interpretation
of the term “association of individuals” not done by applying
the ratio of ejusdem generis. The principle of ejusdem
generis intented for the construction of constitutional and
statutory provisions means “of the same kind” and this
doctrine provides that the general words which follow
the specified words will be restricts to the same class
of the specified words. While applying this principle, (1)
the general words must follow the specific words and the
specific words must necessarily constitute, a genus/class
(2) the legislative intention of the statute to be born in mind
for restricting the general word to the genus/class of the
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specified words if follows and (3) this principle has to be
used by the Courts properly and apply where it is necessary
and not use this principle where it is not necessary so as to
defeat the purpose of the statute and to cause miscarriage
of justice are the conditions to be satisfied. Thus, it appears
that the High Courts of Madras, Bombay and Gujarat
correctly interpreted the various provisions and the law
emerges from the said judgments are as under: (i) The
expression “company” used in sub-clause (a) of explanation
appended to Section 141 of the N.I. Act includes any body
corporate or other “association of individuals” and the term
“association of individuals” to be interpreted by applying
the principle of ejusdem generis. To be construed so, the
term “association of individuals” will include club, trust and
Hindu undivided family business along with the expression
“company” or “firm”. (ii) A Trust, either private or public/
charitable or otherwise, is a juristic person who is liable
for punishment for the offence punishable under Section
138 of the Negotiable Instruments Act. (iii) A Trust, either
private or public/charitable or otherwise, having either a
single trustee or two or more trustees, is a company in
terms of Section 141 of the Negotiable Instruments Act.
(iv) For the offence under Section 138 of The Negotiable
Instruments Act, committed by the Trust, every trustee,
who was in-charge of the day-to-day affairs of the Trust
shall also be liable for punishment besides the Trust.
22. Therefore, following the legal principles set forth above,
it has to be held that the challenge raised by the accused
on the ground that no prosecution under Section 138 read
with Section 141 of the N.I. Act against the Trust would
lie, cannot be sustained and the same stands repelled.’
(emphasis supplied)

32. We do not approve of the manner in which the learned Single Judge
in Prana Educational and Charitable Trust (supra) decided to
ignore binding precedent in K P Shibu (supra), which was a judgment
rendered by another learned Single Judge of the same Court, earlier
in point of time, merely by noting ‘it is discernible that the said decision
is not so elaborative and the interpretation of the term “association
[2025] 11 S.C.R. 217

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of individuals” not done by applying the ratio of ejusdem generis.’
It was not open to the learned Judge in Prana Educational and
Charitable Trust (supra) to prefer the view expressed by other High
Courts in preference to the view of a Bench of the own High Court
of equal strength expressed previously. At the most, recording his
disagreement with the view in K P Shibu (supra), the learned Judge
in Prana Educational and Charitable Trust (supra) ought to have
referred the matter to the learned Chief Justice of the High Court
seeking constitution of a larger Bench. The only other way Prana
Educational and Charitable Trust (supra) could have gotten over
K P Shibu (supra) despite being a co-equal Bench would have been
by undertaking an analysis via the principles of per incuriam and/or
sub-silentio, as undertaken by a 3-Judge Bench recently in A Raja v
D Kumar, 2025 SCC OnLine SC 1033. We say this illustratively.
Not as a matter of routine can a later Bench of equal strength refuse
to follow an earlier decision of a Bench of equal strength. The law
hereon was stated in National Insurance Company Limited v
Pranay Sethi, (2017) 16 SCC 680 and Union Territory of Ladakh v
Jammu and Kashmir National Conference, 2023 SCC OnLine
SC 1140. Therefore, while not disturbing Prana Educational and
Charitable Trust (supra) inter-parties, we declare the statement of
law therein incorrect to the extent it rules on the issue before us, on
account of failure to adhere to binding precedent.
33. Dadasaheb Rawal Co-op. Bank of Dondaicha Ltd. (supra) and
Abraham Memorial Educational Trust (supra) were decided by
the Bombay and Madras High Courts respectively, prior to Pratibha
Pratisthan (supra) and need not detain us further. Mukund (supra)
was decided by a learned Single Judge of the Bombay High Court,
Bench at Nagpur, where the learned Judge held:
‘10. The controversy in this case is required to be addressed
in the backdrop of the above stated facts. At this stage, it
would be necessary to consider the legal position. There
are number of reported decisions, wherein it has been held
that the phrase, “association of individuals” has to be read
along with the word “company and firm” occurring in the
explanation appended to section 141 of the N.I. Act. It is
also settled legal position that the expression, “association
of individuals” is intended to cover the cases of societies,
trusts etc, who have a legal and juristic personality.
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Reference can be made to the decision in the cases of
Shri Banwarilal L. Saini. (supra), Bijaya Manjari Satpathy v.
State of Orissa, 2022 LiveLaw (Ori) 158, and Abraham
Memorial Educational Trust v. C. Suresh Babu, Cri. OP
Nos. 12630 and 12661 of 2012 decided on 7-8-2012.
11. The primary question arisen in these cases was whether
the Trust either public or private is a company covered in
terms of section 141 of the N.I. Act and as such a juristic
person, liable for punishment for the offence punishable
under section 138 of the N.I. Act. It is to be noted that
the specific question as above fell for consideration of
the Madras High Court in the case of Abraham Memorial
Educational Trust. (supra). The learned Single Judge of
the Madras High Court, after considering the length and
breadth of the subject in this erudite decision, has held that
the Trust either public or private/charitable or otherwise is
a juristic person and is liable for punishment for offence
punishable under section 138 of the N: I. Act. It is further
held that a Trust either private or public/charitable or
otherwise having either a single trustee or two or more
trustees, is a company in terms of section 141 of the N.I.
Act. It is further held that for the offence under section 138
of the N.I. Act, committed by the Trust, every trustee, who
were the in-charge of the day-to-day affairs of the Trust
shall also be liable for punishment besides the Trust.
xxx
12. On going through the record and proceedings and
also the dicta laid down in the above decisions, I am of
the opinion that the Trustee is a juristic person. The Trust,
being an association of persons, would be a company
in terms of section 141 of the N.I. Act. In this case, the
cheque was issued by or on behalf of the Trust. The Trust
is, therefore, the principal offender in this case. It is further
pertinent to mention that by a legal fiction created under
section 141 of the N.I. Act, all the persons who are the
Office bearers of the Trust being in-charge of the day-to-
day affairs of the Trust, shall also be liable for punishment
besides the Trust.
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13. In this background, it would be necessary to consider
the settled position on the important point as to the effects
and consequences of not arraigning the Trust as a principal
accused or the effects and consequences of deletion of
the name of Trust from the complaint during the pendency
of the complaint. In my view, this situation would be
required to be addressed in the backdrop of the law laid
down in the cases of Aneeta Hada v. Godfather Travels
and Tours Pvt. Ltd., (2012) 5 SCC 661: (2012) 4 Mah LJ
(SC) 527: (2012) 3 Mah LJ (Cri) (SC) 249, Himanshu v.
B. Shivamurthy, (2019) 3 SCC 797: 2019 Mah LJ OnLine
(Cri) (SC) 126 and Pawan Kumar Goel v. State of U.P.,
2022 SCC OnLine SC 1598: (2023) 2 Mah LJ (SC) 456:
(2023) 2 Mah LJ (Cri) (SC) 1. The exposition of the law
in these decisions clearly states that if a cheque is issued
by the company or on behalf of the company, then the
Company is the principal offender. It is further held that
apart from the company being a principal offender, every
person who at the time when the offence was committed
was in-charge or was responsible to the company for
the conduct of the business of the company, shall also
be deemed to be guilty of offence and shall be liable to
be proceeded against and punished. It is held that in the
absence of company being the principal accused in the
complaint, the prosecution against the remaining persons,
being vicariously liable by deeming fiction, gets vitiated.’
(emphasis supplied)

34. Clearly, Mukund (supra) principally proceeded on equating a Trust
with a ‘company’, which is a fallacy. If we trace our steps back to
over a century ago, in the locus classicus Salomon v A Salomon
and Co. Ltd., [1897] AC 22, Lord Macnaghten of the House of
Lords opined:
‘…
The company is at law a different person altogether from
the subscribers to the memorandum; and, though it may be
that after incorporation the business is precisely the same
as it was before, and the same persons are managers,
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and the same hands receive the profits, the company is
not in law the agent of the subscribers or trustee for them.
Nor are the subscribers as members liable, in any shape
or form, except to the extent and in the manner provided
by the Act. That is, I think, the declared intention of the
enactment. If the view of the learned judge were sound, it
would follow that no common law partnership could register
as a company limited by shares without remaining subject
to unlimited liability.
…’
(emphasis supplied)

35. In Tata Engineering and Locomotive Co. Ltd. v State of Bihar,
(1964) 34 COMP CAS 458, this Court, in a composition of 5 learned
Judges, commented:
‘…
The true legal position in regard to the character of a
corporation or a company which owes its incorporation
to a statutory authority, is not in doubt or dispute. The
Corporation in law is equal to a natural person and has
a legal entity of its own. The entity of the Corporation is
entirely separate from that of its shareholders; it bears
its own name and has a seal of its own; its assets are
separate and distinct from those of its members; it can
sue and be sued exclusively for its own purpose; its
creditors cannot obtain satisfaction from the assets of its
members; the liability of the members or shareholders
is limited to the capital invested by them; similarly, the
creditors of the members have no right to the assets of
the Corporation. This position has been well established
ever since the decision in the case of Salomon v. Salomon
and Co. was pronounced in 1897; and indeed, it has
always been the well-recognised principle of common
law. However, in the course of time, the doctrine that the
Corporation or a Company has a legal and separate entity
of its own has been subjected to certain exceptions by the
application of the fiction that the veil of the Corporation
can be lifted and its face examined in substance. The
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doctrine of the lifting of the veil thus marks a change
in the attitude that law had originally adopted towards
the concept of the separate entity or personality of the
Corporation. As a result of the impact of the complexity
of economic factors, judicial decisions have sometimes
recognised exceptions to the rule about the juristic
personality of the corporation. It may be that in course
of time these exceptions may grow in number and to
meet the requirements of different economic problems,
the theory about the personality of the corporation may
be confined more and more.
…’
(emphasis supplied)

36. Therefore, Mukund (supra) does not lay down the correct position
of law having wrongly assigned equivalence between a ‘company’
and a Trust, besides running counter to our exposition qua Sections
3 and 13 of the Trusts Act. The legal status accorded to a ‘company’
cannot be imported to a Trust, in the eyes of law, in the case at hand.
37. Turning to the Orissa High Court’s verdict in Bijaya Manjari Satpathy
(supra), we find as under:
(a) The Orissa High Court relied on Aparna A Shah v Sheth
Developers Private Limited, (2013) 8 SCC 71, which related
to a company and Dilip Hariramani v Bank of Baroda, 2022
SCC OnLine SC 579, which concerned a partnership firm –
both of which cannot be equated with a Trust;
(b) The High Court also relied on Pawan Kumar Goel v State
of Uttar Pradesh, 2022 SCC OnLine SC 1598. However,
this case also concerned a company but the purpose for
which the High Court considered the same has no nexus with
the question we have answered. Likewise, National Small
Industries Corporation Limited v Harmeet Singh Paintal,
(2010) 3 SCC 330 concerned a company and the pleadings/
averments which would be required to assign vicarious liability
to the concerned accused.
(c) The Orissa High Court altogether omitted to consider the relevant
provisions of the Trusts Act.
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38. The views expressed by the respective High Courts in Prana
Educational and Charitable Trust (supra); Dadasaheb Rawal
Co-op. Bank of Dondaicha Ltd. (supra); Abraham Memorial
Educational Trust (supra); Mukund (supra), and; Bijaya Manjari
Satpathy (supra) run counter to what we have held above. The
same do not commend themselves to us and are overruled in law,
without disturbing their effect(s) inter-parties.
39. The Impugned Judgment accorded reliance to SMS Pharmaceuticals
Ltd. (supra) and Pawan Kumar Goel (supra) while acceding to
the Respondent’s prayer(s) before it. Again, Pawan Kumar Goel
(supra) was in the context of a company and the principles laid
down could not be made applicable straightaway to a Trust, moreso
in light of the reasoning by us hereinabove. The extracts from SMS
Pharmaceuticals Ltd. (supra) cited in the Impugned Judgment
are distinguishable as they related to the averments necessary
in a complaint to invoke vicarious liability and not the factum of
impleadment or lack thereof, specifically, a Trust in a complaint.
Concededly, neither party urged submissions based on the Trusts
Act before the High Court.
40. Accordingly, for reasons aforesaid, taking a holistic view in the
entirety of the extant facts and circumstances as also the submissions
canvassed by the learned counsel for the parties, we find the Impugned
Judgment to be unsustainable. We have no hesitation in quashing
and setting aside the Impugned Judgment. Resultantly, the subject-
proceeding in Criminal Case No.44(S)/2019 stands restored to its
original file and number, to be proceeded with by the Court concerned
in accordance with law. As the matter traces its origin to the year 2019,
we expect the Court concerned to take steps with due expedition.
41. The appeal stands allowed. This Judgment shall not affect any other
contentions of law and fact, which may be raised before the Trial
Court, at the appropriate stage.

THE PENDING REFERENCE AND ITS EFFECT IN LAW:
42. We are conscious that Pratibha Pratisthan (supra) has been
doubted and referred to a Larger Bench vide Order dated 04.10.2019
in Tara Bai Desai Charitable Opthalmic Trust Hospital v
Supreme Elevators India (P) Ltd., Special Leave Petition (Civil)
No.18636/2019 [since reported as (2025) 3 SCC 80]. In fact, one of
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us (Ahsanuddin Amanullah, J.) was nominated by Hon’ble the then
Chief Justice of India to be part of the 3-Judge Bench constituted
to hear the afore-noted reference. As the learned Judge presiding
over that 3-Judge Bench has since demitted office, it would entail
nomination of a new coram. However, till the reference is decided
one way or the other, the law as declared in Pratibha Pratisthan
(supra) continues to hold the field as no order has been passed in
Special Leave Petition (Civil) No.18636/2019 requesting other
Benches to await the outcome thereof. There is no doubt on this,
given the clear dicta in Union Territory of Ladakh (supra) [2-Judge
Bench], which after surveying the law, held:
‘35. We are seeing before us judgments and orders by High
Courts not deciding cases on the ground that the leading
judgment of this Court on this subject is either referred
to a larger Bench or a review petition relating thereto is
pending. We have also come across examples of High
Courts refusing deference to judgments of this Court on
the score that a later Coordinate Bench has doubted its
correctness. In this regard, we lay down the position in
law. We make it absolutely clear that the High Courts will
proceed to decide matters on the basis of the law as it
stands. It is not open, unless specifically directed by this
Court, to await an outcome of a reference or a review
petition, as the case may be. It is also not open to a High
Court to refuse to follow a judgment by stating that it has
been doubted by a later Coordinate Bench. In any case,
when faced with conflicting judgments by Benches of
equal strength of this Court, it is the earlier one which is
to be followed by the High Courts, as held by a 5-Judge
Bench in National Insurance Company Limited v. Pranay
Sethi, (2017) 16 SCC 680 [See Paragraphs 27 and 28 in
the report on this point.]. The High Courts, of course, will
do so with careful regard to the facts and circumstances
of the case before it.’
(emphasis supplied)

43. We have noticed a judgment by a Coordinate Bench in A P Electrical
Equipment Corporation v Tahsildar, 2025 SCC OnLine SC 447
stating:
224 [2025] 11 S.C.R.

Supreme Court Reports

‘35. If two decisions of this Court appear inconsistent with
each other, the High Courts are not to follow one and
overlook the other, but should try to reconcile and respect
them both and the only way to do so is to adopt the wise
suggestion of Lord Halsbury given in Quinn v. Leathern,
[1901] A.C. 495 and reiterated by the Privy Council in
Punjab Cooperative Bank Ltd. v. Commr. of Income Tax,
Lahore AIR 1940 PC 230:
“…… every judgment must be read as applicable
to the particular facts proved or assumed to be
proved, since the generality of the expressions,
which may be found there, are not intended to
be expositions of the whole law, but governed
or qualified by the particular facts of the case
in which such expressions are to be found.”
and follow that decision whose facts appear more in accord
with those of the case at hand.’
(emphasis supplied)

44. The decision rendered in A P Electrical Equipment Corporation
(supra) does not whittle down the enunciation in Union Territory
of Ladakh (supra). A 5-Judge Bench of this Court in Pranay Sethi
(supra) has laid down that an earlier decision of a co-equal Bench
must be followed by a later Bench of co-equal strength, which has
been restated in Union Territory of Ladakh (supra). In any event,
Union Territory of Ladakh (supra) lays down that when following
an earlier decision in the face of a later conflicting decision by a
co-equal Bench, the said exercise is to be done ‘… with careful
regard to the facts and circumstances of the case…’ A P Electrical
Equipment Corporation (supra) expresses the principle slightly
differently by urging to ‘… follow that decision whose facts appear
more in accord with those of the case at hand.’ Undoubtedly, on
the facts of a case, it is always open to a Court to follow the most
applicable precedent, as per its understanding. Yet, the principle has
long been settled that for questions of law, in the case of a conflict
between equal Bench-strength judgments, the earlier view alone
should be followed, as conclusively stated in Pranay Sethi (supra)
and taken note of in Union Territory of Ladakh (supra).
[2025] 11 S.C.R. 225

Sankar Padam Thapa v. Vijaykumar Dineshchandra Agarwal

MISCELLANEOUS:
45. The Registry may seek suitable orders from Hon’ble the Chief Justice
of India apropos constitution of an appropriate Bench to decide the
pending reference in Special Leave Petition (Civil) No.18636/2019.
We clarify that the instant appeal is disposed of and not tagged with
the reference.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Divya Pandey