Whether continuing with the trial in the absence of mandatory averments constitutes an abuse of the judicial process?

Case Citation

Court Name: Supreme Court of India
Case Title: Ravi Dhingra v. State of NCT of Delhi & Anr.
Case No.: Criminal Appeal No. (arising out of SLP (Crl.) No. 13251 of 2023)
Date of Judgment: December 19, 2024
Judges: Justice C.T. Ravikumar and Justice Sanjay Karol

Facts of the Case

The appellant, Ravi Dhingra, was the authorized signatory of M/s Silverstar Fashions Private Limited, which was involved in manufacturing and exporting garments. A loan transaction occurred between the appellant’s company and M/s Pinnacle Capital Solution Pvt. Ltd., a Non-Banking Financial Company (NBFC). Several cheques issued by the appellant’s company were dishonored, leading to complaints being filed under Sections 138 and 142 of the Negotiable Instruments Act, 1881 (NI Act). The appellant sought to quash the summoning orders and the related complaints on the ground that the mandatory averments required to maintain a complaint under Section 138 of the NI Act were missing. The High Court of Delhi dismissed his petitions under Section 482 of the Code of Criminal Procedure (CrPC), leading to the current appeals.

Contentions of the Appellant

1. Lack of Mandatory Averments: The complaints did not include specific averments that the appellant was in charge of and responsible for the conduct of the company’s business, as required under the NI Act.
2. Abuse of Process: Proceeding with the trial based on deficient complaints would result in an abuse of the judicial process.
3. Reliance on Precedents: The appellant referred to the Supreme Court’s decision in Ashok Shewakramani & Ors. v. State of Andhra Pradesh & Anr. to argue that mandatory averments were essential for maintaining the complaints.

Contentions of the Respondent

1. Validity of Complaints: The respondent argued that the complaints contained the necessary averments to maintain charges under Section 138 of the NI Act.
2. Compliance with Statutory Requirements: The respondent contended that the statutory requirements had been met and the appellant should stand trial.

Issues on Judgment

1. Whether the absence of specific averments regarding the appellant’s responsibility for the conduct of the company’s business invalidates the complaints under Section 138 of the NI Act?
2. Whether continuing with the trial in the absence of mandatory averments constitutes an abuse of the judicial process?
3. Whether the High Court erred in dismissing the appellant’s petitions under Section 482 of the CrPC?

Observations/Findings by the Supreme Court

1. Mandatory Averments: The Supreme Court held that the complaints did not include the mandatory averments required to sustain charges under Section 138 of the NI Act.
2. Deficiency in Complaints: The Court observed that the complaints were conspicuously lacking in details regarding the appellant’s role and responsibility in the conduct of the company’s business.
3. Abuse of Process: It was concluded that allowing the trial to proceed based on such complaints would constitute an abuse of the process of law.

Principles Laid Down by the Court

1. Mandatory Averments for Section 138: For a complaint under Section 138 of the NI Act to be maintainable, it must specifically aver that the accused was in charge of and responsible for the company’s conduct of business.
2. Precedent in Similar Cases: The Court reiterated its position from Ashok Shewakramani that such mandatory averments are essential to frame charges and proceed with the trial.
3. Abuse of Process Doctrine: Judicial processes should not be allowed to be misused by proceeding with cases based on deficient complaints.

Final Order

The Supreme Court allowed the appeals, quashing the summoning orders and related complaint cases pending before the Metropolitan Magistrate, New Delhi. The Court set aside the impugned judgment of the High Court dated August 21, 2023, and dismissed all further proceedings emanating from the complaints.

Importance of this Judgment to Society

This judgment reinforces the importance of adhering to statutory requirements when filing complaints under the NI Act, thereby upholding the principles of fairness and due process. It protects individuals and entities from frivolous or deficient legal proceedings and ensures that the judicial system is not misused. By emphasizing the need for specific averments, the judgment also strengthens the procedural safeguards for accused individuals, ensuring that only legitimate cases proceed to trial.