Authority: Supreme Court of India, Criminal Appellate Jurisdiction
Order Date: 08 October 2026
Case Overview
- Parties: Appellant M/S Steel Kart vs. Respondent Prabh Jyoti Singh & others (respondents 2‑5).
- Original complaint filed on 20‑Oct‑2022 in Court of Judicial Magistrate, First Class, Faridabad (NACT No.59289/2022) under Section 138 of the Negotiable Instruments Act, alleging four cheques issued by the first respondent were dishonoured; signatures by Managing Director Arvinder Pal Singh and other directors.
- Summons issued on 11‑Nov‑2022; statutory notice sent to respondents 2‑5 with no response.
- Respondents 3‑5 (directors) moved the Punjab & Haryana High Court under Section 482 CrPC for quashing; High Court on 03‑Feb‑2025 held doctrine of vicarious liability civil, quashed complaint against respondents 3‑5.
- Appellant contested, citing salary statements and financial records (Annexure P‑5, P‑4) showing respondents 3‑5 received higher remuneration than Managing Director and were involved in day‑to‑day affairs.
- Counsel argued that remuneration alone does not prove management control.
Final Outcome
- Supreme Court held that the question of whether respondents 3‑5 were involved in day‑to‑day management is a factual issue for trial; High Court was not justified in terminating proceedings at the threshold.
- The Court set aside the High Court order dated 03‑Feb‑2025 and directed that all respondents be subjected to trial proceedings under Section 138 NI Act.
- No opinion on the merits was expressed; all contentions remain open.
- Appeals were allowed; any pending applications stand disposed of.
Topics: Legal; Negotiable Instruments