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Informative

Supreme Court Clarifies Maintainability of NI Act Complaints Against Trustees Without Including Trust as Party.

Update / Judgement Date

08 Oct 2025

Source

WCP News Bulletin

Author

Sakshi Bhardwaj — WCP Legal Desk

Reading Time

2 min read

Other Legal Matters
Supreme Court Clarifies Maintainability of NI Act Complaints Against Trustees Without Including Trust as Party.
WCP News Bulletin

Headnote:

The Supreme Court addressed the issue of whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) is maintainable against a trustee without the trust being named as a party. The Court held that in such cases, the complaint against the trustee is not maintainable, as the trust is a necessary party to the proceedings.


Background:

The appellant, Sankar Padam Thapa, filed a complaint under Section 138 of the NI Act against the respondent, Vijaykumar Dineshchandra Agarwal, who was the Chairman of the Orion Education Trust. The complaint alleged dishonor of a cheque issued by the respondent in his capacity as Chairman of the Trust. The High Court quashed the proceedings, ruling that the Trust, being a necessary party, was not included in the complaint. The appellant appealed to the Supreme Court.


Court's Opinion/Analysis:

  1. The Court observed that under the NI Act, a complaint for dishonor of a cheque must be filed against the person who drew the cheque.
  2. In cases where the cheque is issued on behalf of a trust, the trust is a necessary party to the proceedings.
  3. The Court emphasized that the absence of the trust as a party renders the complaint non-maintainable against the trustee alone.
  4. The Court referred to previous judgments where it was held that a trust, being a juristic entity, must be included in legal proceedings involving its actions.


Legal Provisions Discussed:

  1. Section 138, Negotiable Instruments Act, 1881 – Offense relating to dishonor of cheque for insufficiency of funds.
  2. Section 482, Code of Criminal Procedure, 1973 – Power to quash proceedings.
  3. Relevant case law on maintainability of complaints involving trusts.


Decision:

The Supreme Court dismissed the appeal, upholding the High Court's decision to quash the complaint. The Court clarified that in cases where a trust is involved, it must be made a party to the proceedings for the complaint to be maintainable.

Case Details:

Appeal: Criminal Appeal No. 4459/2023

Court: Supreme Court of India

Coram: Hon'ble Justice Ahsanuddin Amanullah

Date of Judgment: 09 October 2025