Background Matrix 

In the matter of Priyom Condiments Pvt Ltd vs State of Andhra Pradesh and Ors. In a complaint against the petitioner under Sections 190 and 200 of the Code of Criminal Procedure (CrPC) and Sections 138 and 142 of the National Interest Act, Venkataramana Traders claimed that the petitioner had given them a cheque for $25,000 that had been dishonoured.

Courts Conclusion

After the Andhra Pradesh High Court rejected the petitioners’ argument that the complaint should be dismissed, they petitioned the Supreme Court. According to the appeal before the Supreme Court, the High Court incorrectly rejected the argument since the individual who signed the cheque was not included in the proceedings.

The Supreme Court bench of Justices Abhay S Oka and Rajesh Bindal a plea regarding whether Section 138 of the Negotiable Instruments Act (NI Act) prosecution calls for the signature on the cheque to be added as a party to the case. Priyom Condiments Pvt Ltd’s request for a hearing on its appeal of an Andhra Pradesh High Court decision refusing to dismiss a Section 138 complaint against the business received notice from the court. It emphasised that the Supreme Court had stated in SMS. Pharmaceuticals Ltd. Versus Neeta Bhalla & Anr. that prosecution under Section 138 is not conceivable without the signatory being arraigned. According to the plea, the High Court did not take this into account. As a result, it requested that the contested order’s implementation be suspended.