No Power to Recall Summoning Order in Revision; SICA Not a Shield Against Section 138 NI Act
- REEDLAW
- 1 day ago
- 3 min read
REEDLAW Legal News Network reports: In a judgment pronounced today, 2 September 2025, the Supreme Court of India ruled that revisional courts lack the jurisdiction to recall summoning orders in cases under Section 138 of the Negotiable Instruments Act (NI Act). The Court further clarified that protection under Section 22A of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) cannot be invoked as a shield against criminal prosecution for cheque dishonour.
The Supreme Court Bench of Justice Manoj Misra and Justice Ujjal Bhuyan, while adjudicating a batch of multiple Criminal Appeals, held today, 2 September 2025, that revisional courts have no power to recall summoning orders issued in proceedings under Section 138 of the NI Act. The Court categorically observed that the statutory protection available under Section 22A of SICA does not operate as a bar to criminal prosecution for cheque dishonour, thereby affirming that insolvency-related protections cannot dilute penal consequences under the NI Act.
The Supreme Court delivered its judgment allowing seven appeals that arose from identical orders of the Bombay High Court, which had dismissed writ petitions challenging revisional court orders discharging accused persons in complaints under Section 138 of the Negotiable Instruments Act, 1881. The appellant, an original complainant, had lodged separate complaints against a company and its directors for dishonour of cheques issued towards payment for supplies. The Magistrate had summoned the accused based on the complaints, but the revisional court set aside the summoning orders and discharged the accused, citing a restraint order issued by the Board for Industrial and Financial Reconstruction (BIFR) under Section 22A of the Sick Industrial Companies (Special Provisions) Act, 1985.
The Supreme Court observed that the power to recall a summoning order does not exist, as laid down in Adalat Prasad v. Rooplal Jindal, REEDLAW 2004 SC 08001 and reiterated in the Constitution Bench decision on expeditious trial of cases under Section 138 NI Act. It held that the revisional court erred in recalling the process and discharging the accused at the threshold, and the High Court wrongly affirmed that decision by misconstruing Kusum Ingots and Alloys Limited v. Pennar Peterson Securities Limited and Others, REEDLAW 2000 SC 02001. The Court clarified that Section 22 of SICA does not bar criminal proceedings under Section 138 NI Act and that a restraint order under Section 22A would not automatically preclude such prosecution. The impact of a restraint order is a factual issue to be determined at trial based on evidence. In this case, the BIFR order allowed the company to draw on current assets for day-to-day operations, and the cheques in question were allegedly issued for the discharge of liability against supplies made.
The Court concluded that the restraint order could not justify quashing the complaints without a full trial. It set aside the judgments of the High Court and the revisional court, restoring the complaints to the file of the Magistrate for trial in accordance with law. Pending applications were disposed of.
Mr. Sahil Tagotra, Advocate, represented the Appellant.
This is premium content available to our subscribers.
To access the full content related to this article — including the complete judgment, detailed legal analysis, ratio decidendi, headnotes, cited case laws, and updates on relevant statutes and notifications — we invite you to subscribe to REEDLAW’s premium research platform.
Click here to Subscribe and unlock exclusive access to structured legal analysis, judicial summaries, and a comprehensive legal research database.
Already a subscriber? Click the link below to access the full document and linked case laws.
REEDLAW Legal Research & Analysis is India’s most trusted legal publishing and research platform, empowering legal professionals with structured judicial insights and authoritative legal intelligence since 1985.
Our comprehensive legal intelligence platform covers Corporate Insolvency, Bankruptcy, SARFAESI, Company Law, Contract, MSMEs, Arbitration, Debt Recovery, and Commercial Laws. Through curated journals — IBC Reporter and Bank CLR — and an advanced digital database, REEDLAW simplifies complex legal research for professionals, institutions, and academia across India.
Comments