Latest JudgementNegotiable Instrument Act, 1881Indian Penal Code, 1860

Rajesh Kukreja V. State Of U.P. And Anr. 2026

Section 142 explicitly requires the complaint to be made by payee/holder; third-party complaints are legally invalid.

Allahabad High Court·29 January 2026

Court

Allahabad High Court

Date of Decision

29 January 2026

Judges

Justice Samit Gopal

Citation

Acts / Provisions

Section 138, Negotiable Instruments Act, 1881 (NI Act) Section 142, NI Act Sections 7 and 9, NI Act Sections 406 and 420, Indian Penal Code (IPC)

Facts of the Case

Complaint filed on August 8, 2012, by M/s. Krishna Hotels and Developers through partner Saroj Dubey.
Allegation: Rajesh Kukreja, Director of Mangalam Restaurant and Hotel Pvt. Ltd., dishonoured eleven cheques totaling ₹22 lakhs, committing offences under Section 138 NI Act and Sections 406, 420 IPC.
Cheques were drawn in favour of Hotel Paradise, not M/s. Krishna Hotels.
Metropolitan Magistrate initially questioned the complainant’s locus standi.
Summoning order by trial court in July 2013, accepted the complainant’s claim that Hotel Paradise was a unit of Krishna Hotels.
Kukreja challenged the summoning order before the High Court.

Whether a complaint under Section 138 NI Act is maintainable by a third party who is indirectly affected by the cheque transaction?
Whether only the payee or holder in due course of the cheque can initiate proceedings under Section 138?
Whether an authorised representative (POA holder or authorised signatory) can file the complaint in the name of the payee or holder in due course?
Whether M/s Krishna Hotels and Developers, through its partner, had locus to file the complaint when the cheques were drawn in favour of Hotel Paradise?

High Court clarified that only the payee or holder in due course can file a complaint under Section 138 NI Act.
A third party, even if indirectly affected, has no locus standi to initiate proceedings.
An authorised representative (POA holder or authorised signatory) may file the complaint in the name of the payee or holder in due course, not in their own name.
Cheques drawn in favour of Hotel Paradise meant Krishna Hotels and Saroj Dubey had no legal standing.
Court allowed the revision petition filed by Rajesh Kukreja, quashing the complaint filed by Krishna Hotels.

Complaint under Section 138 must be filed by the payee or holder in due course of the cheque.
Third parties have no legal standing to file such complaints.
Authorised representatives can act only in the name of the payee/holder in due course.
Summoning order by the trial court set aside, complaint quashed.

Court’s reasoning: Section 142 explicitly requires the complaint to be made by payee/holder; third-party complaints are legally invalid.
Definition of payee and holder in due course under Sections 7 and 9 of NI Act.
Section 138 offences require strict locus standi for filing complaints.
Reinforces the requirement of strict compliance with Section 138 procedures.
Clarifies that indirectly affected parties cannot misuse Section 138 to file complaints.
Sets precedent on the limitations of authorised representatives and third-party complaints.