The Calcutta High Court has ruled that a company’s name change does not invalidate cheque bounce proceedings under Section 138 of the NI Act. The judgment confirms that criminal liability continues despite corporate renaming.
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KOLKATA: In a ruling on November 14, 2025, the High Court at Calcutta dismissed a criminal revisional application filed by Super Inducto Steels Limited and its director, thereby affirming their conviction under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).
Justice Ajay Kumar Gupta clarified that a complainant’s subsequent change of name does not nullify ongoing criminal proceedings, rejecting the petitioners’ claim that the complaint was filed in the name of a non-existent juristic person.
The judgment upholds concurrent findings of the 3rd Metropolitan Magistrate, Kolkata, and the Additional District and Sessions Judge, 1st Fast Track Court, Calcutta.
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Case Background
The dispute arose from a commercial transaction between Annapurna Cast Ltd. and Super Inducto Steels Limited. In March 1999, Annapurna Cast supplied iron moulds to the petitioner company under two separate invoices amounting to Rs. 2,14,619/- and Rs. 1,81,105/-.
To clear these dues, the petitioners issued an A/C payee cheque dated October 27, 1999, for a total sum of Rs. 3,95,724/-, drawn on Punjab National Bank. However, when presented for encashment, the cheque was dishonoured on April 22, 2000, with the endorsement “Insufficient funds.” Following this, the complainant issued a statutory notice dated May 2, 2000, as required under Section 138 of the Negotiable Instruments Act.
The petitioners did not make the payment within the statutory time frame, leading to the initiation of Complaint Case No. C/2839/2000.
Conviction and Appeals
Trial Court (December 22, 2022):
Super Inducto Steels Ltd. and its director were convicted under Section 138 NI Act and sentenced to:
- Fine: Rs. 6,00,000/-,
- Interest: 9% simple interest per annum,
- Default sentence: Three months’ simple imprisonment.
First Appeal (October 11, 2023):
The Criminal Appeal No. 16 of 2023 was dismissed, with the Sessions Court affirming the conviction.
Revisional Application Before the High Court:
Aggrieved, the petitioners approached the High Court under Article 227 of the Constitution and Section 482 Cr.P.C.
Arguments before the Court
Petitioners’ Arguments
The petitioners advanced two core arguments:
- Complaint filed in the wrong name:
PW-1 had admitted that the complainant company had changed from a limited company to a private limited company during the pendency of the complaint.
The petitioners argued that continuing the complaint under the old name rendered the proceedings legally void, as the case was pursued by a “non-existent juristic person.” - Part-payment ignored:
The petitioners claimed that payments of Rs. 1,00,000/- by cheque and Rs. 2,00,000/- by Demand Draft were not considered by the lower courts.
Complainant’s Arguments
The complainant argued that:
- The dishonoured cheque squarely attracted liability under Section 138,
- The subsequent name change was inconsequential,
- Under Section 23(1) of the Companies Act, 1956, proceedings initiated in the company’s old name can continue even after a name change,
- The petitioners never disputed issuing the cheque nor replied to the statutory notice.
High Court’s Findings
Justice Ajay Kumar Gupta reiterated that revisional and inherent jurisdictions are narrow and exceptional.
The Court is not an appellate forum, and cannot re-evaluate evidence unless findings are:
- Perversely unreasonable,
- Based on no evidence, or
- Reflective of manifest injustice.
Citing landmark Supreme Court decisions, including State of Haryana v. Bhajan Lal and Shalini Shyam Shetty v. Rajendra Shankar Patil, the High Court refused to reassess factual findings.
The Court held the petitioners’ contention regarding non-amendment of the company name as “untenable.”
Relying heavily on Pioneer Protective Glass Fibre Pvt. Ltd. v. Fibre Glass Pilkington Ltd., Justice Gupta held:
“Any proceeding commenced by a company in its old name can be continued in that name even after a change of name.”
The Court stressed that:
- The complaint was initiated before the name change,
- There was proper authorization (Ext. 1/1),
- The proceedings did not amount to a new complaint,
- Hence, the complaint remained maintainable.
The Court also noted that the alleged part-payments were unsupported by admissible evidence, and the petitioners had not denied issuing the cheque or responded to the statutory notice.
Finding no patent error or miscarriage of justice, the High Court:
- Dismissed the revisional application C.R.R. 4568 of 2023,
- Upheld the concurrent conviction under Section 138 NI Act,
- Vacated all interim orders,
- Directed the Registry to send the order to the trial court for further action.
What are Sections 138 of NI Act?
Section 138: Dishonour of Cheque
- Offence: Dishonour of a cheque due to insufficient funds or exceeding overdraft.
- Essential Elements:
- Cheque drawn for payment of money returned unpaid.
- Cheque presented within 6 months of its validity period.
- Payee issues a written demand notice within 30 days of dishonour.
- Drawer fails to pay within 15 days of notice.
- Penalty: Imprisonment up to 2 years, or fine up to twice the cheque amount, or both.
- Scope: Debt or liability must be legally enforceable.
Appearance:
For the Petitioners: Advocates K.P. Pal, K.K. Pathak, S. Maji
For the Opposite Parties: Advocates Rites Goel, Rabindra Kumar Mitra
Case Title:
Super Inducto Steels Limited & Anr. Versus Annapurna Cast Ltd & Anr.
C.R.R. 4568 of 2023
READ JUDGMENT
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