Ahmedabad’s courtrooms saw a lively exchange on 30 September 2025 as Justice J.C. Doshi of the Gujarat High Court dismissed two petitions filed by Champion Agro Ltd. and its directors. The petitions challenged a trial court order allowing Kotak Mahindra Bank to step into the shoes of Capital First Ltd. in pending cheque bounce cases. After more than an hour of arguments, the judge ruled that the substitution was legally sound, clearing the way for the bank to continue the proceedings.
Background
Champion Agro Ltd., a company based in Rajkot, had borrowed ₹5.48 crore from Capital First Ltd., a non-banking finance company. Its directors had stood guarantor. According to the complaint, in December 2014 the company issued cheques towards repayment, which were later returned unpaid with the remark “Account Block.” Following the statutory notice, a criminal complaint under Section 138 of the Negotiable Instruments Act (which deals with cheque dishonour) was filed in Rajkot.
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During the pendency of the case, Capital First executed a registered deed of assignment on 28 December 2015, transferring the loan and securities to Kotak Mahindra Bank. Kotak then applied to be substituted as the complainant in the ongoing cases. The trial court allowed the request, prompting Champion Agro and its directors to move the High Court seeking to quash the substitution order.
Court’s Observations
The petitioners’ counsel argued that allowing the bank to replace the original complainant robbed the accused of their right to question the personal knowledge of the original company’s representatives. They cited earlier Supreme Court cases to stress that criminal complaints cannot simply be “handed over” like a file.
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The bank’s lawyers countered with the assignment deed’s Clause 5.1.2, which explicitly permitted Kotak to continue legal proceedings. They relied on the Supreme Court’s 2025 decision in Bansal Milk Chilling Centre to say amendments or substitutions can be allowed even after a case is filed.
Justice Doshi appeared unimpressed with the petitioners’ objections. “The apprehension canvassed by the petitioner can by no means be treated as a legitimate ground for nullifying the impugned order,” the bench observed, noting that Champion Agro’s loan transaction involved extensive paperwork, leaving “but little scope for oral testimony.” The court also clarified that the bank, being a juristic person, could act through its authorised representative and did not have to implead a natural person as complainant.
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Decision
After considering the record and precedents, the High Court upheld the trial court’s decision. “In light of the aforesaid discussion, this court is of the considered view that both these petitions are devoid of merit and, accordingly, stand dismissed,” the order concluded. Justice Doshi also directed the trial court to finish the pending cases within six months and asked both parties to cooperate fully.
Case: Champion Agro Ltd. & Ors. vs. Kotak Mahindra Bank Ltd. & Ors.
Case Numbers: R/Special Criminal Application (Quashing) Nos. 1723 & 1726 of 2017
Date of Decision: 30 September 2025
