138 NI Act| Trial Court Cannot Dismiss Complaint For Non-Appearance When High Court Stay Of Proceedings Is In Force: Madras High Court

"When an order of interim stay granted by this Court was in force, there was no possibility for the trial Court to proceed further... the trial Court without referring to the interim order passed by this Court and pendency of Crl.O.P. had simply by recording that the complainant was absent for the hearing continuously for some time, dismissed the complaint and had acquitted the respondent." Madras High Court, in a significant ruling dated September 17, 2026, held that a trial court cannot dismiss a criminal complaint under Section 256(1) of the CrPC for non-appearance of the complainant when an interim stay of proceedings granted by the High Court is in force.

Justice G. Arul Murugan observed that the trial court's order of acquittal passed in ignorance of a subsisting stay is legally unsustainable and must be set aside to ensure the continuity of judicial proceedings.

The appellant had initiated a complaint under Section 138 of the NI Act against the respondent. During the pendency of the matter, the respondent moved the High Court under Section 482 of the CrPC to quash the proceedings, obtaining an interim order of stay on all further proceedings before the trial court.

The primary legal issue before the Court was whether a trial magistrate is justified in dismissing a complaint for non-appearance under Section 256(1) CrPC while a High Court order staying all trial proceedings remains in effect. The Court also had to determine the validity of an acquittal order passed in such circumstances, despite the High Court's subsequent direction for an expeditious disposal of the case.

Trial Court Ignored Subsisting Stay

The High Court noted that the trial court had proceeded to dismiss the complaint and acquit the respondent on the ground that the complainant had failed to appear for several hearings. However, at the material time of the dismissal, the High Court’s stay order granted in the quash petition was active. The bench emphasized that the trial court failed to consider the judicial record regarding the pendency of the High Court proceedings.

Court Explains Legal Futility Of Appearance During Stay

The Court observed that when an interim stay is in operation, the trial court is effectively barred from moving forward with the case. Consequently, even if the complainant had appeared, the matter would have necessarily been adjourned. The bench clarified that the trial court’s omission to take notice of the stay rendered the dismissal order erroneous.

"The fact remains that the interim order was in force on the date of the order passed by the trial Court and the Crl.O.P was disposed of only on 28.10.2021... Therefore, unless the order of the trial Court is set aside and the CC is restored to file, the order dated 28.10.2021 would become meaningless."

No Consideration Of Extraneous Merits

The High Court explicitly refused to delve into the merits of the underlying dispute between the parties, which involved allegations of impersonation and ongoing arbitration proceedings. It strictly confined its analysis to the procedural impropriety of the trial court’s order of acquittal. By setting aside the dismissal, the Court restored the complaint to the file of the Judicial Magistrate, Fast Track Court, Alandur, with a mandate to comply with earlier directions for expeditious disposal.

Date of Decision: 17 September 2026