Delhi High Court
M/S Mgi Developers And Promoters And Anr vs Sh Sumit Bansal on 17 April, 2025
Author: Amit Sharma
Bench: Amit Sharma
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 10th January, 2025
Pronounced on: 17th April, 2025
+ CRL.M.C. 7912/2023, CRL.M.A. 29515/2023 (stay) & CRL.M.A.
8579/2024 (stay)
MR MANOJ GOYAL AND ANR. .....Petitioners
Through: Dr. Harshvir Pratap Sharma, Sr. Adv., with
Mr. Akshu Jain, Mr. Akul Krishnan, Mr.
Amit Kumar, Ms. Stuti Jain, Advs.
versus
SH SUMIT BANSAL .....Respondent
Through: Mr. Namit Suri with Mr. Rameezuddin Raja
and Ms. Tanya Sharma, Advs. along with
Respondent in person.
+ CRL.M.C. 8002/2023 & CRL.M.A. 29845/2023 (Stay)
M/S MGI DEVELOPERS AND PROMOTERS AND ANR .....Petitioners
Through: Dr. Harshvir Pratap Sharma, Sr. Adv. with
Mr. Akshu Jain, Mr. Akul Krishnan, Mr.
Amit Kumar, Ms. Stuti Jain, Advs.
versus
SH SUMIT BANSAL ....Respondent
Through: Mr. Namit Suri with Mr. Rameezuddin Raja
and Ms. Tanya Sharma, Advs. along with
Respondent in person.
Signature Not Verified
Digitally Signed
By:SHIWANI NEGI CRL.M.C. 8002/2023 and connected Page 1 of 29
Signing Date:18.04.2025
15:49:15
CORAM:
HON'BLE MR. JUSTICE AMIT SHARMA
JUDGMENT
AMIT SHARMA, J.
1. The present petitions under Section 482 of the Code of Criminal
Procedure, 1973 (hereinafter referred to as ‘Cr.P.C.’) are being disposed of by a
common judgement. The details of the petitions are follows:
i) CRL.M.C. 7912/2023 is filed challenging and seeking to quash the
Complaint Case no. 2823/2019 under Sections 138, 141 and 142 of the
Negotiable Instruments Act, 1881 (hereinafter referred to as ‘the Act’) and the
summoning and cognizance order dated 20.06.2019 emanating therefrom,
pending before the learned Metropolitan Magistrate-03 (NW), Rohini, Delhi
(hereinafter ‘petition no. 1’); and
ii) CRL. M.C. 8002/2023 is filed challenging and seeking to quash the
Complaint Case no. 3298/2019 under Sections 138, 141 and 142 of the Act and
the summoning and cognizance order dated 06.03.2019 emanating therefrom,
pending before the learned Metropolitan Magistrate-03 (NW), Rohini, Delhi
(hereinafter referred to as ‘petition no. 2’).
2. For the sake of brevity and convenience, petitioner- Mr. Manoj Goyal in
CRL.M.C. 7912/2023 and CRL.M.C. 8002/2023 will be referred to as ‘petitioner
no. 1.’ Petitioner- Ms. Kavita Rani Goyal in CRL. M.C. 7912/2023 and will be
referred to as ‘petitioner no. 2’, and the petitioner- M/s MGI Developers and
Promoters in CRL.M.C. 8002/2023 will be referred to as the ‘petitioner firm.’
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AVERMENTS IN THE COMPLAINT CASES
3. In petition no. 1, i.e., CRL.M.C. 7912/2023, the respondent herein filed a
complaint dated 25.01.2019 against petitioner no. 1 and petitioner no. 2 for the
offences punishable under Sections 138, 141 and 142 of the Act. Averments
made in the complaint for the sake of completeness read as under:
“*** *** ***
2. That accused person approached the complainant and introduced themself
as the owner/proprietor of M/s MGI Developers & Promoters and further
appraised him about their project “MGI MANSION” at Khasra no.966 & 967
Village- Noor Nagar, Tehsil and District Gaziabad U.P and expressed about
need of money for their project and convinced the complainant to invest some
money in their project by ensuring him good returns. They further Convinced
to the Complainant that they have performed very well in their previous
projects. They further offered personal guarantee for the money invested by
the complainant and ensured guaranteed returns.
3. That believing on the assurances of the accused persons for repayment and
considering their past performances as told by them, the complainant arranged
and gave Rs. 1,72,21,200/- (Rupees One Crore Seventy Two Lacs, Twenty
One Thousand Two Hundred Only) in total i.e. his entire hard earned money,
to the accused persons for investment in commercial units in the project.
4. That accused no.1 on behalf of their firm executed an Agreement to sell and
other documents including receipt of money and personal guarantee on
07/11/2018 with complainant, regarding investment in commercial units
situated in MGI Mansion, Khasra No. 966 & 967, Village Noor Nagar, Tehsil
& District-Gaziabad, U.P. It was further agreed between the parties that if the
accused persons would fail in executing Sale Deed of the abovesaid
commercial units till 30/09/2018, then they would return the invested amount
of the complainant in addition to appreciation amount of Rs.35,00,000/-
(Rupees Thirty Five Lacs Only)
5. That the accused persons in order to win the confidence of the complainant,
gave him personal guarantee that in case their firm would fail in executing the
Sale Deed of the abovesaid commercial units till 30/09/2018 and also fails in
Signature Not Verified
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returning his money alongwith appreciation amount then they will issue him
the cheques for the amount invested and appreciation amount from their
personal bank account.
6. That when the accused persons could not execute the Sale Deed till
30/09/2018, in the terms of the Agreement to Sell, they in order to discharge
their abovesaid liability towards complainant, issued two cheques from the
bank account of their firm i.e. cheque bearing no.057140, dated 30-09-2018
for Rs.1,72,21,200/- (Rupees One Crore Seventy Two Lacs Twenty One
Thousand Two Hundred Only) and a cheque no.057141, dated 30/09/2018 for
Rs.35,00,000/-(Rupees Thirty Five Lacs Only) but they told the complainant
that there are some financial constraints in his firm till first week of December,
2018 but they are issuing two cheques more cheques from their personal bank
account towards the personal gurantee i.e. cheque bearing no.114256, dated
30-09-2018 for Rs.1,72,21,200/- (Rupees One Crore Seventy Two Lacs
Twenty One Thousand Two Hundred Only) and a cheque no.114257, dated
30/09/2018 for Rs.35,00,000/-(Rupees Thirty Five Lacs Only) both drawn on
Central Bank of India, Sehani Branch, Meerut Road, Gaziabad, U.P., in case
the complainant wishes to withdraw his money prior to 15/12/2018 then he
can use their personal cheques else after 15/12/2018 money would be realised
from the cheques of the firm.
7. That in the terms of the Agreement to sell and discussion dated 30/09/2018,
after consultation with accused no.1, the complainant presented aforesaid
cheques on 05/12/2018 i.e. cheque bearing no.114256, dated 30-09-2018 for
Rs.1,72,21,200/- (Rupees One Crore Seventy Two Lacs Twenty One
Thousand Two Hundred Only) and a cheque no.114257, dated 30/09/2018 for
Rs.35,00,000/-(Rupees Thirty Five Lacs Only) both drawn on Central Bank of
India, Sehani Branch, Meerut Road, Gaziabad, U.P., through his banker i.e.,
ESAF Bank Ltd Sec.7, Rohini, Delhi to banker of accused for realisation, but
to the utter surprise of complainant aforesaid cheques were dishonoured by the
banker of accused for the reason “Exceeds Arrangement”. The banker of
accused accordingly sent their cheque returning memos alongwith aforesaid
dishonoured cheques to the banker of complainant. The said cheques and
returning memos were sent to complainant by the banker of accused on 06-12-
2018.The accused was not maintaining sufficient balance in his said account
on the date of presentation of the said cheque. On receiving back the said
dishonoured cheques, the complainant intimated the fate of the cheques to the
accused persons. At this the accused persons felt sorry and advised the
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complainant to present the cheques of their firm and ensured him for
honouring of those cheques.
8. That as per the advise of the accused persons and after consultation with
them on 15/12/2018, the complainant presented the cheques of their firm, M/s
MGI Promoters & Developers through his bank but those were also
dishonoured on account of “Exceeds Arrangement.”
9. That the said cheques have been issued by accused with ulterior motive and
malafide intentions and at the time of issuing of said cheques, the accused was
fully aware of the fact that the same would be dishonoured on account of
“Exceeds Arrangement”, as he was not maintaining sufficient balance in his
account to honour the cheques on the Hay of its presentation and as such the
accused persons are guilty of committing of an offence punishable under
section 138, 141 and 142 of Negotiable Instrument Act as amended up-to-date.
10. That immediately on receiving back the said dishonoured cheques, the
complainant served the requisite notice dated 20-12-2018 sent on 21-12-2018
to the accused persons through Speed Post informing them that their cheques
as mentioned above has been received back dishonoured with the remarks
“Exceeds Arrangement”. Further the accused persons was called upon to
remit the payment of amount of the said cheques within 15 days from the
receipt of this notice. The notice has been duly served upon the accused
persons. The accused persons did not make the payment of the aforesaid
cheques amount as demanded in the said notice.
11. That the accused persons despite of the service of the said notice has failed
to remit the payment due under the said cheques and/or this outstanding
amount and as such have committed offence under section 138, 141 and 142
of the Banking Public Financial Institution and Negotiable Instrument Act, as
amended up to date apart from other offences under other provisions of law.
12. That the cause of action arose at Delhi, where the cheques in question was
received, the bank of the complainant falls within jurisdiction of this Hon’ble
Court and the amount was also payable at Delhi and the offence has been
committed within the jurisdiction of this Hon’ble Court and hence this Hon’ble
Court has got the jurisdiction to entertain and try the present complaint.
13. That the cause of action for filing the complaint arose after the expiry of
the period of 15 days from the service of the legal notice as the accused have
failed to remit the payment demanded in the legal notice against the
dishonoured cheques.”
Signature Not Verified
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Signing Date:18.04.2025
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4. In petition no. 2, i.e., CRL. M.C. 8002/2023, the respondent herein filed a
complaint dated 30.01.2019 against the petitioner firm and petitioner no. 1 for
the offences punishable under Sections 138, 141 and 142 of the Act. Averments
made in the complaint for the sake of completeness read as under:
“*** *** ***
2. That accused no. 2 approached the complainant and introduced himself as
the owner/proprietor of M/s MGI Developers & Promoters (i.e. Accused No.1)
and further apprised him about their Project “MGI MANSION” at Khasra
no.966 & 967 Village-Noor Nagar, Tehsil & District Gaziabad, U.P. and
further expressed that they are in need of money for the project and convinced,
the complainant to invest some money in their Project and ensured him good
returns on it. He further told to the complainant that they have performed very
well in their previous projects. He offered personal guarantee for money
invested by himself and by her wife Smt. Kavita Rani Goyal ensured
guaranteed returns.
3. That believing on the assurances of the accused persons for repayment and
considering their past performance as told by them, complainant arranged and
gave Rs1,72,21,200/- (Rupees One Crore Seventy Two Lacs, Twenty One
Thousand Two Hundred Only) in total i.e. his entire hard earned money, to the
accused persons in commercial units of the accused persons.
4. That accused no.2 executed an Agreement to sell and other documents
including receipt of money on 07/11/2018 with complainant with regard to the
purchase of commercial units situated in ‘MGI Mansion, Khasra No.966 &
967, Village Noor Nagar, Tehsil & District- Gaziabad, U.P. and other relevant
document including Personal Guarantee of the accused no.2 and his wife Smt.
Kavita Rani Goyal. It was further agreed between the parties that if the
accused persons would fail in executing Sale Deed of the abovesaid
commercial units till 30/09/2018, then accused person would return the
invested amount of the complainant in addition to appreciation amount of
Rs.35,00,000/- (Rupees Thirty Five Lacs Only).
5. That the accused no.2 and his wife Smt. Kavita Rani Goyal in order to win
the confidence of the complainant, gave the complainant guarantee that in case
their firm i.e. accused no.1 would fail in executing the Sale Deed of the
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abovesaid commercial units till 30/09/2018 and further fails in returning his
money alongwith appreciation amount then would issue cheques for the
amount invested and appreciation amount from their personal bank account.
6. That when the accused persons could not execute the Sale Deed till
30/09/2018, in the terms of the Agreement to Sell, they in order to discharge
their abovesaid liability towards complainant, issued two cheques i.e. cheque
bearing no. 057140, dated 30-09-2018 for Rs.1,72,21,200/- (Rupees One
Crore Seventy Two Lacs Twenty One Thousand Two Hundred Only) and a
cheque no.057141, dated 30/09/2018 for Rs.35,00,000/-(Rupees Thirty Five
Lacs Only) both drawn on Central Bank of India, Sehani Branch, Meerut
Road, Gaziabad, U.P., in favour of complainant to clear his part liability
towards the complainant.
7. That in the terms of the Agreement to sell and after consultation with
accused no.2, the complainant presented aforesaid cheques through his banker
i.e., ESAF Bank Ltd. Sec.7, Rohini, Delhi to banker of accused for realisation,
but to the utter surprise of complainant aforesaid cheques were dishonoured by
the banker of accused for the “Funds Insufficient”. The banker of accused
accordingly sent their cheque returning memos alongwith aforesaid
dishonoured cheques to the banker of complainant. The said cheques and
returning memos were sent to complainant by the banker of accused on 17-12-
2018. The accused was not maintaining sufficient balance in his said account
on the date of presentation of the said cheque. On receiving back the said
dishonoured cheques, the complainant intimated the fate of the cheques to the
accused.
8. That the said cheques have been issued by accused with ulterior motive and
malafide intentions and at the time of issuing of said cheques the accused was
fully aware of the fact that the same would be dishonoured on account of
“Insufficient Balance”, as he was not maintaining sufficient balance in his
account to honour the cheques on the day of its presentation and as such the
accused persons are guilty of committing of an offence punishable under
section 138, 141 and 142 of Negotiable Instrument Act as amended up-to-
date.
9. That immediately on receiving back the said dishonoured cheques, the
complainant served the requisite notice dated 21-12-2018 sent on 21-12-2018
to the accused through Speed Post informing the him that his cheques as
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mentioned above has been received back dishonoured with the remarks
“Insufficient”. Further the accused was called upon to remit the payment of
amount of the said cheques within 15 days from the receipt of this notice. The
notice has been duly served upon the accused. The accused did not make the
payment of the aforesaid cheques amount as demanded in the said notice.
10. That the accused despite of the service of the said notice has failed to remit
the payment due under the said cheques and/or this outstanding amount and as
such have committed offence under section 138, 141 and 142 of the Banking
Public Financial Institution and Negotiable Instrument Act, as amended up to
date apart from other offences under other provisions of law.
11. That the cause of action arose at Delhi, where the cheques in question was
received, the bank of the complainant falls within jurisdiction of this Hon’ble
Court and the amount was also payable at Delhi and the offence has been
committed within the jurisdiction of this Hon’ble Court and hence this Hon’ble
Court has got the jurisdiction to entertain and try the present complaint.
12. That the cause of action for filing the complaint arose after the expiry of
the period of 15 days from the service of the legal notice as the accused have
failed to remit the payment demanded in the legal notice against the
dishonoured cheque.”
SUBMISSIONS ON BEHALF OF THE PETITIONERS
5.1. Learned Senior Counsel appearing on behalf of the petitioners submitted
that the agreement to sell was for a period of 2 years and as per the clause 7c of
the said agreement, in case of breach of the agreement, i.e., on failure to hand-
over the commercial units to the respondent, a post-dated cheque for a sum of
Rs. 35,00,000/- (Rupees thirty five lakhs only) bearing no. 057141 dated
30.09.2018 (hereinafter referred to as the ‘appreciation money’) was to be
encashed by the respondent, over and above Rs. 1,72,21,200/- (Rupees one crore
seventy two lakhs twenty one thousands and two hundred) (hereinafter referred
to as ‘the principal amount’,) which was given to the respondent by petitioner
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no. 1 vide a post-dated cheque bearing no. 057140 dated 30.09.2018. It was
submitted that without any liability or debt, the said post-dated cheques have
been misused by the respondent. It was further submitted that the respondent has
filed 5 complaints against petitioner no. 1, including the present ones. The said
complaints are as under:
a) Ct. Case No. 3298/2019 for Rs. 1,72,21,200/- crores and Rs.
35,00,000/- lakhs.
b) Ct. Case No. 740/2020 for Rs. 35,00,000/- lakhs.
c) Ct. Case No. 743/2020 for Rs. 35,00,000/- lakhs.
d) Ct. Case No. 13508/2019 for Rs. 35,00,000/- lakhs.
e) Ct. Case No. 2823/2019 for Rs. 1,72,21,200/- crores and Rs.
35,00,000/- lakhs.
Learned Senior Counsel submitted that an agreement for a period of two
years with an alleged investment of Rs. 1,72,21,200/- (Rupees One crore seventy
two lakhs twenty one thousands and two hundred only) cannot become Rs.
5,19,42,400/- (Rupees Five crores nineteen lakhs forty two thousands only.)
Reliance was placed on the judgement of the Hon’ble Supreme Court in Indus
Airways Private Limited and Others vs. Magnum Aviation Private Limited
and Another1, in which it was held that on the date of representation of the
cheque, there should be an existing liability. Thus, the case of the petitioners is
that there was no liability existing at the time of presentation of the cheques.
1
(2014) 12 SCC 539
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Reliance is placed on paragraph 9 of the aforesaid judgement, which reads as
under:
“9. The Explanation appended to Section 138 explains the meaning of the
expression “debt or other liability” for the purpose of Section 138. This
expression means a legally enforceable debt or other liability. Section 138 treats
dishonoured cheque as an offence, if the cheque has been issued in discharge of
any debt or other liability. The Explanation leaves no manner of doubt that to
attract an offence under Section 138, there should be a legally enforceable debt
or other liability subsisting on the date of drawal of the cheque. In other words,
drawal of the cheque in discharge of an existing or past adjudicated liability is
sine qua non for bringing an offence under Section 138. If a cheque is issued as
an advance payment for purchase of the goods and for any reason purchase
order is not carried to its logical conclusion either because of its cancellation or
otherwise, and material or goods for which purchase order was placed is not
supplied, in our considered view, the cheque cannot be held to have been drawn
for an existing debt or liability. The payment by cheque in the nature of advance
payment indicates that at the time of drawal of cheque, there was no existing
liability.”
5.2. It was further submitted that as per the entries made by petitioner no. 1,
the respondent had invested an amount of Rs. 66,50,000/- (Rupees sixty-six
lakhs and fifty thousands only), whereas petitioner no. 1 had repaid an amount of
Rs. 97,00,000/- (Rupees ninety-seven lakhs only) in the names of various family
members of the respondent and therefore no liability was existing at the time of
presentation of the said cheques.
5.3. Learned Senior Counsel for the petitioners submitted that an arbitration
petition bearing no. 273/2023 is already pending before a Coordinate Bench of
this Court for alleged violation of the same agreement to sell dated 07.11.2016.
On this account, it is submitted that the subject matter of the said agreement is
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sub judice in the arbitration petition before the said Bench. Learned Senior
Counsel for the petitioners submitted that the pendency of the arbitration
proceedings and the present complaints are violative of Article 20 of the
Constitution of India, leading to multiple prosecutions on the same cause of
action.
5.4. It was also argued by learned counsel for the petitioners that the
respondent has concealed the filing of other complaints which is contradictory to
the law laid down by the Hon’ble Supreme Court in Damodar S. Prabhu vs.
Sayed Babalal H.2, in which it was held that a complaint under the Act should
mandatorily disclose if any other complaint(s) has been filed with respect to the
same transaction. Learned Senior Counsel for the petitioners further submitted
that the present petitions are also covered by the judgment of the Hon’ble
Supreme Court in State of Haryana and Others vs. Bhajan Lal and Others3.
Reliance was placed on paragraph 102 of the said judgement, which reads as
under:
“102. In the backdrop of the interpretation of the various relevant provisions of
the Code under Chapter XIV and of the principles of law enunciated by this
Court in a series of decisions relating to the exercise of the extraordinary power
under Article 226 or the inherent powers under Section 482 of the Code which
we have extracted and reproduced above, we give the following categories of
cases by way of illustration wherein such power could be exercised either to
prevent abuse of the process of any court or otherwise to secure the ends of
justice, though it may not be possible to lay down any precise, clearly defined
and sufficiently channelised and inflexible guidelines or rigid formulae and to2
(2010) 5 SCC 663
3
1992 Supp (1) SCC 335Signature Not Verified
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give an exhaustive list of myriad kinds of cases wherein such power should be
exercised.
(1) Where the allegations made in the first information report or the complaint,
even if they are taken at their face value and accepted in their entirety do not
prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if
any, accompanying the FIR do not disclose a cognizable offence, justifying an
investigation by police officers under Section 156(1) of the Code except under
an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the
evidence collected in support of the same do not disclose the commission of any
offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but
constitute only a non-cognizable offence, no investigation is permitted by a
police officer without an order of a Magistrate as contemplated under Section
155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and
inherently improbable on the basis of which no prudent person can ever reach a
just conclusion that there is sufficient ground for proceeding against the
accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the
Code or the concerned Act (under which a criminal proceeding is instituted) to
the institution and continuance of the proceedings and/or where there is a
specific provision in the Code or the concerned Act, providing efficacious
redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or
where the proceeding is maliciously instituted with an ulterior motive for
wreaking vengeance on the accused and with a view to spite him due to private
and personal grudge.”
5.5. Learned Senior Counsel further argued that no specific averment has been
made qua petitioner no. 1 in his capacity as the proprietor of the petitioner firm.
Reliance was placed on the judgement of the Hon’ble Supreme Court in
Ashok Mal Bafna vs. Upper India Steal Manufacturing and Engineering
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Company Limited4 in paragraphs 8 to 10, and 12 and 13. The said reads as
under:
“8. Interpreting the provisions of Section 141 this Court in National Small
Industries Corpn. Ltd. v. Harmeet Singh Paintal [National Small Industries
Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 : (2010) 1 SCC (Civ)
677 : (2010) 2 SCC (Cri) 1113] observed that Section 141 is a penal provision
creating vicarious liability, and which, as per settled law, must be strictly
construed. It is therefore, not sufficient to make a bald cursory statement in a
complaint that the Director (arrayed as an accused) is in charge of and
responsible to the Company for the conduct of business of the Company
without anything more as to the role of the Director. But the complaint should
spell out as to how and in what manner the accused was in charge of or was
responsible to the Company for the conduct of its business. This is in
consonance with strict interpretation of penal statutes especially where such
statutes create vicarious liability.
9. To fasten vicarious liability under Section 141 of the Act on a person, the
law is well settled by this Court in a catena of cases that the complainant
should specifically show as to how and in what manner the accused was
responsible. Simply because a person is a Director of a defaulter Company,
does not make him liable under the Act. Time and again, it has been asserted
by this Court that only the person who was at the helm of affairs of the
Company and in charge of and responsible for the conduct of the business at
the time of commission of an offence will be liable for criminal action.
(See Pooja Ravinder Devidasani v. State of Maharashtra [Pooja Ravinder
Devidasani v. State of Maharashtra, (2014) 16 SCC 1 : (2015) 3 SCC (Civ)
384 : (2015) 3 SCC (Cri) 378 : AIR 2015 SC 675] .)
10. In other words, the law laid down by this Court is that for making a
Director of a Company liable for the offences committed by the Company
under Section 141 of the Act, there must be specific averments against the
Director showing as to how and in what manner the Director was responsible
for the conduct of the business of the Company.
*** *** *** 4 (2018) 14 SCC 202 Signature Not Verified Digitally Signed By:SHIWANI NEGI CRL.M.C. 8002/2023 and connected Page 13 of 29 Signing Date:18.04.2025 15:49:15
12. Before summoning an accused under Section 138 of the Act, the
Magistrate is expected to examine the nature of allegations made in the
complaint and the evidence both oral and documentary in support thereof and
then to proceed further with proper application of mind to the legal principles
on the issue. Impliedly, it is necessary for the courts to ensure strict
compliance with the statutory requirements as well as settled principles of law
before making a person vicariously liable.
13. The superior courts should maintain purity in the administration of justice
and should not allow abuse of the process of court. Looking at the facts of the
present case in the light of settled principles of law, we are of the view that
this is a fit case for quashing the complaint. The High Court ought to have
allowed the criminal miscellaneous application of the appellant because of the
absence of clear particulars about the role of the appellant at the relevant time
in the day-to-day affairs of the Company.”
5.6. Learned Senior Counsel with respect to petitioner no. 2 in CRL.M.C.
7912/2023 further submitted that the subject cheques which had been issued
were from the joint account of the petitioners. Admittedly, the said cheques
had not been signed by petitioner no. 2. It is also an admitted fact that
petitioner no. 2 was neither a part of the agreement to sell nor related to the
petitioner firm which had entered into an agreement to sell with the
respondent. It is submitted that in the above circumstances, petitioner no. 2
has no role to play and could not have been prosecuted under Section 138 of
the Act.
5.7. Reliance was also placed on the following judgements/orders:
a) Meters and Instruments Private Limited and Another vs.
Kanchan Mehta55
(2018) 1 SCC 560Signature Not Verified
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b) Vijay Gopala Lohar vs. Pandurang Ramchandra Ghorpade and
Another6
c) ING Vysya Bank Limited and Another vs. State of Rajasthan
and Another 7
d) Sanat kumar vs. Sanjay Sharma in CRL. M.C. 5509/2022 dated
20.09.2024 by the Hon’ble Delhi High Court
e) Dr. S. Jaitley & Another vs. State (NCT of Delhi) 8
SUBMISSIONS ON BEHALF OF THE RESPONDENT
6.1. Learned counsel appearing on behalf of the respondent submitted that no
case is made out for this Court to exercise its jurisdiction under Section 482 of
the Cr.P.C. as there is an equally efficacious and alternate remedy with the
petitioners before the learned Trial Court.
6.2. Learned counsel appearing on behalf of the respondent submitted that the
averment made on behalf of petitioner no. 1 about receiving a sum of Rs.
66,50,000/- (Rupees sixty-six lakhs and fifty thousands only) from the
respondent is incorrect inasmuch as the petitioner firm has itself issued receipt
for entire amount of Rs. 1,72,21,200/- (Rupees one crore seventy two lakhs
twenty one thousands and two hundred rupees only) paid by the respondent. It
6
(2020) 14 SCC 806
7
(2015) 15 SCC 763
8
2023:DHC:6464
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was further submitted that petitioner no. 1 had not disputed the execution of
agreement to sell dated 07.11.2016 as well as the issuance of promissory note
alongwith the receipts and the ‘no-due certificate.’ It was submitted that the
petitioners had fully and deliberately concealed the said documents from this
Court. It was the case of the respondent that the sum of Rs. 1,72,21,200/-
(Rupees one crore seventy two lakhs twenty one thousands and two hundred
rupees only) has been paid to the petitioner firm through various means
including the banking channels.
6.3. Learned counsel for the respondent submitted that the claim of petitioner
no. 1 of paying Rs. 97,00,000/- (Rupees ninety seven lakhs only) to the
respondent is again incorrect as he had failed to place on record a single
document substantiating the said claim. It was further argued that the petitioners
had deliberately concealed the fact that petitioner nos. 1 and 2 had tendered and
executed a personal guarantee dated 27.07.2018 in favour of the respondent for
payment of the appreciation amount over and above the principal amount in case
the petitioner no. 1 failed to adhere to the terms of the agreement to sell dated
07.11.2016. It was submitted that in addition to the said personal guarantee,
petitioner no. 1 had undertaken to attach the personal properties of himself as
well as of his wife (petitioner no. 2) with the respondent for the payment of the
said amount(s). In furtherance of the same, it is submitted that petitioner no. 1
had issued post-dated cheques from his personal account towards the refund of
the principal amount and payment of the appreciation amount.
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6.4. Learned counsel for the respondent submitted that with respect to the
contention of petitioner no. 1 regarding lack of specific averments made in the
Complaint Case no. 3928/2019 (subject-matter of petition no. 2) concerning
petitioner no. 1, it was pointed out that the cheques in question had been issued
on behalf of the petitioner firm, whose sole proprietor was the petitioner no. 1. It
was submitted that the proprietorship concern is not a separate legal entity and
cannot be distinguished from its proprietor.
6.5. It was submitted on behalf of the respondent that there was no multiplicity
of proceedings with regard to the same transaction. It was submitted that
petitioner no. 1 through his proprietorship firm as well as in his personal capacity
as a guarantor had issued multiple cheques at different points of time during the
subsistence and after the dishonour of the agreement to sell.
6.6. It was submitted that the arbitration petition pending before the Coordinate
Bench of this Court cannot be a bar to the remedy under Section 138 of the Act.
It was submitted that the said arbitration petition filed by the respondent was also
opposed by petitioner no.1 on the ground of multiplicity of proceedings,
however, the same was allowed vide order dated 14.05.2024 by a Coordinate
Bench of this Court. It was pointed out that against the said order, an SLP
bearing no. SLP (C) 13440/2024 was preferred by petitioner no. 1 before the
Hon’ble Supreme Court and the same was dismissed vide order dated
11.07.2024.
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6.7. Reliance was placed on the judgement of the Hon’ble Supreme Court in
Rathish Babu Unnikrishnan vs. State (Govt. of NCT of Delhi) and Another9
in paragraphs 10 to 13.
ANALYSIS AND FINDINGS
7. Heard learned counsel for the parties and perused the records.
8. From the facts of the present case, as culled out from the averments made
in the complaints as pointed out hereinabove, the respondent was already in
possession of the two cheques, viz., bearing nos. 057140 dated 30.09.2018 for
Rs. 1,72,21,200/- and 057141 dated 30.09.2018 for Rs. 35,00,000/- issued by
petitioner no. 1 from the petitioner firm (subject matter of CRL. M.C.
8002/2023.) It is the case of the respondent that the petitioners told him that
there were some financial constraints in the petitioner firm till the first week of
December, 2018 and in view of the same, they were issuing two more cheques
from their personal bank account towards the personal guarantee, i.e., cheque
bearing no. 114256 dated 30.09.2018 for Rs. 1,72,21,200/- and another cheque
bearing no. 114257 dated 30.09.2018 for Rs. 35,00,000/- (subject-matter of
CRL. M.C. 7912/2023) and in case the respondent wished to withdraw his
money prior to 15.12.2018, he could use their personal guarantee cheques, else
after 15.12.2018, the money could be realised by the respondent from the
cheques of the petitioner firm.
9
2022 SCC OnLine SC 513
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9. It is pertinent to note that the respondent chose to deposit for encashment
the two cheques which had been issued by petitioner no. 1 from his personal
joint bank account with petitioner no. 2 without waiting to deposit for
encashment the other two cheques issued by petitioner no. 1 on behalf of the
petitioner firm. The cheques issued by petitioner no. 1 from his personal joint
account with his wife, i.e., petitioner no. 2 were submitted by the respondent for
encashment on 05.12.2018 and on presentation, the same got dishonoured and
the cheques alongwith the return memos were thereafter sent to the respondent
by the banker of the petitioner nos. 1 and 2 on 06.12.2018. It is stated in the
averments as pointed hereinabove that when the petitioners were apprised about
bouncing of the said personal guarantee cheques, they felt sorry and advised the
respondent to present the cheques of the petitioner firm and ensured him of
honouring of those cheques. The averment is made in the following manner in
the Complaint Case no. 2823/2019 (subject-matter of CRL. M.C. 7912/2023) by
the respondent:
“6. That when the accused persons could not execute the Sale Deed till
30/09/2018, in the terms of the Agreement to Sell, they in order to discharge their
abovesaid liability towards complainant, issued two cheques from the bank
account of their firm i.e. cheque bearing no.057140, dated 30-09-2018 for
Rs.1,72,21,200/- (Rupees One Crore Seventy Two Lacs Twenty One Thousand
Two Hundred Only) and a cheque no.057141, dated 30/09/2018 for Rs.35,00,000/-
(Rupees Thirty Five Lacs Only) but they told the complainant that there are
some financial constraints in his firm till first week of December, 2018 but
they are issuing two cheques more cheques from their personal bank account
towards the personal gurantee i.e. cheque bearing no.114256, dated 30-09-
2018 for Rs.1,72,21,200/- (Rupees One Crore Seventy Two Lacs Twenty One
Thousand Two Hundred Only) and a cheque no.114257, dated 30/09/2018 for
Rs.35,00,000/- (Rupees Thirty Five Lacs Only) both drawn on Central BankSignature Not Verified
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of India, Sehani Branch, Meerut Road, Gaziabad, U.P., in case the
complainant wishes to withdraw his money prior to 15/12/2018 then he can
use their personal cheques else after 15/12/2018 money would be realised
from the cheques of the firm.
7. That in the terms of the Agreement to sell and discussion dated 30/09/2018,
after consultation with accused no.1, the complainant presented aforesaid cheques
on 05/12/2018 i.e. cheque bearing no.114256, dated 30-09-2018 for
Rs.1,72,21,200/- (Rupees One Crore Seventy Two Lacs Twenty One Thousand
Two Hundred Only) and a cheque no.114257, dated 30/09/2018 for Rs.35,00,000/-
(Rupees Thirty Five Lacs Only) both drawn on Central Bank of India, Sehani
Branch, Meerut Road, Gaziabad, U.P, through his banker i.e., ESAF Bank Ltd
Sec.7, Rohini, Delhi to banker of accused for realisation, but to the utter surprise
of complainant aforesaid cheques were dishonoured by the banker of accused for
the reason “Exceeds Arrangement”. The banker of accused accordingly sent their
cheque returning memos alongwith aforesaid dishonoured cheques to the banker
of complainant. The said cheques and returning memos were sent to complainant
by the banker of accused on 06-12-2018.The accused was not maintaining
sufficient balance in his said account on the date of presentation of the said
cheque. On receiving back the said dishonoured cheques, the complainant
intimated the fate of the cheques to the accused persons. At this the accused
persons felt sorry and advised the complainant to present the cheques of their
firm and ensured him for honouring of those cheques.”
(emphasis supplied)
However, in respect to Complaint Case no. 3298/2019, which is the
subject-matter of CRL.M.C. 8002/2023, the averments with respect to the
subject cheques as pointed hereinabove does not mention anything about the
presentation of the cheques issued by petitioner no. 1 in terms of his personal
guarantee to the respondent. It is noted that the cheques issued by petitioner no. 1
from his personal bank account were returned to the respondent by the bank of
the petitioners on 06.12.2018 and the complaint was filed before the learned
Metropolitan Magistrate on 25.01.2019. Further, with respect of cheques issued
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by petitioner no. 1 on behalf of the petitioner firm, the same were returned
alongwith the memos by the bank on 17.12.2018 and complaint with respect to
the same was filed on 30.01.2019. Despite the fact that the complaint with
respect to the cheques issued by petitioner no. 1 on behalf of the petitioner firm
was filed later, there was no mention in the said complaint of the cheques issued
by petitioner no. 1 from his personal bank account and their dishonour. The
relevant portion of the complaint is as under:
“5. That the accused no.2 and his wife Smt.Kavita Rani Goyal in order to win
the confidence of the complainant, gave the complainant guarantee that in case
their firm i.e. accused no.1 would fail in executing the Sale Deed of the
abovesaid commercial units till 30/09/2018 and further fails in returning his
money alongwith appreciation amount then would issue cheques for the
amount invested and appreciation amount from their personal bank account.
6. That when the accused persons could not execute the Sale Deed till
30/09/2018, in the terms of the Agreement to Sell, they in order to discharge
their abovesaid liability towards complainant, issued two cheques i.e. cheque
bearing no. 057140, dated 30-09-2018 for Rs.1,72,21,200/- (Rupees One
Crore Seventy Two Lacs Twenty One Thousand Two Hundred Only) and a
cheque no.057141, dated 30/09/2018 for Rs.35,00,000/-(Rupees Thirty Five
Lacs Only) both drawn on Central Bank of India, Sehani Branch, Meerut
Road, Gaziabad, U.P, in favour of complainant to clear his part liability
towards the complainant.”
10. As pointed hereinabove, it is the case of the respondent himself in
CRL.M.C. 7912/2023 that the cheques issued from the personal bank account of
petitioner no. 1 (jointly held by petitioner nos. 1 and 2) were given as an option
to the respondent in case he wanted the money to be credited in his account
before the date as stated in the said complaint, i.e., 15.12.2018. In essence
therefore, the cheques issued by petitioner no. 1 from his personal bank account
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were in lieu of the cheques issued by petitioner no. 1 from the bank account of
the petitioner firm. In these circumstances the cheques issued by petitioner no. 1
on behalf of the petitioner firm in the first instance should either have been
returned by the respondent and in any case, ought not to have been presented.
There is absolutely no disclosure on behalf of the respondent in the complaint
filed subsequently with respect to the cheques issued by petitioner no. 1 on
behalf of the petitioner firm, i.e., in Complaint Case no. 3298/2019 (subject-
matter of CRL. M.C. 8002/2023) with regard to the cheques already issued by
petitioner no. 1 from his personal bank account. In view of the averments made
in the complaints, there cannot be in any manner, doubt left that the respondent
exercised his option to present the cheques issued from the personal bank
account of the petitioner towards the personal guarantee for discharge of the
liability. In these circumstances, the respondent cannot be permitted to present
the other set of cheques issued from the bank account of the petitioner firm again
for the same transaction. In these circumstances, in the considered opinion of this
Court, continuance of proceedings in Criminal Complaint no. 3298/2019 (subject
matter of CRL.M.C. 8002/2023) would be an abuse of process of law and
therefore, in the interest of justice, exercise of powers under Section 482 of the
Cr.P.C. by this Court is warranted in the present case.
11. So far as the liability of petitioner no. 1 with respect to the cheques issued
from his personal bank account, i.e., cheque nos. 114256 and 114257 dated
30.09.2018 (subject matter of CRL.M.C. 7912/2023,) the same would be covered
by Section 139 of the Act, which reads as under:
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“139. Presumption in favour of holder.–It shall be presumed, unless the
contrary is proved, that the holder of a cheque received the cheque of the nature
referred to in section 138 for the discharge, in whole or in part, of any debt or
other liability.”
The contention on behalf of the learned Senior Counsel for petitioner no. 1 with
respect to the payment made to the respondent is a disputed question of fact and
this Court in the present jurisdiction cannot decide the same.
12. The Hon’ble Supreme Court in Rathish Babu Unnikrishnan vs. State
(Govt. of NCT of Delhi) and Another10 has observed and held as under:
“10. It is also relevant to bear in mind that the burden of proving that there is
no existing debt or liability, is to be discharged in the trial. For a two judges
Bench in M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd. (2002) 1
SCC 234, Justice S.N. Variava made the following pertinent observation on
this aspect:–
“17. There is therefore no requirement that the complainant must
specifically allege in the complaint that there was a subsisting liability.
The burden of proving that there was no existing debt or liability was on
the respondents. This they have to discharge in the trial. At this stage,
merely on the basis of averments in the petitions filed by them the High
Court could not have concluded that there was no existing debt or
liability.”
11. The legal presumption of the cheque having been issued in the discharge
of liability must also receive due weightage. In a situation where the accused
moves Court for quashing even before trial has commenced, the Court’s
approach should be careful enough to not to prematurely extinguish the case
by disregarding the legal presumption which supports the complaint. The
opinion of Justice K.G. Balakrishnan for a three judges Bench
in Rangappa v. Sri Mohan (2010) 11 SCC 441 would at this stage, deserve our
attention:–
10
2022 SCC OnLine SC 513
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“26. … we are in agreement with the respondent claimant that the
presumption mandated by Section 139 of the Act does indeed include the
existence of a legally enforceable debt or liability. As noted in the
citations, this is of course in the nature of a rebuttable presumption and
it is open to the accused to raise a defence wherein the existence of a
legally enforceable debt or liability can be contested. However, there
can be no doubt that there is an initial presumption which favours the
complainant.”
12. At any rate, whenever facts are disputed the truth should be allowed to
emerge by weighing the evidence. On this aspect, we may benefit by referring
to the ratio in Rajeshbhai Muljibhai Patel v. State of Gujarat (2020) 3 SCC
794 where the following pertinent opinion was given by Justice R.
Banumathi:–
“22. ………….. When disputed questions of facts are involved which
need to be adjudicated after the parties adduce evidence, the complaint
under Section 138 of the NI Act ought not to have been quashed by the
High Court by taking recourse to Section 482 CrPC. Though, the Court
has the power to quash the criminal complaint filed under Section 138
of the NI Act on the legal issues like limitation, etc. criminal complaint
filed under Section 138 of the NI Act against Yogeshbhai ought not to
have been quashed merely on the ground that there are inter se disputes
between Appellant 3 and Respondent 2. Without keeping in view the
statutory presumption raised under Section 139 of the NI Act, the High
Court, in our view, committed a serious error in quashing the criminal
complaint in CC No. 367 of 2016 filed under Section 138 of the NI Act.”
13. Bearing in mind the principles for exercise of jurisdiction in a proceeding
for quashing, let us now turn to the materials in this case. On careful reading
of the complaint and the order passed by the Magistrate, what is discernible is
that a possible view is taken that the cheques drawn were, in discharge of a
debt for purchase of shares. In any case, when there is legal presumption, it
would not be judicious for the quashing Court to carry out a detailed enquiry
on the facts alleged, without first permitting the trial Court to evaluate the
evidence of the parties. The quashing Court should not take upon itself, the
burden of separating the wheat from the chaff where facts are contested. To
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say it differently, the quashing proceedings must not become an expedition
into the merits of factual dispute, so as to conclusively vindicate either the
complainant or the defence.”
13. However, petitioner no. 2 has been arrayed as an accused in the complaint
case no. 2823/2019 (subject-matter of CRL. M.C. 7912/2023) in the capacity of
being a joint holder of the bank account with petitioner no. 1. Admittedly,
petitioner no. 2 is not a signatory to those subject cheques. The vicarious liability
in terms of the Section 141 of the Act, reads as under:
“141. Offences by companies.–(1) If the person committing an offence under
section 138 is a company, every person who, at the time the offence was
committed, was in charge of, and was responsible to, the company for the
conduct of the business of the company, as well as the company, shall be
deemed to be guilty of the offence and shall be liable to be proceeded against
and punished accordingly:
Provided that nothing contained in this sub-section shall render any person
liable to punishment if he proves that the offence was committed without his
knowledge, or that he had exercised all due diligence to prevent the commission
of such offence:
Provided further that where a person is nominated as a Director of a
company by virtue of his holding any office or employment in the Central
Government or State Government or a financial corporation owned or
controlled by the Central Government or the State Government, as the case may
be, he shall not be liable for prosecution under this Chapter.
(2) Notwithstanding anything contained in sub-section (1), where any
offence under this Act has been committed by a company and it is proved that
the offence has been committed with the consent or connivance of, or is
attributable to, any neglect on the part of, any director, manager, secretary or
other officer of the company, such director, manager, secretary or other officer
shall also be deemed to be guilty of that offence and shall be liable to be
proceeded against and punished accordingly.
Explanation.–For the purposes of this section, —
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(a) “company” means any body corporate and includes a firm or other
association of individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.”
It is pertinent to note that petitioner no. 2 was neither a part of the
proprietorship firm which entered into the agreement to sell nor a party to any of
the proceedings; and was also not a signatory on the document of guarantee
executed by petitioner no.1. The said document for sake of completeness is
reproduced as under:
” PERSONAL GUARANTEE
I, Manoj Kumar Goyal S/o Late Sh. Satish Chand R/o Mata Wali Gali,
Dankaur, Gautam Budh Nagar hereby confirm and declare that
notwithstanding anything herein contained and have agreed irrevocable
personal guarantee in case M/s. MGI Developers & Promoters fails to comply
the terms and conditions agreed in the agreement dated 07-11-2016 between
M/s. MGI Developers & Promoters And Mr. Sumit Bansal S/o shri K. L.
Bansal R/o 131, Pocket-G-4, Sector-11, Rohini, Delhi-110085 for the
maturity amount of Rs. 2,07,21,200/- (Rupees Two Crore Seven Lacs
Twenty One Thousand Two Hundred Only) If the M/s. MGI Developers &
Promoters fails to comply any condition as agreed in STAMP PAPER NO.
DL131037, I and my successors shall be considered as principal Debtor to
Mr. Sumit Bansal to the extent of amount mentioned above, in respect of
advances made and of all the facilities granted by the Company.
In respect of the above attachment of me and my wife personal property will
be attached with Mr. Sumit Bansal for payment of the above said amount and
I am also providing the postdated cheques of my personal account if the
details of the same is as below. The Cheque given by me will be honoured on
presentation in all aspects.
CHEQUE DATE AMOUNT FAVOURING
NO
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114256 30-09-2018 17221200/- Sumit Bansal
114257 30-09-2018 3500000/- Sumit Bansal
DEPONENT
VERIFICATION
Verified at Noida on dated 27th July, 2018 that the contents of the above are
true and correct to my knowledge and belief and no part of it, is false and
nothing material, has been concealed there from.
DEPONENT”
14. In these circumstances, petitioner no. 2 cannot be prosecuted for the
offence punishable under Section 138 of the Act. She cannot be held liable for
dishonour of the cheques as the same were not issued by her in discharge of any
legal liability or debt. Similarly, she cannot be held vicariously liable on the
ground of being a joint holder of the account with petitioner no. 1, from which
the subject cheques towards personal guarantee were issued.
15. The Hon’ble Supreme Court while determining the liability of the joint-
account holders under Section 138 of the Act in Aparna A. Shah vs. Sheth
Developers Private Limited and Another11, has observed and held as under:
“27. In the light of the above discussion, we hold that under Section 138
of the Act, it is only the drawer of the cheque who can be prosecuted. In
the case on hand, admittedly, the appellant is not a drawer of the cheque
and she has not signed the same. A copy of the cheque was brought to our
notice, though it contains the name of the appellant and her husband, the11
(2013) 8 SCC 71Signature Not Verified
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fact remains that her husband alone had put his signature. In addition to
the same, a bare reading of the complaint as also the affidavit of
examination-in-chief of the complainant and a bare look at the cheque
would show that the appellant has not signed the cheque.
28. We also hold that under Section 138 of the NI Act, in case of issuance
of cheque from joint accounts, a joint account-holder cannot be prosecuted
unless the cheque has been signed by each and every person who is a joint
account-holder. The said principle is an exception to Section 141 of the NI
Act which would have no application in the case on hand. The
proceedings filed under Section 138 cannot be used as arm-twisting tactics
to recover the amount allegedly due from the appellant. It cannot be said
that the complainant has no remedy against the appellant but certainly not
under Section 138. The culpability attached to the dishonour of a cheque
can, in no case “except in case of Section 141 of the NI Act” be extended
to those on whose behalf the cheque is issued. This Court reiterates that it
is only the drawer of the cheque who can be made an accused in any
proceeding under Section 138 of the Act. Even the High Court has
specifically recorded the stand of the appellant that she was not the
signatory of the cheque but rejected the contention that the amount was
not due and payable by her solely on the ground that the trial is in
progress. It is to be noted that only after issuance of process, a person can
approach the High Court seeking quashing of the same on various grounds
available to him. Accordingly, the High Court was clearly wrong in
holding that the prayer of the appellant cannot even be considered.
Further, the High Court itself has directed the Magistrate to carry out the
process of admission/denial of documents. In such circumstances, it
cannot be concluded that the trial is in advanced stage.”
16. In view of the above discussion, this Court holds as under:
CRL.M.C. 7912/2023
a) The petition is partly allowed qua petitioner no. 2- Ms. Kavita Rani Goyal.
b) The Complaint Case no. 2823/2019 and the impugned order dated
20.06.2019 are quashed qua petitioner no. 2.
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c) Complaint Case no. 2823/2019 shall continue in accordance with law with
respect to petitioner no. 1.
CRL.M.C. 8002/2023
a) The petition is allowed. The Complaint Case no. 3298/2019 and the
impugned order dated 06.03.2019 are hereby quashed.
17. Petitions stand disposed of accordingly alongwith pending application(s),
if any.
18. Copy of this judgment be communicated to the learned Trial Court for
necessary information and compliance.
19. Judgment be uploaded on the website of this Court forthwith.
AMIT SHARMA, J.
APRIL 17, 2025/sn
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