Delhi High Court
M/S Shree Sambhav Papers Pvt Ltd vs M/S Shree Ram Straw Products Ltd. & Ors on 28 June, 2025
Author: Neena Bansal Krishna
Bench: Neena Bansal Krishna
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 28th April, 2025
Pronounced on: 28th June,2025
+ CRL.A.586/2025
M/S SHREE SAMBHAV PAPERS PVT LTD
A-5/A-6, Main Karawal Nagar Road,
Johripur, Shahdara,
Delhi - 110094,
(Thorough Shri Neeraj Jain, Director) .....Appellant
Through: Mr. Anukul Raj, Ms. Nikita Raj, Mr. Pratik
Raj & Mr. Tushar Bhalla, Advocates
versus
1. M/S SHREE RAM STRAW PRODUCTS LTD.
Village Lalpur, Kundra
Sultangarh Farm, Kashipur- 244713
(U.S. Nagar) Uttarakhand,
2. SHRI ANIL KUMAR MITTAL
Chairman-Cum-Managing Director
M/s Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur - 244713, (U.S. Nagar) Uttarakhand,
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand.
3. SMT. MEERA MITTAL
M/s. Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm,
Kashipur-244713 (U.S. Nagar), Uttrakhand.
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand. .....Respondents
Through: Mr. Mohit Chaudhary, Mr. Kunal Sachdeva,
Ms. Katyayani, Ms. Nimmi, Advs.
+ CRL.A. 587/2025
M/S SHREE SAMBHAV PAPERS PVT LTD
A-5/A-6, Main Karawal Nagar Road,
Signature Not Verified
Signed By:RITA CRL.L.P. 467/2019 & Connected matters Page 1 of 29
SHARMA
Signing Date:02.07.2025
12:46:39
Johripur, Shahdara,
Delhi - 110094,
(Thorough Shri Neeraj Jain, Director) ..... Appellant
Through: Mr. Anukul Raj, Ms. Nikita Raj, Mr. Pratik
Raj & Mr. Tushar Bhalla, Advocates
versus
1. M/S SHREE RAM STRAV PRODUCTS LTD.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur-244713, (U.S. Nagar) Uttarakhand,
2. SHRI ANIL KUMAR MITTAL
Chairman-Cum-Managing Director
M/s Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur-244713, (U.S. Nagar) Uttarakhand,
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand.
3. SMT. MEERA MITTAL
M/s. Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm,
Kashipur-244713, (U.S. Nagar), Uttrakhand.
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand. .....Respondents
Through: Mr. Mohit Chaudhary, Mr. Kunal Sachdeva,
Ms. Katyayani, Ms. Nimmi, Advs.
+ CRL.A.588/2025
M/S SHREE SAMBHAV PAPERS PVT LTD
A-5/A-6, Main Karawal Nagar Road,
Johripur, Shahdara,
Delhi- 110094,
(Thorough Shri Neeraj Jain, Director) ..... Appellant
Through: Mr. Anukul Raj, Ms. Nikita Raj, Mr. Pratik
Raj & Mr. Tushar Bhalla, Advocates
Versus
1. M/S SHREE RAM STRAW PRODUCTS LTD.
Village Lalpur, Kundra
Sultangarh Farm, Kashipur-244713
Signature Not Verified
Signed By:RITA CRL.L.P. 467/2019 & Connected matters Page 2 of 29
SHARMA
Signing Date:02.07.2025
12:46:39
(U.S. Nagar) Uttarakhand,
2. SHRI ANIL KUMAR MITTAL
Chairman-Cum-Managing Director
M/s Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur-244713, ( U.S. Nagar) Uttarakhand,
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand.
3. SMT. MEERA MITTAL
M/s. Shree Ram Straw Products Ltd.
Village Lalpur, Kundra,
Sultangarh Farm,
Kashipur-244713, (U.S. Nagar), Uttrakhand.
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand. .....Respondents
Through: Mr. Mohit Chaudhary, Mr. Kunal Sachdeva,
Ms. Katyayani, Ms. Nimmi, Advs.
+ CRL.A.589/2025
M/S SHREE SAMBHAV PAPERS PVT. LTD.
A-5/A-6, Main Karawal Nagar Road,
Johripur, Shahdara,
Delhi- 110094,
(Thorough Shri Neeraj Jain, Director) ..... Appellant
Through: Mr. Anukul Raj, Ms. Nikita Raj, Mr. Pratik
Raj & Mr. Tushar Bhalla, Advocates
versus
1. M/S SHREE RAM STRAW PRODUCTS LTD.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur-244713
(U.S. Nagar) Uttarakhand,
2. SHRI ANIL KUMAR MITTAL
Chairman-Cum-Managing Director
M/s Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur-244713
(U.S. Nagar) Uttarakhand,
Also at:
Chamunda Vihar, Ramnagar Road,
Signature Not Verified
Signed By:RITA CRL.L.P. 467/2019 & Connected matters Page 3 of 29
SHARMA
Signing Date:02.07.2025
12:46:39
Kashipur (U.S. Nagar), Uttrakhand.
3. SMT. MEERA MITTAL
M/s. Shree Ram Straw Products Ltd.
Village Lalpur, Kundra,
Sultangarh Farm,
Kashipur-244713
(U.S. Nagar), Uttrakhand.
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand. .....Respondents
Through: Mr. Mohit Chaudhary, Mr. Kunal Sachdeva,
Ms. Katyayani, Ms. Nimmi, Advs.
+ CRL.A.590/2025
M/S SHREE SAMBHAV PAPERS PVT. LTD.
A-5/A-6, Main Karawal Nagar Road,
Johripur, Shahdara,
Delhi - 110094,
(Thorough Shri Neeraj Jain, Director) ..... Appellant
Through: Mr. Anukul Raj, Ms. Nikita Raj, Mr. Pratik
Raj & Mr. Tushar Bhalla, Advocates
versus
1. M/S SHREE RAM STRAW PRODUCTS LTD.
Village Lalpur, Kundra
Sultangarh Farm, Kashipur-244713
(U.S. Nagar) Uttarakhand,
2. SHRI ANIL KUMAR MITTAL
Chairman-Cum-Managing Director
M/s Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur-244713
(U.S. Nagar) Uttarakhand,
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand.
3. SMT. MEERA MITTAL
M/s. Shree Ram Straw Products Ltd.
Village Lalpur, Kundra,
Sultangarh Farm,
Kashipur-244713
(U.S. Nagar), Uttrakhand.
Signature Not Verified
Signed By:RITA CRL.L.P. 467/2019 & Connected matters Page 4 of 29
SHARMA
Signing Date:02.07.2025
12:46:39
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand. .....Respondents
Through: Mr. Mohit Chaudhary, Mr. Kunal Sachdeva,
Ms. Katyayani, Ms. Nimmi, Advs.
+ CRL.A.591/2025
M/S SHREE SAMBHAV PAPERS PVT. LTD.
A-5/A-6, Main Karawal Nagar Road,
Johripur, Shahdara,
Delhi - 110094,
(Thorough Shri Neeraj Jain, Director) ..... Appellant
Through: Mr. Anukul Raj, Ms. Nikita Raj, Mr. Pratik
Raj & Mr. Tushar Bhalla, Advocates
versus
1. M/S SHREE RAM STRAW PRODUCTS LTD.
Village Lalpur, Kundra
Sultangarh Farm
Kashipur-244713
(U.S. Nagar) Uttarakhand,
2. SHRI ANIL KUMAR MITTAL
Chairman-Cum-Managing Director
M/s Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur - 244713
(U.S. Nagar) Uttarakhand,
Also at;
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand.
3. SMT. MEERA MITTAL
M/s. Shree Ram Straw Products Ltd.
Village Lalpur, Kundra,
Sultangarh Farm,
Kashipur-244713
(U.S. Nagar), Uttrakhand.
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand. .....Respondents
Through: Mr. Mohit Chaudhary, Mr. Kunal Sachdeva,
Ms. Katyayani, Ms. Nimmi, Advs.
Signature Not Verified
Signed By:RITA CRL.L.P. 467/2019 & Connected matters Page 5 of 29
SHARMA
Signing Date:02.07.2025
12:46:39
+ CRL.A.592/2025
M/S SHREE SAMBHAV PAPERS PVT LTD
A-5/A-6, Main Karawal Nagar Road,
Johripur, Shahdara,
Delhi- 110094,
(Thorough Shri Neeraj Jain, Director) ..... Appellant
Through: Mr. Anukul Raj, Ms. Nikita Raj, Mr. Pratik
Raj & Mr. Tushar Bhalla, Advocates
versus
1. M/S SHREE RAM STRAW PRODUCTS STRAW PRODUCTS LTD.
Village Lalpur, Kundra
Sultangarh Farm
Kashipur-244713
(U.S. Nagar) Uttarakhand,
2. SHRI ANIL KUMAR MITTAL
Chairman-Cum-Managing Director
M/s Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur - 244713
(U.S. Nagar) Uttarakhand,
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand.
3. SMT. MEERA MITTAL
M/s. Shree Ram Straw Products Ltd.
Village Lalpur, Kundra,
Sultangarh Farm,
Kashipur-244713
(U.S. Nagar), Uttrakhand.
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand. .....Respondents
Through: Mr. Mohit Chaudhary, Mr. Kunal Sachdeva,
Ms. Katyayani, Ms. Nimmi, Advs.
+ CRL.A.593/2025
M/S SHREE SAMBHAV PAPERS PVT LTD
A-5/A-6, Main Karawal Nagar Road,
Johripur, Shahdara,
Delhi - 110094,
(Thorough Shri Neeraj Jain, Director) ..... Appellant
Signature Not Verified
Signed By:RITA CRL.L.P. 467/2019 & Connected matters Page 6 of 29
SHARMA
Signing Date:02.07.2025
12:46:39
Through: Mr. Anukul Raj, Ms. Nikita Raj, Mr. Pratik
Raj & Mr. Tushar Bhalla, Advocates
versus
1. M/S SHREE RAM STRAW PRODUCTS LTD.
Village Lalpur, Kundra
Sultangarh Farm
Kashipur- 244713
(U.S. Nagar) Uttarakhand,
2. SHRI ANIL KUMAR MITTAL
Chairman-Cum-Managing Director
M/s Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur-244713
(U.S. Nagar) Uttarakhand,
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand.
3. SMT. MEERA MITTAL
M/s. Shree Ram Straw Products Ltd.
Village Lalpur, Kundra,
Sultangarh Farm,
Kashipur-244713
(U.S. Nagar), Uttrakhand.
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand. .....Respondents
Through: Mr. Mohit Chaudhary, Mr. Kunal Sachdeva,
Ms. Katyayani, Ms. Nimmi, Advs.
+ CRL.A.594/2025
M/S SHREE SAMBHAV PAPERS PVT LTD
A-5/A-6, Main Karawal Nagar Road,
Johripur, Shahdara,
Delhi - 110094,
(Thorough Shri Neeraj Jain, Director) ..... Appellant
Through: Mr. Anukul Raj, Ms. Nikita Raj, Mr. Pratik
Raj & Mr. Tushar Bhalla, Advocates
versus
1. M/S SHREE RAM STRAV PRODUCTS LTD.
Village Lalpur, Kundra
Sultangarh Farm
Signature Not Verified
Signed By:RITA CRL.L.P. 467/2019 & Connected matters Page 7 of 29
SHARMA
Signing Date:02.07.2025
12:46:39
Kashipur-244713
(U.S. Nagar) Uttarakhand,
2. SHRI ANIL KUMAR MITTAL
Chairman-Cum-Managing Director
M/s Shree Ram Straw Products Ltd.
Village Lalpur, Kundra, Sultangarh Farm
Kashipur-244713
(U.S. Nagar) Uttarakhand,
c- Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand.
3. SMT. MEERA MITTAL
M/s. Shree Ram Straw Products Ltd.
Village Lalpur, Kundra,
Sultangarh Farm,
Kashipur-244713
(U.S. Nagar), Uttrakhand.
Also at:
Chamunda Vihar, Ramnagar Road,
Kashipur (U.S. Nagar), Uttrakhand. .....Respondents
Through: Mr. Mohit Chaudhary, Mr. Kunal Sachdeva,
Ms. Katyayani, Ms. Nimmi, Advs.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
J U D G M E N T
NEENA BANSAL KRISHNA, J.
CRL.A. 586/2025, CRL.A. 587/2025, CRL.A. 588/2025, CRL.A. 589/2025, CRL.A.
590/2025, CRL.A. 591/2025, CRL.A. 592/2025, CRL.A. 593/2025 & CRL.A.
594/2025.
1. The nine Appeals under Section 378(1) Cr. P.C. have been filed by
the Appellants to challenge the common Judgment dated 06.04.2009
whereby the Learned MM has acquitted the Respondents in the nine
Complaints filed for the offence under Section 138 Negotiable Instruments
Act.
Signature Not Verified
Signed By:RITA CRL.L.P. 467/2019 & Connected matters Page 8 of 29
SHARMA
Signing Date:02.07.2025
12:46:39
2. Briefly stated, the Appellant/M/S Shree Sambhav Papers Pvt. Ltd. is a
Company registered under Indian Companies Act of which Neeraj Jain is the
Director and authorized to file the Complaints as per Resolution dated
20.02.2009. The Respondent Company is also registered under Companies
Act of which the Respondent no.2 Anil Kumar Mittal is the Chairman-cum-
Managing Director while Respondent no.3/Meera Mittal its Director.
3. The case of the Appellant/Complainant is that the Respondents no.2
& 3 had purchased 9,97,500 shares @ Rs.41.50 per share for a total
consideration of Rs.4,13,96,250/- sometime in August, 2008 from the
Complainant. Additionally, a sum of Rs.36,03,750/- had been given as an
advance for sale of paper, to the Respondent no.1/M/S Shree Ram Straw
Products Ltd. which was also liable to be returned. Thus the Respondents
were liable to pay a sum of Rs.4,50,00,000/- towards purchase of Shares and
the advance for sale of paper.
4. In discharge of this Legal liability, impugned nine Cheques with
Serial Numbers from 008814 till 008822, all dated 30.11.2008, each in the
sums of Rs.50 lacs drawn on SBI, Uttarakhand, were issued.
5. The cheques on presentation for encashment, were returned unpaid
vide Return Memo dated 19.02.2009 with the remarks “Stop Payment”. The
Complainant/Appellant sent a Legal Notice of Demand dated 23.02.2009,
which was duly served upon the Respondents as the AD Card was received
under the signatures of the Respondents. Despite being served with the
Legal Notice, the Respondents failed to pay the cheque amount.
6. Hence, nine Complaints under Section 138 NI Act in respect of nine
cheques, were filed by the Appellant.
Signature Not Verified
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SHARMA
Signing Date:02.07.2025
12:46:39
7. After the Respondents were summoned, Notice under Section 251
Cr.P.C. was given to them on 05.06.2010, to which they pleaded not guilty
and claimed trial.
8. The Complainant Shri Neeraj Jain appeared as CW1 and tendered his
evidence vide Affidavit Exhibit C1 and Exhibit P1/X.
9. The statement of the Respondent No.2, Shri Anil Kumar Mittal was
recorded under Section 313 Cr.P.C. It was asserted by him that the
Respondent no.3 Meera Mittal was never involved in the business affairs of
the Company. Furthermore, he asserted that he had never purchased any
shares from Neeraj Jain/M/s. Shree Sambhav Papers Pvt. Ltd. (Complainant)
and had no liability to pay any amount. There was no question of having
purchased a share @ Rs.41.50 per share, as he had already purchased all the
shares of the Respondent Company from Vinod Gupta and his family/group
in the financial year 2007-08. Insofar as the advance amount of
Rs.36,03,750/- was concerned, he was unable to say anything unless the
Accounts were looked into. The Respondent no.2 Anil Kumar Mittal further
stated that ten cheques got misplaced, information of which was given to the
concerned Bank and to the Police Chowki, and the payment against those
Cheques was stopped. The cheques in question are those missing cheques
which have been misused by the Appellant. For this reason, the said
Cheques were dishonoured on account of stop payment on the instructions
given by the Respondent no.2 Anil Kumar Mittal.
10. The Respondents in support of their defence examined DW1 Mr.
Prabhakar who exhibited the photographs of Vishwakarma Puja as Ex.
DW1/A and DW2 Anil Kumar Mittal/Respondent no.2.
Signature Not Verified
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SHARMA
Signing Date:02.07.2025
12:46:39
11. Learned MM considered in detail, the rival contentions of the parties
and concluded that there was no evidence whatsoever adduced by the
Complainant to prove that they had purchased the Shares of accused no.1
M/s Shree Ram Straw Products Ltd. at a face value of Rs.10 per share from
Shri Vinod Gupta and that there was no further evidence to prove that the
said shares were sold to the Respondents. It was concluded that in the
absence of any requisite documents of transfer of shares, it could not be held
that the Complainant ever owned and possessed the impugned Shares which
it could have sold to the Respondents.
12. It was further observed that the Statement of Accounts produced by
the Complainant, also did not corroborate his assertion of purchase and sale
of the shares. It was thus, concluded that the Appellants had failed to
discharge the burden of proof in rebutting the statutory presumptions
attached to Dishonour of cheque and thereby, dismissed the aforesaid
Petitions.
13. Aggrieved by the dismissal of the Complaints, present Appeals have
been filed.
14. The grounds of challenge essentially are that during the proceedings,
parties had arrived at a Settlement and the statements of the Respondent no.2
Anil Kumar Mittal as well as the Appellant Neeraj Jain, were recorded on
23.11.2012. Pertinently, certain admissions were made by the parties which
has been incorrectly ignored by the Learned MM. Reliance has been placed
on Dayawati vs. Yogesh Kumar Gosain, (2017) 243 DLT 117 which held
that the settlement arrived at between the parties under Section 138 NI Act,
are binding.
Signature Not Verified
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SHARMA
Signing Date:02.07.2025
12:46:39
15. It is further contended that the evidence led by the parties along with
the documents placed on record, has not been appreciated correctly. It has
not been considered that the Complainant Company is engaged in the
business of Paper. The Respondent no.2 in connivance with the Respondent
no.3, with a mala fide intent to cheat and usurp the funds of the Complainant
Company, had approached the Respondent no.1 Company which was in the
similar business. The Respondents no.2&3 had assured Appellant no.2
Neeraj Jain that they had a lucrative business proposal for the Complainant
Company and that if the Complaint Company agrees to sell them its Shares
and supply Papers to the accused Company, it shall be rewarded with good
returns. Respondents no.2 & 3 further assured of their personal guarantee
with respect to the transactions between the Complainant and the
Respondent Company. The Complainant was thus, induced by the
Respondents no. 2 & 3 to enter into multiple transactions with them.
16. It is further contended that it has not been appreciated that the
Respondent no. 2/Anil Kumar Mittal, was the Chairman-cum-Managing
Director and was responsible for the dealings of Respondent no.1 Company.
Likewise, the Respondent no.3/Meera Mittal being a Director, looked after
the entire accounts and administrative work of Respondentno.1 Company.
They were all liable for the offence under Section 138 NI Act, being in
charge and responsible for the conduct of the affairs of the Respondent no.1.
17. It is further submitted that Respondents no. 2 & 3 had jointly
purchased the Shares from the Complainant Company and issued nine
cheques jointly in discharge of the liability. The Original Share Certificates
were never brought in evidence and the photocopies were brought on record,
Signature Not Verified
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SHARMA
Signing Date:02.07.2025
12:46:39
which was not taken into consideration. It is claimed that in getting the
cheques dishonoured by issuing instructions for “Stop Payment”, the malice
in their intention is manifest in that they have tried to usurp the funds of the
Appellant.
18. Reliance has been placed on Mahendra A. Dadia and Others vs. State
of Maharashtra and Another 1999 (5) BomCR 124 wherein it has been held
that even if the cheque has been dishonoured for the reasons “Stop
Payment” it will still come within the ambit of Section 138 NI Act. Similar
observations have been made by Chhattisgarh High Court in the case
Bhikham Chandrakar vs. Amar Nath Tamrakar.
19. It is submitted that Sections 118 and 139 NI Act have not been
considered and the facts have been wrongly twisted. The accounts of the
parties have also not been looked into. In V.S. Yadav vs. Reena 2010 (4) JCC
(NI) 323 this Court had held that the presumptions under Section 139 NI
Act must not be taken lightly and must be relied upon unless the same has
been rebutted. Reliance has also been placed on K.N. Beena vs. Maniyappan
(2001) 107 Comp. Case. 459 (SC) wherein the Supreme Court has held that
the presumptions under Section 139 NI Act have to be drawn unless the
contrary has been proved by the holder of the cheque. The holder of the
cheque must prove that he has received it for discharge in the whole or in
part of the debt or liability. Similar observations have been made in Bansal
Plywood vs. The State (NCR of Delhi) & Ors. in Crl. Appeal No.17/2017
decided on 04.9.2017 by this Court.
20. The Legal Notice was duly served upon the respondents, despite
which the Cheque amounts were not paid.
Signature Not Verified
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SHARMA
Signing Date:02.07.2025
12:46:39
21. The Apex Court in V. Raja Kumari vs. Subbarmana Naidu, 2004 X
AD (SC) 433 has held that Section 27 of General Clause Act can profitably
be imported in a case where the sender has dispatched Notice by post on
correct address. It may be deemed to have been served on the sendee unless
it is proved that it was not really sent or served and that the sendee was not
in any way responsible for non service.
22. It is therefore, submitted that the impugned judgments are liable to be
set aside and Complaints under Section 138 NI Act, be allowed.
23. Submissions Heard and Record Perused
24. To put the facts in the right perspective, Respondent No.1 Company
M/s. Shree Ram Straw Products Ltd. was originally owned by Sh. Vinod
Gupta and his family members.
25. Sh. Vinod Gupta sold these shares to the Petitioners and Respondents,
which has become the subject matter of dispute. While the Complainant
alleged that it purchased the shares in August, 2008 and sold them to the
Respondent Company in September, 2008 to which the dishonoured cheques
pertain, the Respondents claim to have purchased these shares directly from
Vinod Gupta in August, 2008.
26. The Complainant has filed the aforesaid nine Petitions on account of
dishonour of 9 respective cheques of Rs.50,00,000/- each, which according
to him were the sale consideration for the sale of 9,97,500 shares @
Rs.41.50/- per share to Respondent Nos.2 and 3, who were the Directors of
Respondent No.1 Company M/s. Shree Ram Straw Products Ltd.
Signature Not Verified
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SHARMA
Signing Date:02.07.2025
12:46:39
27. The Respondents have admitted their signatures on the impugned
cheques. However, the defence of the Respondents was that these were
misappropriated by Neeraj Jain while they were jointly working. It was
further claimed that the shares had already been purchased by them from its
Owner Vinod Gupta in August, 2008 and denied that any shares were ever
purchased by the Respondents from the Complainant Company.
28. The Signatures being admitted by the respondent on the Cheques,
presumption under S.139 and S.118 NI Act arises that the cheques were
issued for legally recoverable debt and the onus shifted on the respondents
to prove otherwise.
29. The first defence taken by the Respondents was that they had jointly
decided to run the business with Neeraj Jain, Complainant and his persons,
which was discontinued and blank cheques given in trust to the Complainant
during their joint business, have been misused by the Complainant.
30. To prove this defence, DW-1 (sic DW-2) Anil Kumar Mittal/
Respondent No. 2, and Managing Director of M/s. Shree Ram Straw
Products Ltd. (Respondent No.1), deposed that respondent No.1 was a
closely held Company and its shares were held by six family members,
namelynamely Anil Kumar Mittal, Meera Mittal, Ambika Mittal, Atul
Krishna, Ramesh Singh and Kamleshwar Singh, and 40,04,000 shares were
owned by others. The conservative value of the Company assets was above
Rs.40 crores.
31. DW-1 further deposed that in May, 2008, he was introduced to the
Complainant Neeraj Jain, whose Company was also dealing in Papers work.
They had a detailed meeting in July-August, 2008 and it was agreed that
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Neeraj Jain and his persons, would bring Rs.5 crores as the initial payment
and Rs.4 crores as working capital. However, instead of bringing the entire
amount of Rs.9 crores, Neeraj Jain and his persons, brought in Rs.50 lacs
from the account of M/s Satya Craft Pvt. Ltd. and Rs.45 lacs from the
account of M/s Shree Sambhav Papers Pvt. Ltd./Complainant. The joint
running of Paper Mill was commenced on 10.08.2010, when a hawan pooja
was performed in which they all participated. The photograph of all
participating in the Havan Pooja is Ex. DW1/A.
32. It is further deposed that Neeraj Jain having assured to bring in the
entire amount of Rs.9 crores in the account of Respondent No.1 Company,
was managing day to day affairs of this Company, along with his persons. In
the normal course of business, he and his persons, were authorised to make
payment of waste paper Supplier, spare parts Suppliers and chemical
Suppliers, etc. For this purpose, a Cheque Book of the deponent, containing
signed leaves, was given in trust to Neeraj Jain and his persons. These pre-
signed Cheque leaves had the endorsement that they were valid for „Rs.10
lacs and under‟.
33. DW-1 Anil Kumar Mittal, in his testimony, gave details of the
payments due from the Respondent No.1/Company, which got paid from the
account of Petitioner/Complainant. Likewise, details have been furnished of
the material sent from Respondent No.1 Company on the instructions of the
Complainant Company and the payment received in the account of the
Respondent No. 1.
34. Such details have been furnished by DW-1 to demonstrate that Neeraj
Jain and his persons through their business concerns, were dealing with day
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to day affairs of Respondent No.1 Company and were participating jointly in
running of the Paper Mill.
35. DW-1 Anil Kumar Mittal further deposed that somewhere in
November/December, 2008, it was realised that Neeraj Jain and his persons
were not bringing any kind of money that they had promised earlier and that
huge quantity of paper (manufactured products) was being sent from the
Respondent No.1 Company to the Complainant Company, for which there
were no proper Accounts. It was also realised that there was
mismanagement by Neeraj Jain and his persons, resulting in a loss of about
Rs.2,08,87,929/- to Respondent No.1 Company. It was therefore, decided
that no further joint business of Paper Mill, would be continued. Neeraj Jain
and his persons were asked to leave the premises of the Company.
36. DW-1 Anil Kumar Mittal further deposed that though Neeraj Jain left
the premises but with dishonest intention, he and his persons took away the
unfilled signed cheque leaves of the Respondent No.1 Company about
which the deponent was not aware. He, in order to prevent any misuse of
these missing cheques, gave written instructions to his Banker to stop the
payment against these Cheques.
37. In the cross-examination of DW-1 Anil Kumar Mittal, the
Complainant had questioned him on the aspect of having made a Complaint
to the Police with regard to the cheques having been misplaced. No other
significant cross-examination was done on any of the material aspects
deposed by DW-1 Anil Kumar Mittal. There is no challenge to they having
undertaken joint business or that because of differences that arose
subsequently, they separated in November/December, 2008. Not an iota of
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cross-examination has been done on the testimony of DW-1 that there was
mismanagement of business affairs of the Respondent No.1 Company,
which led to disengagement of Neeraj Jain and his persons and the
respondents. It was also not challenged that blank signed Cheque Book was
handed over to the Complainant, to facilitate the day to day affairs of
Respondent No.1 Company from August, 2008 till November, 2008.
38. The testimony of DW-1 therefore, discharged the initial onus that
these signed blank cheques had been issued to facilitate the running of joint
business by Neeraj Jain and his persons. The Respondent, had acted with
prudence to instruct the Bank to stop the payments against the missing
Cheques. Pertinently, the Cheques also got dishonoured for the reason
“Account Closed”, which lends credence to the defence of the Respondents.
39. The second defence taken by the Respondents was that they never
purchased any shares from the Complainant and there was no legally
recoverable debt. To corroborate this defence, DW-1 Anil Kumar Mittal has
further deposed that Complainant was never the owner of the Shares;
therefore, there was no question of transferring the same to the deponent. In
fact, the Respondents had purchased the shares of Respondent No.1
Company in the financial year 2007-2008 from Vinod Gupta, and his family
members and there was no question of the purchasing the same from the
Complainant Company. There was no denial or challenge by the
Complainant that earlier the Company M/s. Shree Ram Straw Products Ltd.
was owned by Vinod Gupta.
40. The onus thus, shifted on the Complainant to prove that there was an
existing liability or a debt in discharge of which the nine cheques were
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issued. To prove these facts , CW-1 Neeraj Jain deposed that he had
purchased 9,97,500 shares of Respondent No.1 Company of denomination
Rs.10 per share, from Vinod Gupta. In his cross-examination he had
admitted that he was not aware of the status of Vinod Gupta in the
Company. He did not know his father’s name and address though he resided
somewhere in Mahipalpur. He further admitted that he had gone to the
residence of Vinod Gupta and had never seen the Memorandum of
Understanding or Articles of Association or M/s Shree Ram Straw Product
Ltd. at the time of purchase of its shares from Vinod Gupta and his family
members.
41. Pertinently, it has not been explained either in the Complaint or
otherwise to which Company did these shares pertain to. Even if it is
accepted that these shares pertained to Respondent No.1 M/s. Shree Ram
Straw Products Ltd., it has to be considered if the Complainant has been
able to discharge the onus of proving that these Shares were purchased by
him for and on behalf of the Complainant, Ms. Shree Sambhav Papers Pvt.
Ltd.
42. Pertinently, none of the relevant documents, be it Memorandum of
understanding, Articles of Association, Company Resolutions, Bank
Statements, Balance Sheets, ITRs and such other relevant documents, had
been produced by the Complainant, even though he was specifically
questioned about the existence of these documents in his cross-examination.
43. After his cross-examination was concluded, the Respondents filed an
Application on 14.02.2011 under Section 311 of Cr.P.C., wherein all these
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relevant documents were sought from the Complainant, with the permission
to cross- examine the complainant in the light of these documents.
44. The documents were produced by the Complainant along with the
covering Letter dated 08.03.2011. Significantly, these documents were
neither put to CW-1 in his cross-examination nor did the Complainant
choose to prove/exhibit these material documents.
45. Be as it may, the first document of relevance are the Board
Resolutions authorising the purchase and sale of the shares by petitioner
No.2, Neeraj Jain on behalf of Complainant Company. The learned MM for
the convenience had exhibited the Board Resolution dated 31.07.2008 of the
Complainant Company as Ex. A-4. According to this Board Resolution,
Neeraj Jain, Director of the Company was authorised to invest funds subject
to overall limit of Rs.80,15,000/-, in the shares of M/s. Shree Ram Straw
Products Ltd, Respondent No.1.
46. According to CW-1 Neeraj Jain, he purchased 9,97,500 shares @
Rs.10 per share, of Respondent No.1 Company. The purchase of these
Shares is corroborated by the Statement of Investment Accounts of the
Complainant Company, which was marked as Ex.A-1 by learned MM, for
the purpose of identification. This statement reflects the purchase of Equity
Shares of respondent No.1 Company, for which the payments were made to
Vinod Gupta and his family members as under:
SHREE SAMBHAV PAPERS (P) Ltd.
A-5 & A-6, MAIN ROAD,
JOHRIPUR, DELHI – 110094Investment A/C For The Period From 01/04/2008 To 31/03/2009
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DATE DESCRIPTION DEBIT CREDIT BALANCE
04/08/08 BA TO CH. NO. 38,55,000.00 38,55,000.00Dr
957512 to Sh. Vinod
Gupta for purchasing
of equity share of
M/s Shree Ran Straw
Product Ltd.
BA TO CH. NO. 5,60,000.00 44,15,000.00Dr
957513 to Smt. Anita
Gupta for purchasing
of equity share of
M/s Shree Ran Straw
Product Ltd.
11/08/08 BA TO CH. NO. 23,75,000.00 67,40,000.00Dr
957514 to Sh. Vinod
Gupta for purchasing
of equity share of
M/s Shree Ran Straw
Product Ltd.
BA TO CH. NO. 6,25,000.00 74,15,000.00Dr
957515 to Sh.
Akshat Gupta for
purchasing of equity
share of M/s Shree
Ran Straw Product
Ltd.
BA TO CH. NO. 6,00,000.00 80,15,000.00Dr
957516 to Sh. Ishan
Gupta for purchasing
of equity share of
M/s Shree Ran Straw
Product Ltd.
80,15,000.00
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47. Additionally he also produced his Statement of Account Ex. A2 for
the period 01.04.2008 to 31.03.2009 reflecting the credit/debit of the
amounts. The amounts have been reflected. These two documents though
not proved by the Complainant, but having been produced on the asking of
the Respondent, establish that 9,97,500 shares of Respondent No.1
Company were purchased by the Complainant Company from Vinod Gupta,
in August, 2008.
48. The significant fact which however, emerges is that Neeraj Jain had
been authorised vide Resolution Ex. A-1 to make an investment upto
Rs.80,15,000/-, while this investment of Rs.99,75,000/- exceeds the
approved amount. Clearly, such purchase of shares was beyond the
authorisation of Neeraj Jain. No subsequent document / Board Resolution
has been placed rectifying, authorising or accepting such purchase of shares
as investment by Neeraj Jain.
49. Be as it may, the next aspect which is of significance is the sale of
these shares to Respondent Nos.2 and 3. For this again, the Complainant has
produced the Board Resolution dated 15.10.2008 Ex.A-5, whereby it was
resolved by the Complainant Company that Equity Shares of M/s. Shree
Ram Straw Products Ltd.(Respondent No.1) held by M/s. Shree Sambhav
Papers Pvt. Ltd(Complainant) as investment, be sold to strengthen the
liquidity of the Company. It was further resolved that Neeraj Jain Director
was authorised to negotiate the sale price with the prospective buyer and to
finalise the same in the interest of the Company.
50. Pertinently, it is the consistent case of Neeraj Jain that these shares of
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of the Complainant, were sold to Respondent Nos.2 and 3 in September,
2008. If the shares already stood sold in September, 2008, there could not
have been a subsequent Board Resolution of 15.10.2008, authorising Neeraj
Jain to negotiate and enhance the liquidity of the Company, by selling these
shares. This Resolution clearly belies the assertion of the Complainant that
the shares got sold to Respondent Nos.2 and 3 in September, 2008 for a sale
consideration of Rs. 4,13,96,250/-.
51. This assumes significance in the light of there being not a single
document corroborating the sale transaction. Also, there is no Board
Resolution of the Complainant Company whatsoever, endorsing the sale of
shares of Respondent No.1 M/s. Shree Ram Straw Products Ltd. to
Respondent Nos.2 and 3. It is also significant to note that while it is asserted
that the shares were sold in the year 2008, but despite it being a business
transaction, no exact date on which the alleged sale was made, is either
disclosed or detailed in any of the documents of the Complainant.
52. It is pertinent to note that according to CW1, he had purchased the
shares of Rs.9,97,500 of respondent No.1. However there is not a single
document to corroborate his purchase of shares from Vinod Gupta.
Pertinently, he is not even aware of the status of Vinod Kumar from whom
he allegedly purchased the Shares.
53. The procedure for purchase of shares is detailed in Section 108
Companies Act 1956. There are various mandatory formalities such as
execution of Share Transfer Deed in the prescribed Form duly signed by the
Transferor and Transferee, payment of stamp duty, etc necessarily required
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to be fulfilled in case of transfer of Shares. Admittedly none of these have
been fulfilled.
54. The Complainant admitted in his cross-examination that the Shares
were never transferred in the name of Complainant Company. He tried to
explain that he was handed over the physical cheques at the time of
purchase, which he further sold to Respondent No.1 Company. It may be
that the Shares got transferred directly to the Respondent No.1 through the
Complainant, but simplest way was to produce the requisite documents to
show the Book transfer, but unfortunately no records have been produced by
the Complainant to prove the sale of Shares to the respondent No.1
Company.
55. These facts are relevant in the light of denial by Respondent No.2
about the purchase of shares. In fact, Respondent No.2 as DW-1 has
explained in detail that he had already acquired all the Shares of Respondent
No.1 M/s. Shree Ram Straw Products Ltd. in August, 2008. The alleged sale
of shares of Respondent No.1 M/s. Shree Ram Straw Products Ltd. by the
Complainant therefore, does not fit into the alleged sale of the shares by the
Complainant in September, 2008.
56. The case of the Petitioner does not end there. The Balance Sheet and
ITRs of the Complainant Company have been placed on record, pursuant to
Application under Section 311 Cr.P.C. filed on behalf of the Respondents.
The perusal of these Balance Sheet and ITRs, clearly reflect that there is no
mention whatsoever of any investment in the shares in August, 2008 nor is
there any reflection of the amount outstanding from Respondent No.1
Company, as debtors on account of sale of shares to it. Furthermore, in the
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list of Sundry Debtors, the name of Respondent No.1 Company does not
feature anywhere.
57. The Complainant therefore, has not been able to establish that the
Shares got sold to Respondent Nos.2 or 3 or that there was outstanding
amount in the sum of Rs. 4,13,96,250/- from Respondent Nos.2 or 3.
58. The incongruity of the case of the Complainant also emerges from the
circumstance that according to the Complainant, he got the shares in August,
2008 @ Rs.10/- per share, but barely within a month i.e. in September, 2008
he claims to have sold those shares @ Rs.41.50/- per share for a value of
Rs.4,43,96,250/-. Such exponential difference in the value of shares from
Rs.10/- to Rs.41.50/- per share, within one month, again raises doubt about
the claims of the Complainant Neeraj Jain.
59. Rather, as already discussed, it emerges that the Complainant and the
Respondents had gone into joint business venture, which did not go well and
consequently they separated. The possibility of the Complainant having got
blank signed cheques of Respondent No.2 during the joint business
transaction, cannot be outrightly rejected. Rather, it makes the testimony of
CW-1 Neeraj Jain, which is lacking in all the material particulars and who
did not produce the relevant documents in his testimony, lends credence to
the defence as projected by DW-1 Anil Kumar Mittal.
60. The Complainant has not been able to prove that the impugned
Cheques had been issued in discharge of existing liability or that the
complaint under Section 138 NI Act was maintainable.
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61. To sum up, when a person tries to build a case of slippery grounds, it
cannot make a castle stand on it for long. Though the Complainant may
have been able to file the Complaint and even litigate for last more than nine
years, but definitely, it cannot result in any favourable Order for the
Complainant. The figures and the amounts which have been projected by the
Complainant do not tally at any level. The Board Resolution had authorised
the sale for an amount of Rs.80,15,000/-, when according to the
Complainant, the shares were purchased for Rs.99,75,000/-. Further,
according to the Complainant, the sale value of the shares was
Rs.4,13,96,250/-. Interestingly, the nine cheques had been filled with an
amount of Rs.50 lacs each.
62. The question was how to match the cheque amount with the alleged
sale consideration for the Shares. The Complainant worked out an ingénius
way of asserting that sum of Rs.36,03,750/- was due from the Respondents
as advance paid for sale of Paper. This figure interestingly and evidently was
being project to make a round figure of Rs.4,50,00,000/- to correspond to
the Cheques amount. While doing so, not an iota of evidence has been led
by the Complainant to prove this advance of Rs.36,03,750/-. This again
reflects the falsity of the entire case of the Complainant.
63. Another contention raised on behalf of the Complainant is that the
parties during the trial, had arrived at a Settlement and the statements of Anil
Kumar Mittal and Neeraj Jain were recorded on 23.11.2012 by the learned
MM., wherein it was agreed by them that their disputes would be settled on
payment of Rs.1,82,00,000/- by Respondent No.2 in the name of M/s. Shree
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Sambhav Papers Pvt. Ltd./Complainant towards full and final settlement and
that the amount would be paid in nine monthly instalments.
64. Learned counsel for the Complainant had vehemently contended that
once the matter got amicably settled, then in the light of the judgment passed
by Hon’ble Division Bench of this Court in the case of Dayawati (supra) the
Complaint under Section 138 NI Act could not have been continued and was
liable to be disposed of in terms of the Settlement, and there was no
occasion for the Complaints to be dismissed.
65. Pertinently, Respondent No.2 Anil Kumar Mittal, while giving this
statement, stated that the settlement will be given effect if the Resolution is
passed and brought on record by M/s. Satya Craft Pvt. Ltd., Surya Cable and
NOC from Pankaj Jain and Anil Jain to the effect that they have no
objection to this settlement. Further, the Resolution must contain upon the
payment being also received in the cases under Section 138 NI Act at
District Courts, Faridabad, Haryana and Police Complaint pending at PS
Sector 51, Faridabad, Haryana would be withdrawn unconditionally.
Similarly, Notice sent in case of Surya Cable, would also be withdrawn.
Further, certain C-form, which were lying with Complainant Company and
M/s. Satya Craft Pvt. Ltd., shall be handed over to Anil Jain on 02.03.2013
on payment of first instalment of Rs.20 lacs.
66. Likewise, Neeraj Jain, while accepting the terms of the Settlement
and agreeing to bring on record the desired Resolutions from M/s. Satya
Craft Pvt. Ltd., M/s. Surya Cable and NOC from Pankaj Jain and Anil Jain,
he also undertook to withdraw the present Petitions as well as all other
pending litigations before District Courts, Faridabad, Haryana and
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proceedings pending before the Police and the Notices, unconditionally. He
also undertook to bring the C-Form to be handed over to Anil Mittal. It was
however, stated in the event of failure of Anil Mittal to pay the instalments
consecutively for two occasions, the Settlement shall not be binding on the
Complainant.
67. The question is whether the statements of the Parties recorded in the
Court constituted a concluded Settlement. This is reflected in the Order
dated 16.03.2013 whereby the learned MM had noted that Complainant was
unable to bring the Resolutions as per the statements of Settlement. The
counsel for the accused/Respondents stated that no payments can be made if
there are no Resolutions produced by the complainant. He also submitted
that District Courts, Faridabad had refused to accept the statement of the
Complainant and was proceeding with the trial.
68. Accordingly, the Settlement Terms recorded on 23.11.2012, were
scrapped as unworkable and parties were discharged from their respective
obligations/undertakings. It was also observed that this Order shall not affect
any of the parties adversely and the Settlement was quashed.
69. From the aforesaid discussion, it emerges that it was not a concluded
Settlement and had not even been acted upon. It was subject to production of
requisite Resolutions and NOCs from all the parties involved. Neither
Neeraj Jain nor Anil Mittal were competent to arrive at a Settlement without
proper authorisation and Board Resolutions. At best, their statement can
only reflect an intent and an attempt to settle over the dispute, which was not
confined only to these Complaints, but also involved other Firms and
Companies, but as is evident this settlement did not get crystallised into a
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binding Settlement. There being no Settlement, the Complaints were
proceeded and decided on merits. This contention of the Complainant, is of
no assistance to them.
Conclusion:
70. The aforesaid discussion thus, reflects that Complaints under Section
138 NI Act have been rightly dismissed by the learned MM. There is no
merit in the present Petitions, which are hereby dismissed. The pending
Applications are disposed of accordingly.
(NEENA BANSAL KRISHNA)
JUDGE
JUNE 28, 2025/pp
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