Delhi District Court
M/S.Rocktek Infra Service P.Ltd vs Utm Engineering P.Ltd on 28 April, 2026
IN THE COURT OF Dr. NEHA SAINI
JMFC (NI ACT)-02, SOUTH-WEST
DWARKA COURTS, NEW DELHI
CC NI ACT NO: 6254/2019
CNR / Case No. DLSW0262822019
M/s Rocktek Infra Service Private Ltd.
Having its registered office at 302/23,
Gaurav Tower, PVR Complex
Vikaspuri, New Delhi
Through AR Mr. Sanjeeva Kumar
(Previously at 9/319,
Sunder Vihar, New Delhi) ........Complainant
Versus
M/s UTM Engineering Pvt. Ltd.
550, Udyog Vihar, Phase V
Gurgram-122016
Through its Managing
Director/Authorized Signatory ........Accused no.1
Mr. Krupasindhu Mandal
Director/Authorized Signatory
550, Udyog Vihar, Phase V
Gurgram 122016
Haryana ........Accused no.2
Offence Complained of or proved : Under Section 138 of Negotiable Instruments
Act, 1881
Plea of the Accused : Pleaded not guilty
Date of filing : 06.02.2019
Date of Institution : 07.02.2019
Date of reserving judgment/order : 16.04.2026
Final Order/Judgment : Convicted
Date of pronouncement : 28.04.2026
CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 1/34
neha Digitally signed by
neha saini
saini Date: 2026.04.28
16:49:01 +0530
JUDGMENT
1 Vide this Judgment, I will dispose of the present complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act") filed by the complainant against accused no.1 and 2 on account of dishonour of two cheques i.e. first cheque bearing no. 026525 dated 20.09.2018, amounting to Rs. 3,62,417/- and second cheque bearing no. 026526 dated 20.10.2018, amounting to Rs. 3,68,302/-, drawn on Yes Bank Ltd., Diplomatic Enclave, Chanakyapuri, New Delhi (hereinafter referred to as the cheques in question).
A. BRIEF FACTS OF THE CASE 2 As per the complainant, the complainant is a Private Limited Company
incorporated under the Indian Companies Act, 1956, having its registered office at 302/23, Gaurav Tower, PVR Complex, Vikas Puri, New Delhi previously at 9/319, Sunder Vihar, New Delhi-110087. Sanjeeva Kumar is the Assistant Manager Shri Accounts and Authorized Signatory of the Complainant Company. Shri Sanjeeva Kumar has been duly authorized by the Board of Director of the complainant Company through resolution passed in the board meeting held on 28th January 2019 to sign, verify and institute the present complainant against the accused on behalf of the complainant. The present complainant is accordingly being signed, verified, and instituted by Shri Sanjeeva Kumar for and on behalf of complainant. The complainant is in the business of Trading in Mining and Construction Equipment under the name and style of Rocktek Infra Service Private Limited and has reputation in the industries for their products and quality. The accused is a Private limited company registered under the Indian Companies Act and having their office at 550 Udyog Vihar, Phase-V, CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 2/34 neha Digitally signed by neha saini Date: 2026.04.28 saini 16:49:10 +0530 Gurugram Haryana. From time to time accused purchased the material from the complainant strictly against bill and making on account payment to the complainant. Lastly accused purchased the goods against invoice dated 30.12.2017 of Rs. 1,51,866/-. As per books of account maintained by the complainant company during the course of their business, sum of Rs. 7,30,719/- (Rupees seven lacs thirty thousand seven hundred and nineteen) was lying outstanding as on 31.12.2018. Against the outstanding liability, the accused issued and handed over the two cheques under the signature of accused no.2 to the complainant i.e. first cheque bearing no. 026525 dated 20.09.2018, amounting to Rs. 3,62,417/-, and second cheque bearing no. 026526 dated 20.10.2018, amounting to Rs. 3,68,302/-, drawn on Yes Bank Ltd., Diplomatic Enclave, Chanakyapuri, New Delhi. The above said cheques were issued and handed over by the accused towards discharge of their liability towards payment of outstanding against purchase of goods by the accused and also assured the complainant that the same cheques would be honoured on presentation for encashment. As per the direction of the accused, the complainant presented the above said cheque for encashment through their Banker on 12th December 2018 but the same were returned back unpaid by the banker of the accused with the remarks 'FUNDS INSUFFICIENT" in the account of accused vide memo dated 13th December 2018. Immediately after receiving of the intimation about dishonour of the above said cheque of the accused, official of the complainant approached the accused and facts regarding dishonour of the above said cheques were brought to the knowledge of the accused and requested them again to make the payment of the above said dishonor cheque amount/outstanding payment. Inspite of repeated request and demand by the complainant, accused willfully failed and neglected to pay the aforesaid dishonour cheques amount of Rs. 7,30,719/- (Rupees seven lacs thirty thousand seven hundred and nineteen) to the complainant till so far. When the accused failed to make the payment of dishonour cheque amount, then the Complainant was forced to serve a legal notice under section 138 of the Negotiable Instrument Act 1881 upon the accused CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 3/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:49:23 +0530 through their counsel dated 9th January 2019 by way of Speed Post at their address and demanded back the aforesaid dishonour cheques amount and called upon accused to make the payment of aforesaid dishonour cheque amount of Rs. 7,30,719/- (Rupees seven las thirty thousand seven hundred and nineteen) as balance outstanding against bill. The Notice was duly received by the accused on 12.01.2019 as per the postal authority report. Accused no.1 and 2 have failed to make the payment of the cheque amount in question to the complainant, despite service of legal notice of demand, he has, thus, committed an offence under Section 138 of the NI Act, 1881.
B. APPEARANCE OF ACCUSED, NOTICE AND ADMISSION AND DENIAL OF DOCUMENTS 3 Upon receipt of the complaint, cognizance of the offence was taken and the accused no.1 and 2 were summoned vide order dated 15.03.2019. Accused no.1 and 2 appeared in response to summons of the court and accused no.2 was admitted to bail.Copy of complaint with all the documents were supplie to the accused.
4 On 04.02.2020, Ld. Proxy Counsel for the IRP had submitted that Hon'ble NCLT, New Delhi has appointed Mr. Rajesh Jhanga as the Interim Resolution Professional. Thereafter, a separate notice explaining accusation to accused no.2 under Section 138 of the Negotiable Instruments Act, 1881 was served upon in terms of Section 251 Code of Criminal Procedure, 1973 (hereinafter referred to as CrPC) on 19.11.2022. Accused no.2 did not plead guilty and claimed trial. Further, the following plea of defence was taken by the accused at the time of framing of notice: -
"Complainant was the supplier of raw material to our company. Our company was developing two projects at Northern Railway Katra and North Western Railway, Jaipur. The cheque in question were issued on the same date as mentioned upon both the cheques for the payment of raw material to be supplied by the complainant for our CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 4/34 neha Digitally signed by neha saini Date: 2026.04.28 saini 16:49:32 +0530 projects. Both the cheques were issued as advanced payment cheque. Our company could not pay the amount to the complainant due to for closure of our contract with the Northern Railway. Our company got into liquidation in the year 2019. Now I am suspended director of the accused company. The liquidation process is still on."
5 Statement of accused no.2 regarding admission/denial of documents was recorded under Section 294 CrPC on 19.11.2022. The signature on the cheques and the return memo(s) were admitted by accused no.2.
6 Thereafter, accused was allowed to cross examine the complainant after his oral prayer for allowing the application u/s 145(2) of NI Act was allowed vide order dated 08.06.2023.
C. COMPLAINANT'S EVIDENCE 7 During the trial, the complainant has led the following oral and documentary evidence: - ORAL EVIDENCE CW-1 AR of the Complainant company Sanjeeva Kumar,
tendered his evidence by way of affidavit and the same is Ex. CW-1/A. DOCUMENTARY EVIDENCE
1.Ex.CW-1/1 Board of Resolution.
neha Digitally signed
by neha saini
Date: 2026.04.28
saini 16:49:40 +0530
CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 5/34
2.Ex.CW-1/2 Certified copy of statement of account/ ledger of accused
company.
3.Ex.CW-1/3 First cheque bearing no. 026525 dated 20.09.2018,
amounting to Rs. 3,62,417/-
4.Ex. CW1/4 Second cheque bearing no. 026526 dated 20.10.2018,
amounting to Rs. 3,68,302/-
5.Ex.CW-1/5 Returning memo.
6.Ex.CW-1/6 Legal Notice.
7.Ex.CW-1/7 Postal receipts.
8.Ex.CW-1/8 Tracking report.
9.Ex.CW-1/9 Certificate u/s 65 B of Indian Evidence Act.
CW-1 was duly cross examined by the Ld. Counsel for the accused. CE was closed vide order dated 04.04.2024.
D. STATEMENT OF ACCUSED 8 Thereafter, the statement of accused was recorded without oath u/s 313 CrPC to allow the accused to personally explain the circumstances appearing in evidence against the accused. In statement u/s 313 CrPC, the accused denied all the allegations neha Digitally signed by neha saini Date: 2026.04.28 saini 16:49:46 +0530 CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 6/34 against him and stated that the company could not pay the amount as the company got into liquidation.
E. DEFENCE EVIDENCE 9 Accused no. 2 examined himself at the stage of defence evidence as DW-1 after
his application u/s 315 CrPC was allowed by Ld. Predecessor of this court and he was duly cross examined by the Ld. Counsel for the complainant. On 24.04.2015, Ld. Counsel for the complainant admitted the documents given by the accused i.e. Mark X i.e. Form B, Public Announcement made by the liquidator of the accused dated 21.10.2020 and Mark Y i.e. the list of creditors of the accused compnany from the period 01.04.2019 to 01.11.2019. DE was closed vide order dated 24.04.2025 and matter was fixed for final arguments.
F. FINAL ARGUMENTS 10 Final arguments on behalf of the parties. 11 It is submitted by Ld. Counsel for the Complainant that that the complainant had
supplied goods to the accused no. 1 company and accused no. 2 had issued the cheques in questions to the complainant for payment of the said goods. Further, accused no. 2 has admitted his signatures on the cheques in question. In view of his admission, according to Ld. Counsel for complainant, a presumption arises in favour of complainant that the cheques in question were issued by the accused in discharge of his legally enforceable debt or liability towards the complainant. He submits that the accused has not given any plausible rebuttal of the aforesaid presumption, even on the touchstone of preponderance of probabilities as the accused has not produced any proof of payment of outstanding settlement amount by him to the complainant, as CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 7/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:49:57 +0530 alleged by him. Further, liquidation proceedings against the accused company were initated in 2019 wheras the cheques in question were issued in 2018. Ld. Counsel for Complainant has further submitted that it is correct that accused no.1 company has been liquidated and sold and the name of the complainant company is reflected in the list of creditors of the accused no.1 compnany from the period 01.04.2019 to 01.11.2019 but the complainant company has not received any amount from the Buyer. Accordingly, it is prayed that accused no.2 be convicted. Ld. Counsel for the complainant has relied upon the following judgment:-
(i) Ashish Mehra Vs. Byways India Pvt. Ltd., 2023 SCC OnLine Del 6570, In the High Court of Delhi at New Delhi.
12 Per Contra, Ld. Counsel for the accused has submitted that before placing the order of supply of material the accused no.2 clearly informed to the complainant that the financial position of accused no.1 is unstable. The accused no.2 signed the postdated cheques in question in good faith after consultation with accused no.1. Two Directors of accused no.1 were empowered to sign the bank cheques behalf of accused no.1. The accused no.2 and Sh. K. Gnyandeep were empowered to sign the bank cheques. During the month of November-December 2018, the cheques signed by Sh. K. Gnyandeep were cleared and balance amount in the bank account of accused no.1 became insufficient to clear the cheques in question. The huge payments were held with Northern Railway which were supposed to receive in the bank account of accused no.1. A litigation against the accused no.1 was filed by vendors under IBC-2016 Section 33 (1)(a) before NCLT, New Delhi. Accused no.2 is not holding the post of Director of accused no.1 since 17.10.2019. In the liquidation proceedings, accused no.1 prepared the list of creditors from 01.04.2019 to 01.11.2019 and filed before IRP/RP, mentioning therein the name of complainant i.e. M/s Rocktek Infra Service Pvt. Ltd., amount due Rs.7,30,719/-, the same is Mark Y. It shows the bonafide intention of accused persons to pay the money to its suppliers and creditors. The CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 8/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:50:03 +0530 complainant was well aware about the facts that the accused no.1 is facing liquidation proceedings before Hon'ble NCLT, New Delhi. Several Public Notices in the Newspapers were published regarding liquidation of accused no.1. This fact is clearly mentioned in the order of NCLT dated 15.10.2020 (EX.DW-1/B) and the copy of public announcement in Form B the same has been Marked X. despite knowledge of the fact regarding liquidation of accused no.1 is going on, the complainant never approached to Liquidator which shows the rigidness of complainant that they will recover the amount of cheques from the accused no.2 through the present case. By virtue of liquidation proceedings the accused no.1 (company) has been sold out to S.K. Khetan Infraprojects Pvt. Ltd., the Sale Certificate dated 13.06.2024 has been executed, the copy of same is exhibited as EX.DW-1/D. It is clearly mentioned in para no.14 of Sale Certificate that the members of Board of Directions including the accused no.2 shall cease to be the Directors of UTM Engineering Pvt. Ltd. w.e.f. the date of this sale certificate without requiring any further action by any person. Thus, now accused no.2 cannot be convicted merely on the basis of holding the post of Director of accused no.1 company and signing the cheques in question. Ld. Counsel for the accused no. 2 is relying upon the following judgments of the Hon'ble Supreme Court of India:-
(i) Sushela Padmavathy Amma Vs. M/s Bharti Airtel Ltd., 2024 Law Suit (SC) 232.
(ii) Ashoke Mal Bafna Vs. Upper India Steel Manufacturing and Engineering Co. Ltd. (2018)14 SCC 202.
(iii) State of Haryana Vs. Brij Lal Mittal & Ors. (1998) 5 SCC 343.
(iv) Bijoy Kumar Moni V Paresh Manna & Anr. 2024 LawSuit (SC) 1205.
G. DISCUSSION ON PRINCIPLES OF LAW 13 I have heard the submissions made on behalf of the parties and have also
perused the record. Before appreciation of evidence led on behalf of the parties, at the CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 9/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:50:16 +0530 very outset, it would be pertinent to discuss the principles of law regarding the essential ingredients to prove an offence under Section 138 NI Act, 1881.
14 To establish an offence under Section 138 NI Act, 1881, the following essential ingredients are required to be proved by the complainant: -
i The cheque was drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person, from out of that account, for the discharge, in whole or in part, of any debt or liability. "Debt or other liability" means a legally enforceable debt or other liability ii The cheque has been presented to the bank within a period of three months from the date on which it is drawn or within the period of its validity, whichever is earlier.
iii The cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank iv The payee or the holder in due course of the cheque, as the case may be, has made a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.
neha Digitally signed
by neha saini
Date: 2026.04.28
saini 16:50:23 +0530
CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 10/34 v The drawer of the cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
H. POINTS FOR DETERMINATION 15 From the above discussion, the following points arise for determination:
i. Whether the proceedings under Section 138 NI Act can continue against accused no.1 and 2 after sale of accused no.1 company?
i. Whether the cheques in question were drawn by the accused on his account and signed by him?
ii. Whether the cheques in question were issued in discharge of a legally enforceable debt or liability?
iii. Whether the cheques in question were presented within their validity period and were dishonoured?
iv. Whether legal notice of demand was duly served upon the accused? v. Whether the accused has successfully rebutted the statutory presumptions under Sections 118 and 139 NI Act?
vi. Whether the offence under Section 138 NI Act stands established against the accused?
I. REASONS FOR THE DECISION Whether the present proceedings under Section 138 NI Act can continue against accused no.1 and 2 after sale of accused no.1 company?
neha Digitally signed
by neha saini
Date: 2026.04.28
saini 16:50:32 +0530
CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 11/34
16 In the present case, as admitted by both the parties, accused no.1 M/S UTM
Engineering Private Ltd. is a company and one of its vendors Argentium International Priavte limited went to Hon'ble NCLT against accused no.1 company and filed an appliction under section 9 of Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy Code Rules, 2016 by to initate the Corporate Insolvency Resolution Resolution Process against accused no.1. Vide order 17.10.2019, Mr. Rajesh Jangra, Interim Resolution professional of accused no.1 company Ex. DW1/A. Further, vide order dated 15.10.2020, the Hon'ble NCLT allowed the application of liquidation of accused no.1 company and official liquidator was appointed for accused no.1 company. The official liquidator issued public announcement staing that accused no.1 is in liqudation in terms of Regulation 12 of the Insolvency and Bankruptcy Board of India (Liquidation processs) Regulations, 2016, Mark x, which has already been admitted by Ld. Counsel for the complainnat.
Theraafter, accused no.1 company was sold to S K KHETAN INFRPROJECTS PRIVATE LIMITED vide sale certicate dated 13.06.2024 Ex. DW1/D. Further, List of Creditors of Accused no.1 Company from the period 01.04.2019 to 01.11.2019 is also on record which is Mark Y, which has been admitted by Ld. Counsel for the complainnat and it also includes the name of the complainnat company.
17 In P. Mohanraj v. Shah Bros. Ispat (P) Ltd., (2021) 6 SCC 258, the Hon'b;e Supreme Court held that:
"101. As far as the Directors/persons in management or control of the corporate debtor are concerned, a Sections 138/141 proceeding against them cannot be initiated or continued without the corporate debtor--see Aneeta Hada [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] . This is because Section 141 of the Negotiable Instruments Act speaks of persons in charge of, and responsible to the Company for the conduct of the business of the Company, CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 12/34 neha Digitally signed by neha saini Date: 2026.04.28 saini 16:50:49 +0530 as well as the Company. The Court, therefore, in Aneeta Hada [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] held as under : (SCC pp. 686-88, paras 51, 56 & 58-59) "51. We have already opined that the decision in Sheoratan Agarwal [Sheoratan Agarwal v. State of M.P., (1984) 4 SCC 352 : 1984 SCC (Cri) 620] runs counter to the ratio laid down in C.V. Parekh [State of Madras v.
C.V. Parekh, (1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil Hada [Anil Hada v. Indian Acrylic Ltd., (2000) 1 SCC 1 :
2001 SCC (Cri) 174] has to be treated as not laying down the correct law as far as it states that the Director or any other officer can be prosecuted without impleadment of the Company. Needless to emphasise, the matter would stand on a different footing where there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted.
56. We have referred to the aforesaid passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to be imposed affecting the rights of persons, whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of punishment is vested in the legislature and that is absolute in Section 141 of the Act which clearly speaks of commission of offence by the Company. The learned counsel for the respondents have vehemently urged that the use of the term "as well as" in the section is of immense significance and, in its tentacle, it brings in the Company as well as the Director and/or other officers who are responsible for the acts of the Company and, therefore, a prosecution against the Directors or other officers is tenable even if the Company is not arraigned as an accused. The words "as well as" have to be understood in the context.
neha Digitally signed
by neha saini
Date: 2026.04.28
saini 16:50:54 +0530
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58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the Company is an express condition precedent to attract the vicarious liability of others. Thus, the words "as well as the Company" appearing in the section make it absolutely unmistakably clear that when the Company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the Company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted.
59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh [State of Madras v. C.V. Parekh, (1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal [Sheoratan Agarwal v. State of M.P., (1984) 4 SCC 352 : 1984 SCC (Cri) 620] does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada [Anil Hada v. Indian Acrylic Ltd., (2000) 1 SCC 1 : 2001 SCC (Cri) 174] is overruled with the qualifier as stated in para 51. The decision in Modi Distillery [U.P. Pollution Control Board v. Modi Distillery, (1987) 3 SCC 684 : 1987 SCC (Cri) 632] has to be treated to be restricted to its own facts as has been explained by us hereinabove."
102. Since the corporate debtor would be covered by the moratorium provision contained in Section 14 IBC, by which continuation of Sections 138/141 proceedings against the corporate debtor and initiation of Sections 138/141 proceedings against the said debtor during the corporate insolvency resolution process are interdicted, what is stated in paras 51 and CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 14/34 neha Digitally signed by neha saini Date:
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59 in Aneeta Hada [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] would then become applicable. The legal impediment contained in Section 14 IBC would make it impossible for such proceeding to continue or be instituted against the corporate debtor. Thus, for the period of moratorium, since no Sections 138/141 proceeding can continue or be initiated against the corporate debtor because of a statutory bar, such proceedings can be initiated or continued against the persons mentioned in Sections 141(1) and (2) of the Negotiable Instruments Act. This being the case, it is clear that the moratorium provision contained in Section 14 IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act."
18 Further, in Rakesh Bhanot v. Gurdas Agro (P) Ltd., (2025) 6 SCC 781, the Hon'ble Supreme Court of India held that:
"31. For the foregoing discussion, we are of the opinion that the object of moratorium or for that purpose, the provision enabling the debtor to approach the Tribunal under Section 94 is not to stall the criminal prosecution, but to only postpone any civil actions to recover any debt. The deterrent effect of Section 138 is critical to maintain the trust in the use of negotiable instruments like cheques in business dealings. Criminal liability for dishonouring cheques ensures that individuals who engage in commercial transactions are held accountable for their actions, however subject to satisfaction of other conditions in the NI Act, 1881. Therefore, allowing the respective appellant-petitioners to evade prosecution under Section 138 by invoking the moratorium would undermine the very purpose of the NI Act, 1881, which is to preserve the integrity and CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 15/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:51:11 +0530 credibility of commercial transactions and the personal responsibility persists, regardless of the insolvency proceedings and its outcome.
32. In view thereof, the contention of the appellants that the decisions relied on by the High Court dealt with the proceedings under Section 14 IBC and not the proceedings under Section 96 IBC, cannot be countenanced by us. Furthermore, the decision in Dilip B. Jiwrajka [Dilip B. Jiwrajka v. Union of India, (2024) 5 SCC 435 : (2024) 242 Comp Cas 358] is not relevant to the facts of the present case, as the issue therein was relating to the constitutional validity of certain provisions of IBC and the applicability of moratorium to a proceedings under Section 138 of the NI Act, 1881 was not the subject-matter."
19 Further, in Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corpn. of India Ltd., (2023) 10 SCC 545, it was held by the Hon'ble Supreme Court of India that:
"73. It is equally true that once the corporate debtor comes under the resolution process, its erstwhile Managing Director(s) cannot continue to represent the company. Section 305(2)CrPC states that where a corporation is the accused person or one of the accused persons in an inquiry or trial, it may appoint a representative for the purpose of the inquiry or trial and such appointment need not be under the seal of the corporation. Therefore, it is only the resolution professional who can represent the accused Company during the pendency of the proceedings under IBC. After the proceedings are over, either the corporate entity may be dissolved or it can be taken over by a new management in which event the company will continue to exist. When a new management takes over, it will have to make arrangements for representing the company. If the company is dissolved as a result of the resolution process, obviously proceedings against it will CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 16/34 neha Digitally signed by neha saini Date:
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have to be terminated. But even then, its erstwhile Directors may not be able to take advantage of the situation. This is because, this Court in Aneeta Hada [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] , even while overruling its decision in Anil Hada v. Indian Acrylic Ltd. [Anil Hada v. Indian Acrylic Ltd., (2000) 1 SCC 1 : 2001 SCC (Cri) 174] , as not laying down the correct law insofar as Anil Hada [Anil Hada v. Indian Acrylic Ltd., (2000) 1 SCC 1 : 2001 SCC (Cri) 174] states that the Director or any other officer can be prosecuted without impleadment of the company, proceeded to hold that the matter would stand on a different footing where there is some legal impediment as the doctrine of lex non cogit ad impossibilia gets attracted. It was specifically observed that the decision in Anil Hada [Anil Hada v. Indian Acrylic Ltd., (2000) 1 SCC 1 : 2001 SCC (Cri) 174] is overruled with the qualifier as stated in para 51. Considering the same, the ratio of the decision of this Court in Ajit Balse [Ajit Balse v.
Ranga Karkere, (2015) 15 SCC 748 : (2016) 3 SCC (Civ) 465 : (2016) 3 SCC (Cri) 379] upon which strong reliance is placed on behalf of the appellant is of no avail.
74. What follows from the aforesaid is that for difficulty in prosecuting the corporate debtor under Section 138 of the NI Act after the approval of the resolution plan under IBC, we need not let the natural persons i.e. the signatories to the cheques/Directors of the corporate debtor escape prosecution. How can one allow the natural persons to escape liability on such specious plea? In such a situation the Latin maxim lex non cogit ad impossibilia is attracted which means law does not compel a man to do which he cannot possibly perform. Broom's Legal Maxims contains several illustrative cases in support of the maxim. This maxim has been referred to with approval by this Court in State of Rajasthan v. Shamsher Singh [State CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 17/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:51:25 +0530 of Rajasthan v. Shamsher Singh, 1985 Supp SCC 416 : 1985 SCC (Cri) 421] .
75. Thus, where the proceedings under Section 138 of the NI Act had already commenced and during the pendency the plan is approved or the company gets dissolved, the Directors and the other accused cannot escape from their liability by citing its dissolution. What is dissolved is only the company, not the personal penal liability of the accused covered under Section 141 of the NI Act. They will have to continue to face the prosecution in view of the law laid down in Aneeta Hada [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661 : (2012) 3 SCC (Civ) 350 : (2012) 3 SCC (Cri) 241] . Where the company continues to remain even at the end of the resolution process, the only consequence is that the erstwhile Directors can no longer represent it."
20 Further, in Shashankbhai Jayantibhai Shah v. HDFC Bank Ltd., 2025 SCC OnLine SC 3117, it was held by the Hon'ble Supreme Court of India that:
"16. Reliance has been placed by them on the decision of this Court in Rakesh Bhanot v. Gurdas Agro (P) Ltd. and in particular paragraphs 12 and 13 thereof:
12. The legislative intent behind the Insolvency and Bankruptcy Code (IBC) is to provide a structured framework for the resolution of corporate debtors' financial distress, facilitating their rehabilitation and ensuring the maximization of asset value. The application under Section 94 or 95 would fall under Chapter III of the IBC. An application under Section 94, when taken out by a debtor in the capacity of a personal guarantor of a company, to declare him/her as insolvent, is to be disposed by following the procedures in Sections 97 to 119. The application filed under Section 94 is scrutinized by the Resolution Professional and a report is submitted as contemplated under Section 99 recommending either the approval or rejection of the application. The interim moratorium which commences on CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 18/34 Digitally signed by neha saini neha saini Date: 2026.04.28 16:51:37 +0530 the presentation of the application will expire on the admission of the application by an order of the adjudicating authority under Section 100.
Upon admission, the moratorium under Section 101 comes into operation. The interim moratorium under Section 96 and the moratorium under Section 101 IBC are designed to offer a breathing space to the corporate debtor, allowing them to reorganize their financial affairs without the immediate threat of creditor actions. However, this moratorium is not intended to shield individuals from personal criminal liabilities arising from their actions outside the scope of corporate debt restructuring. The respective appellants/petitioners, having filed insolvency applications as personal guarantors under Section 94 IBC, cannot extend this protection to avoid prosecution under Section 138 of the N.I. Act, 1881. Upon filing of the application under section 94 IPC, a moratorium comes into effect, designed to protect the debtors from any legal actions concerning their debts. Specifically, Section 96 IBC provides that any legal proceedings pending against the debtor concerning any debt shall be deemed to have been stayed. The term "any legal action or proceedings" does not mean "every legal action or proceedings". In sub-clauses 96(b)(i) and (ii), the term "legal action or proceedings" are followed by the term "in respect of any debt". The term "legal action or proceedings" would have to be understood to include such legal action or proceedings relating to recovery of debt by invoking the principles of noscitur a sociius. The purpose of interim moratorium contemplated under Section 96 is to be derived from the object of the act, which is not to stall the proceedings unrelated to the recovery of the debt. The protection is not available against penal actions, the object of which is to not recover any debt. This moratorium serves as a critical mechanism, allowing the debtor to reorganize their financial affairs without the immediate threat of creditor actions. The clear and unequivocal language of this provision reflects the legislative intent to provide a protective shield for debtors during the insolvency process.
13. On the other hand, the proceedings under Section 138 of the N.I. Act, 1881, pertain to the dishonor of cheques issued by the respective appellants/petitioners in their personal capacity. These proceedings are distinct from the corporate insolvency proceedings and are aimed at upholding the integrity of commercial transactions by holding individuals accountable for their personal actions. The scope and nature of the CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 19/34 neha Digitally signed by neha saini Date: 2026.04.28 saini 16:54:54 +0530 proceedings under the IBC may result in extinguishment of the actual debt by restructuring or through the process of liquidation. But such extinguishment will not absolve its directors from the criminal liability. Section 141 of the N.I. Act, 1881 enables the prosecution of the persons in charge of the affairs and responsible for the conduct of the business of the company along with the company. The statutory liability against the directors under Section 138 of the N.I. Act, 1881, is personal and hence, continues to bind natural persons, irrespective of any moratorium applicable to the corporate debtor. The acceptance of the resolution plan under Section 31 IBC or its implementation thereof will have no effect on the prosecution under Section 138 of the N.I. Act, 1881. Similarly, the acceptance of the report by the resolution professional under Section 100 and the moratorium under Section 101, which reprises Section 96, will not bar the continual of any criminal action. The cause of action for prosecution under Section 138 of NI Act commences on the dishonor of the cheque and the failure to pay the amount unpaid because of dishonour, within 15 days from the date of receipt of notice demanding payment. It is pertinent to mention here that the prosecution can be only with respect to the amount unpaid by dishonour of the cheque irrespective of the actual debt. The distinction between the right to sue based on a dishonoured cheque by initiating a civil suit and launching a prosecution under Section 138 of the Negotiable Instruments Act is significant. In case of former, the interim moratorium can operate, but not in case of later. (emphasis supplied)
17. Having perused the decision in Rakesh Bhanot (supra), we share the view expressed therein.
18. There is, thus, no reason to hold that because the company has been liquidated, the appellant has no liability. Incidentally, the appellant was convicted even before the process under the Insolvency and Bankruptcy Code was initiated. Further, his position is that of a personal guarantor for the loan advanced to the company. Also, NCLAT expressly permitted proceedings under Section 138 of the N.I. Act to continue.
19. For the reasons aforesaid, it is not open to the appellant to claim protection by urging that proceedings under Section 138 of the N.I. Act cannot be carried forward against him."
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21 In Narinder Garg v. Kotak Mahindra Bank Ltd., (2022) 19 SCC 623, the Hon'ble Supreme Court held that:
"3. In P. Mohanraj v. Shah Bros. Ispat (P) Ltd. [P. Mohanraj v. Shah Bros. Ispat (P) Ltd., (2021) 6 SCC 258 : (2021) 3 SCC (Civ) 427 : (2021) 2 SCC (Cri) 818] , a Bench of three Judges of this Court considered the matter whether a corporate entity in respect of which moratorium had become effective could be proceeded against in terms of Sections 138 and 141 of the Negotiable Instruments Act, 1881 ("the Act" for short).
4. A subsidiary issue was also about the liability of natural persons like a Director of the Company. In para 77 of its judgment, this Court observed that the moratorium provisions contained in Section 14 of the Insolvency and Bankruptcy Code, 2016 would apply only to the corporate debtor and that the natural persons mentioned in Section 141 of the Act would continue to be statutorily liable under the provisions of the Act.
5. It is submitted by Mr Gopal Sankaranarayanan, learned Senior Advocate that the resolution plan having been accepted in which the dues of the original complainant also figure, the effect of such acceptance would be to obliterate any pending trial under Sections 138 and 141 of the Act.
6. The decision rendered in P. Mohanraj [P. Mohanraj v. Shah Bros. Ispat (P) Ltd., (2021) 6 SCC 258 : (2021) 3 SCC (Civ) 427 : (2021) 2 SCC (Cri) 818] is quite clear on the point and, as such, no interference in this petition is called for."
22 Further, in Ortho Relief Hospital v. Anand Distilleries, (2026) 263 Comp Cas 291, it was held by the Hon'ble High Court of Bomaby that:
"20. From the bare perusal of the above observations, it is crystal clear that the proceedings under section 138 of the Negotiable Instruments Act is not a recovery proceeding. Once it is held by the larger Bench of the Supreme Court (three-Judges), that the Insolvency and Bankruptcy Code proceeding and section 138 of the Negotiable Instruments Act proceedings are altogether different, it is not open for this court to take a different view. Some of the key features which can be culled out from those judgments are CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 21/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:55:17 +0530 as under: (i) Section 138 of the Negotiable Instruments Act, proceedings are not recovery proceedings.
(ii) The directors of the company remain liable under section 138 of the Negotiable Instruments Act, even if company's debt is resolved under the Insolvency and Bankruptcy Code.
(iii) A resolution plan approved under the Insolvency and Bankruptcy Code does not automatically extinguish the criminal liability of directors under section 138 of the Negotiable Instruments Act.
(iv) Section 138 of the Negotiable Instruments Act, proceedings are penal in nature, aimed at maintaining the integrity of commercial transactions and not just compensating.
(v) The approval of a resolution plan under section 31 of the Insolvency and Bankruptcy Code, does not automatically discharge the signatory/directors from the liability under section 138 of the Negotiable Instruments Act.
(vi) Section 32A protects the corporate debtor, but, not individuals responsible for company's conduct.
(vii) The Insolvency and Bankruptcy Code and the Negotiable Instruments Act, serve different purposes and do not conflict with each other.
21. From the above discussion it is clear that it makes no difference whether the proceedings are initiated prior to initiation of the Insolvency and Bankruptcy Code, proceeding or thereafter. The Supreme Court has in unequivocal terms held that natural persons cannot escape from their personal liability under section 138 of the Negotiable Instruments Act. It is further held that section 138 proceedings in relation to the signatories who are liable or covered by the two proviso to section 32A(1), will continue in accordance with law. I am further fortified in my view by the judgment of the Punjab and Haryana High Court in the matter of Rakesh Juneja v.
Maruti Suzuki India Ltd. [2025 NCPHHC 101360.] , wherein a similar view is taken while dealing with the identical factual matrix, as in the present case. The court after taking into consideration the judgment of the Supreme Court in Vishnoo Mittal v. Shakti Trading Co. [[2025] 262 Comp Cas 1 (SC); (2025) 9 SCC 417; 2025 SCC OnLine SC 558.] , has stated CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 22/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:55:26 +0530 that the reliance on the same is misplaced in view of legal position as settled by the three-Judges Bench of the Supreme Court. Eventually, the fact remains that in Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Ltd. [(2023) 237 Comp Cas 601 (SC); (2023) 10 SCC 545; (2024) 1 SCC (Cri) 128; 2023 SCC OnLine SC 266.] , the three- Judges Bench of the Supreme Court has in unequivocal term held that the scope of nature of proceedings under the two acts are quite different. Further it is clarified that the nature of proceedings which have to be kept in abeyance under section 14 of the Insolvency and Bankruptcy Code, would not include criminal proceedings, which is the nature of proceedings under section 138 of the Negotiable Instruments Act."
23 Thus, it is clear from the above discussion that by operation of provisons of Insolvency and Bankruptcy Code,2016 (Herinafter referred to as IBC, 2016), the criminal prosecution initiated against the natural persons under Sections 138/141 of the NI Act read with Section 200 CrPC would not stand terminated. Where the proceedings under Section 138 of the NI Act had already commenced and during the pendency, the company got dissolved, the signatories or directors could not escape from their penal liability under the NI Act by citing its dissolution. What was dissolved was only the company and not the personal penal liability of the accused covered under Section 141 of the NI Act. In the present case, offence under Section 138 NI ACT was completed on 27.01.2019 and the present complaint under Section 138 NI Act was filed on 07.02.2019 wheras proceedings against accused no.1 company under IBC, 2016 before Hon'ble NCLT were initated on 17.10.2019, much after filing of the present complaint under Section 138 NI Act, 1881.
24 Further, as per notice under Section 251 Cr.P.C., Statement of accused under Section 313 Cr.P.C and testimony of accused no.2 as DW-1, accused no.2 was admittedly the Director of accused no.1 company at the time of filing of the present complaint under Section 138 NI Act, 1881 and, is admittedly signatory to the cheques CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 23/34 neha Digitally signed by neha saini Date: 2026.04.28 saini 16:55:35 +0530 in question and admittedly was in the management of accused no.1 company. Thus, in view of the same and considering the fact that accused no.1 comapny has already been sold, the present proceedings under Section 138 NI Act will continue only against accused no.2, being natural person and active Director of accused no. 1 company who was responsible for day to day affairs and management of accused no. 1 company, at the time when the cheques in question were drawn.
Issuance of Cheque 25 Accused no. 2 has admitted his signatures on the two cheques in question i.e. Ex. CW1/3 and Ex. CW1/4 in notice under Section 251 Cr.P.C, Statement of accused recorded under Section 313 CrP.C and in his testimony as DW-1.Thus, the issue that the cheques in question Ex. CW1/3 and Ex. CW1/4 were executed by accused no.2 on bank account of accused no.1 company stands proved.
Legally Enforceable Debt 26 The Supreme Court has held in Sanjabij Tari v. Kishore S. Borcar, (2025) 259 Comp Cas 685 that:
"15. In the present case, the cheque in question has admittedly been signed by respondent No. 1-accused. This court is of the view that once the execution of the cheque is admitted, the presumption under section 118 of the Negotiable Instruments Act, that the cheque in question was drawn for consideration and the presumption under section 139 of the Negotiable Instruments Act, that the holder of the cheque received the said cheque in discharge of a legally enforceable debt or liability arise against the accused. It is pertinent to mention that observations to the contrary by a CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 24/34 neha Digitally signed by neha saini Date:
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two-judge Bench in Krishna Janardhan Bhat v. Dattatraya G. Hegde [(2008) 141 Comp Cas 665 (SC); (2008) 4 SCC 54; (2008) 2 SCC (Cri) 166; 2008 SCC OnLine SC 106.] have been set aside by a three-judge Bench in Rangappa v. Sri Mohan [(2010) 11 SCC 441; (2010) 4 SCC (Civ) 477; (2011) 1 SCC (Cri) 184; 2010 SCC OnLine SC 583.]
17. Needless to mention that the presumption contemplated under section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the initial onus of proving that the cheque is not in discharge of any debt or other liability is on the accused/drawer of the cheque (see : Bir Singh v. Mukesh Kumar [(2019) 5 Comp Cas-OL 560 (SC); (2019) 4 SCC 197; (2019) 2 SCC (Cri) 40; (2019) 2 SCC (Civ) 309; 2019 SCC OnLine SC
138.] ."
27 Thus, once execution of cheque is admitted, presumption arises against the accused under Section 118(a) NI Act (cheque is drawn for consideration) and Section 139 NI Act (cheque is issued in discharge of a legally enforceable debt or liability). Further, The Hon'ble Supreme Court of India has held in Rangappa v. Sri Mohan, (2010) 11 SCC 441 that:
"26...Presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability..."
28 In the present case, accused no.2 has stated in notice under Section 251 Cr.P.C. that the complainant was the supplier of raw material to accused no.1 company and the cheques in question were issued for the payment of raw material to be supplied by the complainant for our projects. Both the cheques were issued as advanced payment CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 25/34 neha Digitally signed by neha saini Date: 2026.04.28 saini 16:56:33 +0530 cheque. Accused no.1 company could not pay the amount to the complainant due to for closure of contract with the Northern Railway. Further, accused no.1 company got into liquidation in the year 2019 and now accused no.2 is the suspended director of the accused no.1 company. Accused no.2 further stated in his staement recorded under Section 313 Cr.P.C that accused no.1 company could not pay the amount as it got into liquidation. Further, Accused no. 2 deposed in his examination-in-chief dated 04.02.2025 that: "There was four directors in the accused company and I was one of the signatory/director of the accused company. Since 2014, the supplier-complainant company has been supplying material from 2014 onward." Accused no.2 further deposed in his cross-examination dated 24.04.2025 that: "It is correct that I was the director of accused no 1 company at the time when the transactions took place with the complainant. It is correct that I was the part of the management of the accused no 1 company and the cheques in question were given per my knowledge. Vol. It was issued in a routine manner. I do not know if the agents of the complainant company had approached me post dishonourment of the cheque in question.
Q. I put it to you that the orders were placed to the complainant company by the accused under your management. What do you have to say?
A. It was under my management but not placed directly be me. Order was not placed directly by the accused."
Thus, accused no.2 has admitted at the various staeges of trial and in aforesaid testimony that the complainnat company had supplied raw material to the accused compnay and cheques in question Ex. CW1/3 and Ex. CW1/4 were executed in favour of the complainnt for payment of aforesaid raw material. In view of the above discussion, it is clearly established that the cheques in question Ex. CW1/3 and Ex.
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CW1/4 were drawn by the acccused for a legally enforceable debt or other liability towards the complainant.
Dishonour of Cheque 29 In the instant case, perusal of the case record reveals that the cheques in question Ex. CW1/3 and Ex. CW1/4 i.e. first cheque bearing no. 026525 dated 20.09.2018, amounting to Rs. 3,62,417/-, and second cheque bearing no. 026526 dated 20.10.2018, amounting to Rs. 3,68,302/-, drawn on Yes Bank Ltd., Diplomatic Enclave, Chanakyapuri, New Delhi respectively were presented by the complainant in his bank account Axis Bank, Vikaspuri for encashment on 13.12.2018 but the same got dishonoured for the reason "Funds Insufficient" vide cheque return memo dated 13.12.2018 Ex. CW1/5. Thus, it is evident from the record of the present case that the cheques in question Ex. CW1/3 and Ex. CW1/4, were presented within 3 months from the date on which they was drawn and were returned unpaid due to "funds insufficient" vide cheque return mems dated 13.12.2018 Ex. CW1/5 . Ex. CW1/5 confirms dishonour of the cheques in question due to "Funds Insufficient." Dishonour is not disputed and accused no.2 has admitted the cheque return memo Ex. CW1/5 . Thus, this ingredient is also satisfied.
Service of Legal Demand Notice 30 In the instant case, accused no.2 has denied the factum of receipt of legal demand notice dated 09.01.2019 Ex. CW1/6 but has admitted that the address on the said legal dmand notice is statement of accused under Section 313 Cr.P.C.. Thus, Ex.CW1/6 was dispatched to the admitted correct address of accused.
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CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 27/34 31 In C.C. Alavi Haji v. Palapetty Muhammed (2007) 6 SCC 555 it has been held by the Hon'ble Supreme Court of India that:
"10. It is, thus, trite to say that where the payee dispatches the notice by registered post with correct address of the drawer of the cheque, the principle incorporated in Section 27 of the GC Act would be attracted; the requirement of Clause ( b) of proviso to Section 138 of the Act stands complied with and cause of action to file a complaint arises on the expiry of the period prescribed in Clause (c) of the said proviso for payment by the drawer of the cheque. Nevertheless, it would be without prejudice to the right of the drawer to show that he had no knowledge that the notice was brought to his address.
17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of criminal law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act. In our view, any other CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 28/34 neha Digitally signed by neha saini Date: 2026.04.28 saini 16:57:15 +0530 interpretation of the proviso would defeat the very object of the legislation. As observed in Bhaskaran case [(1999) 7 SCC 510 :
1999 SCC (Cri) 1284] if the "giving of notice" in the context of Clause (b) of the proviso was the same as the "receipt of notice" a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act."
32 Thus, it it settled law that when notice is dispatched to correct address by registered post, presumption of service arises and drawer cannot avoid liability on plea of non-receipt. Hence, legal demand notice dated 09.01.2019 Ex. CW1/6, is deemed served upon the accused. Thus, the aforesaid ingredient is also satisfied.
Rebuttal of Presumption 33 In the case of Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513, the Hon'ble Supreme Court of India has held that:
"20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 29/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:57:26 +0530 to be discharged by him. However, the court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act.
21. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 30/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:57:35 +0530 adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, thereafter, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue."
34 In the present case, accused no.2 has taken plea of liquidation and sale of accused no.1 company and now as per the sale certificate the members of Board of Directions including the accused no.2 shall cease to be the Directors of accused no.1 company UTM Engineering Pvt. Ltd. w.e.f. the date of this sale certificate without requiring any further action by any person and now all the liabilities of management of UTM Engineering Pvt. Ltd., shall be shifted solely on account of Buyer. This, issue has already been decided and it is settled law that liquidation proceedings and sale of accused no.1 company does not extinguish personal liability of accused no.2 director who has admitted his signatures on the cheques in question and has further admitted in is testimony that he was the director of accused no 1 company at the time when the transactions in question of supplying of raw material took place with the complainant.
35 Furher, accused no.2 has taken the plea of lack of joint signatories on the cheques in question. Acccused no.2 deposed in his cross-examination dated 24.04.2025 that: "It is correct that the cheques in question bears my signature. Vol. The date when the cheque was presented in bank it was required for two people to sign the cheque.
Q. I put it to you that the cheque was deliberately and maliciously given by you/evon though you knew that it would not be honoured. What do you have to say?
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A. The company in last week of October made a decision to induct joint signatories for the cheque.
It is was never informed by me to the complainant not to present the cheque as the company had inducted joint signatories. Q. I put it to you that the accused company under your management asked the complainant to present the cheque with an assurance that the same would be honoured what do you have to say?
Λ. The complainant had themselves presented the cheque without being informed by anyone from the accused company.
Q. I put it to you that the cheques were dishonoured due to funds insufficient and not due to lack of signatories. What do you have to say? Λ. It may be one of the reasons but it is not the whole reason for dishonour. The bank has not pointed out the lack of signatories as the dishonourment reason.
Q. Can you produce any communication with the complainant wherein you or the accused company had informed the complainant not to present the cheque due to change of signatories or insufficient balance? Λ. I do not remember anything as I do not have any dealing with the company since 2019."
However, accused no.2 has not produced any documents to show proof of any such requirement of joint signatories. Further, nothing has been produced on record to show that any such requirement was communicated to the complainant company and moreover, the cheques in question also did not get dishonoured due to the lack of joint signatories. Thus, this plea of accused no.2 also does not inspire confidence.
36 Thus, accused no.2 has relied on plea of liquidation proceedigs and sale of accused no.1 company and lack of joint signatories on the cheques in question. Both CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 32/34 neha Digitally signed by neha saini saini Date: 2026.04.28 16:58:06 +0530 these pleas have been rejected by the court due to reasons discussed above. Further, accuse no.2 has admitted liability towards the complainant ompany for supply of raw material and has admitted that he has signed on the cheques in question and he was part of the management of accused no.1 comapny and the cheques in question were given as per his knowledge. Thus, accused no.2 has not produced any cogent evidence to rebut the aforesaid presumptions and has only made vague denial of existence of any legally enforceable debt or liability towards the complainant. Further, nothing has been extracted from the AR of complainnat company during his cross-examinaton by Ld. Counsel of accused no.2 which would rebut the aforesaid presumptions. On the contrary, the testimony of the AR for the complainant company is cogent and consistent regarding the liability of accused towards the transaction in question, i.e., suply of raw material.
37 Due to the said reasons, the defence of the accused no.2 does not inspire confidence. Thus, due to the aforesaid reasons, accused no.2 has failed to rebut the presumptions arising in favour of complainant under Section 139 and 118 of NI Act even on the touchstone of preponderance of probabilities and once the initial presumption has not been rebutted by the accused, onus to prove the liability of accused to the extent of cheques amount in question by production of documents, evidencing the proof of transaction in question has not shifted to the complainant and complainant has been successful in proving his case beyond reasonable doubt against the accused.
DECISION 38 In view of the above discussion, the complainant has been successful in proving his case beyond reasonable doubt against accused no.2 Krupasindhu Mandal.
neha Digitally signed
by neha saini
saini Date: 2026.04.28
16:57:57 +0530
CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 33/34 Consequently, accused no.2 Krupasindhu Mandal is held guilty for the offence under Section 138 r/w 141 Negotiable Instruments Act, 1881.
39 Accused no.2 Krupasindhu Mandal is, thus, convicted for the offence under Section 138 r/w 141 of the Negotiable Instruments Act, 1881.
This Judgment consists of 34 signed pages.
Copy of the judgment be given to the convict free of cost Digitally signed Pronounced in open court today on this 28th day of April, 2026 neha by neha saini Date:
2026.04.28 saini 16:58:18 +0530 (Dr. Neha Saini) JMFC-(NI Act-02) South West District Dwarka Courts, Delhi 28.04.2026 CC No. 6254/2019 Rocktek Infra Service P. Ltd. Vs. UTM Engineering P. Ltd. & Anr. 34/34