Delhi District Court
Aims Sanya Developers Pvt Ltd vs Brahama Internation Llp on 16 March, 2026
IN THE COURT OF MR. HARGURVARINDER SINGH JAGGI,
ADDL. SESSIONS JUDGE (FTC- 01), SOUTH DISTRICT,
SAKET COURTS, NEW DELHI
A No:
C 309/2025
CNR No.: DLST010128232025
CC NI Act No.: 1 05/2020
u/Section: 138 NI Act, 1881
IN THE MATTER OF:
1. IMS Sanya Developers Pvt. Ltd.
A
[Through its authorized representative - Mr. Shripal]
Having its registered office at -
D - 155, Basement, Defence Colony
New Delhi - 110024 ... Appellant No. 1
2. r. Roop Kishore Madan
M
S/o Sh. L.C. Madan
R/o A-9/4, Vasant Vihar - 1
New Delhi - 110057 ... Appellant No. 2
3. r. Sanjay Thukral
M
S/o late Mr. I.R. Thukral
R/o E-47, Saket, New Delhi - 110017 ... AppellantNo. 3
Through- M r. Mayank Goel, Mr. Diganta
Das,andMs.MehakpreetKaur,
Advocates for the Appellant.
v.
CA No. 309/2025
Page No.1/50
1. rahama International LLP
B
Registered Office at -
C-5/21, Safdarjung Development Area
New Delhi - 110016 ... Respondent
Through- M r.BharatAhuja,Advocatefor the Respondent. Date of filing of appeal: 19.08.2025 Date of reserving judgment: 31.01.2026 Date of pronouncement of judgment: 16.03.2026 J U D G M E N T 16.03.2026 1) AIMS SanyaDevelopersPvt.Ltd.(appellantNo.1)alongwith its directors, Roop Kishore Madan (appellant No. 2) and Sanjay Thukral (appellant No. 3) have preferred an appeal against the judgment dated 30.06.2025 (impugned judgment) and order dated 16.07.2025 (sentencing order) passed by the Court of Ld.Judicial Magistrate, First Class (NI Act) Digital Court-02, South District, Saketcourt,Delhi(TrialCourt)inacomplaintcasetitledasBrahama InternationalLLPv.AIMSSanyaDevelopersPvt.Ltd.-CCNIAct No. 105/2020(complaint case). 2) The appellants are aggrieved by the impugned judgment wherein the Trial Court has convicted the appellants for commission of offence punishable under Section 138, NI Act and through the CA No. 309/2025 Page No.2/50 sentencingorderimposedafineof₹2.00crorestobepaidbythemto the respondent/complainant within 45daysintermsoftheprovisions ofSection357(3)oftheCodeofCriminalProcedure,1973(CrPC)for expenses incurred in the proceedingsofthecomplaintcase,litigation charges, and the cheque amount. 3) For the sake of clarity, convenience, and avoidance of any confusion,theappellantNos.1,2and3arecollectivelyreferredasthe appellants. Further, the parties are also referred interchangeably by their rank and status as before the Trial Court. actual background F 4) The facts of the case as traced from thecomplaintfiledbythe respondent/complainant before the TrialCourtarethaton16.03.2011 thecomplainant,M/sBrahamaInternationalLLP,enteredintoaspace buyer agreement with the appellant/accused No. 1, AIMS Sanya Developers Pvt. Ltd., for the allotment of Unit No. 815 in the Landmark Towers project in NOIDA, Uttar Pradesh. 5) The respondent/complainant, Brahama International LLP (formerly known as M/s Brahama International Pvt. Ltd.) having its registered office at C - 5/21, Safdarjung Development Area, New Delhi - 110016. The appellant/accused No. 1 is a private limited company having its registered office at D - 155, Basement, Defence Colony, New Delhi. The appellant/accused No. 2, Roop Kishore Madan is the managing director, and the appellant/accused No. 3, Sanjay Thukral is the director of the appellant/accused No. 1 company. CA No. 309/2025 Page No.3/50 6) The complainant invested a total amount of ₹95,96,388/- inclusive of service tax underanassuredreturnplan(ARP-II),which entitled the complainant to monthly payments of ₹88.05 per sq. ft. until the offer of possession. 7) While the accused initially fulfilled the monthly payments under the assured return plan, these payments ceased after March 2016. Upon beingapproachedbythecomplainantfortheoutstanding returnsandpossessionoftheunit,theaccusedexpressedtheirinability to hand over the property. Consequently, they agreed to settle the account by returning the principal amount along with the accrued assured returns. 8) In partial discharge of this liability, the accused issued three cheques dated 25.06.2020 bearing cheque No. 150173 for ₹93,55,487/-; cheque No. 150174 for ₹13,14,832/-, and cheque No. 150175 for ₹7,01,244/-. These cheques were drawn on the Central Bank of India and signed by the appellant/accused No. 3, namely, Sanjay Thukral, an authorized signatory and director of the appellant/accused No. 1 company. 9) The complainant presented these cheques for encashment multiple times, but they were consistently dishonored. The final presentation on 23.09.2020, resulted in the return of cheque Nos. 150173 and 150174 for the reason "Refer to Drawer", while the cheque No. 150175 was returned for "Signature not as per mandate". CA No. 309/2025 Page No.4/50 10) Following the dishonor, on 19.10.2020,thecomplainantissued thestatutorylegaldemandnoticescallingupontheaccusedpersons,to paythechequeamountswithin15days.Thesenoticeswereservedon 20.10.2020. Despite receiving the notices, the accused personsfailed to make the required payments within the stipulated statutory period. 11) Due to this failure, the complainant on 28.11.2020 filed a complaint against theaccusedpersonsunderSections138and141of theNegotiableInstrumentsAct,1881(NIAct).Thecomplaintsought the summoning and punishment of the company and its responsible directors, Roop Kishore Madan and Sanjay Thukral,forthedishonor of the cheques issued in discharge of their legal liability. rial Court's holding T 12) The Trial Court by judgment dated 30.06.2025 convicted the accused persons for commission of offencepunishableunderSection 138 read with 141 of the NI Act. 13) The Trial Court found that the complainant successfully established, beyond a reasonable doubt, the existence of a legally enforceable debt or liability related to the three dishonored cheques, which were issued by the accused No. 1. The Trial Court held that oncesignaturesonthechequeswereadmitted,astatutorypresumption aroseunderSection139oftheNIActthattheywereissuedforavalid debt, which the accused persons failed to rebut in accordance with law. CA No. 309/2025 Page No.5/50 14) The Trial Court addressed thetechnicalobjectionsthatreasons for dishonour such as 'refer to drawer', 'signature not as per mandate' donotattractSection138,NIActbyholdingthatthesame are untenable in law and contrary to the settled legal position. The TrialCourtinparagraphNo.23ofitsjudgmentclarifiedthattechnical reasons do not preclude the operation of statutory presumptions. It specifically cited the Hon'ble Supreme Court's ruling in M/s Laxmi Dyechemv.StateofGujarat&Ors.-2012INSC546,whereinitwas held that dishonour of cheque based on a mismatch with specimen signatures like 'signature does not match', still falls within the purviewofSection138,NIAct.TheTrialCourtruledthatdespitethe signature of only one authorized signatory, the statutorypresumption under Section 139, NI Act remained intact unless rebutted by the accused persons. 15) The Trial Court found that the defence of the accused persons that the cheques were merely for 'assurance' and not meant for encashment was found implausible and legally meritless, especially since the accused persons did not object to their presentation during their validity period. 16) The Trial Court held the appellant/accused person No. 2, vicariously liable as the managing director of the appellant/accused No. 1 company even though he did not sign the cheques in question. 17) Subsequenttotheconvictionoftheaccusedpersonsbypassing oftheimpugnedjudgmentbytheTrialCourtunderSection138,141, CA No. 309/2025 Page No.6/50 NI Act, the Trial Court on 16.07.2025 passed the sentencing order against the accused persons. 18) Duringthehearingonthepointofsentence,thelearnedcounsel for the convicts argued for a lenient view, requesting only a fine without substantive imprisonment because the convicts were law-abiding citizens and their incarceration would be detrimental to their company and families. In contrast, the complainant's counsel requested the maximum punishment allowed by law, citing the convicts' evasive conduct and multiple instances where non-bailable warrants had to be issued during the trial. 19) The Trial Court after weighing the rival submissions against establishedlegalprinciples,notedthattheobjectiveoftheNegotiable Instruments Act, 1881, is both punitive and compensatory. While Section 138 allows for imprisonment up totwoyearsandfinesupto double the cheque amount, the Trial Court determined that the complainant should be adequately compensated in monetary terms rather than through substantive sentencing. The Trial Court emphasizedthatthepunishmentmustbeproportionaltothegravityof the offence while considering all mitigating circumstances presented by the defence. 20) Ultimately, the Trial Court ordered all convicts to pay a combined fine of ₹2,00,00,000 (Rupees Two crores only) as compensationtothecomplainantwithin45days.Theaforesaidsumof ₹2.00 crores was intended to cover the original cheque amount, interest, and litigation expenses incurred duringtheproceedings.The CA No. 309/2025 Page No.7/50 Trial Courtfurtherdirectedthatifthefineof₹2.00croresisnotpaid within the stipulated time frame, individual directors Roop Kishore Madan and Sanjay Thukral must undergo six months of simple imprisonment. rounds of appeal G 21) The appellants laid challenge to the impugned judgment and sentencing order passed by the TrialCourtbyfilinganappealbefore the Court of Sessions on the following grounds: a) Incomplete and defective nature of cheques: The appellants contended the cheques lacked necessary signaturesoftwoauthorisedpersons.Theappellantshave urged that the Trial Court fell in grave error to not consider the key fact that the cheques in question were incomplete and defective because they required the signatures of both the directors of accused No. 1 for clearance. The appellants have urged as a ground that the cheques wereissuedingoodfaithtotherepresentativesofAditya Birla Capitals Private Limited for negotiation purposes only, with a clear understandingthattheywerenottobe encashed. b) Non-fulfillment of the statutory presumptions to trigger Section138,NIAct:Theappellantshaveurgedasground seeking the setting aside of the impugned judgment and sentencing order that the cheques were returned with CA No. 309/2025 Page No.8/50 remarks 'Refer to Drawer'and'Signaturenotasperthe mandate'.Theappellantshaveurgedasagroundthatthe aforesaid reasons do not fall within the two specific categories required to trigger Section 138 oftheNIAct, insufficient fundsorexceeds the amount arranged. c) FailureofTrialCourttocorrectlyinterpretandapplythe legal precedents has also been urged as a ground by the appellants challenging the impugned judgment and sentencing order. The appellants have urged asaground that the Trial Court misinterpreted the ruling in M/S Conserve Ready Mix Concrete v. M/S Subh Laabh Minerals1, which differentiates between dishonor for want of funds and dishonor for signature not as per mandate. d) ChallengetovicariousliabilityunderSection141NIAct: The appellants have urged as a ground that the complainant in its complaint merely reproduced the language of Section 141, NI Act without providing specific factual details as to how the directors were responsible for the company's day-to-day business. As per the appellants, the appellant No. 2, Roop Kishore Madan maintained a specific stance of not being a signatory to the cheques and the same were issued without his knowledge. On the other hand,theappellant 1 Order dated 16.10.2021 passed by the High Court of Karnataka, Dharwad Bench in Crl.P. No. 102099/2021. CA No. 309/2025 Page No.9/50 No.3signedthechequesinquestionbutstatedbeforethe TrialCourtthatthesameweregivenassecurityandwere nottobebankedwithoutthesecondsignatureandafinal settlement. e) ProcedurallapsesinevidencebeforetheTrialCourt:The appellants have urged as a major ground of appeal that the respondent/complainant failed to tender its affidavit of evidence on oath during the post-summoning stage. The appellants have further urged that since the complainantdidnotenterthewitnessboxtotestify,there is effectively no evidence led by the respondent/complainant, to prove the allegations in the complaint. ubmissions by Counsel for parties S 22) Mr. Mayank Goel learned counsel for theappellantopenedhis argument challenging the impugned judgment and sentencing order passed by the Trial Court by submitting that the same are not only perverseinlawbutalsowayonerousasTrialCourthasimposedafine of ₹2.00 crores upon the appellants. 23) The learned counsel for the appellant submitted that the complaintbeforetheTrialCourtwasfiledbytherespondent,Brahama International LLP against AIMS Sanya Developers Pvt. Ltd. and its two directors after three cheques, issued by the accused in part payment of a liability arising from an assured return plan, were dishonoured upon presentation. CA No. 309/2025 Page No.10/50 24) Mr. Mayank Goel learned counsel for theappellantssubmitted thatthedefencebytheaccusedpersonshasbeenconsistentbeforethe Trial Court that the cheques in question were misused as the same werenotfinalcheques.Thelearnedcounselfurthersubmittedthatthe appellant No. 3 in response to thenoticeunderSection251,CrPCin his defence stated that the cheques were given for finalisation of the settlement and it was agreed that after finalisation the cheques in questionshallbereturnedbutthecomplainantdidnotdosoandrather misused the same. 25) Thelearnedcounselfurthersubmittedthattheappellant/accused No.3onbeingconfrontedwiththeincriminatingevidenceatthetime of recording hisstatementunderSection313,CrPCon06.02.2024in hisdefenceurgedthatthechequesinquestionwereissuedonlyunder hissignaturebecausethechequesinquestionweregiveningoodfaith to the complainant with the directionthatchequesinquestionshould be presented only after finalization of the amount. After the finalization of the amount, the complainant was directed to take the signature of another person also on the cheques in question. 26) The learned counsel for the appellant submitted that the appellant No. 3, Sanjay Thukral (DW-1) testified in defence of the accused persons that the office bearers of Aditya Birla Capitals Pvt. Ltd.(sic)cameupwithafigureandthreechequeswereissued,outof whichonetowardstherefundofinvestmentandtheothertwotowards the interest component. It was further submitted by the learned counsel that the three cheques would be taken to the client to prove CA No. 309/2025 Page No.11/50 that they had an intention to refund their investment and also show theirbonafide.Theappellantsreluctantlyagreedtoissuethecheques with the clear understanding that these were only being issued as security cheques and subject to finalisation of final amount to be limited. The learned counsel for the appellants submitted that it was also clarified thattherearetwosignatoriestothechequesissued,and since the other signatory was not available and the amount not yet finalised, only one signature was being appended on the cheques. 27) Thelearnedcounselfortheappellantssubmittedthatitwasalso clarifiedtoAdityaBirlaCapitalofficialsthatthesechequeswouldnot be banked by the clients as they are yet to surrender the allotment documentssuchasallotmentletter,originalreceipts,andbuilderbuyer agreement. The learned counsel further submittedthatthechequesin questionweremerelyissuedforthecomfortoftheclientandtoprove the bona fide intention of the appellant No. 1 company. The learned counsel strenuously submitted that there was no existing liability against the cheques and they were simply issued by the appellants under the peculiar facts and circumstances. 28) The learned counsel for the appellants submitted that to understandthepleaofdefenceurgedbytheappellantsbeforetheTrial Court it is important that the factual background be unearthed. The learnedcounselsubmittedthattheappellantNo.1andtherespondent entered an apartment buyer's agreement in the year 2011.Asperthe agreed terms and conditions, assured returns at the rate of 1% per month foratermoffiveyearsweretobepaidbytheappellantNo.1 CA No. 309/2025 Page No.12/50 company to the respondent. Until the month of March 2016, the project did not start due to litigation before the National Green Tribunal and the appellant No.1stoppedmakingpaymentasassured returns. 29) MrGoellearnedcounselfortheappellantsretortedtothequery posed by the Court by submitting that there was no reconciliation between parties between the period 2016 to 2020. It was in the year 2020, negotiation talks between the parties commenced through Aditya Birla Finance. The learned counsel for the appellant further submitted that surprisingly, themissinglinkremainsunresolvedasto how the cheques in question handed over to Aditya Birla Finance Group came in the possession of the respondent/complainant. 30) Mr. Goel learned counsel for the appellants submitted that the impugned judgment passed by the Trial Court is untenable in lawas the cheques in questionwereincompleteanddefectivecheques.The learnedcounselsubmittedthattheTrialCourtfailedtoapplytheratio of Vinod Tanna's case - (2002) 7 SCC 541 and Babulal Nainwal Jain's case. 31) ThelearnedcounselfortheappellanturgedthattheTrialCourt fell in grave error by failing to consider that as per Section 139, NI Act,thepresumptionunderlawisrebuttableandtheappellantNo.3in his testimony stated that not only the cheques were incomplete but also the same were not issued towards the discharge of liability. CA No. 309/2025 Page No.13/50 32) The learned counsel further urged that theimpugnedjudgment reveals that the Trial Court alsofellingraveerrorbymisinterpreting Section141,NIAct.Thelearnedcounselsubmittedthatthechequein question does not bear the signature of appellant No. 2, and yet the Trial Court proceeded to convict him, impose fine and six months sentence in default payment of fine. The learned counsel submitted that the cheques in question required two signatures, a fact to which theTrialCourtagreedinparagraphNo.13oftheimpugnedjudgment andyettheTrialCourtproceededinanarbitrarymannerandarrivedat an erroneous conclusion at paragraph No. 23 of the impugned judgment, toholdtheappellantsguiltyforallegedoffencepunishable under Section 138, NI Act. 33) Per contra, Mr. Bharat Ahuja learned counsel for the respondents vehemently contended the submissions advanced by the learned counsel for the appellant. The learnedcounselsubmittedthat there is no merit in the present appeal as the impugned judgment passedbytheTrialCourtdoesnotsufferfromanyallegedimpropriety and errors. 34) The learned counsel fortherespondentsubmittedthattheTrial Court by its impugned judgment has rightly convicted the appellants/accused persons for dishonour of three cheques, which were issued by the appellant company in discharge of their legally enforceable debt. 35) The learned counsel further submitted that the arguments advanced by the learned counsel for the appellants are nothing but CA No. 309/2025 Page No.14/50 figments of imagination and sheer afterthought. The learned counsel submittedthatneitherinreplytothenoticeunderSection251,CrPC, 1973, nor any averments about the requirement of two signatures on theimpugnedchequesweremadeintheapplicationmovedbeforethe Trial Court under Section 145(2), NI Act. 36) The learned counsel for the respondent contended that despite service of notice upon the appellants/accused persons, they intentionally refrained from replying to the legal notice. The learned counsel submitted that such anevasiveconductoftheappellantswas duly noted by the Trial Court. 37) The learnedcounselfortherespondentsubmittedthatthethree cheques in question were issued by the appellants towards the discharge of their legally enforceable debt. The learned counsel further submitted that the appellants miserably failed to rebut the presumption inlaw,andtheirconvictionisbasedonfactsandcorrect appreciation of evidence by the Trial Court. 38) The learned counsel for the respondent submitted that the judgments cited by the learned counsel for the appellant are clearly distinguishableonfactsandhedoesnotintendtoburdentheCourtby dealingwitheachoneofthem.Thelearnedcounselfortherespondent further submitted that the managing director of the company, Roop KishoreMadandidnotstepintothewitnessdock,thus,itdoesnotlie in the mouth of the appellants, to the agitate that the Trial Court proceeded against the accused persons in an arbitrary manner. CA No. 309/2025 Page No.15/50 39) Mr Ahuja, learned counsel for the respondent concluded his argument on the note that there is no merit intheappealfiledbythe appellants and the same deserves to be dismissed as the appellants herein have not only wasted the precious time of the Court, but also deprived the respondent/complainant of its hard earned money. To buttresshiscontentions,thelearnedcounselfortherespondentplaced reliance on the judgment of the High Court of Delhi in the case of Gujarat Ambuja Cements Limited v. Shree Lakshmi Venkatesh Cargo Movers and Consultants - 2025 DHC 1048. 40) Mr Goel rejoined by submitting that the impugned judgment andthesentencingorderpassedbytheTrialCourtmeritsinterference bythisCourtinexerciseofitsappellatepowerandsetasidethesame astheyarecontrarytolawandthefactsaslaidbeforetheTrialCourt. Thelearnedcounselfortheappellantsconcludedhisargumentsonthe notethattheappealpreferredbytheapplicantmaybeallowedandthe impugnedjudgmentandsentencingorderpassedbytheTrialCourtbe set aside as the same is marred by illegality and perversity. egal provisions and legal principles L 41) ThepresentappealemanatesfromacomplaintcasefiledbyM/s Brahama International LLP against the appellants underSection138, NI Act arising out of an alleged legally enforceable debt under the terms andconditionsofaspacebuyeragreemententeredbetweenthe parties.Thus,itisimperativetosetoutthelegalstandardbyreferring totheappropriatelegalprovisionsandlegalprinciplesofdishonourof cheque and liabilities of the company under the NI Act. CA No. 309/2025 Page No.16/50 42) TheApexCourtinRohitbhaiJivanlalPatelv.StateofGujarat &Anr.-2019INSC393(RJPatel'scase)whileholdingaclearview with regard to theconvictionoftheaccused-appellantfortheoffence under Section 138 NI Act, the impugned judgment and order dated 08.01.2018 does not call for any interference but, onthefactsandin thecircumstancesofthecase,modifiedthepunishmentasawardedby the High Court. The Apex court emphasized that, ordinarily, an appellatecourtwillnotupsetajudgmentofacquittaliftheviewtaken by the trial court is one of the possible views of the matter. The appellate court may only interfere if it arrives at a clear finding that the judgment of the trial court is perverse, i.e., not supported by evidence on record, contrary to what is regarded as normal or reasonable, or wholly unsustainable in law. 43) The relevant extract of paragraph 11 of the RJ Patel's case is reproducedverbatimas below: "11. According to the learned counsel for the a ccused-appellant, the impugned judgment is contrary to the principles laid down by this Court in the case of Arulvelu (supra) becausetheHighCourthassetasidethe judgment of the Trial Court without pointing out any perversitytherein.ThesaidcaseofArulvelu(supra)related to offences underSections304-Band498-AIPC.Therein, onthescopeofthepowersofAppellateCourtinanappeal against acquittal, this Court observed as follows: 36. Carefully scrutiny of all these judgments lead to the "
definite conclusion that theappellatecourtshouldbevery slowinsettingasideajudgmentofacquittalparticularlyin a case where two views are possible. The trial court judgmentcannotbesetasidebecausetheappellatecourt's view is more probable. The appellate court would not be justified in setting aside the trial court judgment unlessit CA No. 309/2025 Page No.17/50 a rrives at a clear finding on marshalling the entire evidence on record that the judgment of the trial court is either perverse or wholly unsustainable in law." 1 1.1 The principles aforesaid are not of much debate. In other words, ordinarily, the Appellate Court will not be upsetting the judgment of acquittal, if the view taken by Trial Court is one of the possible views of matter and unless the Appellate Court arrives at a clear finding that the judgment of the Trial Court is perverse, i.e., not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essentiallytoremindtheAppellateCourtthatanaccusedis presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the contextoftheparticularmatterbeforetheAppellateCourt andthenatureofinquirytherein.Thesamerulewithsame rigourcannotbeappliedinamatterrelatingtotheoffence under Section 138 of the NI Act, particularly where a presumption is drawn that the holder has received the cheque forthedischarge,whollyorinpart,ofanydebtor liability. Of course, the accused is entitled to bring on recordtherelevantmaterialtorebutsuchpresumptionand to show that preponderance of probabilities are in favour of his defence but while examining if the accused has brought about a probable defence so as to rebut the presumption, the Appellate Court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused." 44) In summary, while appellate courts should be cautious in overturning acquittals, they are empowered to do so where the Trial Court's decision is perverse, unsustainable, or contrary to law, especially in cases involving statutory presumptions like those under the Negotiable Instruments Act, 1881. CA No. 309/2025 Page No.18/50 45) The Parliament amended the NI Act by insertion of Chapter XVII, Of Penalties in case of Dishonour of Certain Cheques for Insufficient of Funds in the Accounts by the Act 66 of 1988 w.e.f. 01.04.1989. Section 138 of the NI Act reads as below: 138. Dishonour of cheque for insufficiency, etc., of "
funds in the account.--Where any cheque drawn by a persononanaccountmaintainedbyhimwithabankerfor payment of any amount of money to another person from outofthataccountforthedischarge,inwholeorinpart,of any debt orotherliability,isreturnedbythebankunpaid, either because of the amount of money standing to the credit of that account is insufficient to honour thecheque orthatitexceedstheamountarrangedtobepaidfromthat accountbyanagreementmadewiththatbank,suchperson shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: rovided thatnothingcontainedinthissectionshallapply P unless-- ( a) the cheque has been presented to the bank within a periodofsixmonthsfromthedateonwhichitisdrawnor within the period of its validity, whichever is earlier; ( b)thepayeeortheholderinduecourseofthecheque,as the case may be, makes a demand for the payment of the saidamountofmoneybygivinganotice;inwriting,tothe 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; and ( c)thedrawerofsuchchequefailstomakethepaymentof thesaidamountofmoneytothepayeeor,asthecasemay be,totheholderinduecourseofthecheque,withinfifteen days of the receipt of the said notice. xplanation.--For the purposes of this section, "debt of E other liability" means a legally enforceable debt or other liability." CA No. 309/2025 Page No.19/50 46) TheNIActenliststhreeessentialconditions,whichoughttobe fulfilled before Section 138, NI Act can be invoked. Firstly, the cheque ought to havebeenpresentedwithintheperiodofitsvalidity. Secondly, a demand for payment ought to have been made by the presenter of the cheque to the issuer, and lastly, the drawer ought to havefailedtopaytheamountwithinaperiodof15daysofthereceipt of the demand. 47) These principles and pre-requisites stand well established through judgment of the Apex Court in Sadanandan Bhadran v. Madhavan Sunil Kumar - (1998) 6 SCC 514. There is an explicit limitation of 30 days, beginning from the period when the cause of actionarose,prescribedbySection142(b)oftheNIAct,toinitiatethe proceedings under Section 138 of the NI Act. 48) His Lordship Dr. Dhananjay Y. Chandrachud, J., (As His Lordshipthenwas)inGimpexPrivateLimitedvs.ManojGoel-2021 INSC 637,culledouttheingredientsformingthebasisoftheoffence under Section 138 of the NI Act in the following structure: (i) The drawing of a cheque by a person on the account maintained by him with the banker for the payment of any amount of money to another from that account; (ii) The chequebeingdrawnforthedischargeinwholeorin part of any debt or other liability; (iii) Presentationofthechequetothebankarrangedtobepaid from that account; CA No. 309/2025 Page No.20/50 (iv) The return of the cheque by the drawee bank as unpaid eitherbecausetheamountofmoneystandingtothecredit ofthataccountisinsufficienttohonourthechequeorthat it exceeds the amount; (v) Anoticebythepayeeortheholderinduecoursemaking ademandforthepaymentoftheamounttothedrawerof the cheque within 30 days of the receipt of information from the bank in regard to the return of the cheque, and (vi) The drawer of the chequefailedtomakepaymentofthe amountofmoneytothepayeeortheholderinduecourse within 15 days of the receipt of the notice. 49) The Superior Courts have expounded that the issuance of cheque towards a liability, the presentation of the cheque within the prescribed period, its return on account of dishonour, notice to the accused, and failure to pay within 15 days thereof, standassinequa nonfor an offence under Section 138 of the NI Act. 50) At this stage, a reference to Section 118 of the NI Act is also relevantasitlaysdownspecialrulesforevidencetobeadducedwith the scheme of the NI Act. Section 118 is reproduced verbatim as below: 118. Presumptions as to negotiable instruments.--Until "
thecontraryisproved,thefollowingpresumptionsshallbe made: -- (a) of consideration:--that every negotiable instrument was madeordrawnforconsideration,andthateverysuch instrument,whenithasbeenaccepted,indorsed,negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; CA No. 309/2025 Page No.21/50 (b)astodate:--thateverynegotiableinstrumentbearinga d ate was made or drawn on such date; ( c) as to time of acceptance:--that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; (d) as to time of transfer:--that every transfer of a negotiable instrument was made before its maturity; ( e) as to order of indorsements:--that the indorsements appearing upon a negotiable instrument weremadeinthe order in which they appear then on; (f) as to stamp:-- that a lost promissory note, bill of e xchange or cheque was duly stamped; ( g)thatholderisaholderinduecourse:--thattheholder of a negotiable instrument is a holder in due course: providedthat,wheretheinstrumenthasbeenobtainedfrom its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burdenofprovingthattheholderisaholderinduecourse lies upon him." 51) The above-quoted legal provision of Section 118showcases,it raisesarebuttablepresumptionasagainstthedrawertotheextentthat the concerned negotiable instrument was drawn and subsequently accepted, indorsed, negotiated, or transferred for an existing consideration,andthedatesodesignatedonsuchaninstrumentisthe date when the concerned negotiable instrument was drawn. It is also furtherpresumedthatthesamewastransferredbeforeitsmaturityand that the order in which multiple endorsements appear on such an instrument, that is the deemed order thereon. Lastly, the holder of a negotiable instrument is one in its due course, subject to a situation CA No. 309/2025 Page No.22/50 where the concerned instrument while being obtained from a lawful ownerandfromhisorherlawfulcustodythereofthroughundertaking ofanoffenceascontemplatedunderanystatuteorthroughthemeans offraud,theburdentoprovehimorherbeingaholderinduecourse, instead,liesuponsuchaholder-SeeSriDattatrayav.Sharanappa- 2024 INSC 586. 52) Another relevantprovisionoftheNIActisSection139,which reads as below: " 139. Presumption in favour of holder.--It shall be presumed, unless thecontraryisproved,thattheholderof a cheque received the cheque of the nature referred to in section138 for the discharge, in whole or in part, of any debt or other liability." 53) Section 139 of the NI Act, mandates the presumption, which involvesanobligationontheCourtconductingthetrialforanoffence under Section 138 of the NI Act, to presume that the cheque in question was issued by the drawer or accused for the discharge of a particular liability.Theuseofexpression"shallpresume"setsoutthe right of the accused to present evidence for the purpose of rebutting thesaidpresumption.ThepresumptionunderSection139,NIActisa rebuttable one - See Rangappa v. Sri Mohan - 2010 INSC 500 (Rangappa's case). The effect of the presumption under Section139 NI Act is that on filing of the complaint along with supporting documents, thereby prima facie establishing the case against the drawer(accused),theonusofproofshiftsonthedraweroraccusedto adduce cogent material and evidence for rebutting the said CA No. 309/2025 Page No.23/50 presumption based on preponderance of probabilities - See Laxmi Dyechem v. State of Gujarat and Others - 2012 INSC 546. 54) At this juncture, it is relevant to expound upon the landmark judgmentoftheApexCourtintheRangappa'scase.ThethreeJudges Bench of Hon'ble Supreme Court examined the liability under Sections 138 and 139 of the NI Act, in a cheque-dishonour case involving stop-payment instructions on a post-dated cheque. The Court clarified that Section 138 applies even when payment is countermanded and that Section 139 raises a rebuttable presumption of a legally enforceable debt oncethedrawer'ssignatureisadmitted. The Apex Court emphasized that the accused must raise a probable defence on the preponderance of probabilities to rebut the statutory presumption, not an unduly high standard of proof. Applying these principles, the Court upheld the High Court's conviction becausethe accusedfailedtopresentacredible,timelydefenceanddidnotcontest the existence of the debt convincingly. 55) Hon'ble Supreme Court in the case of Basalingappa v. Mudibasappa-2019INSC500(Basalingappa'scase),whiledealing with a criminal appeal concerning a hand loan of ₹6,00,000/- culled outlegalprinciplesafterreviewingtheevidentiarypresumptionsunder Sections 118(a) and 139 of the Act, assessing whether the accused rebutted the presumption that the cheque discharged a debt and whether the complainant proved lending capacity. The Apex Court held that the defence evidence raised a probable doubt about the complainant's financial capacity and contradictions in his testimony. CA No. 309/2025 Page No.24/50 56) The legal principles culled out in Basalingappa's case are reproduced for ready reference as below: 23.WehavingnoticedtheratiolaiddownbythisCourtin "
above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:- ( i) Once the execution of cheque is admitted Section 139oftheActmandatesapresumptionthatthechequewas for the discharge of any debt or other liability. ( ii) The presumption under Section 139 isarebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. ( iii) Torebutthepresumption,itisopenfortheaccused to relyonevidenceledbyhimoraccusedcanalsorelyon the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials broughtonrecordbythepartiesbutalsobyreferencetothe circumstances upon which they rely. ( iv) That it is not necessary fortheaccusedtocomein the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. (v) It is not necessary for the accused to come in the itness box to support his defence." w 57) A neat questionarosebeforetheHon'bleSupremeCourtinthe case of Rajesh Jain v. Ajay Singh - 2023 INSC 888(RajeshJain's case) that since the execution of the cheque is admittedly, not under dispute, whether the accused can be said to have discharged his evidential burden, for the Courts below to have concluded that the CA No. 309/2025 Page No.25/50 presumption of law supplied by Section 139, NI Act had been rebutted. 58) HisLordshipAravindKumar,J.,inRajeshJain'scaseanalysed theproperapplicationofthestatutorypresumptionunderSection139, NI Act, how it shifts the evidentialburdenontotheaccusedoncethe cheque's execution is established. The Apex Court found errors in Trial Court and High Court's reasoning and held that the accused failed to rebutthepresumptiononpreponderanceofprobabilitiesand allowedtheappeal,convictedtheaccusedandsentencedhimtoafine and alternative imprisonment. 59) In Rajesh Jain's case, the Supreme Court clarified and reinforced several key legal principles regarding prosecutions under Section 138 of the NI Act, particularly concerning the operation of statutory presumptions and the burden of proof: a) Presumption Under Section 139 and Shifting Burden: i) Once execution/signature on the cheque is admitted: the presumption under Section 139 NI Actisautomaticallyactivated.Thispresumptionis thatthechequewasissuedindischargeofadebtor liability. ii) The evidential burden then shifts to the accused: The accusedmustrebutthepresumption,eitherby leading defence evidence or by establishing, on a CA No. 309/2025 Page No.26/50 preponderance of probabilities, that no debt or liability existed at the time of cheque issuance. iii) Nature and StandardofRebuttal:Theaccusedcan rebutthepresumptionby-leadingdirectevidence to prove non-existence of debt, liability orrelying oncircumstancesandprobabilitiesarisingfromthe case record, including the complainant's own evidence. The standard of proof fortheaccusedis not "beyond reasonable doubt" but the lesser standard of "preponderanceofprobabilities"--like a civil case. iv) RoleoftheCourtinEvaluatingEvidence:Oncethe presumption is activated, the Court's focus must shifttotheaccused'scaseandwhethertheaccused hasdischargedtheevidentialburden.Iftheaccused fails to discharge this burden, the presumption stands, and the complainant is not required to do anything further. If theaccuseddoesdischargethe burden, thecomplainantmustindependentlyprove theexistenceofdebt/liability,withouttheaidofthe presumption. The proper approach is to first determine if the accused has rebutted the presumption; only then, if rebutted, does the onus shift back to the complainant. CA No. 309/2025 Page No.27/50 v) ConsistencyandCredibilityinDefence:TheCourt emphasized that the defencesetupbytheaccused must be credible and consistent. Contradictory or implausible defences, unsupported by evidence or reasonableexplanation,willnotsufficetorebutthe presumption. b) General Principles on Presumptions and Burden of Proof: The Court reiterated thedistinctionbetweenlegal burden (remains on complainant) and evidential burden (can shift during trial). Section 139 is a"shallpresume" provision, meaning the court is compelled to raise the presumption once basic facts are established. nalysis A 60) Now coming to the case at hand with the above-said legal standards as anchor point, to ascertain whether the impugned judgmentandsentencingorderaremarredbyperversity,illegalityand oughttobeinterferedinexerciseofappellatepowerasassertedbythe appellants/accused persons. 61) The grounds of challenge urged by the appellants challenging the impugned judgment and sentencing order passed by the Trial Court are summed up as follows: a) Incomplete signatures on the cheques. b) Dishonour reasons not covered under the ambit of Section 138, NI Act. CA No. 309/2025 Page No.28/50 c) Cheques were issued as security and not for immediate discharge of debt. d) Procedural lapses for denying cross-examination of complainant' witnesses. e) Insufficient evidence of vicarious liability. Each of the aforementioned grounds of challenge are dealt in the ensuing paragraphs of this judgment. a) Incomplete signatures on the cheques, and b) ishonour reasons not covered under the ambit of D Section 138, NI Act 62) The appellants have mounted a significant challenge in their appeal on the ground of validity of cheque signatures and that the dishonourreasonsarenotcoveredundertheambitofSection138,NI Act. The grounds (a) and (b) of challenge, as statedinthepreceding paragraph are interlinked and thus being dealt together. 63) Thecorecontentionlodgedbytheappellantsisthatthecheques in question were incomplete and defective as it did not bear the signatures of both the directors of the appellant No. 1company.Itis repeatedly urged by the appellants that the Trial Court fell in grave error to consider and give due weightage that the cheques wereonly signed by one of the directors, Sanjay Thukral. 64) The Trial Court in the impugned judgment found that the challenge to the validity of the cheque signatures--specifically, the argument that the cheques required two authorized signatories but CA No. 309/2025 Page No.29/50 weresignedonlybyonedirector--wasnottenableinlawandcontrary to settled legal position. The Trial Court held that, despite being signed by only one authorized signatory, the statutory presumption under Sections 118(a) and 139, NI Act remained intact, unless rebuttedbytheaccused.Insupportofitsfinding,theTrialCourtcited the judgment of the Hon'ble Supreme Court of India in M/s Laxmi Dyechem v. State of Gujarat & Ors. - 2012 INSC 546 (Laxmi Dyechem'scase),toconcludethattechnicalreasonssuchassignature not as per mandate do not preclude the operation of Section 138 NI Act. 65) As the Trial Court has placedrelianceuponLaxmiDyechem's case2, to knock off the primary grounds of defence of the appellants/accused persons, it is pertinent to examine the facts and holding of the case. 66) The facts of the case before the Apex Court in Laxmi Dyechem's case were that the appellant, Laxmi Dyechem, a proprietorship firm engaged in the sale of chemicals, had supplied naphthalene chemicalstotherespondent-companyoverseveralyears, raising various invoices and bills. 67) Therespondent-companymaintainedarunningaccountwiththe appellant, and a sum of ₹4,91,91,035/- was outstanding against the respondent-companyforthesuppliesmade.Todischargethisliability, the respondent-company issued several post-dated chequessignedby its authorised signatories in favour of the appellant. When these 2 2012 INSC 546 CA No. 309/2025 Page No.30/50 cheques, 117 in total were presented to the bank, they were dishonoured on the grounds that the signatures were incomplete, no image was found, or the signatures did not match the specimen signatures on record with the bank. 68) The appellant sent a statutory notice to the respondents under Section 138, NI Act, demanding payment of the dishonouredcheque amounts.Therespondentsdidnotpaytheamountsdespitethenotice. They claimed to have informed the appellant about a change in mandate and requested the return of the old cheques inexchangefor fresh ones, but such replacement cheques were never issued. Consequently, the appellant filed forty different complaints under Section 138. NI Act before the concerned Trial Court, which took cognizance and issued summons to the respondents. 69) The respondents then filed petitions before the High Court of Gujarat at Ahmedabad, seeking quashing oftheproceedings,arguing that dishonour due to signature mismatchdidnotattractSection138, NI Act. The High Court accepted this argument and quashed the complaints. The appellant challenged the High Court's orders before the Supreme Court. 70) The Supreme Court held that under Section 139, NI Act, the presumption infavouroftheholderofachequeisrebuttable,andthe accused (drawer) can escape liability if he demonstrates a bona fide dispute regarding the existence of debt or liability. The Court emphasized that the accused may rebut the presumptionbyshowing, even at the threshold, that the cheque was not issued in dischargeof CA No. 309/2025 Page No.31/50 any legally enforceable debt or liability, including by proving there was a bona fide dispute between thedraweranddrawee.Thiscanbe donebyadducingevidenceorevenrelyingonmaterialssubmittedby thecomplainant.Ifaprobabledefenceisestablishedthatcreatesdoubt about the existence of a legally enforceable debt or liability, the prosecution can fail. Thestandardofproofrequiredisonthebalance of probabilities, not beyond reasonable doubt. The Apex Court also clarifiedthatexamplesofbonafidedisputeincludecaseswheregoods suppliedweredefective,therewasabreachofcontract,orothervalid causes for withholding payment, and that such matters must be determined at trial after considering the evidence adduced by the parties. 71) Thesecondmaingrouseoftheappellantsisthattheveryreason for which the cheques were dishonoured, 'signature not as per mandate' and 'refer to drawer' do not fall within the strict grounds contemplated by Section 138 NI Act. 72) On having consideredthesettledpositioninlawasheldbythe Apex Court in Laxmi Dyechem's case3 with regard to'signaturenot as per mandate', 'refer to drawer' and 'signatures do not match' is covered under Section 138, NI Act. The Apex Court clarified that these reasons are speciesofthebroadergenusof"insufficientfunds" as contemplated in Section 138, NI Act. Therefore, such dishonour constitutes an offence under Section 138, NI Act, provided other statutory conditions are met. 3 ibid. CA No. 309/2025 Page No.32/50 73) During the course of oral arguments, the Court did pose an incisive questiontothelearnedcounselfortheappellantswithregard to the mandate of two signatures on thechequebeingcommunicated in writing to the respondent/complainant. The response to the query was negative and no documentary evidence on this countwasledby the appellants before the Trial Court. 74) Inthecaseathand,thoughtheappellants/accusedpersonshada righttorebutthestatutorypresumptionunderSection139,NIActbut nocogentevidencewasledbythembeforetheTrialCourt.Thus,this Court finds no impropriety with regard to the findings of the Trial Court and the challenge to the impugned judgment on the basis of both the afore-mentioned grounds fails. c) heques were issued as securityandnotforimmediate C discharge of debt 75) Now coming to thethirdgroundofchallengebytheappellants that the cheques in question were issued as security and not for immediate discharge of debt. The plea of defence urged by the appellants/accusedpersonsbeforetheTrialCourtwasthatthecheques in question were not the final cheques. The cheques were given for finalisation of the settlement and it was agreed that after finalization cheques in question shallbereturnedtotheaccusedcompanybutthe complainant did not return the cheques to the accused company and misused the same. As per the appellants/accused person,thecheques were given in good faith.4 4 Seereply of appellant/accused No. 3, Sanjay Thukralto notice under Section 251, CrPC, 1973 before the Trial Court, p. 107 of the appeal paper-book filed by the appellants. CA No. 309/2025 Page No.33/50 76) The findings of the Trial Court on this point is nestled in paragraphNos.25and26oftheimpugnedjudgment.TheTrialCourt found that the cheques in question were issuedforthedischargeofa legally enforceable debt or liability. The Trial Court noted that there was an admitted "Space Buyer Agreement"betweenthecomplainant andaccusedNo.1,andthatthecomplainanthadmadepaymentsunder an assured return plan, with periodic returns being paid until 2016. When the returns ceased and possession was not given, the complainantdemandedarefund,andthechequeswereissuedpursuant to settlement negotiations. 77) TheTrialCourtheldthatthesefactsestablishedtheexistenceof a legally enforceable debt or liability at the time the cheques were issued, and that the statutory presumption under Section139,NIAct applied. The defence of the accused persons that the cheques were issued merely as a gesture or for assurance was found to be implausible and unsupported by evidence, and the accused failed to rebut the presumption. Therefore, the Trial Court concluded that the cheques were issued in discharge of a legally enforceable debt or liability. 78) Not only the learned counsel for the appellants but also the appellants in theirwrittenargumentshavevociferouslyurgedthatthe cheques in question were handed over in good faith to the representative of Aditya Birla Capitals Private Limited during negotiations,specificallyassecuritychequesandnotforthedischarge of any existing debt or liability. CA No. 309/2025 Page No.34/50 79) For rebutting the presumption that the cheques in question issuedbytheappellant/accusedNo.1companyweresecuritycheques andnotissuedtowardsdischargeoflegallyenforceabledebt,theirstar defencewitnessbeforetheTrialCourtwasSanjayThukral.Hence,to ascertain failure on the part of the Trial Court for arriving at a conclusion that the cheques were issued in discharge of a legally enforceable debt or liability, it is a must to examine and weigh the testimony of Sanjay Thukral, who is also one of the directors of the appellant company and appellant No. 3. 80) On careful perusal of the testimonyofdefencewitness,Sanjay Thukral (DW-1) recorded on 06.06.2024 and 20.03.2025, it is observed that about the role of Aditya Birla Capital he testified that theinvestmentsmadebythecomplainant,BrahamaInternationalLLP and other investors in the project were routed through Aditya Birla Capital. Hestatedthataftertheappellantcompanywasunabletopay interest due to the financial crisis, representatives from Aditya Birla Capital, specifically Mr. Navneet Bishnoi,visitedtheofficeofAIMS SanyaDevelopersPvt.Ltd.tonegotiateonbehalfoftheinvestorsfor a refund of their investments. 81) Sanjay Thukral (DW-1) also stated that Aditya Birla Capital's representatives requestedthecompanytoissuethreecheques,onefor refund of investment, two for interest, to show the investors that the company intended to refund their money and to pacify them. He emphasized that these cheques were given as security cheques and were not meant to be banked, as the final settlementamounthadnot CA No. 309/2025 Page No.35/50 beendecidedandtheoriginaldocumentshadnotbeensurrenderedby the investors. 82) Sanjay Thukral (DW-1) clarified to Aditya Birla Capital officials that only one signatory himself was signing the cheques at thattime,andthatthechequeswouldnotbepresenteduntilthesecond signatory had signed or replacement cheques were issued after final settlement. 83) In his examination-in-chief statement, Sanjay Thukral (DW-1) stated that all discussions and negotiations regardingtherefundwere handled through Aditya Birla Capital'srepresentatives,andthatnone of the investors or their representatives ever visited the company office directly. 84) On being cross-examined, particularly on 20.03.2025, Sanjay Thukral (DW-1) admitted that he had not filed any document on record to show that the amount paid by the complainant was routed through Aditya Birla Capital, but said he could check the office file and produce such documents if required. He confirmed that the company had sent communication, letter or email to Aditya Birla Capital regarding the transaction, but could not recall whetheritwas byletteroremail,andacknowledgedthatnosuchcommunicationhad been placed on record or given to his counsel. 85) SanjayThukral(DW-1)duringhiscross-examinationalsostated that CRM Mr. P. Muthupandi maintained records pertaining to customers, investors, including letters sent by the company, and that CA No. 309/2025 Page No.36/50 the accounts department maintained records related to issuance of cheques and books of accounts. 86) The sum and substance of Sanjay Thukral (DW-1)'stestimony isthatAdityaBirlaCapitalactedasanintermediaryfortheinvestors, facilitated negotiations for refund, and received the security cheques with the understanding that they were not to be presented until final settlement. He admitted in cross-examination that no documentary evidenceofthesecommunicationswithAdityaBirlaCapitalhadbeen filed in Court, though such records might exist in the company's files. 87) The best evidence to rebut thepresumptionunderSection139, NI Act is by establishing aprobabledefencethatcreatesdoubtabout the existence of a legally enforceable debt or liability at the time of cheque issuance. The standard of proof is on the preponderance of probabilities, not beyond reasonable doubt. The accusedmaypresent evidencethatnodebtorliabilityexistedwhenthechequewasissued, such as receipts, account statements, or settlement agreements showing the debt was already paid. Correspondence or agreements indicating the cheque was issued as security or for a purpose other than discharge of a debt. About the proof of a bona fide dispute between the parties, theevidencewouldbedefectivegoods,services, breach of contract or non-fulfillment of conditionsbythepayee.The accused can rely ondocumentsandadmissionsfromthecomplainant to demonstrate the absence of debt or liability. Admissions are also extracted during the cross-examination of a witness and this aspect willbedealtseparatelyinthenextgroundofchallengeofappeal.The CA No. 309/2025 Page No.37/50 other evidence that cheque in question was issued under coercion, fraud, or as an accommodation without consideration. 88) The position in law is well settled that there exists a statutory presumption under Sections 118 and 139 of the NI Act. The default settingisthatonceyouadmitthesignatureonthechequeasyours,the Court automatically presumes that there exists a legally enforceable debt. However, the law also provides that the accused can rebut the presumption by raising a probable defence on a preponderance of probabilities to show that there existed no debt in the manner so pleadedandurgedbythecomplainantinhiscomplaint,demandnotice or evidence. Once the accused has successfully raised a probable defence to the satisfaction of the Court, his burdenisdischargedand the default setting i.e., presumption vanishes and the burden now shifts on the complainant, to prove the existence of a legally enforceable debt as a matter of fact. 89) That said, the challenge to the impugned judgment on the ground that cheques in question were issued as security and not for immediatedischargeofdebtfailsmiserably,astheTrialCourtrightly arrived at the finding that the accused persons failed to raise a credible, probable defence to rebut the statutory presumption. This Court is in complete concurrencewiththefindingsoftheTrialCourt rightly rejecting the defence's challenge and treating the cheques as valid for the purposes of proceedings under Section 138, NI Act. CA No. 309/2025 Page No.38/50 d) rocedural lapses for denying cross-examination of P complainant' witnesses 90) The appellants, AIMS Sanya Developers Pvt. Ltd. and its directors, have argued that the Trial Court committed a significant procedural lapse by denying them the opportunity to cross-examine the complainant's witnesses. Their core contentions are no tendering of evidence by the complainant after taking oath, no opportunity to cross-examine the complainant witness, closure of their right to cross-examine and failure to address the issue in the impugned judgment. The appellants have stated in their written arguments that theTrialCourtdespiteacknowledgingthisproceduralargument,failed to return any finding on the issue. The appellants claim that such an omission is a fatal flaw and undermines the fairness of the trial. 91) The aforesaid arguments urged by the appellants challenging both the fairness and legality of the Trial Court proceedings are not only contrary to record but also misplaced in law. On careful examination of the trial court record (TCR), it is observed that the Trial Court by orderdated13.09.2023closedtherightoftheaccused persons to cross-examine the complainant because various opportunities were granted to the accused persons to cross-examine the authorised representative of the complainant. It is also observed thatason13.09.2023thecostsof₹9,000/-imposedbytheTrialCourt for an opportunity to cross-examine the complainant's witness was also unpaid. CA No. 309/2025 Page No.39/50 92) The order dated 12.12.2023 passed by the Trial Court further reveals that the appellants/accused persons hadmovedanapplication under Section 311, CrPC, 1973 seeking permission to recall the complainant'switnessforcross-examination.TheTrialCourtheldthat the change, engagement of new counsel is not a valid ground and dismissed the application. 93) The TCR further revealed that the appellants/accused persons preferredapetitionunderSection482,CrPC,1973beforetheHon'ble High CourtofDelhichallengingtheorderdated12.12.2023inacase titledasAIMSSanyaDevelopersPvt.Ltd.v.BrahamaInternational LLP.5 The Hon'ble High Court by judgment dated 02.05.2024 dismissed the petition in AIMS Sanya Developers Pvt. Ltd. v. Brahama International LLP - 2024 DHC 3556. 94) The Hon'ble High Court observed that the accused persons were granted multiple opportunities over a period of more than 16 months (oneyearandfourmonths)tocross-examinethecomplainant but failed to do so. It was also observed that the counsel for the accused persons remained absent on several hearing dates without providing valid reasons or priorintimation.Thefailureonthepartof the accused persons to pay the previously imposed costs of₹9,000/- was also weighed in by the High Court. 95) The Hon'ble High Court agreed with the Trial Court that the appointment of a new counsel is not a valid ground to allow an application for recalling a witness under Section 311, CrPC,1973.It 5 Crl.M.C. No. 3197/2024 CA No. 309/2025 Page No.40/50 wasalsonotedthatthecase,pendingsince2020,wasbeingdelayedat the cross-examination stageandthattheTrialCourthadalreadybeen lenient in granting multiple opportunities. 96) Consequently,theHighCourtfoundnoreasontointerferewith the Trial Court's order dated 12.12.2023, which had dismissed the accused persons application to recall the complainant for cross-examination. 97) Adisturbingfactsurfacedoncarefulperusalandexaminationof theappealpaper-book,thoughtheappellantshaveatlengthurgedasa groundthattherewasaprocedurallapseonthepartoftheTrialCourt bydenyingthemtherighttocross-examinethecomplainant'switness, but it is found that the appellants have not disclosed in their appeal thattheychallengedtheorderspassedbytheTrialCourtclosingtheir right to cross-examine the complainant's witness before the High Court of Delhi. 98) In the memorandum of appeal documents and listofdatesand events, the appellants mention that their right to cross-examine was closed and that this was a significant procedural lapse. They specifically argued that the complainant never tendered post-summoning evidence and that the closure of cross-examination was erroneous. However, there is no statement or disclosure in the appeal by the appellants that they filed or pursued any challenge beforetheHighCourtofDelhiagainsttheTrialCourt'sorderclosing their right to cross-examine - See AIMSSanyaDevelopersPvt.Ltd. v. Brahama International LLP - 2024 DHC 3556. CA No. 309/2025 Page No.41/50 99) The only reference to any High Court proceedings pertains to AccusedNo.2havingfiledapetitionforquashingunderSection482 CrPC (regarding vicarious liability), not for restoration of cross-examination rights. 100) In the adversarial nature of proceedings before the criminal Courts in India, the inviolable ruleisthatoffairnessandplayingby the rules for the contesting parties. The lawandtheCourtsofjustice abhor catching the opposite party by surprises and suppression of materialfacts.TheCourtisconstrainedtoobservethattheconductof the appellants is not forthcoming on this count. 101) Accordingly, in view of the aforesaid facts and deliberations, the challenge totheimpugnedjudgmentpassedbytheTrialCourton the ground of denial to cross-examine the complainant's witness is dismissed. e) Insufficient evidence of vicarious liability 102) By the impugned judgment the Trial Court convicted the appellant/accused No. 2, Roop Kishore Madan and the appellant/accused No. 3, Sanjay Thukral on the legal doctrine of vicarious liability foroffencepunishableunderSection138readwith Section 141, NI Act. 103) The appellants have challenged vicarious liability on the grounds of insufficient and non-specific averments in the complaint, lack of evidence of actual responsibility or control, reliance on legal precedentsrequiringspecificpleadingandproof,denialofknowledge CA No. 309/2025 Page No.42/50 or participation in the alleged offence, and the absence of any stated roleordutieslinkingthemtotheconductofthecompany'sbusinessat the relevant time. 104) Regarding the insufficient averments and evidence in the complaint filed before the Trial Court, the appellants argued that the complaint merely reproduces the language of Section 141 NI Act withoutprovidingspecificfactsorparticularsastohowthedirectors, appellant Nos. 2 and 3 were in charge of, or responsible for, the conduct of the business of the company at the time of the alleged offence.TheappellantsrelieduponthejudgmentoftheApexCourtin the case of Susela Padmavathy Amma v. Bharti Airtel Limited - 2024 INSC 206, emphasizing that mere designation as a director is insufficient to fasten vicarious liability. The complaint must specifically showinwhatmannerthedirectorwasresponsibleforthe conduct of the company's business. 105) The appellantscontendedthatonlythedrawerofthechequeor theauthorizedsignatorycanbeheldliableunderSection138,andthat vicariousliabilityunderSection141,NIActcannotbeimposedinthe absence of specific averments or evidence. The appellants cited the judgmentofBijoyKumarMoniv.PareshManna-2024INSC1024, which holds that only the drawer of the cheque can be held liable underSection138,andanauthorizedsignatoryactingonbehalfofthe company cannot be said to be the drawerunlessthechequeisdrawn on an account maintained by him. CA No. 309/2025 Page No.43/50 106) The appellants also contended that the evidence on record including Ministry of Corporate Affairs data and annual returnsonly shows the appellant Nos. 2 and 3 as directors of the appellant No. 2 company, not that they weremanagingtheday-to-dayaffairsorwere actually responsible for the conduct of thecompany'sbusinessatthe relevanttime.Itisurgedbytheappellantsthatthereisnomaterialon record to establish, even on a preponderance of probabilities, that appellantNo.2wasinchargeoforresponsiblefortheconductofthe business of the company. To buttress their arguments, the appellants have also placed reliance upon the judgments of the Apex Court on SMS Pharmaceuticals Ltd. v. Neeta Bhalla - (2005) 8 SCC 89; AparnaA.Shahv.ShethDevelopersP.Ltd.&Anr(2013)8SCC71, andK.K. Ahuja v. V.K. Vora (2009) 10 SCC 48. 107) Further, the appellant/accused No. 2 in his statement under Section 313, CrPC,1973statedthatthechequesinquestionwerenot signed by him and the samewereissuedwithouthisknowledge.Itis forthisreasonthathecannotbeheldvicariouslyliableforthealleged offence. 108) Oncarefulandelaboratereadingoftheimpugnedjudgmentand the sentencingorder,itisfoundthattheTrialCourtheldthataccused No. 2, Roop Kishore Madan was vicariously liable for the offence under Section 138, NI Act due to his role as managing director and active involvement in the appellant/accused company, rejecting his defence and finding the statutory requirements for vicarious liability under Section 141 NI Act satisfied. CA No. 309/2025 Page No.44/50 109) TheTrialCourt'sreasoningisbasedonthespecificavermentby the complainant that the accused No. 2wasthemanagingdirectorof thecompanyandactivelyinvolvedinitsbusiness.Theannualreports bearing his signature and his substantial shareholding (49%) further established his role in the company's affairs. 110) TheTrialCourtalsoplacedrelianceuponthelatestjudgmentof the Apex Court in the case of HDFC Bank Ltd. v. State of Maharashtra-2025INSC759,whereinitwasheldthatanaverment in the complaint about a director being in charge of and responsible for the conduct of thebusinessissufficienttoproceedagainstsucha person. It is then for the accused person to prove they were not in charge or responsible at the relevant time. 111) The Trial Court rejected the appellant/accused No. 2's claim thathewasunawareoftheissuanceofthechequesandnotinvolvedin their purpose was not substantiated byanyevidence.TheTrialCourt found no material on record to showthathewasnotinchargeofthe company's affairs or that the offence was committed without his knowledge. The Trial Court concluded that there was sufficient materialtoinferthattheappellant/accusedNo.2wasakeymanagerial person,andtherefore,vicariouslyliableunderSection141,NIActfor the acts of the appellant/accused company. 112) The Trial Court also held the appellant/accused No. 3, Sanjay Thukral as the signatory director liable, but the primary findings on vicarious liability focussed on the appellant/accused No. 2 as a non-signatory director. CA No. 309/2025 Page No.45/50 113) The admitted position is that the appellant/accused No. 3, Sanjay Thukral is the signatory to the cheques in question, thus the challenge upon the vicarious liability aspect of the impugned judgment and sentencing orderquahim is flail andflaccid. 114) The complaint preferred by the respondent/complainant before theTrialCourtunequivocallyrevealsthattherearespecificaverments about the accused No. 2 being the managing director of the appellant/accused No. 1 company and the accused Nos. 2 and 3 in charge of the day-to-day affairs of the company.6 115) The ratio of the judgment of the Apex Court in the case of HDFC Bank Limited v. State of Maharashtra &Anr.-2025INSC 759asrelieduponbytheTrialCourtontheissueofvicariousliability ofthedirectorappliesonitsfourstothecaseathand.TheApexCourt dealt with an issue, whether the HighCourtofJudicatureatBombay was justified in quashing the complaint on the groundthatnecessary averments to invoke the vicarious liability against the director ofthe company were lacking. 116) The Apex Court concluded in its analysis that the documents, board resolution, sanction letters, loan documents, and complaint averments when read together most strongly establish vicarious liabilitybyshowingthatthedirectorwasin-chargeofandresponsible for the conduct of the company's business at the relevant time. 6 Seeparagraph No. 2 of the complaint filed beforethe Trial Court, at p. 89 of the appeal paper-book filed by the appellants. CA No. 309/2025 Page No.46/50 117) The Apex Court judgment relied upon by the appellantsinthe caseofBijoyKumarMoniv.PareshManna-2024INSC1024dealt with an issue whether a director who signed a chequeonacompany could be prosecuted under Section 138, NI Act, when the company itselfwasnotarraigned.TheApexCourtheldthatSection138,NIAct appliesonlywherethechequeisdrawnonaccountmaintainedbyhim, so an authorised signatory signing for a company is not the drawer. The company must be prosecuted first for vicarious liability under Section 141, NI Act. It is observed that the ratio of the aforesaid judgment does not apply to the case at hand, as the company was arraigned by the respondent/complainant in its complaint before the Trial Court, as the appellant/accused No. 1. 118) Regardingthe challengeflankedbytheappellant/accusedNo.2 on the vicarious liability and the heavy reliance placed upon the judgmentoftheApexCourtinthecaseofSuselaPadmavathyAmma v. Bharti Airtel Limited - 2024 INSC 206,7 this Court findsthatthe sameisclearlydistinguishableonfacts,asSuselaPadmavathyAmma, whowasarrayedasanaccusedincriminalcomplaintfordishonourof cheques under Section 138, 141, NI Act, was a director and not a managing or joint managing director of Fibtel Telecom Solutions. Further, the Apex Court observed that there was no averment that Susela Padamavathy Amma was in charge of or responsible for the conduct of the company's business. 7 InSusela Padmavathy Amma v. Bharti Airtel Limited- 2024 INSC 206, the case laws:SMS harmaceuticals Ltd. v. Neeta Bhalla - (2005) 8 SCC 89; Aparna A. Shah v. Sheth Developers P. P Ltd. & Anr (2013) 8 SCC 71, and K.K. Ahuja v. V.K. Vora (2009) 10 SCC 48were also cited and discussed at length. CA No. 309/2025 Page No.47/50 119) Withallduedeferenceandhumilityatmycommand,theCourt is of the considered view that the judgment of Susela Padmavathy Amma v. Bharti Airtel Limited - 2024 INSC 206 cuts across the challenge laid by theappellantsmerelyforthereasonthattheyfailed toprovethatwhentheoffencewascommitted,theyhadnoknowledge of the offence or that they exercised all due diligence to prevent the commission of offence. Fruitfulrelianceisplacedbyreproducingthe extract of the paragraph No. 10 of the judgment as below: ... ... "
10. It was held that merely because a personisadirectorofa company, it is not necessary that he is aware about the day-to-day functioning of the company. This Court held that there is no universal rule that a director of a company is in charge of its everyday affairs. It was, therefore, necessary, to aver as to how the director of the company was in charge of day-to-dayaffairsofthecompanyorresponsibletotheaffairsof thecompany.ThisCourt,however,clarifiedthatthepositionofa managing director or a joint managing director in a company may be different. This Court furtherheldthatthesepersons,as the designation of their office suggests, are in charge of a company and are responsible fortheconductofthebusinessof the company. To escape liability, they will have to prove that whentheoffencewascommitted,theyhadnoknowledgeofthe offence or that they exercised all due diligencetopreventthe commission of the offence." [Emphasis added by highlighting, and underlining of text] 120) This Court finds that to escape his vicarious liability,noshred of evidence was led by the appellant/accused No. 2 before the Trial Court, to prove that when the alleged offence was committedhehad no knowledge of theoffenceorheexercisedduediligencetoprevent the commission of the offence. CA No. 309/2025 Page No.48/50 121) As discussed above, none of the law reports, cited by the learned counsel for the appellants come to their aid, as the same are eitherdistinguishableonfacts,legaland/orcontextualdifferences.The Court does not find any perversity, impropriety in the impugned judgment and the sentencing order passed by the Trial Court on the aspect of holding both the directors vicariously liable for the commission of offence under Section 138 read with Section 141, NI Act. ecision D 122) In view oftheaforesaidlegalprinciples,foregoingreasonsand observations,thisCourtholdsthatthereisneitheranyperversityinthe impugned judgment passed by the Trial Court nor any merit in the appeal preferred by the appellants in challenging the impugned judgment dated 30.06.2025 and sentencing order dated 16.07.2025 passed by the Trial Court in a complaint case titled as Brahama InternationalLLPv.AIMSSanyaDevelopersPvt.Ltd.--CCNIAct No. 105/2020. 123) ThisCourtfindsandrulesthattheTrialCourtrightlyconvicted the appellants for the offence of Section 138, NI Act, 1881. Accordingly, the instant appeal is dismissed and the impugned judgment dated 30.06.2025 and sentencing order dated 16.07.2025 passed by the Trial Court are upheld and affirmed. All pending applications, if any, stand disposed of. No order to costs. 124) Consequentialtothedismissaloftheappeal,theCourtdeemsfit to direct the appellants to pay the fine imposed bytheTrialCourtin CA No. 309/2025 Page No.49/50 terms of the impugned judgment dated 30.06.2025 and sentencing order dated 16.07.2025 to the respondent within 15 days from today before the Trial Court. In case of non-payment of the fine by the appellants to the respondent, the Trial Court must proceed with the execution of sentence imposed in accordance with law. 125) Accordingly, the parties to the appeal are directed to appear before the Trial Court on01.04.2026 at 2:00 P.M. 126) Let a certified copy of this judgment be provided to all the appellant/convict(s)andtherespondent/complainantfreeofcost.Leta certified copy of this judgment along withtheTCRbetransmittedto theTrialCourtasperrules.FilebeconsignedtotheRecordRoomon compliance of directions and as per applicable rules. Digitally signed by Hargurvarinder Hargurvarinder Singh jaggi Singh jaggi Date: 2026.03.16 12:16:24 +0530 ronounced in the open Court P ( Hargurvarinder Singh Jaggi) on March 16, 2026 Addl. Sessions Judge (FTC-01) South District Saket Courts, New Delhi ote: This judgment comprises of 50 pages in total. The electronic signature N certificate (digital signature) of the Presiding Officer has beenappendedonthe last page of the electronic or digital copy (PDF) of this document. CA No. 309/2025 Page No.50/50