Delhi District Court
Smt.Indu Rai (Sr.Citizen) vs Octagon Builders Promoters Pvt.Ltd on 4 May, 2026
-1-
IN THE COURT OF Ms. AASTHA SHARMA, LD. JMIC (N.I. Act)-03,
SOUTH-EAST DISTRICT, SAKET COURTS COMPLEX:
DELHI
Indu Rai v. Octagon Builders
CC No. 614234/2016
U/S 138 Negotiable Instruments Act, 1881
DLSE02-000108-2010
1. CNR number
Indu Rai
2. Name of the complainant
D/o Sh. H.C Dhall,
R/o E-78, Greater
Kailash, Part-1, New
Delhi-110048.
1. Octagon Builders &
3. Name of the accused person(s), parentage Promoters Ltd.
& residential address Registered Office-78,
Hargovind Enclave,
Delhi-92.
2. Kuldeep Nandrajog
(Director), Octagon
Builders & Promoters
Ltd. Registered
Office-78, Hargovind
Enclave, Delhi-92.
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016
-2-
3. Satpal Nandrajog
(Director), Octagon
Builders & Promoters
Ltd. Registered
Office-78, Hargovind
Enclave, Delhi-92.
4. Sourabh Gandhi,
S/o Late Sh. S.K
Gandhi,78, Hargovind
Enclave, Delhi-92.
5. Sanjiv Gupta,
S/o Sh. Shruti Kant
Gupta,78, Hargovind
Enclave, Delhi-92.
4. Offence complained of or proved U/s 138 of Negotiable
Instruments Act, 1881
5. Plea of the accused Pleaded not guilty and
claimed trial
Accused no.2 and 3 are
6. Final Judgment/order convicted.
Accused no.4 and 5 are
acquitted.
7. Date of judgment/order 04.05.2026.
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016
-3-
Date of Institution: 17.02.2010
Date of Reserving Judgment/Order: 20.12.2025
Date of Pronouncement of Judgment/Order: 04.05.2026
ARGUING COUNSELS:
Ld. Counsel for the complainant: Sh. Sunil Mund.
Ld. Counsel for the Accused: Sh. Faiz Rizvi.
JUDGMENT
1. Vide this judgment, this Court shall dispose of the present complaint filed by the complainant Ms. Indu Rai (hereinafter referred to as "the Complainant") against Octagon Builders & Promoters Pvt. Ltd. through its Directors Sh. Kuldeep Nandrajog, Sh. Satpal Nandrajog, Sh. Sourabh Gandhi and Sh. Sanjiv Gupta (hereinafter referred to as "the Accused no. 1 to 5 respectively ") under Section 138 of the Negotiable Instruments Act, 1881 read with Section 142 of Negotiable Instruments Act, 1881 (hereinafter referred to as "NI Act").
Brief facts of the case:
2. It is the case of the complainant, A. That, the complainant invested Rs. 4 crore against 5% profit share per month since April 2007 in Octagon Builders & Promoters Pvt. Ltd. for real estate project, against which accused no. 1, 2 and 3 issued receipts, acknowledgment slips and partial returns post dated cheques alongwith deed of partnership dated 03.08.2007 showing son of the complainant Sh. Sanjeev Chowdhary as a partner in the Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -4- investment project. That, the accused in furtherance also allotted 1500 sq yards of plot in Dehradun to the complainant by a letter of allotment dated 27.07.2007 as partial return of investment without the possession of the plot or any ownership document till date. That, when the complainant approached the accused for profit share or return of the invested money, the accused persons kept making promises. That, when the accused persons did not comply, the complainant lodged a criminal complaint on 01.07.2009 with EOW, Malviya Nagar for prosecution of the accused alongwith accused Sh. Pritam Singh. That, when the accused persons got knowledge of the same, they issued 12 cheques in favour of the complainant in exchange of the earlier ones and assured the complainant that the same shall be encashed in December 2009. The details of the cheques in question are as follows:
(i) cheque bearing no. 000427 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,00,000/- drawn on Yes Bank Ltd., Sector 19, Noida.
(ii) cheque bearing no. 000429 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,00,000/- drawn on Yes Bank Ltd., Sector 19, Noida.
(iii) cheque bearing no. 000430 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,00,000/- drawn on Yes Bank Ltd., Sector 19, Noida.
(iv) cheque bearing no. 29864 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,000/- drawn on Axis Bank Ltd., Sector 18, Noida.
(v) cheque bearing no. 29865 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,000/- drawn on Axis Bank Ltd., Sector 18, Noida.
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -5-
(vi) cheque bearing no. 29866 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,000/- drawn on Axis Bank Ltd., Sector 18, Noida.
(vii) cheque bearing no. 29867 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,000/- drawn on Axis Bank Ltd., Sector 18, Noida.
(viii) cheque bearing no. 29868 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,000/- drawn on Axis Bank Ltd., Sector 18, Noida.
(ix) cheque bearing no. 29877 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,000/- drawn on Axis Bank Ltd., Sector 18, Noida.
(x) cheque bearing no. 29881 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,000/- drawn on Axis Bank Ltd., Sector 18, Noida.
(xi) cheque bearing no. 29883 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,000/- drawn on Axis Bank Ltd., Sector 18, Noida.
(xii) cheque bearing no. 29884 dated 11.11.2009 in favour of Ms. Indu Rai in the sum of Rs. 50,000/- drawn on Axis Bank Ltd., Sector 18, Noida.
B. That, the complainant presented the abovesaid 12 cheques amounting to Rs. 1,54,50,000/- through her banker Axis Bank Ltd., E-64, Greater Kailash-I, New Delhi-110048, however to shock of the complainant, the same were returned with the remarks "Account Closed" and "Account does not exist" vide return memos dated 12.12.2009 and 16.12.2009.
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -6- C. In these circumstances, the complainant got issued a statutory legal demand notice to the accused through his counsel, dated 08.01.2010, thereby requiring the accused to pay the amount of the aforesaid cheque within a period of 15 days from the receipt of the said notice. The said notice under Sec. 138 of NI Act was sent to the accused through Registered AD/Speed Post/Courier at his correct address. That despite service of the above stated notice of demand, the Accused has deliberately and wilfully failed to comply with the said notice of demand and has failed to pay the amount of the aforesaid cheque within the stipulated period of 15 days from the date of receipt of the said notice. Consequently, this case was filed by the complainant against the accused persons, which was within the limitation period as laid down u/s 138, NI Act.
3. In the pre-summoning evidence, the Authorised representative of the complainant examined himself as CW-1 on affidavit being Ex. CW1/A and placed on record documents Ex. CW1/1 to Ex. CW1/24.
4. Upon prima facie consideration of the pre-summoning evidence, the accused persons were summoned.
5. Upon the appearance of the accused persons, notices under Section 251 CrPC were served upon him on 29.01.2011 and 05.03.2011 to which they pleaded not guilty. At this stage, the accused no. 1, 2 and 3 have admitted that they issued the cheques in question and also admitted their signatures therein. However, accused no. 1, 2 and 3 have stated the cheques were given to the son of the complainant to procure a land in Mumbai as he was a partner in the accused company and that whatever money was invested in by the complainant, it was returned to her. While, Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -7- accused no. 4 and 5 stated that they had already left the company in September 2009, i.e., before the cheques in question were dishonoured and they are not liable to pay any amount to the complainant.
6. Thereafter CW-1 was examined, cross-examined and discharged vide order dated 03.06.2017. Vide order of the court, CE was closed. Accordingly, matter proceeded to the stage of recording the statement of the accused.
7. Statement of accused under Section 313 CrPC read with Section 281 CrPC was recorded wherein the accused persons stated that they wish to lead DE. Thereafter DW-1 and DW-2 were examined, cross-examined and discharged and vide order of this court, DE was closed on 24.07.2024.
8. Thereafter, the matter proceeded to the stage of final arguments. Final arguments heard and written submissions considered on behalf of both the parties. Record perused and considered.
9. It is well settled position of law that to constitute an offence under Section 138, NI Act, the following ingredients are required to be fulfilled:
I. drawing of the cheque by a person on an account maintained by him with a banker, II. The cheque was issued for payment to another person for discharge in whole/part any debt or liability;
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -8- III. Cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier. RBI in its notification DBOD.AML BC.No.47/14.01.001/2011-12 has reduced the aforesaid period from 6 months to 3 months.
IV. Returning of the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque;
V. Giving notice in writing to the drawer of the cheque within 30 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount;
VI. Failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered by the cheque within 15 days of the receipt of the notice.
The offence under Section 138, NI Act is made out against the drawer of the cheque, only when all the aforementioned ingredients are fulfilled.
10. Analysing all the concerned provisions of law and various pronouncements in this regard, the Hon'ble Apex Court in the case of Basalingappa v. Mudibasappa [AIR 2019 SC 1983] held that:
I. Once the execution of cheque is admitted, Section 139 of the Act mandates that a presumption be drawn that the cheque in question was for the discharge of any debt or other liability.
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -9- II. The presumption under Section 139 is a rebuttable 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. To rebut the presumption, it is open for the accused to rely on evidence led by him or accused can also rely on 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 brought on record by reference to the circumstances upon which they rely.
IV. That it is not necessary for the accused to come in the witness box in support of his defence. Section 139 imposes an evidentiary burden and not a persuasive burden.
It is therefore implied that the law regarding the presumption for the offence under Section 138, NI Act, the presumptions under Section 118(a) and Section 139 have to be compulsorily raised as soon as the execution of cheque by the accused is admitted or proved by the complainant and thereafter the burden is shifted upon the accused to prove otherwise.
Appreciation of evidence and marshalling of facts:
11. Issuance of cheque: The complainant has filed on record the original cheques, i.e., cheque bearing no. 000427 dated 11.11.2009 in the sum of Rs. 50,00,000/-; cheque bearing no. 000429 dated 11.11.2009 in the sum of Rs. 50,00,000/-; cheque bearing no. 000430 dated 11.11.2009in the sum of Rs. 50,00,000/-, all drawn on Yes Bank Ltd., Sector 19, Noida; cheque bearing no. 29864 dated 11.11.2009 in the sum Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -10- of Rs. 50,000/-; cheque bearing no. 29865 dated 11.11.2009 in the sum of Rs. 50,000/-; cheque bearing no. 29866 dated 11.11.2009 in the sum of Rs. 50,000/-; cheque bearing no. 29867 dated 11.11.2009 in the sum of Rs. 50,000/-; cheque bearing no. 29868 dated 11.11.2009 in the sum of Rs. 50,000/-; cheque bearing no. 29877 dated 11.11.2009 in the sum of Rs. 50,000/-; cheque bearing no. 29881 dated 11.11.2009 in the sum of Rs. 50,000/-; cheque bearing no. 29883 dated 11.11.2009 in the sum of Rs. 50,000/-; cheque bearing no. 29884 dated 11.11.2009 in the sum of Rs. 50,000/-, all drawn on Axis Bank Ltd., Sector 18, Noida (Ex. CW1/1 to Ex. CW1/12 respectively). It is not disputed that the cheques in question are not drawn on the account maintained by the accused no. 1 and it is impliedly admitted therefore that the accused no. 1 through its directors is the drawer of the cheques. Therefore, ingredient number I stands fulfilled in the present case.
12. Presentment and dishonor of cheque: As per the RBI guidelines, it is essential for the cheque in question be to presented within a period of three months from the date on which they are drawn and the same be returned as unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque. In the case at hand, the cheques in question were returned vide return memos dated 16.12.2009 (Ex. CW1/14 to Ex. CW1/22) due to the reason "Account Closed/Account does not exist." By implication thereof, the cheques were presented within three months and the same were returned. Therefore, Ingredient number III & IV stand fulfilled in the present case.
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -11-
14. Legal demand notice and payment by the accused thereof: The legal notice dated 08.01.2010 (Ex. CW1/23) was dispatched vide Speed Post (Ex. CW1/24), i.e., within 30 days of return of the bank memo indicating cheques in question being unpaid. The fact that the legal demand notice has made a clear and unambiguous demand for payment of the cheque in question is not disputed. The accused persons have admitted to the receipt of legal demand notice in notice u/s 251 CrPC. However, as per the presumption raised under Section 114 of Indian Evidence Act, 1872 and Section 27 of General Clauses Act, if the legal demand notice is sent at the correct address, then the same shall be deemed to have been duly served, as per the precedent laid down by the Hon'ble Supreme Court in C.C. Alavi Haji v. Palapetty Muhammed, (2007) 3 SCC (Cri). The ingredient number V is fulfilled by virtue of giving of legal demand notice within 30 days from the bank return memo. The receipt of legal demand notice by the accused is deemed to be admitted as per the discussion above.
15. Moving on, it is not disputed that the accused has not made the payment of the cheque amount within 15 days of the receipt of legal demand notice. Therefore, ingredient number VI also stands fulfilled in the present case.
Presumption under Section 118A read with Section 139, NI Act
16. The NI Act raises two presumptions in favour of the holder of the cheque, i.e., complainant; firstly, with regard to the issuance of cheque for consideration, as contained in Section 118(a) and secondly, with regard to the fact that the holder of cheque received the same for discharge, in whole or in part, of any debt or other liability, as contained in Section 139 of the Act. These presumptions shall end only Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -12- when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability etc. The Hon'ble Supreme Court of India in its judgment titled Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 held that a reverse onus clause usually imposes an evidentiary burden and not a persuasive burden and when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. It was further held that the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own. Once a probable defence is raised, then the onus is shifted to the complainant to establish that a legally enforceable liability existed in his favour and the burden of proof on the complainant in this case is that of "beyond reasonable doubt."
17. The accused can rebut the presumption as raised under Section 138, NI Act by:
(a) putting forth his defence at the time of framing of notice u/s 251 CrPC;
(b) cross-examining the complainant;
(c) when statement of accused is recorded u/s 313 CrPC;
(d) or by leading defence evidence, thereby demolishing the case of the complainant.
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -13- Rebuttal of Presumption by Accused as to existence of legally enforceable debt
18. In light of the above discussion, since the accused persons have admitted the signatures on the cheques and legal notice has also been deemed to be served, what is left to be seen is whether the accused persons have been able to rebut the presumption against them, i.e., whether the accused persons are able to raise a probable defence which creates doubts about the existence of a legally enforceable debt?
19. In the present case, in order to discharge his initial burden to prove the abovementioned ingredients, the complainant relied upon the affidavit of the complainant being Ex. CW1/A and placed on record documents mentioned hereinbefore. The defence of the accused number 2 is that the cheques in question are forged and fabricated and the same were issued to the son of the complainant; further the complainant has not given any amount to the directors or the accused company. The defence of accused number 3 is the same as accused number 2, however, in addition he has stated that he was not the director at the time of handing over of the cheques. The defence of accused number 4 and 5 is the same as accused number 2, however in addition they have stated that they were not the directors on the date of presentation of the cheques in question.
20. Before dealing with the defences of the accused person let us discuss the law regarding liability of a director of a company for a cheque issued by the accused company. Section 141 of the NI Act provides for a constructive liability on directors on behalf of the company, thereby creating a legal fiction. A legal fiction is created in the manner that by reason of the said provision, a person although not personally Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -14- liable for commission of such an offence, would be vicariously liable thereof. In the landmark judgment of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89 it has been held that (a) a director would not be liable simply because they are holding that position. It needs to be shown that the director being made liable should be in charge of and responsible for the conduct of the business of the company at the time of committing the offence; and (b) the persons holding the office of "Managing Director" or "Joint Managing Director", by virtue of the very nature of their role, renders them in charge of, and responsible for the conduct of the business of the company, can be made liable under Section 141. It is well settled that every director who is managing the affairs of the company at the time of commission of the offence is vicariously liable for the offence.
Discussion qua accused number 1, 2 and 3:-
21. The first leg of argument of the Ld. Counsel for accused number 3 is that accused number 3 is not the signatory and there are no specific averments against him in the complaint, thus the complaint is not maintainable against him. It is well settled law that to ensure vicarious liability of the director, the test is whether he was aware about the transaction and he was managing the affairs of the company. It is not mandated by law that only the directors who have signed the cheques shall be responsible. Further the complainant has made specific averments against the accused person in paragraph number 1 of the complaint.
22. The next leg of argument for the Ld. Counsel for accused number 3 is that the complainant was never cross examined on Ex. CW1/25 therefore this document cannot be used in evidence against him. The Ld. Counsel has relied upon Sunil Vs. Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -15- State Crl.A. 273/2009 DHC. The Ld. Counsel has rightly argued that without cross examination, the document cannot be used against the accused. However, in the present case the accused number 3 in his statement under Section 313 of CrPC has admitted his signatures on Ex. CW1/25. It is not the case of accused number 2 and 3 that their signatures were taken using coercion or by playing a fraud upon them.
Therefore, the moot question that arises is: in the absence of cross-examination of a witness on a document whether it can be used against the accused if he has admitted his signatures on the same. In the opinion of this court, the document can be used against the accused, had it been the case of the accused that he had not signed the agreement then the document could not have been used against him. The contents of Ex. CW1/25 clearly shows that the accused number 3 has admitted his liability. It is to be noted here that at the stage of framing of notice both accused number 2 and 3 had taken the defence that there was no transaction between the complainant and the accused company or any director, rather, the cheques in question have been misused by the complainant and there exists no liability. The defence taken by the accused is completely negated by Ex. CW1/25 which is the settlement agreement; the signatures on Ex. CW1/25 have been admitted by both accused number 2 and 3. Therefore, this argument of the Ld. Counsel holds no ground.
23. The next leg of argument for the Ld. Counsel for accused number 3 is that the complainant did not have financial capacity to advance the amount in question and she has not produced her ITR, any receipt or any other document to prove the transaction. The Ld. Counsel has relied upon APS Forex Service Private Limited vs Shakti International Fashion Linkers, AIR 2020 SC 945 to support his argument. The Ld. Counsel has rightly pointed out that no document has been produced Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -16- however, accused number 2 and 3 have admitted their signatures on Ex. CW1/25 which is the settlement agreement. When the accused persons have already admitted their liability, they cannot question the financial capacity of the complainant. The Ld. Counsel for the complainant has rightly pointed out that even if the transaction is in cash that does not mean that presumption under Section 139 of NI Act is rebutted. Thus, this argument of the Ld. Counsel does not hold any ground.
24. The last leg of argument for Ld. Counsel for accused number 2 and 3 is that after execution of the settlement agreement the present complaint is not maintainable. The Ld. Counsel has relied upon M/S Gimpex Private Limited vs Manoj Goel (2022) 11 SCC 705. to support his argument. Per contra, the Ld. Counsel for the complainant has stated that the complaint is maintainable as there can be two parallel complaints, moreover multiple cheques have been dishonoured so there is cause of action. The Hon'ble Supreme Court in Gimpex (Supra) has held:
When a complainant party enters into a compromise agreement with the accused, it may be for a multitude of reasons - higher compensation, faster recovery of money, uncertainty of trial and strength of the complaint, among others. A complainant enters into a settlement with open eyes and undertakes the risk of the accused failing to honour the cheques issued pursuant to the settlement, based on certain benefits that the settlement agreement postulates. Once parties have voluntarily entered into such an agreement and agree to abide by the consequences of Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -17- non-compliance of the settlement agreement, they cannot be allowed to reverse the effects of the agreement by pursuing both the original complaint and the subsequent complaint arising from such non-compliance. The settlement agreement subsumes the original complaint. Non-compliance of the terms of the settlement agreement or dishonour of cheques issued subsequent to it, would then give rise to a fresh cause of action attracting liability under Section 138 of the NI Act and other remedies under civil law and criminal law.
It may be noted that the settlement agreement Ex. CW1/25 was executed in 2011 and the present complaint has been filed in the year 2010. Perusal of the ordersheets reveal that the accused persons defaulted in making the payment as per the settlement and they stopped appearing in the present complaint as well. The intent of Gimpex (Supra) was to reduce litigation and not to take away the remedy of the complainant. In the present case a settlement agreement was reached in 2011, however, both the parties kept pursuing the matter even after the settlement agreement was reached. Moreover as per the last term of the settlement agreement, both the parties have mutually agreed that in case of default, the issues between the parties shall stand revived in its entirety. From the above discussion, it can be concluded that both the parties have mutually agreed that in case of default on part of the accused persons the present complaint shall be pursued. In lieu of the above discussion, this court concludes that there is no merit in the argument of Ld. Counsel Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -18- for the accused and the accused person cannot take the benefit of Gimpex (Supra) to avoid their liability.
Discussion qua accused number 4 and 5:-
25. The defence of accused number 4 and 5 is that they were not the directors at the time of presentation of the cheque. Both the accused persons have relied upon document Mark B which is Form 32, showing their date of resignation. At this stage it must be noted that no questions have been asked about the date of resignation from accused number 4 and 5 during their cross examination as DW1 and DW2. Therefore, it is right to conclude that both accused had resigned from the accused company on 22.09.2009, which is clearly before the date of presentation of the cheques in question i.e. 11.11.2009. This means that accused number 4 and 5 were not even the directors when the cause of action for filing a complaint under Section 138 NI Act arose. It has been clearly held in S.M.S. Pharmaceuticals Ltd. (Supra) that only the directors who are managing the affairs of the accused company at the time of commission i.e. at the time of occurrence of cause of action can be held vicariously liable under Section 141 of NI Act. Thus, accused number 4 and 5 cannot be held vicariously liable for the accused company.
26. In light of the discussion above, ingredient no. II has been fulfilled in the present case qua Accused no. 1 company through its directors Accused no. 2 Kuldeep Nandrajog and Accused no. 3 Satpal Nandrajog.
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016 -19-
27. Accordingly, Directors of Accused No.1 Octagon Builders & Promoters P Ltd., Kuldeep Nandrajog and Satpal Nandrajog are held guilty and are convicted of the offence under Section 138 of Negotiable Instruments Act. Further, as per the discussioin accused no.4 Sourabh Gandhi and accused no.5 Sanjiv Gupta are hereby acquitted of offence punishable U/s 138 of NI Act.
28. Copy of this judgment be given to the convicts free of cost as per rules.
PRONOUNCED IN THE OPEN COURT TODAY ON 4th May, 2026.
This judgment consists of 19 pages and all pages are duly signed by me.
Digitally signed by AASTHAAASTHA SHARMA SHARMA Date:
2026.05.04 17:51:53 +0530 (AASTHA SHARMA) JMFC(NI-Act)-03/SE/ SAKET COURTS NEW DELHI /04.05.2026.
Smt. Indu Rai vs. Octagon Builders Promoters Pvt. Ltd. & Ors. CT Cases 240/2016 614234/2016