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IN THE HIGH COURT OF DELHI AT NEW DELHI
NEENA BANSAL KRISHNA, J.
GBL Chemicals Limited – Appellant
Versus
State of NCT of Delhi – Respondent
Crl. M.C. Nos. 2155, 2156 of 2025, Crl. M.A. Nos. 9696, 9701, 23020 of 2025
Decided On : 29-01-2026
| Table of Content |
|---|
| 1. overview of the factual background. (Para 1 , 2 , 3 , 4 , 5) |
| 2. summary of the legal actions initiated. (Para 6 , 7 , 8 , 9) |
| 3. claims of fraud and liability of the directors. (Para 10 , 11 , 12 , 13) |
| 4. opposition and contentions raised by the complainant. (Para 14 , 15 , 16 , 17) |
| 5. defenses related to liability and designation. (Para 18 , 19 , 20 , 21) |
| 6. issues surrounding trial procedures and forum shopping. (Para 22 , 23 , 24 , 25) |
| 7. vicarious liability under the ni act. (Para 32 , 33 , 34 , 35) |
| 8. legal requirements for holding directors liable. (Para 36 , 37 , 38) |
| 9. implications of dropping the signatory. (Para 39 , 40 , 41 , 42) |
| 10. nature of liability regardless of signature status. (Para 43 , 44 , 45) |
| 11. discussion on completion of cheque dishonor offense. (Para 46 , 47 , 48) |
| 12. the notion of corporate liability and continuance of proceedings. (Para 49 , 50 , 51) |
| 13. discussion on the mastermind theory as a defense. (Para 52 , 53) |
| 14. evaluation of prima facie case under section 138 ni act. (Para 54 , 55 , 56) |
| 15. validity of instrument and violation of bank mandate. (Para 57 , 58 , 59) |
| 16. position of a holder in due course. (Para 60 , 61) |
| 17. debate on company liability relative to internal disputes. (Para 62 , 63) |
| 18. discussion on enforceable debt and specifics of liability. (Para 64 , 65 , 66) |
| 19. arguments on cheque status and enforcement. (Para 67 , 68 , 69) |
| 20. implications of classification of cheques. (Para 70 , 71 , 72) |
| 21. conclusion on disputed facts and necessity for trial. (Para 73 , 74 , 75) |
| 22. final conclusion and outcome of the petitions. (Para 76 , 77 , 78) |
JUDGMENT :
NEENA BANSAL KRISHNA, J.
1. By way of the aforesaid two Petitions under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (hereinafter referred to as “ BNSS ”) read with Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as “Cr.P.C”) The Petitioners seek the quashing of the Summoning Orders dated 04.01.2025 passed by the Learned Judicial Magistrate, New Delhi (hereinafter referred to as the “Ld. Trial Court”) in Complaint Case No. 5688/2024 titled M/s Progfin Private Limited vs. GBL Chemicals Ltd. & Ors. and Complaint Case No. 6285/2024 titled M/s Progfin Private Limited vs. Ganesh Benzoplast Ltd & Ors. respectively under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.
2. Briefly stated, the case Respondent No. 2/M/s Progfin Private Limited (hereinafter referred to as the "Complainant"), a Non-Banking Financial Company ("NBFC"), extended a credit facility to Petitioner No. 1 in Crl. M.C. 2155/2025, GBL Chemical Limited (hereinafter referred to as the "Borrower").
3. In Crl. M.C. 2156/2025, Petitioner No. 1 Ganesh Benzoplast Limited (hereinafter referred to as the "Corporate Guarantor"), being the holding Company, stood as a Corporate Guarantor for the said facility.
4. A Facility Agreement dated 26.10.2023 was executed between the parties for a principal amount of Rs. 10,00,00,000/-), which was subsequently enhanced by an Addendum dated 30.01.2024. The Complainant disbursed a total sum of approximately Rs. 21.54 Crores (after margin deductions) to the Borrower. It is alleged by the Complainant that as of 31.03.2024, an amount of Rs. 15,44,80,484/- remained unpaid. To discharge this liability, cheque No. 000396 dated 29.04.2024, for an amount of Rs. 15,44,80,484/-, drawn on HDFC Bank, J.B. Nagar, Mumbai, signed by Accused No. 2/Mr. Ramakant Pilani, was issued which on presentation, was dishonoured on 30.04.2024 for the reason "drawer's signature differs". The Petitioners have asserted that this does not constitute an offence under Section 138 NI Act qua the Company when the signature was unauthorized.
5. Further, M/s Ganesh Benzoplast Limited stood as a corporate guarantor for the credit facilities extended to its sister concern, GBL Chemical Ltd., and issued a security Cheque No. 501951 for Rs. 13,83,86,781/-, under the signature of Mr. Ramakant Pilani. Upon presentation, t
Vicarious liability of company directors under Section 141 of the NI Act is established if directors were in charge of the business, regardless of the signatory's involvement and claims of internal f....
The company must be summoned as an accused in Section 138 N.I. Act cases for proceedings against its Directors to be valid.
Point of Law : On face of the record, participation of applicants is not found in the day to day functioning of Company, hence, on basis of the version that defence would be seen at the time of evide....
For maintaining a prosecution under Section 138 of the Negotiable Instruments Act, arraigning of the company as an accused is imperative. The person in charge of the company cannot be held liable if ....
Directors and company secretary can be held liable under Section 138 and 141 of the NI Act if they are responsible for the day-to-day affairs of the company or if their negligence, connivance, or con....
Vicarious liability under the Negotiable Instruments Act requires proof of a director's active involvement and responsibility in the company's operations, not merely their title.
The main legal point established in the judgment is that the role of each accused in the commission of the offence can only be determined during the trial and cannot be examined in detail by the cour....
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