Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(Del) 7638

IN THE HIGH COURT OF DELHI AT NEW DELHI
Amit Mahajan, J
NISHANT MUKUL – Appellant
Versus
NISCHAL AGGARWAL – Respondent
CRL.M.C. 642/2020 & CRL.M.A. 2674/2020 | CRL.M.C. 643/2020 & CRL.M.A. 2686/2020 | CRL.M.C. 656/2020 & CRL.M.A. 2724/2020 | CRL.M.C. 657/2020 & CRL.M.A. 2728/2020 | CRL.M.C. 660/2020 & CRL.M.A. 2737/2020

Advocates:
For the Petitioner: Mr. Pramod Kumar Dubey, Sr. Adv., Mr. Manoj Sharma, Mr. Amit Sinha, Mr. Prince Kumar, Ms. Amrita Vats, Mr. Ankit Vashisht, Mr. Satyam Sharma
For the Respondent: Mr. Siddharth Khattar, Mr. Divij Andley, Mr. Sanket Kumar, Mr. Gaurav Raj Sharma

A director can be held vicariously liable under the NI Act for dishonored cheques if they were in charge during the relevant time; factual disputes should be resolved in trial, not pre-trial.

Headnote:(A) Code of Criminal Procedure, 1973 - Section 482 - Negotiable Instruments Act, 1881 - Sections 138, 141 - Quashing of summoning orders - Petitioner sought quashing of various summoning orders on grounds including lack of directorial responsibility and no specific averments made against him - Court reaffirmed standard for quashing complaints, emphasizing that a director could be held liable if they were in charge at the time of offence, and that factual disputes should be resolved at trial rather than at the quashing stage. (Paras 20-34)

(B) Directors’ Liability - Vicarious liability of directors highlighted under Section 141 of the NI Act - Basic averments in the complaint establish liability unless disproven by unimpeachable evidence during trial - Importance of being a director during the relevant time for application of NI Act provisions confirmed. (Paras 22-30)

Table of Content
1. respondent's complaint regarding dishonored cheques (Para 1 , 2 , 3 , 4 , 5)
2. arguments regarding directorial liability (Para 12 , 13 , 16 , 18)
3. court's power to quash complaints at pre-trial stage (Para 20 , 21 , 22 , 30)
4. conclusion upholding summons and dismissing petitions (Para 34 , 35)

JUDGMENT

1. The present petitions have been filed by the petitioner under Section 482 of the Code of Criminal procedure, 1973 (‘CrPC’) seeking quashing of the summoning orders dated 17.02.2017 in Complaint Case Nos. 9489/2017 and 9492/2017, 06.09.2017 in Complaint Case Nos. 13653/2017 and 13674/2017 and 16.10.2017 in Complaint Case No. 14166/2017. The petitioner also seeks the consequential relief of quashing of the aforesaid complaint cases filed under Section 138 of the Negotiable Instruments Act, 1881 (‘NI Act’) read with Section s 141 /142 of the NI Act.

2. Briefly stated, it is the case of the respondent/complainant that he is the sole proprietor of M/s Shree Krishna Grit Company which is engaged in the business of trading cement, maurang, bajri, river sands and grit. It is alleged that the accused company approached the company of the respondent and placed certain purchase orders with it.

3. It is alleged that the company of the respondent timely delivered the goods to the accused company, whereafter, it raised invoices amounting to ?30,60,424/- against the accused company.

4. It is alleged that in discharge of its liability the accused company paid a sum of ?4,00,000/- to the company of the respondent through banking channels. The accused company, thereafter, issued 13 post-dated cheques for a total sum of ?26,60,424/- all drawn on State Bank of Patiala. It is alleged that the directors of the accused company assured the respondent that the aforesaid cheques will be honored at the time of presentation.

5. It is alleged that when the respondent presented the aforesaid cheques for presentation out of the 13 cheques issued by the accused company, cheque bearing No. 075991 dated 31.07.2016 for a sum of ?2,00,000/- was honored and rest of the cheques were dishonored.

6. It is alleged that cheque bearing No. 075992 dated 31.08.2016 for a sum of ?2,00,000/- was returned vide return memo dated 15.11.2016, cheques bearing Nos. 075993 dated 31.09.2016 and 075994 dated 31.10.2016 for a sum of ?2,00,000/- each were returned vide return memo dated 15.11.2016, cheques bearing Nos. 075995 dated 30.11.2016, 075996 dated 31.12.2016 and 075997 dated 31.01.2017 for a sum of ?2,00,000/- each were returned vide return memo dated 16.02.2017, cheques bearing Nos. 075998 dated 28.02.2017, 075999 dated 31.03.2017 and 076000 dated 30.04.2017 for a sum of ?2,00,000/- each were returned vide return memo dated 06.05.2017, cheques bearing Nos. 076001 dated 31.05.2017, 076002 dated 30.06.2017 for a sum of ?2,00,000/- each and cheque bearing No. 076003 dated 31.07.2017 for a sum of ?2,60,424/- were returned vide return memo dated 14.08.2017.

7. The respondent, thereafter, issued statutory legal demand notices to the directors of the accused company demanding payment of the aforesaid amount, and upon their failure to do so, the respondent filed the subject complaints before the learned Metropolitan Magistrate (‘MM’) and arrayed the petitioner as Accused No. 5.

8. As noted above, the learned MM by the aforesaid orders summoned the petitioner for the offence under Section 138 of the NI Act.

9. Aggrieved by the aforesaid summoning orders, the petitioner preferred an application before the learned MM seeking discharge. The learned MM vide order dated 13.08.2019 dismissed the application filed by the petitioner noting that, proceedings under NI Act are summary in nature and a magistrate does not have the power to discharge the accused in summary trial cases.

10. The petitioner, thereafter, filed revision petitions before the learned Additional Sessions Judge (‘ASJ’) challenging the aforesaid order passed by the learned MM. The learned ASJ vide order dated 0

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