[Cites 5, Cited by 0]
Bombay High Court
Jindal Drugs Private Limited Through ... vs State Of Maharashtra And Anr on 29 April, 2026
Author: N.J.Jamadar
Bench: N.J.Jamadar
2026:BHC-AS:20531
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
WRIT PETITION NO.5004 OF 2025
Jindal Drugs Pvt. Ltd. ... Petitioner
versus
The State of Maharashtra and Anr. ... Respondents
Mr. Rafique Dada, Sr. Advocate with Ms. Fereshte Sethna, Mr. Zubair Dada,
Mr. Mohit Tiwari, Mr. Prakalathan Bathey, Ms. Naomi Ting, Ms. Sushmita
Chauhan, Ms. Aditi Shrivastava and Ms. Tarang Saraogi i/by DMD Advocates,
for Petitioner.
Mrs. R.S.Tendulkar, APP for State.
Mr. Abad Ponda, Sr. Advocate with Ms. Isha Jani, Ms. Sachi Udeshi, Mr.
Sujith Nair i/by Wadia Ghandy and Co., for Respondent No.2.
SWAROOP
SHARAD CORAM: N.J.JAMADAR, J.
PHADKE
Digitally signed by
SWAROOP
SHARAD PHADKE
RESERVED ON : 22 JANUARY 2026
Date: 2026.04.29
22:40:08 +0530
PRONOUNCED ON : 29 APRIL 2026
JUDGMENT :
1. Rule. Rule made returnable forthwith, and, with the consent of the
learned Counsel for the parties, heard finally.
2. This Petition under Article 227 of the Constitution of India and Section
528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 assails the legality,
propriety and correctness of the judgment and order dated 28 August 2025
passed by the learned Additional Sessions Judge, Greater Mumbai, in
Criminal Revision Application No.123 of 2025, whereby the revision preferred
by the Petitioner (A1) against the order passed by the learned Metropolitan
Magistrate, 33rd Court, Ballard Pier, on 4 January 2024 of issue of process
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against the Petitioner (A1), and its directors for an offence punishable under
Section 138 read with 141 of the Negotiable Instruments Act, 1881, came to
be dismissed.
3. Shorn of unnecessary details, the background facts leading to this
Petition, can be stated as under :
3.1 The Petitioner (A1) is a Private Limited Company. Accused No.2 is
alleged to be a director and signatory to the subject cheque. Accused No.4 is
its Managing Director and accused Nos.3, 5 and 6 are the whole-time
directors of accused No.1 Company.
3.2 The petitioner (A1) is a family run company . A3 is the family patriarch.
Accused No.4 is the son of accused No.3. Rest of the accused are the wife
and children of accused No.4. Respondent No.2 - complainant is another
son of accused No.3.
3.3 In the wake of disputes among the family members of accused No.3, an
Arbitrator came to be appointed. On 4 January 2017, consent terms were
executed amongst accused Nos.2 to 6, and Krishnabai Jindal, the wife of
accused No.3, on the one part, and the Complainant and Jayshree Jindal,
wife of the complainant, on the other part. Pursuant thereto, a consent award
came to be passed on 11 January 2017.
3.4 The Petitioner Company is not a party to the said consent terms or
consent award.
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3.5 The Complainant asserts, under the consent award, the Complainant
and his branch was entitled to business and assets aggregating to the value
of Rs.400 Crores. The accused Nos.3 and 4 acknowledged that the said
amount was payable to the Complainant as a legal debt and liability. In
accordance with the consent award, the Complainant and his wife resigned as
directors of the Petitioner (A1), and the Complainant incorporated a new
Company "Jindal Cocoa Pvt. Ltd.".
3.6 The complainant asserts, the accused did not comply with the terms of
the consent award. Thus, the complainant and his wife were constrained to
file Execution Application being (L) No.1452 of 2017 before this Court to
execute the consent award. Instead of perfecting the title to the assets
agreed to be transferred to the Complainant and the Company incorporated
by the Complainant, the Petitioner (A1) instituted a suit being Suit No.314 of
2018 against the Complainant, his wife, and Jindal Cocoa Pvt. Ltd.
3.7 While the disputes were subjudice, in or around June 2018, accused
No.3 assured the complainant that all the accused intended to honour the
consent award and would settle all the disputes with the complainant and
offered him an additional amount of Rs.100 Crores or cash equivalent
("Additional Arrangement"). For the said purpose, accused No.3 handed over
the subject cheque drawn for Rs.37 Crores payable on 20 November 2020
and title documents of some immovable properties under a letter dated 19
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November 2020. However, upon presentment on 19 January 2021, the
subject cheque was returned unencashed with the remarks 'payment stopped
by the drawer'.
3.8 Under the consent award, and the additional arrangement, which was
agreed upon between the parties, the complainant claims the complainant
was still entitled to a further amount of Rs.84.98 Crores.
3.9 As the accused committed default in payment of the amount covered by
the cheque, despite service of the demand notice and took a false stand that
the subject cheque was drawn by way of a gift, the complainant was
constrained to file the complaint for the offence punishable under Section 138
read with 141 of the N.I.Act, 1881.
3.10 By an order dated 4 January 2024, learned Magistrate was persuaded
to issue process against the Petitioner and accused Nos.2 to 6.
3.11 Being aggrieved, the Petitioner preferred a revision before the learned
Sessions Judge raising multifold grounds. By the impugned judgment and
order dated 28 August 2025, the learned Additional Sessions Judge
dismissed the revision opining, inter alia, that, though the cheque did not
appear to have been issued in the discharge of the legal debt of the
Petitioner, yet, it appeared to be issued towards the discharge of the "other
liability". Learned Magistrate had applied his mind and recorded adequate
reasons for the issuance of process against the Petitioner and its directors,
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and, thus, no interference was warranted in the exercise of the revisional
jurisdiction.
3.11 Being further aggrieved, the Petitioner has invoked the writ and inherent
jurisdiction of this Court.
4. I have heard Mr. Rafique Dada, the learned Senior Advocate for the
Petitioner, and Mr. Aabad Ponda, learned Senior Advocate for Respondent
No.2 - complainant, at length. The learned Senior Advocates took the Court
through the pleadings and material on record.
5. Mr. Dada, learned Senior Advocate for the Petitioner, took a slew of
exceptions to the order passed by the learned Magistrate. First and foremost,
Mr. Dada would urge, the order passed by the learned Magistrate betrays
complete non-application of mind, and the learned Sessions Judge committed
an error in not correcting the error in the exercise of jurisdiction by the learned
Magistrate.
6. Secondly, Mr. Dada submitted that the Courts below lost sight of the
fact that there was no privity between the Petitioner and the complainant. The
Petitioner was not a party to the consent award. The Petitioner neither owed
any debt to, nor any liability towards, the complainant. Thus, the complainant
could not have laid any claim arising out of the consent award qua the
Petitioner company.
7. Thirdly, nothing was due on the date the cheque was allegedly drawn in
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favour of the complainant, even under the consent terms. On the contrary,
Mr. Dada submitted that, under the consent terms, the complainant was to
make a provision for the differential amount of Rs.99 Crores; being the
amount by which the value of the assets allotted to the complainant exceeded
the share of the complainant in the family assets. The complainant did not
comply with his part of the bargain. Consequently, even under the consent
terms, till the complainant complied with the conditions precedent, no amount
was due and payable to the complainant.
8. Fourthly, the additional arrangement, referred to in the complaint, under
which the subject cheque was allegedly drawn, was in the nature of a without
prejudice settlement. There was no final concluded settlement. The
complainant even did not comply with the conditions, subject to which the
amount was offered under the letter dated 19 November 2020. The
complainant did not give any acknowledgment of the settlement. At best the
purported additional arrangement, was an additional offer made by
Shrikrishan P. Jindal (A3), in the capacity of the father to the son - the
complainant, in the without prejudice negotiatons; which were not accepted by
the complainant. Thus, the complaint in question, on the basis of the cheque
which was drawn sans any debt or liability, is a clear abuse of the process of
the Court, and, therefore, the complaint deserves to be quashed qua the
Petitioner Company, submitted Mr. Dada.
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9. Per contra, Mr. Ponda, learned Senior Advocate for the Complainant
submitted that the scope of interference with an order of issuance of process
is further constricted by the dismissal of the revision application preferred by
the Petitioner by the impugned order. In such a situation, the powers under
Section 528 of the BNSS are required to be exercised even more sparingly
and cautiously.
10. Mr. Ponda would urge, the petition proceeds on an erroneous
impression that the cheque ought to have been drawn in discharge of the debt
or liability of the drawer himself. The offence under Section 138 of the Act,
1881 can also be committed where the cheque has been drawn in discharge
of "other liability", provided it is a legally enforceable. The liability need not be
that of the drawer himself.
11. Mr. Ponda further submitted that, at this juncture, this Court cannot
delve into the contentious issues whether the cheque was drawn in discharge
of legally enforceable or liability as that is a matter to be adjudicated at the
trial. The contentions raised by the Petitioner, according to Mr. Ponda, are in
the realm of defences, which cannot be considered while exercising the
jurisdiction under Section 528 of BNSS. The Petitioner (A1) would get an
efficacious opportunity to rebut the statutory presumptions at the trial.
12. Even otherwise, on the merits of the matter, Mr. Ponda submitted that
the material on record does not lend any support to the contention of the
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Petitioner that the subject cheque was issued as a part of without prejudice
settlement. Thus, the question whether the subject cheque was a part of
without prejudice settlement, or drawn merely by way of a gift, as contended
in reply to the statutory notice and also in the Petition, enters in the arena of
adjudicatory facts. Reference was made by Mr. Ponda to the documents
annexed to the Petition and the financial statements of the Petitioner to
demonstrate that the Petitioner, which is essentially a family Company, cannot
feign ignorance of the transactions, as was sought to be projected.
13. To begin with, there is not much controversy over the genesis of the
dispute. Relationship between the parties is also not in dispute. It is a
common ground that, in the wake of familial disputes, an Arbitrator came to be
appointed to resolve the disputes. Consent terms were executed before the
Arbitrator; pursuant to which consent award came to be passed on 11 January
2017. The consent award, however, did not put an end to the disputes and
the parties continued to be entangled in litigation.
14. It is the claim of the complainant that, in order to put an end to the
dispute, accused No.3, the father of the complainant and accused No.4,
assured the complainant that all the accused would settle all the disputes with
the complainant and offered him an additional Rs.100 Crores or cash
equivalent. Towards payment of the outstanding dues, Shrikrishan Jindal
(A3) handed over the subject cheque drawn by the Petitioner company. It
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was signed by Ishaan Jindal (A2) in the capacity of its director and authorized
signatory. Accused No.3 also handed over title documents of some
immovable properties as additional assets, under the letter dated 19
November 2020.
15. At this stage, there is not much controversy over the issue of the letter
dated 19 November 2020 by the accused No.3 to the complainant. Vide said
letter, as a part of agreement and understanding, the following assets and title
documents were either delivered to the complainant or were stated to be
already in the possession of the complainant :
Assets Value (INR
Crs.)
16. The cheque at Item No.4 is the subject cheque drawn for the sum of
Rs.37 Crores by the Petitioner company. Under the said letter, the
complainant was called upon to acknowledge receipt of possession of assets,
related property documents and cheque towards the full and final cash
payment.
17. In the Petition, the Petitioner asserts, the said cheque was drawn as
Shrikrishan (A3) had requested for a loan of the said amount to facilitate the
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payment thereof, as a gift to Respondent No.2 - complainant, on the
occasion of wedding of Respondent No.2's daughter. Thus, the cheque was
drawn. However, on the instructions of Shrikrishan (A3) that he did not intend
to avail the said loan on account of continuous discord with the complainant,
the Petitioner issued the stop payment instructions on 23 November 2020.
18. Evidently, the issue of cheque is not disputed. A counter version in
regard to the purpose for which the cheque was drawn by the Petitioner is
sought to be pressed into service. In this context, the principal submission
sought to be canvassed by Mr. Dada that the complainant had not drawn the
cheque towards the discharge of its debt or liability, deserves consideration.
19. The provisions of Section 138 are explicitly clear. Penal liability arises
when any cheque drawn for the discharge in whole or in part of any debt or
other liability is dishonoured and the other concomitant ingredients are
fulfilled. Section 139 incorporates the presumption of law that, unless contrary
is proved, the holder of a cheque received the cheque of the nature referred
to in Section 138 for the discharge, in whole or in part of any debt or "other
liability".
20. The use of the expressions "any cheque" and "any debt" or "other
liability" expands the scope of the offence envisaged by the provisions
contained in Section 138 of the Act. The legislature has not used the
expression "any cheque drawn in discharge of his/its debt or liability". Even if
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the cheque is drawn for the discharge of the liability of another person, if it is
legally enforceable, the drawer cannot be permitted to wriggle out of the penal
liability.
21. In the case of ICDS Ltd. V/s. Beena Shabeer and Anr. 1, the import of
the expressions "where any cheque" and "other liability" was expounded by
the Supreme Court in the following words :
"8. The High Court, as noticed above, did allow the Petition upon
a categorical finding that being a cheque from the guarantor it
could not be said to have been issued for the purpose of
discharging any debt or liability and the complaint under Section
138 of the Negotiable Instruments Act, 1881, thus cannot be
maintained.
9. As noticed hereinbefore, the principal reason for quashing of
the proceeding as also the complaint by the High Court was by
reason of the fact that Section 138 of the Act provides for issuance
of a cheque to another person towards the discharge in whole or in
part of any debt or liability and on the factual context, the High
Court came to a conclusion that issuance of the cheque cannot be
co-related for the purpose of discharging any debt or liability and
as such complaint under Section 138 cannot be maintainable.
10. The language, however, has been rather specific as regards
the intent of the legislature. The commencement of the Section
stands with the words "Where any cheque". The above noted three
words are of extreme significance, in particular, by reason of the
user of the word "any" the first three words suggest that in fact for
whatever reason if a cheque is drawn on an account maintained by
him with a banker in favour of another person for the discharge of
1 (2002) 6 SCC 426
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any debt or other liability, the highlighted words if read with the first
three words at the commencement of Section 138, leave no
manner of doubt that for whatever reason it may be, the liability
under this provision cannot be avoided in the event the same
stands returned by the banker unpaid. The legislature has been
careful enough to record not only discharge in whole or in part of
any debt but the same includes other liability as well. This aspect
of the matter has not been appreciated by the High Court, neither
been dealt with or even referred to in the impugned judgment.
11. The issue as regards the co-extensive liability of the guarantor
and the principal debtor, in our view, is totally out of the purview of
Section 138 of the Act, neither the same calls for any discussion
therein. The language of the Statute depicts the intent of the law-
makers to the effect that wherever there is a default on the part of
one in favour of another and in the event a cheque is issued in
discharge of any debt or other liability there cannot be any
restriction or embargo in the matter of application of the provisions
o Section 138 of the Act: 'Any cheque' and 'other liability' are the
two key expressions which stands as clarifying the legislative
intent so as to bring the factual context within the ambit of the
provisions of the Statute. Any contra interpretation would defeat
the intent of the legislature. The High Court, it seems, got carried
away by the issue of guarantee and guarantor's liability and thus
has overlooked the true intent and purport of Section 138 of the
Act. The judgments recorded in the order of the High Court do not
have any relevance in the contextual facts and the same thus does
not lend any assistance to the contentions raised by the
respondents." (emphasis supplied)
22. Following the aforesaid pronouncement, in another judgment in the
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case of Bijoy Kumar Moni V/s. Paresh Manna and Anr. 2, the Supreme
Court further clarified that, Section 138 of the NI Act does not envisage that
only those cases where a cheque was issued towards the discharge of the
personal liability of the drawer towards the payee gets dishonoured would
come within the ambit of the provision. The observations in paragraph Nos.52
are instructive and hence extracted below:
"52. Section 138 of the NI Act does not envisage that only those
cases where a cheque issued towards the discharge of the
personal liability of the drawer towards the payee gets
dishonoured would come within the ambit of the provision. The
expression "of any debt or other liability" appearing in Section
138 when read with the Explanation to the provision is wide
enough to bring any debt or liability which is legally enforceable
within its fold. Thus, the requirement under the provision is that
the debt or any other liability has to be legally enforceable and
the emphasis is not on the existence of such debt or other liability
between the drawer and the payee. A number of decisions of this
Court have clarified that even those cases where a person
assumes the responsibility of discharging the debt of some other
person, and in furtherance thereof draws a cheque on an
account maintained by him, which subsequently gets
dishonoured upon being presented before the drawee, would be
covered by Section 138 if the payee is able to establish that there
was some sort of an arrangement by way of which the debt was
assumed by the drawer."
(Emphasis supplied)
2 2024 SCC Online SC 3833
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23. In view of the aforesaid position in law, the substratum of the
submission of Mr. Dada that, in the absence of privity between the Petitioner
(A1) and the complainant, and the Petitioner (A1) not being a party to the
consent award and, consequently, not being liable to satisfy the consent
award, the Petitioner could not have been prosecuted for an offence
punishable under Section 138 of the Act, 1881, though the subject cheque
was drawn on an account maintained by the Petitioner (A1), falls through.
24. As a second limb of the submission, Mr. Dada would urge, even
otherwise, nothing was due and payable under the consent award on the date
the subject cheque was drawn for a sum of Rs.37 Crores. A reference was
made to clause 4 of the consent award, under which the complainant was to
make good the excess amount of Rs.99.25 Crores and, only thereafter,
business transfer under the consent terms was to be effected by slump sale
or a business transfer agreement.
25. I am afraid, at this juncture, and in this proceeding, this Court would be
justified in delving into all these issues, including the explanation sought to be
offered that the subject cheque was issued by way of a gift by Shrikrishan
(A3). The financial statements of Petitioner (A1) do indicate that the Petitioner
(A1) was fully cognizant of the terms of settlement amongst the directors of
the Petitioner (A1), on the one part, and the complainant and his family
members and the proposed company, on the other part. The financial
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statements for the year ending March 2019, thus, inter alia, record that, under
the family settlement arrangement, the aggregate value of assets agreed to
be transferred was higher than the complainant's share of entitlement by
approximately 99.25 crores, and, thus, adjusting for this amount, book value
of net assets to be transferred has been fully provided for. The Petitioner
(A1), thus, prima facie, cannot completely disassociate itself from the consent
award, as if it had no knowledge whatsoever with the said consent award.
These contentions are essentially the defences of the Petitioner (A1) which
the Petitioner would be required to pursue at the trial to dislodge the
presumptions contained in sections 118, 138 and 139 of the Act, 1881.
26. The submission of Mr. Dada that the subject cheque was delivered by
way of 'without prejudice arrangement' between the parties is again a matter
which falls in the arena of factual controversy. At this juncture, the unrebutted
assertions in the complaint and the documents annexed with the complaint
can only be taken into account to appreciate whether a prima facie case for
an offence punishable under Section 138 read with Section 141 of the Act, is
made out. All these contentions and documents, sought to be relied upon in
support of such contentions, which are in the nature of defences, cannot be
legitimately delved into. Nor can be it said that the pleadings and documents
in other proceedings between the parties constitute documents of such
unimpeachable and sterling quality that this court, while exercising power
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under Section 528 of BNSS 2023, would be justified in basing its findings on
such documents.
27. Having considered the matter of sustainability of the impugned order of
issue of process through the prism of prima facie case, this Court is inclined
to hold that the view of the learned Magistrate and the learned Additional
Sessions Judge that, prima facie the cheque seemed to have been drawn in
discharge of "other liability", appears sustainable.
28. Multitude of defences sought to be raised by Mr. Dada are essentially
the matters for trial. Those grounds, at this stage, do not sustain a prayer for
quashing of the complaint qua the Petitioner (A1).
29. Hence, the following order :
ORDER
(i) The Writ Petition stands dismissed.
(ii) Rule discharged.
(iii) No costs.
(iv) It is, however, clarified that the observations made
hereinabove are confined to determine the prayer of quashing the
complaint, and the trial court shall decide the complaint on its own
merits and in accordance with law without being influenced by any of
the aforesaid observations.
( N.J.JAMADAR, J. )
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30. At this stage, Ms. Sethna, learned Counsel for the Petitioner, seeks
stay to the execution and operation of this order.
31. Since the challenge in the Petition is to an order passed by the learned
Additional Sessions Judge, thereby dismissing the revision application against
the order of issuance of process, the prayer for stay does not merit
countenance. Hence, oral application for stay stands rejected.
( N.J.JAMADAR, J. )
