Gujarat High Court
Dipakkumar Ratilal Deliwala vs State Of Gujarat on 26 September, 2025
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Reserved On : 08/09/2025
Pronounced On : 26/09/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 11984 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J. C. DOSHI
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Approved for Reporting Yes No
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DIPAKKUMAR RATILAL DELIWALA & ANR.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MS HETVI H SANCHETI(5618) for the Applicant(s) No. 1,2
ADITYA A GUPTA(7875) for the Respondent(s) No. 2
MR. CHINTAN DAVE ADDL. PUBLIC PROSECUTOR for the Respondent(s)
No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
CAV JUDGMENT
1. The instant petition filed under Article 226 and 227 of
the Constitution of India, 1950, read with Section 482 of
the Criminal Procedure Code ( Cr.P.C.) 1973, seeks
following reliefs :
(a) To allow this petition;
(b) To issue a writ of mandamus and/or any other
appropriate writ, order or direction quashing and
setting aside the Criminal Case No.89623 of 2019
pending before the learned Additional Chief
Metropolitan Magistrate (NI Act) Court No.37,
Ahmedabad qua the petitioners herein and pass all
other consequential and further orders in that
regard;
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(c) To direct the respondent No.2 to bear the cost of
the proceedings that have been required to be
instituted on account of the malice of the
respondent No.2;
(d) Pending admission, hearing and final disposal
of the present petition, be pleased to stay all further
proceedings of Criminal Case No.89623 of 2019
pending before the learned Additional Chief
Metropolitan Magistrate (NI Act) Court No.37,
Ahmedabad qua the petitioners herein;
(e) Pending admission, hearing and disposal of the
present petition, be pleased to direct the respondent
No.2 to withdraw the Criminal Case
No.COMPL/129(C) of 2018 pending before the
learned Magistrate Court, at Bhojpur, Bihar;
(f) To pass any other and further orders as may be
deemed fit and proper to this Hon'ble Court.
2. Brief facts are as under :
2.1 The respondent has filed the criminal complaint
under Section 138 read with Section 141 of the
Negotiable Instruments Act ( for short the 'N.I Act')
against the petitioners and its Director . According to the
respondent No.2 the complainant and the petitioners
were engaged in a business relationship pursuant to
which since the petitioners-company was in need of Rs.
9 crores, the complainant had tendered a loan of Rs. 9
crores to the petitioners between August to November
2011. In the year 2017 when the amount of loan was
reclaimed by the respondent, the petitioners issued a
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cheque on 14.11.2017, bearing No. 679730 drawn from
the account No. 33001720194. The complainant
deposited the said cheque on 15.11.2017 but however,
the cheque was not encashed and returned with the
endorsement "account closed".
2.2 According to the complainant, he had approached
the petitioner, however, no positive response has been
found. Therefore, a statutory notice under Section 138 of
the N.I Act was issued to the petitioners and its Director
on 13.12.2017 which was served on 15.12.2017. Evasive
reply of the notice was given by the petitioners and its
Director on 29.12.2017. Since the petitioners and its
Director have not paid the amount of the cheque which
was returned unpaid at the end of statutory time limit,
the complainant had filed the criminal complaint under
Section 138 read with section 141 of the N.I Act which
was registered as Criminal Inquiry case No. 100 of 2018
before the learned Additional Chief Metropolitan
Magistrate Court No. 37, Ahmedabad who after
recording the verification of the complainant issued
process for the offence punishable under Section 138
read with section 141 of the N.I Act against the
petitioners and its Director.
2.3 Being aggrieved and dissatisfied by the issuance of
the process aforesaid, the petitioners are before this
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Court by way of this petition by claiming the aforesaid
relief. According to the petitioner the parallel incident
took place between the parties whereby a settlement was
arrived by tri-partite compromise dated 9.6.2018 between
Mr. Ritesh Dilipbhai Kotak, complainant, Bharat Ratilal
Deliwala one of the accused and confirming party Hitesh
Ishwarlal Thakkar. According to the petitioner the
dispute was resolved by deciding that sale deed for some
chunk of land executed in favour of the confirming party,
Mr. Hitesh Ishwarlal Thakkar shall be executed.
According to the petitioner following the compromise
arrived between the parties the sale deed of chunk of
land was executed in the favour of Hitesh Ishwarlal
Thakkar. Yet the complainant did not follow other
conditions of compromise to withdraw the criminal
complaint, hence, this petition is also filed under Article
226 of the Constitution of India, claiming relief to enforce
the complainant to withdraw the complaint.
3. Heard learned advocate Mr. Narendra Jain for
learned advocate Mr. Hetvi Sancheti for the petitioner,
learned advocate Mr. Aditya Gupta for respondent No.2
complainant and learned APP Mr. Chintan Dave for the
respondent State and have perused the record.
4. Learned advocate Mr.Jain appearing for petitioner
made two fold submissions firstly referring to the
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judgment in the case of A.C. Narayanan Vs. State of
Maharashtra reported in (2015) 12 SCC 203,
submitted that the complaint under Section 138 of the
N.I Act has been filed through, power of attorney.
However, in the body of the complaint it is not
specifically stated that the power of attorney holder has
personal knowledge of the transaction impugned in the
complaint. He would submit that since the essential
ingredients of filing of the complaint by power of
attorney on behalf of the petitioner is missing, the
complaint filed by the power of attorney holder is not
maintainable.
4.1 Secondly, learned advocate Mr. Jain submitted that
tripartite compromise arrived at between the parties
(Annexure B) is clear as crystal. The petitioner was
under obligation to execute the sale deed for some
chunk of land in favour of confirming party Hiteshbhai
Ishwarlal Thakkar. He would further submit that
according to the agreement/settlement arrived between
the parties, once the sale deed is executed for chunk of
land in favour of confirming party Hiteshbhai Thakkar,
the complainant was required to withdraw the proceeding
under the N.I Act. However, the complainant turned away
from his promise made in the compromise and
settlement, despite the sale deed for the chunk of land
having executed in favour of the Hiteshbhai I. Thakkar.
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Therefore, he submitted that this Court may exercise
power under Article 226 of the Constitution of India and
enforce the compromise arrived at between the parties
and compel the complainant to withdraw the
proceedings. Alternatively, it is argued that whereby the
petitioner discharging his obligation by specifically
performing his part slated in compromise in regard to the
dispute since the compromise has been arrived at
between the parties whereby the petitioner discharging
his obligation by specifically performing his part slated
in compromise in regard to the dispute raised in the
criminal complaint, the Court may close the proceedings
of the complaint.
5. It was further argued by learned advocate Mr. Jain
that the petition has filed in the year 2021 with specific
averments about the compromise between the parties,
however, it has not been denied by the respondent by
filing any reply on the affidavit thus, it will amount to
acceptance of the plea that the parties have settled the
despite through compromise amongst them outside the
Court, pursuant to which the petitioners have performed
their part of the compromise by executing sale deed for
chunk of land. Hereafter, the complainant being a part
of the compromise/settlement was required to act upon
his part of the compromise deed and to withdraw the
criminal complaint filed under Section 138 of the N.I
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Act, but as he failed to perform his part of compromise,
this Court, alternatively, may exercise the power and
quash the complaint impugned.
5.1 In the premise of the aforesaid argument, learned
advocate Mr.Jain submitted to allow this petition and to
grant relief prayed in the petition.
6. Per contra learned advocate Mr. Aditya Gupta
appearing for the private respondent-complainant
vehemently argued that POA has filed affidavit during the
inquiry proceeding where it is specifically stated that the
power of attorney holder has personal knowledge of the
transaction between the complainant and the accused being
the subject matter of the complaint. He referred to page 30
of the compilation to buttress his submission. Learned
advocate Mr. Aditya Gupta further submits that whether the
power of attorney holder has personal knowledge with
regard to the transaction between the parties, is the subject
matter of trial and can be established during the trial
however, it cannot be the basis to quash the complaint.
6.1 Learned advocate Mr. Gupta further argued that the
settlement and compromise admittedly was arrived between
the parties but it was not actuated as per the terms and
conditions. He would submit that according to the
settlement and compromise arrived between the parties, for
some chunk of land, sale deed was required to be executed
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in favour of the nominee of the complainant. The title of the
land was required to be made clear and the purchaser was
required to put in the possession of the chunk of the land.
Learned advocate Mr. Gupta submitted that though the
sale deed was executed in favour of the nominee of the
complainant for some chunk of land the title of it has not
been made clear nor the nominee has been put into
possession. Therefore, Mr. Gupta learned advocate has
submitted that since the petitioner had failed to cohere to
the terms and conditions of the settlement and compromise,
rather fall out the petitioner cannot say that pursuant to
arriving at settlement and compromise, rather fall out the
complainant should withdraw the complaint and
alternatively, the complaint be quashed. He would submit
that whether the terms and conditions of the settlement and
compromise is acted upon or not is also subject matter of
the trial and can be established during the trial. It cannot
be a basis to quash the complaint under Section 138 of the
N.I Act.
6.2 Upon above submissions learned advocate Mr. Gupta
submit to dismiss this petition.
7. Learned APP considering the aspect that the dispute is
private between the complainant and the accused submit to
pass necessary order.
8. Regard being made to the rival submissions by learned
advocates for both the sides and considering the record of
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case the first contention raised by learned advocate Mr.
Jain, placing reliance upon the case of A.C. Narayanan Vs.
State of Maharashtra (supra), that complainant filed
through POA, since lacks necessary averments of POA has
personal knowledge of transaction. The copy of the
complaint is placed on record at (Annexure A). The body of
the complaint specifically states that Nileshkumar Dilipbhai
Kotak has filed the complaint in capacity of the power of
attorney holder of Riteshbhai Dilipbhai Kotak. The criminal
complaint was registered as Criminal Inquiry No. 100 of
2018. The complainant has filed affidavit in support of his
complaint at page 30. In this affidavit, the power of
attorney holder has specifically stated on oath that he has
personal knowledge of transaction that took place with
accused. He has been authorised by the principal to
prosecute the accused and also produced the copy of the
power of attorney along with the affidavit.
9 In Naresh Potteries Vs Aarti Industries reported in
AIR 2025 SC, 886 held that if person filing complaint
under Section 138 of the N.I Act other than payee and
accused raised dispute of not having personal knowledge,
same can be decided during trial. Relevant para is extracted
as under :
"21. It could thus be seen that this Court distinguished
the position of a complainant ling a complaint on behalf
of an individual from the position of a complainant ling a
complaint on behalf of a company. This Court claried that
although the decision in the case of A.C. Narayanan
(supra) had taken centre stage, the facts involved in that
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case were in the background that the complaint led was
based on the power of attorney issued by the 'payee'
who was also an individual. In such cases, the manner
in which the power was being exercised had to be
explicitly stated. However, this Court claried that the
position that would emerge when the complainant is a
company or a corporate entity will have to be viewed
from a different standpoint. This Court held that when
the company is the payee of the cheque based on which
a complaint is led under Section 138 of the NI Act, the
complainant should necessarily be the company which is
to be represented by an authorised employee and in such
a situation, the indication in the complaint and the sworn
statement, oral or by adavit, to the effect that
complainant is represented by an authorised person who
has knowledge, would be sucient. Drawing a distinction
from the "specic assertion as to the knowledge of the
power-of-attorney holder" which is to be "stated
explicitly" as categorically laid down in A.C. Narayanan
(supra), this Court held that in cases where the
payee/complainant is the company, all that is necessary
to be demonstrated before the Magistrate is that the
complaint is led in the name of the payee and if the
complaint is being prosecuted by someone other than the
payee, he has knowledge of the contents of the complaint
and he is duly authorised to prosecute the complaint.
This Court further claried that if there is any dispute with
regard to the person prosecuting the complaint not being
authorised or it is to be demonstrated that the
complainant had no knowledge of the transaction, and
as such could not have instituted and prosecuted the
complaint, it would be open for the accused person to
dispute the position and establish the same during the
course of the trial. However, dismissal or quashing of the
complaint at the threshold would not be justied. It was
held that the issue of proper authorisation and
knowledge can only be an issue for trial.
10. In the aforesaid circumstances, it is incorrect to say
that the private complaint is lacking the essential
averments with regard to the power of attorney having
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personal knowledge. The body of the complaint specifically
states that it has been filed by the power of attorney holder.
In the affidavit filed along with the private complaint
annexed with the complaint shows that the power of
attorney holder has personal knowledge with regard to the
transaction mentioned in the complaint. Even otherwise
such contention are not the reason to quash the complaint
at the threshhold. In view of the aforesaid finding the first
submission of learned advocate Mr. Jain failed to sustain.
As far as second submission with regard to settlement and
compromise arrived at between the parties pursuant to
which the complainant was required to withdraw the
complaint and this Court in exercise of power under Article
226 of the Constitution of India to enforce the compromise
arrived at between the parties and quash the complaint, it is
apt to observe that Court under the jurisdiction of Section
482 of the CRPC or under Article 226 of the Constitution of
India cannot enforce any party to perform his part of the
compromise settlement. The party seeking relief of specific
performance on the part of the contract is required to
approach the Civil Court concerned.
11. Learned advocate Mr. Gupta referred to para 4 a and 4
b of the compromise/settlement arrived at between the
parties and would submit that the compromise was also a
conditional one. The complaint was not only required to
execute the sale deed for chunk of land in favour of Hitesh
Ishwarbhai Thakkar but was also required to clear the title
of the chunk of land and was required to put the
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complainant or his nominee into the possession of the land.
Learned advocate Mr. Gupta submit that though the sale
deed was executed the residuary part of clearing the title
and putting Hitesh Thakkar into the possession of the
chunk of land has not been complied with by the petitioner.
He would submit that since the compromise settlement is
only partially held fast , the complainant has not
withdrawn the criminal proceedings filed against the
petitioner.
12. This Court in the aforesaid factual aspects is of the
opinion that whether the compromise or settlement arrived
at between the parties or actuated in its terms and
conditions and whether pursuant to which the complainant
was required to withdraw the complaint can be determined
in the trial. They are disputed questions of facts and cannot
be gone at this stage of quashing complaint. This Court
either under Section 482 of the CPRC or under Article 226
of the Constitution of India cannot enfore the party or to
adhere to the settlement of the compromise made between
them outside the Court. This Court cannot hold a mini-trial
at the time of quashing of complaint and to determine the
issue whether compromise/settlement has been arrived at
between the parties? Whether it is acted upon or not?
Whether it is conditional and whether its conditions are
fulfilled? All these questions are questions to be raised and
decided during trial and they cannot be agitated and argued
in quashing the proceeding.
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13. In another decision in the case of Dharambeer kumar
Singh Vs. State of Jharkhand 2025(1) SCC 392, the
Apex Court held that the Court cannot conduct mini trial at
this juncture to appreciate the rival submissions made by
the petitioner which could be a good defense at the trial.
Relevant observartions are as under :-
"5. This Court in a series of judgements has held that
while exercising inherent jurisdiction under Section 482
of Criminal Procedure Code, 1973, the High Court is not
supposed to hold a mini trial. A profitable reference can
be made to the judgment in the case of CBI vs Aryan
Singh (2023 SCC Online SC 379).
Relevant paragraph from the judgment is extracted
hereunder:
"Para 10...As per the cardinal principle of law, at the
stage of discharge and/or quashing of the criminal
proceedings, while exercising the powers under Section
482 Cr. P.C., the Court is not required to conduct the mini
trial.
At the stage of discharge and/or while exercising the
powers under Section 482 Cr. P.C., the Court has a very
limited jurisdiction and is required to consider "whether
any sufficient material is available to proceed further
against the accused for which the accused is required to
be tried or not".
14. I may also refer to the decision of the Apex Court in
the case of Kaptan Singh Vs. State of Uttar Pradesh and
Ors. (2021) 9 SCC 35. Relevant para is read as under :
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9.2 In the case of Dhruvaram Murlidhar Sonar Vs.State
of Maharashra (Supra) after considering the decisions of
this Court in Bhajan Lal (Supra), it is held by this Court
that exercise of powers under Section 482 Cr.P.C. to
quash the proceedings is an exception and not a rule. It
is further observed that inherent jurisdiction under
Section 482 Cr.P.C. though wide is to be exercised
sparingly, carefully and with caution, only when such
exercise is justified by tests specifically laid down in
section itself. It is further observed that appreciation of
evidence is not permissible at the stage of quashing of
proceedings in exercise of powers under Section 482
Cr.P.C. Similar view has been expressed by this Court in
the case of CBI Vs. Arvind Khanna 2019 (10) SCC 686
(S CBI Vs. Arvind Khanna 2019 (10) SCC 686upra),
State of Telangana Vs. Managipet 2019, (19) SCC87
(Supra) and in the case of XYZ Vs. State of Gujarat
2019, (10) SCC 337, referred to hereinabove.
9.3 Applying the law laid down by this Court in the
aforesaid decisions to the facts of the case on hand, we
are of the opinion that the High Court has exceeded
its jurisdiction in quashing the criminal proceedings in
exercise of powers under Section 482 Cr.P.C.
15. In Dhruvaram Murlidhar Sonar Vs. State of
Maharashtra 2019, (18) SCC 191, the Apex Court, after
considering the ratio in the case of State of Haryana Vs.
B.Bhajanlal & ors., AIR 1992 SC 604, summed up the
proposition of law, held that the exercise of power under
Section 482 to quash the proceeding is an exception and not
the rule. It is further observed that the inherent jurisdiction
under Section 482 of the CRPC though wide is to
beexercised sparingly, carefully and with caution only when
such exercises justified the tests specifically laid down in
the section itself. It is further observed that the
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appreciation of evidence is not permissible at the stage of
quashing of the proceeding in exercise of powers under
Section 482 of the CRPC.
16. Similar view has been expressed by the Apex Court in
the case of CBI Vs. Arvind Khanna 2019 (10) SCC 686,
State of Telangana Vs. Managipet 2019, (19) SCC87 and
in the case of XYZ Vs. State of Gujarat 2019, (10) SCC
17. Applying the law laid down by the Apex Court in the
aforesaid decision to the facts of the case on hand, this
Court is of the considered opinion that the petitioner has
failed to make out any case to exercise jurisdiction in
quashing the criminal complaint under Section 482 of the
CRPC.
18. For the foregoing reasons, this petition stands
dismissed. Interim relief if any stands vacated. Notice/Rule
is discharged.
(J. C. DOSHI,J)
19. After pronouncement of judgment, learned advocate
Mr.Jain for the petitioner seeks stay of implementation of
present order for period of four weeks and to continue
interim relief operating in favour of the petitioner till then.
However, for the reasons stated herein above, this Court is
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not inclined to accept the request and accordingly, it is
rejected.
(J. C. DOSHI,J)
MARY VADAKKAN
