[Cites 3, Cited by 0]
Telangana High Court
M/S. Nestila Developers Llp vs The State Of Telangana on 26 March, 2026
Author: Juvvadi Sridevi
Bench: Juvvadi Sridevi
HIGH COURT FOR THE STATE OF TELANGANA
*****
CRIMINAL PETITION No.11901 of 2024
Between:
M/s. Nestila Developers LLP and three others ...Petitioners
AND
The State of Telangana represented
by Public Prosecutor and another ...Respondents
DATE OF ORDER: 26th MARCH, 2026
SUBMITTED FOR APPROVAL:
THE HON'BLE SMT. JUSTICE JUVVADI SRIDEVI
1 Whether Reporters of Local
newspapers may be allowed to see Yes/No
the Judgment?
2 Whether the copies of judgment
may be marked to Law Yes/No
Reporters/Journals
3 Whether HER Lordship wish to see
the fair copy of the Judgment? Yes/No
___________________
JUVVADI SRIDEVI, J
2
* THE HON'BLE SMT. JUSTICE JUVVADI SRIDEVI
+ Criminal Petition No.11901 of 2024
% Date: 26th March, 2026
Between:
M/s. Nestila Developers LLP and three others ...Petitioners
AND
The State of Telangana represented
by Public Prosecutor and another ...Respondents
! Counsel for the Petitioners: Sri Bankatlal Mandhani
! Additional Public Prosecutor for
the State: Sri M.Ramachandra Reddy
! Counsel for Respondent No.2: Sri Anup Koushik Karavadi
>HEAD NOTE:
? Cases referred
3
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT
HYDERABAD
THE HONOURABLE SMT. JUSTICE JUVVADI SRIDEVI
CRIMINAL PETITION No.11901 of 2024
DATED: 26th MARCH, 2026
Between:
M/s. Nestila Developers LLP and three others ...Petitioners
AND
The State of Telangana represented
by Public Prosecutor and another ...Respondents
O R D E R:
This Criminal Petition is filed by the petitioners-accused
Nos.1 to 4 seeking to quash the criminal proceedings against
them in C.C.No.3046 of 2021 pending on the file of the learned
VIII Additional Metropolitan Magistrate-cum-Principal Junior
Civil Judge, Ranga Reddy District at Kukatpally, (for short
'learned trial Court), registered for the offences under Section
138 of the Negotiable Instruments Act (for short 'the Act') and
Section 420 of the Indian Penal Code (for short 'IPC').
02. Heard Sri Bankatlal Mandhani, learned counsel for
the petitioners and Sri M.Ramachandra Reddy, learned
Additional Public Prosecutor for the State-respondent No.1 as
well as Sri Anup Koushik Karavadi, learned counsel for the
unofficial respondent No.2. Perused the record.
03(a). As seen from the record, the respondent No.2-
partnership firm lodged a private complaint before the learned
trial Court against the petitioner-accused No.1-partnership firm
and its representatives i.e. the petitioner-accused Nos.2 to 4, for
the offences punishable under Section 138 of the Act and
Section 420 of IPC. It is stated in the complaint that the
petitioner-accused No.1-firm, along with others, were retired
designated partners of the respondent No.2-firm and had
contributed certain amounts towards share capital in the
respondent No.2-firm.
03(b). According to the complainant, there were financial
adjustments between the respondent No.2-firm and the
accused No.1-firm in connection with their business dealings.
In relation to a sale transaction covered under a registered sale
deed dated 09.02.2021, the petitioners-accused Nos.1 to 4
allegedly issued seven cheques for a total sum of
Rs.3,53,27,404/- towards discharge of their liability. On
presentation, the said cheques were dishonoured by the
banker. Thereupon, the respondent No.2 issued statutory legal
notice to the petitioners demanding payment of the cheque
amounts within the stipulated time. The petitioners issued a
reply notice disputing the liability. However, as the cheque
amounts were not paid within the statutory period and remained
unpaid despite subsequent developments, the respondent No.2
initiated the complaint proceedings against the petitioners
before the learned trial Court.
04(a). Learned counsel for the petitioners-accused Nos.1
to 4 contended that there was no legally enforceable debt or
liability subsisting as on the date of presentation of the post-
dated cheques, i.e. 02.04.2021. It is submitted that in view of
the subsequent tripartite Memorandum of Understanding dated
19.02.2021, the original arrangement stood altered and,
therefore, the very foundation for invoking Section 138 of the
Act is absent. It is further contended that the essential
ingredients of the offence under Section 420 IPC are not made
out, as there was no dishonest or fraudulent intention at the
inception of the transaction.
04(b). It is further submitted that the cheque amount of
Rs.3,53,27,404/- was deposited by the petitioners in O.S.No.80
of 2021 on the file of the learned XVI Additional District Judge,
Ranga Reddy District at Malkajgiri, which was subsequently
transferred and renumbered as O.S.No.682 of 2022 on the file
of the learned II Additional District and Sessions Judge,
Medchal, and that such deposit was made on 29.04.2021
pursuant to orders in I.A.No.772 of 2021 filed by the petitioners
seeking permission to deposit the said amount. It is also stated
that the respondent No.2 had filed I.A.No.487 of 2021 in the
said suit seeking attachment of the property covered under the
sale deed dated 09.02.2021.
04(c). It is further submitted that the respondent No.2 had
filed Civil Revision Petition No.1581 of 2022 before this Court
and ultimately the deposited amount was withdrawn by the
respondent No.2 pursuant to the order dated 25.05.2024
passed in I.A.No.106 of 2023 in O.S.No.682 of 2022 (old
O.S.No.80 of 2021). With the above submissions, learned
counsel for the petitioners prays that continuation of the criminal
proceedings would amount to abuse of process of law and
therefore seeks quashing of the proceedings against the
petitioners-accused Nos.1 to 4.
05(a). Per contra, learned counsel for the respondent
No.2, while fairly admitting the factum of deposit and
subsequent withdrawal of the amount, contended that such
withdrawal was permitted only pursuant to an understanding
between the petitioners and a third party, whereby the
respondent No.2 was required to deposit the withdrawn amount
into the account of the said third party in C.O.P.No.80 of 2022.
It is submitted that the said withdrawal cannot be construed as
voluntary payment by the petitioners towards discharge of the
cheque liability.
05(b). It is further contended that the deposit of the
cheque amount in the civil suit was made subject to the
outcome of the suit proceedings and, therefore, the amount
cannot be treated as unconditional payment to the respondent
No.2. According to the learned counsel, the liability under the
dishonoured cheques was not extinguished, as the amount was
neither paid within the statutory period contemplated under
Section 138 of the Act nor paid absolutely and unconditionally
to the complainant.
05(c). It is further submitted that the amount remained
withheld from the respondent No.2 for more than two years and
no interest whatsoever was paid on the said sum. Therefore,
the statutory offence under Section 138 of the Act stood
completed upon failure to pay within the prescribed period after
receipt of legal notice, and subsequent developments cannot
absolve the petitioners of criminal liability. It is contended that
the conduct of the petitioners, viewed in its entirety, discloses
dishonest intention from the inception of the transaction,
thereby attracting the ingredients of cheating. It is submitted
that these aspects involve disputed questions of fact which
require trial and cannot be adjudicated in proceedings under
Section 528 of BNSS. Hence, he prayed for dismissal of the
Criminal Petition.
06. Having considered the rival submissions made by
the either side and on perusal of the material available on
record, it is apparent that the complaint specifically alleges
issuance of cheques towards discharge of liability arising out of
financial adjustments and sale transaction, dishonour of the
said cheques, issuance of statutory notice and failure to pay the
amount within the prescribed time. These averments, prima
facie, satisfy the ingredients of Section 138 of the Act. Whether
there existed a legally enforceable debt on the date of
presentation of cheques in view of the subsequent MoU dated
19.02.2021 is a matter of evidence which requires appreciation
during trial. Similarly, the contention regarding absence of
dishonest intention and the effect of deposit and subsequent
withdrawal of the amount in civil proceedings are disputed
questions of fact. The plea that the amount was deposited
subject to outcome of the suit and that the liability stood
discharged are matters that require adjudication on evidence
and cannot be conclusively determined in proceedings under
Section 528 of BNSS.
07. It is well settled that subsequent deposit of the
cheque amount or pendency of civil proceedings does not
absolve the accused of criminal liability under Section 138 of
the Act, unless it is demonstrated that the liability stood legally
extinguished. Such determination involves factual inquiry.
Insofar as the offence under Section 420 IPC is concerned, the
allegations in the complaint, when read as a whole, cannot be
said to be inherently improbable or absurd at this stage.
Whether there was dishonest intention at the inception of the
transaction is again a matter to be established by evidence
during trial. Therefore, this Court is of the considered view that
the matter involves disputed questions of fact, which are triable
in nature, and the truth or otherwise of the allegations can be
determined only upon conclusion of the trial. Therefore, there
are no grounds to quash the criminal proceedings against the
petitioners.
08. Accordingly, this Criminal Petition is dismissed. The
learned trial Court shall proceed with the matter in accordance
with law and dispose of the same expeditiously, without being
influenced by any observations made in this order, which are
made only for the purpose of deciding this petition.
As a sequel, pending miscellaneous applications, if any,
shall stand closed.
__________________
JUVVADI SRIDEVI, J
Date: 26-MAR-2026
KHRM
