Arun Kumar Gupta (D) Thr Lrs vs Tama Jawahar
- Court
- Delhi High Court
$~63 & 64
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Date of decision: 24 April 2026
+ CRL.A. 891/2024
ARUN KUMAR GUPTA (D) THR LRS .....Appellants
Through: Mr. Shekhar Prit Jha & Ms. Preeti
Kumari, Advs.
versus
TAMA JAWAHAR .....Respondent
Through: Mr. P. Sureshan, Adv. with respondent
through VC.
64.
+ CRL.A. 892/2024
ARUN KUMAR GUPTA (D) THR-LRS .....Appellants
Through: Mr. Shekhar Prit Jha & Ms. Preeti
Kumari, Advs.
versus
TAMA JAWAHAR .....Respondent
Through: Mr. P. Sureshan, Adv. with respondent
through VC.
CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT
ANISH DAYAL, J (Oral)
1. The present matter arises out of conviction of respondent/accused for
the offence punishable under Section 138 of the Negotiable Instruments Act
th
1881 [“ NI Act ”], whereby this Court, vide judgement dated 19 September
Signature Not Verified
CRL.A. 891/2024 & CRL.A. 892/2024 Page 1 of 8
Digitally Signed
By:MANISH KUMAR
Signing Date:05.05.2026
12:44:30
th
2024, set aside two judgements dated 29 January 2021 passed in
CC.No.5475/2016 (in CRL. L.P.56/2021) and in CC.No.6241/2016 (in CRL.
L.P.57/2021) by the Metropolitan Magistrate- 05 (North West) Rohini, Delhi
[“ MM ”], whereby respondent/accused was acquitted.
th
2. This Court vide judgement date 19 September 2024 particularly from
paragraph 16-28 , analysed the facts of the case and stated that the issuance
of the cheques by the respondent stood admitted and the defence that the
cheques were issued merely as security towards a trade advance of Rs.
2,00,00,000/- remained unsubstantiated in the absence of any defence
evidence. It was further observed that the issuance of ten cheques aggregating
to Rs. 2,60,00,000/- was inconsistent with respondent’s version of transaction,
th
denial of execution of the Memorandum of Understanding dated 05
December 2007 [‘ MoU ’] was vague, ambiguous and not credible, particularly
when signatures thereon prima facie appeared to be of the respondent and no
convincing explanation was offered in the statement under Section 313 of the
Code of Criminal Procedure 1973 [ Cr.P.C. ].
3. It was accordingly held that the MoU subsisted and formed the basis of
the liability and that once the cheques for Rs. 85,00,000/- were issued in
discharge of the settled outstanding amount, the statutory presumption under
Section 139 of NI Act operated against respondent and remained unrebutted.
The Court further observed that the contention that such a substantial amount
had been advanced without any written agreement was implausible in a
commercial transaction of this magnitude, and therefore the findings of the
Trial Court were unsustainable, resulting in setting aside of the acquittal.
Signature Not Verified
CRL.A. 891/2024 & CRL.A. 892/2024 Page 2 of 8
Digitally Signed
By:MANISH KUMAR
Signing Date:05.05.2026
12:44:30
Proceedings before this Court and the Supreme Court
4. The record reflects that the present matter travelled before the Delhi
High Court by way of Criminal Leave Petition being CRL.L.P. 56/2021 and
CRL.L.P. 57/2021 filed by appellants/claimants challenging the judgments
dated 29th January 2021 passed by MM-05 (North-West), Rohini Courts,
Delhi, whereby the respondent was acquitted of the offence punishable under
Section 138 of NI Act. Upon grant of leave to appeal and consideration of the
material on record, this Court vide judgment dated 19th September 2024, set
aside the impugned judgments of acquittal and held that the issuance of the
cheques stood admitted, the statutory presumption under Section 139 of NI
Act remained unrebutted, and the defence taken by respondent that the
cheques were issued merely as security was untenable, resulting in conviction
of the respondent for the said offence.
5. Subsequently, the matter was carried before the Supreme Court by way
of a Special Leave Petition being SLP (Crl.) No. 13799–13800/2024 , by the
respondent challenging the judgement dated 19th September 2024 passed by
this Court wherein, by order dated 21st November 2025, the Supreme Court
observed that it was open to the High Court to proceed with the question of
sentence, while requesting that the sentence, if imposed, be kept in abeyance
in view of the pendency of the petition.
6. In compliance with the said order, this Court has proceeded to
determine the quantum of sentence in the present matter, keeping the aforesaid
directions in view.
Submission made on behalf of parties
7. Counsel for appellants made the following submissions in relation to
sentencing :
Signature Not Verified
CRL.A. 891/2024 & CRL.A. 892/2024 Page 3 of 8
Digitally Signed
By:MANISH KUMAR
Signing Date:05.05.2026
12:44:30
a) despite the matter having been referred to mediation before the
Supreme Court of India, the respondent neither made any
settlement proposal nor expressed willingness to discharge the
cheque liability and instead persisted in denying liability
altogether; such conduct, even post-conviction, reflects lack of
bona fides and justifies imposition of a deterrent sentence under
Section 138 of NI Act;
b) respondent adopted inconsistent and false defences during the
proceedings initially asserting partial discharge of liability and
thereafter contending that the entire amount stood repaid and the
cheques were issued merely as security despite the statutory
presumptions under Sections 118(a) and 139 of the NI Act
operating against him and despite not leading any defence
evidence, thereby prolonging the litigation and abusing the
process of law;
c) the transaction being commercial in nature and involving
dishonour of cheques aggregating to Rs. 85,00,000/- , appellants
have been deprived of the said amount since 2007 and are
therefore entitled to compensation along with reasonable
interest; reliance is placed upon R. Vijayan v. Baby , (2012) 1
SCC 260, wherein it was observed that in cheque dishonour
cases compensation may appropriately include interest
[ commonly computed at about 9% per annum ] so as to restitute
complainant, and prayed that maximum permissible sentence
along with enhanced compensatory relief be awarded.
Signature Not Verified
CRL.A. 891/2024 & CRL.A. 892/2024 Page 4 of 8
Digitally Signed
By:MANISH KUMAR
Signing Date:05.05.2026
12:44:30
8. Counsel for respondent made the following submissions in relation to
sentencing:
a) the cheque in question pertained only to the alleged balance
amount of Rs. 85,00,000/- towards interest/profit and not
towards repayment of the principal liability, inasmuch as a sum
of Rs. 2,01,60,511/- already stood repaid by the respondent
against the admitted advance of Rs. 2,00,00,000/ -; therefore, the
cheque amount represents only a disputed component of alleged
profit based on an oral understanding and constitutes a relevant
mitigating circumstance for the purposes of sentencing;
b) there existed no written agreement authorising payment of any
enhanced liability towards interest/profit and the claim of Rs.
85,00,000/- rests solely on an unsubstantiated oral
understanding; it is further submitted that the transaction was
purely commercial in nature, the respondent has no criminal
antecedents, and the learned Trial Court had originally
acquitted the respondent, which circumstances merit a lenient
approach while determining sentence;
c) under Section 138 of NI Act, the Court retains discretion to
impose sentence ranging from nominal punishment to the
statutory maximum, and considering that the principal amount
substantially stood repaid and the dispute relates only to the
alleged profit component, the present case falls within
mitigating parameters warranting imposition of the minimum
sentence permissible in law.
Signature Not Verified
CRL.A. 891/2024 & CRL.A. 892/2024 Page 5 of 8
Digitally Signed
By:MANISH KUMAR
Signing Date:05.05.2026
12:44:30
Analysis
9. Heard the counsel for parties on the question of sentence.
10. Having considered the submissions advanced by counsel for parties and
perused the record, this Court notes that the conviction of the respondent
arises from dishonour of cheques aggregating to Rs. 85,00,000/-, which were
issued in discharge of a legally enforceable liability pursuant to the MoU. As
already analysed in the judgment passed by this Court, the defence taken by
respondent that cheques were issued merely as security was found to be
untenable and unsupported by any evidence, and the statutory presumption
under Section 139 of the NI Act remained unrebutted. Liability of respondent,
therefore, stood established in the course of a commercial transaction of
substantial magnitude.
11. This Court also takes note of the conduct of respondent during the
course of proceedings, including adoption of inconsistent stands with respect
to the nature of liability and the absence of any meaningful effort towards
settlement. Continued denial of liability despite issuance of cheques and
failure to discharge the outstanding amount for a considerable period of time
since 2007 has resulted in prolonged deprivation to the appellants of monies
admittedly due to them. In such circumstances, the submission of the
respondent that the cheque amount pertained only to an interest component
does not constitute a mitigating factor warranting a nominal sentence,
particularly when the offence itself stands crystallised upon adjudication by
this Court.
12. It is well settled that the object of Section 138 of NI Act is not merely
punitive but primarily compensatory in nature, intended to ensure credibility
of commercial transactions and to restitute the complainant for the loss
Signature Not Verified
CRL.A. 891/2024 & CRL.A. 892/2024 Page 6 of 8
Digitally Signed
By:MANISH KUMAR
Signing Date:05.05.2026
12:44:30
occasioned by dishonour of cheques. The Supreme Court in Meters and
Instruments (P) Ltd. v. Kanchan Mehta , (2018) 1 SCC 560, has observed
that proceedings under Section 138 of NI Act are largely compensatory in
character, with the punitive element being mainly to ensure compliance with
the compensatory remedy. Further, in R. Vijayan v. Baby ( supra ), the
Supreme Court observed that compensation awarded in such cases should be
realistic and adequate so as to make good the loss suffered by the complainant
on account of non-payment of the cheque amount over a prolonged period of
time.
13. In the facts of the present case, where appellants have been deprived of
the cheque amount since 2007 and no bona fide effort towards repayment has
been made by the respondent despite opportunities including mediation
proceedings, this Court is of the view that imposition of fine equivalent to
twice the cheque amount, payable to the appellants as compensation in terms
of Section 357(1)(b) Cr.P.C., would appropriately subserve the object of the
statute. At the same time, this Court does not consider it necessary to compute
separate interest in addition thereto, since the direction for payment of twice
the cheque amount sufficiently balances the equities between the parties and
meets the ends of justice.
Sentence
14. Accordingly, having regard to the facts and circumstances of the case,
the nature of the transaction, and the compensatory object underlying Section
138 of NI Act, respondent/accused is sentenced to pay a fine equivalent to
twice the cheque amount, i.e., Rs. 1,70,00,000/ -. Said fine shall be paid to the
complainant as compensation in terms of Section 357(1)(b) of Cr.P.C.
Signature Not Verified
CRL.A. 891/2024 & CRL.A. 892/2024 Page 7 of 8
Digitally Signed
By:MANISH KUMAR
Signing Date:05.05.2026
12:44:30
15. Respondent is directed to deposit the aforesaid fine amount before the
Trial Court within a period of six months from the date of this order. In default
of payment of the said amount within the stipulated period, respondent shall
undergo a simple imprisonment for a period of three months.
16. It is clarified that the amount shall be recoverable in accordance with
law as a fine under the provisions of the Cr.P.C.
17. The order on sentence has been passed by this Court, keeping in view
st
of the direction passed by the Supreme Court vide order dated 21 November
2025 in SLP (Crl.) No.13799-13800/2024 , wherein the Court categorically
stated that “ it is well open to the High Court to impose sentence. However, we
request the High Court to keep it in abeyance in view of the pendency of this
petition. ”
18. Accordingly, the appeals are disposed of. However, in view of the
aforesaid directions of the Supreme Court, the sentence imposed herein shall
remain in abeyance till further orders in the pending proceedings before the
Supreme Court.
19. Judgment be uploaded on the website of this Court.
(ANISH DAYAL)
JUDGE
APRIL 24, 2026/ ak / tk
Signature Not Verified
CRL.A. 891/2024 & CRL.A. 892/2024 Page 8 of 8
Digitally Signed
By:MANISH KUMAR
Signing Date:05.05.2026
12:44:30