M/S Patson Preserved Vegetables Pvt Ltd Through Its Managing Director And Ors. & Anr. vs M/S Small Farmers Agri-Business Consortium Through Its Attorney Of Secretary/Managing Director

Court
Delhi High Court

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: August 07, 2026
% Pronounced on: September 09, 2026

# CNR No. DLHC010094932022
+ CRL.M.C. 1025/2022, CRL.M.A. 4404/2022
M/S PATSON PRESERVED VEGETABLES PVT LTD
THROUGH ITS MANAGING DIRECTOR AND ORS. & ANR.
.....Petitioners
Through: Mr. Biswajit Kumar Patra, Mr. Sunil
Mund, Ms. Khushboo Gupta, Advs.

versus

M/S SMALL FARMERS AGRI-BUSINESS CONSORTIUM
THROUGH ITS ATTORNEY OF SECRETARY/MANAGING
DIRECTOR .....Respondent
Through: Mr. Ravindra Kanth and M. N. Kant
Das, Advs.

CORAM:
HON'BLE MR. JUSTICE SAURABH BANERJEE
J U D G M E N T
1. By virtue of the present petition under Section 482 of the Criminal
Procedure Code, 1973, the petitioner seeks quashing of the complaint being
CC No. 3488/2018 entitled ‘ Small Farmers Agri Business Consortium
(SFAC) vs. M/s. Patson Preserved Vegetables Pvt. Ltd. & Ors. ’ and the
1
summoning orders dated 29.06.2018 alongwith all the consequential
proceedings pending before the learned MM (SOUTH), Saket Courts, New
2
Delhi qua the petitioners.

1
Hereinafter “ impugned order ”
2
Hereinafter “ learned MM ”
CRL.M.C. 1025/2022 Page 1 of 5

Signature Not Verified
Digitally Signed
By:BABLOO SHAH
Signing Date:09.09.2026
17:49:45

2. As per averments made in the complaint, the petitioners approached
the Canara Bank seeking financial assistance for setting up a vegetable
processing project. Pursuant thereto, Canara Bank, vide sanction letter
dated 17.08.2009, sanctioned a term loan of Rs. 300 lacs and a cash credit
facility of Rs. 225 lacs for a period of eight years in favour of the
petitioners. Accordingly, the said credit facilities were repayable by
16.08.2017.

3. Despite the promoters having contributed a sum of Rs. 244.25 lacs
towards the project, there remained a fund deficiency of Rs. 63.49 lacs. The
petitioners, therefore, approached the respondent vide application dated
16.09.2009 under the Venture Capital Assistance Scheme, seeking financial
assistance towards the aforesaid shortfall. Pursuant thereto, the respondent
vide sanction letter dated 11.01.2010 sanctioned a sum of Rs. 49.40 lacs,
and in furtherance thereof also entered into an agreement dated 18.01.2010
with the petitioner no.1. Accordingly, the petitioner no.2 handed over a
blank cheque bearing no. 372116 to the respondent by way of security. The
sanctioned amount of Rs. 49.40 lacs was thereafter disbursed and credited
to the current bank account of petitioner no.1 maintained with the Canara
Bank.
4. Subsequently, the respondent filled in the date on the aforesaid
cheque as 31.12.2017 and presented it for encashment through its banker.
The cheque, however, was returned unpaid vide returning memo dated
02.01.2018, with the endorsement, “ drawer’s signature differs ”. Thereafter,
the respondent issued a Legal Notice dated 25.01.2018 to the petitioners,
which was replied by the petitioner no.1 on 26.02.2018, prior to filing a
CRL.M.C. 1025/2022 Page 2 of 5

Signature Not Verified
Digitally Signed
By:BABLOO SHAH
Signing Date:09.09.2026
17:49:45

3
complaint under Section 138 of the Negotiable Instruments Act, 1881 ,
against the petitioners, wherein the impugned order her been passed.
5. Heard learned counsel for the parties and perused the material
available on record.
6. At the outset, it is noteworthy that in terms of order dated 08.03.2022
passed by this Court notice herein was issued only to the extent that the
petitioners were ready to make the payment of cheque amount/ interest/
penalty by 31.03.2023. It is also relevant to note that pursuant thereto the
petitioners had also filed a payment schedule, and vide order dated
07.10.2022 this Court directed the petitioners to pay the said amount as per
the payment schedule to show their bona fides and stayed the proceedings
before the learned MM. Thereafter, as on date the entire cheque amount i.e.
Rs. 49.40 lacs has been paid by the petitioners as borne out from the bank
statement of the petitioner no.1.
7. This Court is proceeding to adjudicate the present petition keeping
the aforesaid position in mind.
8. For this, legally speaking the scope and intent behind insertion of
Chapter XVII (Sections 138 to 148) of the NI Act, which came into effect
from 01.04.1989 is clear from the Prefatory Note-Statement of Objects and
Reasons of Act 66 of 1988, which inter alia states that the same is “ (xi) to
enhance the acceptability of cheques in settlement of liabilities by making
the drawer liable for penalties in case of bouncing of cheques due to
insufficiency of funds in the accounts or for the reason that it exceeds the
arrangements made by the drawer, with adequate safeguards to prevent
harassment of honest drawers. ”.

3
Hereinafter “ NI Act ”
CRL.M.C. 1025/2022 Page 3 of 5

Signature Not Verified
Digitally Signed
By:BABLOO SHAH
Signing Date:09.09.2026
17:49:45

9. Thus, what entails therefrom is that the legislative intent behind
introducing Chapter XVII in the NI Act was to restore the credibility of
cheques as a trustworthy substitute for cash payment and to promote a
culture of using cheques, and the intention to criminalize such an act of
issuing cheques without sufficient funds or for other specified reasons, was
to promote financial discipline, discourage irresponsible practices and
allows for more efficient and timely resolution of disputes compared to
previous pure civil remedies which were found to be a long-drawn process
of litigation.
10. As per the prevalent facts and circumstances involved, the dispute
inter se the parties dates back to the year 2018, and as on date, even the
complainant’s evidence is yet to commence before the learned MM as the
proceedings therein were stayed vide order dated 07.10.2022 passed by this
Court, and lastly it is an admitted position that today the entire cheque
amount of Rs. 49.40 lacs has already been transferred by the petitioners and
accepted by the respondent in terms of what has been recorded in the order
dated 01.10.2024 by this Court.
11. Applying the aforesaid legal position qua the legislative intent
behind introducing Chapter XVII in the NI Act as above, mutatis mutandis ,
to the existing facts herein, particularly, this Court is of the considered
opinion that continuation of the proceedings before the learned MM at this
stage once again, more so, after the dispute inter se the parties hardly
survives anymore, will make them suffer the ignominy of prolonged delay,
and in fact, may not be very productive for any of them.
12. Thus, in the interest of the parties and justice, this Court is inclined
to quash the complaint being CC No. 3488/2018.
CRL.M.C. 1025/2022 Page 4 of 5

Signature Not Verified
Digitally Signed
By:BABLOO SHAH
Signing Date:09.09.2026
17:49:45

13. Accordingly, the present petition is allowed and the complaint being
CC No. 3488/2018 entitled ‘ Small Farmers Agri Business Consortium
(SFAC) vs. M/s. Patson Preserved Vegetables Pvt. Ltd. & Ors. ’, the
summoning orders dated 29.06.2018 and all proceedings emanating
therefrom, are hereby quashed, albeit , subject to the petitioners depositing
costs of Rs.5,00,000/- ( Rupees Five Lakhs Only ) in the bank account of the
respondent within a period of two weeks from the date of pronouncement of
this judgment.
14. Let the petitioners furnish proof of deposit of such costs with the
Registry within a period of one week thereafter.
15. Accordingly, the present petition, alongwith the pending application,
is disposed of in the aforesaid terms.


SAURABH BANERJEE, J.
SEPTEMBER 09, 2026/ bh/DA


CRL.M.C. 1025/2022 Page 5 of 5

Signature Not Verified
Digitally Signed
By:BABLOO SHAH
Signing Date:09.09.2026
17:49:45