Full Judgment Text
$~J-1 & 2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 12.11.2025
Judgment delivered on: 15.01.2026
+ CRL.M.C. 8417/2023, CRL.M.A. 31444/2023, CRL.M.A.
15187/2024
RAVINDRA DHARIWAL & ANR. .....Petitioners
Through: Mr. Madhav Khurana, Sr. Adv with
Mr. Petrushka Das Gupta, Mr. Mridul
Yadav, Mr. Raghav Mittal, Mr
Shaurya Singh & Ms. Tulika
Bhatnagar & Ms. Kashvi Bansal,
Advs.
versus
KOTAK MAHINDRA BANK LIMITED & ANR .....Respondents
Through: Ms. Vaishnavi Viswanathan, Adv. for
R-1.
+ CRL.M.C. 8431/2023, CRL.M.A. 31481/2023 & CRL.M.A.
15190/2024
KISHORE LAXMNARAYAN BIYANI & ANR. .....Petitioners
Through: Mr. Madhav Khurana, Sr. Adv with
Mr. Petrushka Das Gupta, Mr. Mridul
Yadav, Mr. Raghav Mittal, Mr
Shaurya Singh & Ms. Tulika
Bhatnagar & Ms. Kashvi Bansal,
Advs.
versus
KOTAK MAHINDRA BANK LIMITED & ANR. .....Respondents
Through: Ms. Vaishnavi Viswanathan, Adv. for
R-1.
Signature Not Verified
Signed By:NARENDRA
SINGH ASWAL
Signing Date:17.01.2026
22:16:23
CRL.M.C. 8417/2023 & CRL.M.C. 8431/2023 Page 1 of 9
CORAM:
HON'BLE MR. JUSTICE VIKAS MAHAJAN
JUDGMENT
VIKAS MAHAJAN, J
1. The present petition has been filed under Section 482 CrPC praying
quashing of summoning order dated 24.01.2023 whereby the petitioners
were summoned to stand trial for the offence under Section 138 of
Negotiable Instruments Act, 1881 [in short „N.I. Act‟].
2. Further prayer has been made for quashing of order dated 23.05.2023
whereby the petitioners were directed to furnish their bail bonds.
3. The aforesaid orders came to be passed in complaint under Section
138 NI Act being CC No.3106/2022 titled as Kotak Mahindra Bank Ltd. v.
Future Retail Ltd. & Ors. which is stated to be pending before the Court of
Judicial Magistrate First Class (JMFC), (N.I. Act), West District, Digital
Court-01, Tis Hazari Court, New Delhi.
4. The case set out in the present petition is that the petitioners herein
were the directors of respondent no.2/company namely, M/S Future Retail
Ltd. (hereinafter „the company‟). The said company had availed credit
facility from respondent no.1/bank, against which undated cheques were
issued to respondent no.1/bank.
5. The aforesaid complaint case under Section 138 of N.I. Act filed by
respondent no.1/bank pertains to two such cheques issued to it by the
company, the details of which are as under:
(i) Cheque No.081660 for an amount of Rs.3,48,39,892.00.
(ii) Cheque No.081659 for an amount of Rs.50,00,00,000.00.
6. The aforesaid two cheques were presented for encashment by
Signature Not Verified
Signed By:NARENDRA
SINGH ASWAL
Signing Date:17.01.2026
22:16:23
CRL.M.C. 8417/2023 & CRL.M.C. 8431/2023 Page 2 of 9
respondent no.1/bank, but the same were returned unpaid with the cheque
return memo dated 29.04.2022 with the remarks “kindly contact
drawer/drawee bank and present again”.
7. Respondent no.1/bank, once again presented the said two cheques on
01.07.2022 for clearing, however, the cheques were again returned unpaid
by the drawee bank with a cheque return memo dated 02.07.2022,
containing the same remarks. This was followed by issuance of demand
notice dated 14.07.2022 by respondent no.1/bank, which got dispatched on
21.07.2022, in terms of Section 138 of N.I. Act, to respondent
no.2/company, as well as, to the petitioners.
8. As per the case of respondent no.1/bank in its complaint, the said
notices were received by the petitioners between 23.07.2022 and
26.07.2022. Since the payment was not made within a period of 15 days
from the receipt of notice, as stipulated therein, respondent no.1/bank filed
complaint under Section 138 of N.I. Act on 02.09.2022.
9. Thereafter, the two impugned orders came to be passed.
10. Mr. Madhav Khurana, learned Senior Counsel appearing on behalf of
the petitioners submits that a petition under Section 7 of Insolvency and
Bankruptcy Code, 2016 [in short, „IBC‟] against the respondent
no.2/company was admitted by the NCLT vide its order dated 20.07.2022
which led to initiation of CIRP against it.
11. Further, vide same order, Interim Resolution Professional [hereinafter,
referred as “IRP”] was also appointed, and the moratorium in terms of
Section 14(1) of IBC came into play.
12. He submits that even taking the earliest date i.e. 23.07.2022 as date of
service of demand notice dated 14.07.2022, which was dispatched on
Signature Not Verified
Signed By:NARENDRA
SINGH ASWAL
Signing Date:17.01.2026
22:16:23
CRL.M.C. 8417/2023 & CRL.M.C. 8431/2023 Page 3 of 9
21.07.2022, the 15 days period for making payment in terms thereof would
expire on 07.08.2022 i.e. after initiation of CIRP was ordered against
respondent no.2 on 20.07.2022.
13. He submits that during the said 15 days, as well as, when the offence
under Section 138 of N.I. Act was completed and the cause of action arose
to file a complaint under the said provision i.e. on 07.08.2022, the
petitioners were not in charge of respondent no.2/company, the corporate
debtor, as they had been suspended from their position as directors thereof,
hence it was not possible for them to ensure the payment of the said two
cheques in compliance of the demand made in the notice dated 14.07.2022,
dispatched on 21.07.2022 and admittedly served on the petitioners after the
order dated 20.07.2022 of the NCLT. Therefore, the complaint under section
138 of NI Act is not maintainable against the petitioner nor they can be held
guilty for the offence under the said provision.
14. In support of his contention, Mr. Khurana has placed reliance on the
decision of the Hon‟ble Supreme Court in Vishnoo Mittal v. Shakti Trading
Company, (2025) 9 SCC 417 .
15. Per contra, Ms. Vaishnavi Viswanathan, learned counsel appearing
on behalf of respondent no.1/bank submits that the petitioners were in
charge of, and responsible for, the conduct of business of respondent
no.2/company at the time cheques in question were issued and were
presented. Therefore, their subsequent suspension upon initiation of CIRP
does not extinguish the liability for the acts of their omission or commission
at a prior point in the statutory chain of events under Section 138 of N.I.
Act.
16. She has placed reliance on the decision of the Hon‟ble Supreme Court
Signature Not Verified
Signed By:NARENDRA
SINGH ASWAL
Signing Date:17.01.2026
22:16:23
CRL.M.C. 8417/2023 & CRL.M.C. 8431/2023 Page 4 of 9
in S.P. Mani and Mohan Dairy v. Dr. Snehalatha Elangovan, 2022 SCC
OnLine SC 1382.
17. Having heard the learned counsel for the parties, a short question
which arises for consideration of this Court is whether the complaint under
Section 138 of N.I. Act could have been filed and continued against the
petitioners with regard to dishonour of cheques issued by respondent
no.2/company, when CIRP proceedings had been initiated and IRP had been
appointed prior to giving of demand notice to them.
18. The controversy is no more res integra. In Vishnoo Mittal (supra), an
identical issue had arisen before the Hon‟ble Supreme Court. In the said
case, the cheques had been issued by a private limited company which were
dishonoured on 07.07.2018, and the legal notice dated 06.08.2018 under
Section 138 of N.I. Act was issued to the director of the company namely,
Vishnoo Mittal, who failed to make the payment. Consequently, a complaint
was filed for the offence under Section 138 of N.I. Act in September, 2018.
18.1. In the meanwhile, on 25.07.2018, the insolvency proceedings against
the said private limited company commenced and a moratorium under
Section 14 of IBC was imposed. On the same day i.e. 25.07.2018, the IRP
also came to be appointed.
18.2. In the factual backdrop, the Hon‟ble Supreme Court placing reliance
1
on Section 17 of IBC, observed that when the notice was issued to the
1
17. Management of affairs of corporate debtor by interim resolution professional. –
(1) From the date of appointment of the interim resolution professional, -
( a) the management of the affairs of the corporate debtor shall vest in the interim resolution
professional; (b) the powers of the board of directors or the partners of the corporate debtor, as the
case may be, shall stand suspended and be exercised by the interim resolution professional ;
(c)
(d) the officers and managers of the corporate debtor shall report to the interim resolution professional and
provide access to such documents and records of the corporate debtor as may be required by the interim
resolution professional;
Signature Not Verified
Signed By:NARENDRA
SINGH ASWAL
Signing Date:17.01.2026
22:16:23
CRL.M.C. 8417/2023 & CRL.M.C. 8431/2023 Page 5 of 9
director of the said company, he was not incharge of the corporate debtor as
he was suspended from his position as director thereof from the day IRP was
appointed on 25.07.2018, and all the powers vested with the Board of
Directors were to be exercised by the IRP. Thus, all the bank accounts of the
corporate debtor were operating under the instructions of the IRP, hence, it
was not possible for the director of the said private limited company to repay
the amounts. Accordingly, the Hon‟ble Supreme Court quashed the
summoning order, as well as, the complaint filed under Section 138 of N.I.
Act. The relevant paragraphs from Vishnoo Mittal (supra) read thus:
“13. The bare reading of the above provision shows that the
appellant did not have the capacity to fulfil the demand raised by
the respondent by way of the notice issued under clause (c) of the
proviso to Section 138 NI Act. When the notice was issued to the
appellant, he was not in charge of the corporate debtor as he was
suspended from his position as the Director of the corporate
debtor as soon as IRP was appointed on 25-7-2018. Therefore, the
powers vested with the Board of Directors were to be exercised by
the IRP in accordance with the provisions of IBC. All the bank
accounts of the corporate debtor were operating under the
instructions of the IRP, hence, it was not possible for the
appellant to repay the amount in light of Section 17 IBC.
14. Additionally, we have been informed on behalf of the appellant
that, after the imposition of the moratorium, the IRP had made a
public announcement inviting the claims from the creditors of the
corporate debtor and the respondent has filed a claim with the IRP.
15. Keeping in mind the above observations and distinguishing
facts and circumstances of this case from that of P. Mohanraj [P.
Mohanraj v. Shah Bros. Ispat (P) Ltd., (2021) 6 SCC 258 : (2021) 3
SCC (Civ) 427 : (2021) 2 SCC (Cri) 818 : (2021) 14 Comp Cas-OL
1], we are of the considered view that the High Court ought to have
quashed the case against the appellant by exercising its power
under Section 482CrPC.
Signature Not Verified
Signed By:NARENDRA
SINGH ASWAL
Signing Date:17.01.2026
22:16:23
CRL.M.C. 8417/2023 & CRL.M.C. 8431/2023 Page 6 of 9
16. Therefore, we allow this appeal by setting aside the impugned
order dated 21-12-2021 [Vishnoo Mittal v. Shakti Trading Co.,
(2022) 17 Comp Cas-OL 342 : 2021 SCC OnLine P&H 4434] and
quash the summoning order dated 7-9-2018. Further, we hereby
quash Complaint Case No. 15580/2018, pending before the Chief
Judicial Magistrate Court, Chandigarh, filed by the respondent
against the appellant.”
(emphasis supplied)
19. In Govind Prasad Todi v. Govt. of NCT of Delhi, 2023 SC OnLine
Del 3717 , a Coordinate Bench while dealing with identical factual matrix,
observed that when Resolution Professional has been appointed, the control
of the operation of the bank accounts of the corporate debtor is taken over
by the RP, the directors of the corporate debtor cannot be said to be in
control of the affairs of the company. Accordingly, it was held that the
erstwhile directors of the corporate debtor cannot be summoned under
Section 138 of NI Act.
20. Reference may also be had to the decision of yet another Coordinate
Bench of this court in Innoventive Industries Ltd. vs Govt. of NCT of
Delhi, 2025 SCC Online Del 5743, wherein under similar set of facts, this
Court relying upon Vishnoo Mittal (supra), held as under:
“ 55. Applying the aforesaid principles to the facts in hand, herein
Company as well the Directors were left with no control over the
management and affairs of the Company, which got taken over by
the RP/Liquidator, much prior to the presentation of the cheques.
The Directors of the Petitioner Company, could not have been
held liable, once the proceedings under IBC had commenced,
prior to institution of the Complaint under Section 138 of N.I. Act.
56. Therefore, to say that the proceedings under Section 138 of
N.I. Act can be continued against the Directors, would be against
the principles of vicarious liability of the Directors for the debts of
the Company, since the Directors can be only be held vicariously
liable for the acts of the Company, once the Company has been
Signature Not Verified
Signed By:NARENDRA
SINGH ASWAL
Signing Date:17.01.2026
22:16:23
CRL.M.C. 8417/2023 & CRL.M.C. 8431/2023 Page 7 of 9
found to be liable.
57. In the present case, the IBC proceedings had already got
commenced in January, 2017 i.e. almost six months prior to the
proceedings under S. 138 NI Act. At the time when the Legal Notice
dated 02.07.2017 was issued by the Complainant, the entire powers
of Board of Directors, had come to be vested in the RP. Therefore,
they were no powers either with the Company or that the Board of
Directors and they had no managerial authority to pass any Board
Resolution for repayment of the amounts under the impugned
cheques.”
(emphasis supplied)
21. In the case in hand, as noted above, the two cheques in question were
returned unpaid for the second time on 02.07.2022. The demand notices
dated 14.07.2022 issued by respondent no.1/bank, which were dispatched on
21.07.2022, were received by the petitioners between 23.07.2022 and
26.07.2022. Even on the basis of the earliest date of service of demand
notice i.e. 23.07.2022, the 15 days period for making payment in terms of
demand notice had expired on 07.08.2022.
22. Thus, the offence under Section 138 of N.I. Act was complete on
07.08.2022 and it is thereafter, that the cause of action arose for filing the
complaint under the said provision. However, in the meanwhile, the NCLT,
Mumbai admitted the petition under Section 7 of IBC; initiated CIRP against
respondent no.2/company; appointed the IRP, and imposed a moratorium
under Section 14 of IBC, vide order dated 20.07.2022.
23. Clearly, even prior to the dispatch of the demand notice by respondent
no.1/bank on 21.07.2022, the IRP had been appointed and moratorium was
also imposed on 20.07.2022, therefore, during the notice period of 15 days
which commenced with the service of demand notice on 23.07.2022, the
petitioners were not having any control over the bank accounts of
Signature Not Verified
Signed By:NARENDRA
SINGH ASWAL
Signing Date:17.01.2026
22:16:23
CRL.M.C. 8417/2023 & CRL.M.C. 8431/2023 Page 8 of 9
respondent no.2/company, as the power to operate the said accounts had
vested with the IRP in accordance with the provisions of Section 17 of IBC.
In other words, the petitioners in their capacity as erstwhile directors were
not incharge of respondent no.2/company‟s [corporate debtor] affairs nor
were having any authority to operate its bank accounts and to ensure
honouring, or to prevent the dishonouring, of two cheques in question.
Therefore, the petitioners could not have been summoned under section 138
of NI Act, and holding them guilty for the alleged offence does not arise.
24. The Reliance placed by the respondent‟s counsel on S.P. Mani
(supra) is misplaced. Unlike instant case, S.P. Mani (supra) was not a case
where CIRP had been initiated and moratorium was imposed against the
company which had drawn the cheques, rendering its directors incapacitated
to operate the account of company to facilitate honouring of cheques.
25. In view of the above discussion, the present petition is allowed.
Consequently, the impugned summoning order dated 24.01.2023 is quashed.
Further, the complaint case being CC No.3106/2022 titled as Kotak
Mahindra Bank Ltd. v. Future Retail Ltd. & Ors. pending before the Court
of Judicial Magistrate First Class (JMFC), (N.I. Act), West District, Digital
Court-01, Tis Hazari Courts, New Delhi, and all proceedings emanating
therefrom in respect of the petitioners herein, are quashed.
26. Consequently, the pending applications also stand disposed of.
VIKAS MAHAJAN, J
JANUARY 15, 2026/ aj
Signature Not Verified
Signed By:NARENDRA
SINGH ASWAL
Signing Date:17.01.2026
22:16:23
CRL.M.C. 8417/2023 & CRL.M.C. 8431/2023 Page 9 of 9