Delhi High Court – Orders
Ipex Infrastructure Pvt Ltd vs Raj Kamal Bhatia on 3 August, 2026
$~70
* IN THE HIGH COURT OF DELHI AT NEW DELHI
# CNR No. DLHC010346952026
+ CRL.M.C. 5535/2026 & CRL.M.A. 23106/2026, CRL.M.A.
23107/2026
IPEX INFRASTRUCTURE PVT LTD .....Petitioner
Through: Mr. Varun Chandiok and Mr. Pardeep
Dhingra, Mr. Ketan Joshi, Advs.
versus
RAJ KAMAL BHATIA .....Respondent
Through: Ms. _____, Adv. (through VC)
(Appearance not given)
CORAM:
HON'BLE MS. JUSTICE MADHU JAIN
ORDER
% 03.08.2026
1. This hearing has been done through hybrid mode.
2. The present petition has been filed under Section 528 of the Bharatiya
Nagarik Suraksha Sanhita, 2023 (hereinafter referred to as the ‘BNSS’)
seeking quashing of the summoning order dated 18.04.2026 passed by the
learned Judicial Magistrate First Class-05 (NI Act), South-East District,
Saket Courts, New Delhi in Complaint Case No. 544/2025 titled Raj Kamal
Bhatia v. Ipex Infrastructure Private Limited & Ors., whereby the learned
Trial Court, after taking cognizance of the complaint under Sections 138 and
141 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the
‘NI Act‘), directed issuance of summons to the petitioners for the alleged
commission of the offence punishable under Section 138 NI Act. The
petitioners also seek quashing of the complaint and all consequential
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proceedings arising therefrom.
3. Brief facts being that the petitioner No.1 is a company incorporated
under the provisions of the Companies Act, 2013 and is stated to be engaged
in the business of construction and ground engineering. Petitioners No.2 and
3 are Directors of petitioner No.1 and are stated to be responsible for the
affairs of the company. The respondent/complainant, Raj Kamal Bhatia, was
admittedly one of the Directors as well as a shareholder of petitioner No.1
company until his resignation in March, 2024.
4. As per the case set up in the complaint, the respondent had, during his
association with petitioner No.1, advanced unsecured loans to the company
from time to time. Subsequently, disputes arose between the parties
regarding the management of the company. It is the respondent’s case that
petitioner No.2 desired to continue the affairs of the company exclusively
with his family members, whereupon the respondent expressed his intention
to exit the company by transferring his shareholding and resigning from the
office of Director.
5. It is alleged that in the meeting of the Board of Directors held on
26.03.2024, the parties agreed that the respondent would transfer his
shareholding in favour of petitioner No.2 and resign from the Directorship.
According to the respondent, it was simultaneously agreed that the
outstanding unsecured loan together with interest payable to him by the
company would also be discharged. The Minutes of Meeting dated
26.03.2024 are stated to acknowledge an outstanding liability of
approximately Rs.2,53,41,461/- towards the respondent and further record
that the company would continue to furnish its bank statements to the
outgoing directors until the outstanding amounts were cleared.
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6. Thereafter, the parties executed a Memorandum of Understanding
dated 16.05.2024, whereunder the outstanding unsecured loan was agreed
to be discharged in stages. According to the respondent, towards the third
tranche of payment, petitioner No.1 issued cheque bearing No. 000746 dated
29.08.2024 for a sum of Rs.30,84,873/-, drawn on ICICI Bank, Lajpat Nagar
Branch, New Delhi, in favour of the respondent. The respondent asserts that
the cheque represented a legally enforceable liability arising out of the
outstanding unsecured loan.
7. The respondent further alleges that the cheque was presented for
encashment; however, it was returned unpaid vide return memo dated
19.11.2024 with the remarks “Refer to Drawer”. Consequently, the
respondent issued a statutory legal notice dated 16.12.2024 calling upon the
petitioners to make payment of the cheque amount within the statutory
period prescribed under Section 138 of the Negotiable Instruments Act.
Despite receipt of the notice, no payment having been made within the
prescribed period, the respondent instituted Complaint Case No.544/2025
under Sections 138 and 141 of the Negotiable Instruments Act before the
learned Trial Court.
8. The petitioners, on the other hand, rely upon the same Memorandum of
Understanding dated 16.05.2024 to contend that the cheque in question was
never intended to be an immediately enforceable instrument. According to
them, Clause A(f) of the MoU, read conjointly with Clause A(i)
contemplated that the amount covered by the cheque would become payable
only upon recovery of specified dues from certain identified debtors of the
company. It is their case that till the date of presentation of the cheque, no
such recovery had taken place and, therefore, the cheque had not matured
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for presentation.
9. It is further the case of the petitioners that immediately upon receipt of
the statutory legal notice, they issued a detailed reply dated 30.12.2024,
disputing the existence of any legally enforceable debt and asserting that the
presentation of the cheque was contrary to the express terms of the
Memorandum of Understanding. According to the petitioners, the
complainant deliberately omitted to place the said reply before the learned
Trial Court while instituting the complaint, thereby suppressing material
facts relevant to the consideration of the complaint.
10. The record further reflects that upon presentation of the complaint, the
learned Trial Court initially issued notice to the proposed accused under the
proviso to Section 223(1) of the Bharatiya Nagarik Suraksha Sanhita by
order dated 03.02.2025.
11. After hearing the parties, the learned Trial Court, by order dated
30.04.2025, observed that the objections raised by the proposed accused
pertained to matters requiring trial and proceeded to take cognizance of the
offence under Section 138 NI Act. The matter was thereafter listed for pre-
summoning evidence and further proceedings.
12. During the pendency of the proceedings, the petitioners also moved an
application before the learned Trial Court seeking dismissal of the complaint
on the ground that the complainant had concealed the reply to the statutory
notice. The said application remained pending before the learned Trial
Court.
13. Subsequently, on 18.04.2026, the learned Trial Court, after hearing the
complainant on the question of summoning, observed that the complaint,
affidavit and accompanying documents disclosed sufficient grounds for
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proceeding under Section 138 NI Act. Subsequently the learned Trial Court
issued summons to the petitioners.
14. Aggrieved by the aforesaid summoning order dated 18.04.2026, the
petitioners have approached this Court by way of the present petition.
15. Learned counsel appearing on behalf of the petitioners submits that the
impugned summoning order dated 18.04.2026 has been passed
mechanically. It is submitted that the learned Trial Court merely recorded
that the complaint and accompanying documents had been perused without
examining whether the essential ingredients of an offence under Section 138
NI Act, were made out.
16. Learned counsel submits that the complaint is vitiated by suppression
of material facts. Despite having received a detailed reply dated 30.12.2024
to the statutory demand notice, the complainant deliberately withheld the
same while filing the complaint. It is argued that the reply specifically
explained the nature of the transaction and raised substantial issues touching
upon the maintainability of the complaint. Reliance is placed on the decision
of the Hon’ble Supreme Court in Rekha Sharad Ushir v. Saptashrungi
Mahila Nagari Sahkari Patsanstha Ltd., 2025 SCC OnLine SC 641,
wherein suppression of material documents was held to be sufficient to
invalidate the criminal proceedings.
17. Learned counsel further submits that the cheque in question was issued
only pursuant to the Memorandum of Understanding dated 16.05.2024 and
was never intended to be an unconditional instrument for immediate
payment. Under the terms of the MoU, the third tranche of payment was
expressly linked to recovery of dues from specified debtors, and the cheque
was not to be presented unless such recoveries were effected. Since no such
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recoveries had taken place on the date of presentation of the cheque, no
legally enforceable debt or liability had arisen.
18. Learned Counsel for the petitioner submits that the complainant
presented the cheque in complete disregard of the contractual terms
governing the parties. The allegations that the petitioners had received
payments from the debtors ‘in kind’ are vague, unsupported by any
particulars or documentary material, and do not disclose any factual basis
for asserting that the amount covered by the cheque had become due.
19. Learned counsel also submits that the petitioners had placed these facts
before the learned Trial Court by filing an application seeking dismissal of
the complaint in light of the judgment in Rekha Sharad Ushir (supra).
However, without deciding the said application, the learned Trial Court
proceeded to pass the impugned summoning order, thereby failing to
consider the objections raised by the petitioners at the threshold.
20. The learned counsel for the petitioner places reliance upon Pepsi Foods
Ltd. Anr. Vs. Special Judicial Magistrate and Ors., (1998) 5 SCC 749,
Mehmood Ul Rehman v. Khazir Mohammad Tunda, (2015) 12 SCC 420,
and the decision of this Court in CRL.M.C. 5260/2024 titled Aeiforia
Constructions Pvt. Ltd. v. Continental Carbon India Pvt. Ltd.
21. Per contra, learned counsel for respondents, who appeared on advance
notice, through video conferencing, submits that the complaint, the affidavit
by way of pre-summoning evidence and the documents placed on record
disclose all the ingredients of an offence under Section 138 of the Negotiable
Instruments Act. The learned Trial Court, after considering the complaint
and the material placed before it, rightly found sufficient grounds to proceed
against the petitioners and issued summons. At the stage of summoning, the
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Court is only required to ascertain whether a prima facie case is made out
and is not expected to undertake a detailed examination of the defence set
up by the proposed accused.
22. Learned counsel further submits that the defence sought to be raised by
the petitioners proceeds entirely on their interpretation of the Memorandum
of Understanding dated 16.05.2024 and the alleged contingent nature of the
cheque. According to the respondents, these are disputed questions of fact
which cannot be adjudicated in proceedings under Section 528 of the BNSS.
Whether the cheque represented a legally enforceable liability or whether
the conditions stipulated in the MoU had been fulfilled are triable issues,
which can only be determined upon appreciation of evidence during trial.
23. It is further submitted that the petitioners cannot seek quashing of the
complaint merely on the basis of the reply dated 30.12.2024 to the statutory
notice. The allegations made therein constitute the defence of the accused,
which is required to be established during trial and cannot be accepted at the
threshold for stifling a criminal prosecution.
24. It is further submitted that the impugned summoning order does not
suffer from any jurisdictional error, perversity or patent illegality warranting
interference by this Court. The petitioners have raised factual defences
which are available to them before the learned Trial Court, and the inherent
jurisdiction of this Court ought not to be invoked to short-circuit a duly
instituted prosecution. It is, therefore, prayed that the present petition be
dismissed.
25. At the outset, it is relevant to note that the High Court is empowered to
quash complaints under the NI Act at the pre-trial stage in the exercise of its
inherent jurisdiction under Section 482 of the CrPC if such unimpeachable
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material is brought forth by the accused persons which indicates that they
were not concerned with the issuance of the cheques or that no offence is
made out from the admitted facts. The Hon’ble Apex Court in the case of
Rathish Babu Unnikrishnan v. State (NCT of Delhi) : 2022 SCC OnLine
SC 513 reiterated the aforesaid principle.
26. A perusal of the impugned order demonstrates that the learned
Magistrate has considered the complaint and the documents placed on
record. The learned Magistrate has specifically recorded that, upon
consideration of the complaint and documents, sufficient grounds existed to
proceed against the accused persons for the offence punishable under
Section 138 NI Act.
27. The order further records reliance upon the decision of the Hon’ble
Supreme Court in A.C. Narayanan v. State of Maharashtra & Anr., (2014)
11 SCC 790 thereby indicating conscious application of mind to the material
available on record. Merely because the order is concise cannot lead to the
conclusion that it has been passed mechanically.
28. The principal contention urged on behalf of the petitioners is that the
cheque in question was never intended to be presented unless recoveries
were effected from the debtors identified under Clause A(f) of the
Memorandum of Understanding dated 16.05.2024. It is submitted that the
liability under the cheque was contingent upon such recoveries and, since
no recoveries had taken place, no legally enforceable debt existed on the
date of presentation of the cheque.
29. This contention however, cannot be accepted at this stage. Whether the
cheque represented an existing legally enforceable liability or merely a
contingent obligation, whether the clauses of the Memorandum of
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Understanding are to be interpreted in the manner suggested by the
petitioners and whether the conditions contemplated under the
Memorandum of Understanding stood fulfilled, are all disputed questions
which necessarily require appreciation of documentary as well as oral
evidence. Such issues cannot be conclusively adjudicated while exercising
jurisdiction under Section 528 of the BNSS.
30. The petitioners have further placed reliance on judgment of the Hon’ble
Supreme Court in Rekha Sharad Ushir v. Saptashrungi Mahila Nagari
Sahkari Patsanstha Ltd., 2025 SCC OnLine SC 641, and contended that the
complainant deliberately suppressed the reply dated 30.12.2024 to the
statutory legal notice and that such suppression vitiates the entire complaint
in view of the aforesaid judgement.
31. In Rekha Sharad Ushir (supra), the Hon’ble Supreme Court was
dealing with a case where material correspondence exchanged between the
parties, which went to the root of the transaction itself, had been consciously
withheld from the learned Magistrate while setting the criminal law in
motion. The Supreme Court found that the suppression was deliberate and
that the undisclosed documents had a direct bearing on the very
maintainability of the complaint. The aforesaid judgement held as under:
“19. If these two letters were disclosed
in the complaint, the learned Magistrate while
recording the statement under Section 200 of
CrPC, could have always questioned the
respondent on the supply of documents to the
appellant. What is important is that in the reply
dated 28th November 2016, the appellant had
reserved her right to give a reply to the demand
notice after receiving the documents. It was the
respondent’s duty to supply documents to theThis is a digitally signed order.
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appellant or her advocate to enable the
appellant to properly reply to the demand
notice. At least, the inspection of documents
could have been provided to the appellant. After
noticing the fact that notwithstanding service of
two letters written by the appellant, relied upon
documents were not provided to the appellant,
the learned Magistrate could have dismissed
the complaint by exercising power under
Section 203 of CrPC, as the appellant could not
have replied to the statutory notice without
looking at the documents relied upon.
20. Thus, this was a case where very material
documents in the form of two letters
addressed by the appellant were suppressed in
the complaint and the statement on oath
under Section 200. In the statement on oath,
the respondent-complainant vaguely referred
to a ‘false notice reply’, but a copy of the reply
was not produced by the respondent along
with the complaint.
21. While filing a complaint under Section 200
of CrPC and recording his statement on oath
in support of the complaint, as the complainant
suppresses material facts and documents, he
cannot be allowed to set criminal law in motion
based on the complaint. Setting criminal law in
motion by suppressing material facts and
documents is nothing but an abuse of the
process of law.
22. Hence, the High Court ought to have
interfered and quashed the complaint.
Accordingly, the impugned order of the High
Court is set aside. The complaint bearing S.C.
No. 648 of 2016 pending in the court of the
learned Judicial Magistrate First Class at
Kalwan and the order of cognizance dated 2nd
March 2017 are hereby quashed and setThis is a digitally signed order.
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aside.”
32. The facts of the present case stand on an entirely different footing. The
complaint itself discloses the underlying transaction, the Memorandum of
Understanding, the issuance of the cheque, its dishonour and the statutory
notice. The reply dated 30.12.2024 merely sets out the defence sought to be
raised by the petitioners regarding the interpretation of the Memorandum of
Understanding and the alleged contingent nature of the liability. The
correctness of the assertions contained in the reply is itself a disputed issue.
Therefore, the mere non-filing of the reply along with the complaint cannot,
in the facts of the present case, lead to the conclusion that the complaint
deserves to be dismissed at the threshold. The decision in Rekha Sharad
Ushir (supra) cannot be read as laying down an inflexible proposition that
every omission to place a reply to the statutory notice before the Magistrate
would ipso facto result in quashing of the complaint.
33. The reply relied upon by the petitioners is, in substance, a defence to
the complaint. Whether the assertions contained therein are factually
correct, whether the terms of the Memorandum of Understanding support
the interpretation canvassed by the petitioners and whether the complainant
had prematurely presented the cheque, are all matters which can only be
examined upon appreciation of evidence during trial. Accepting the
petitioner submissions at this stage would necessarily require this Court to
enter into disputed factual issues and undertake an exercise akin to a mini-
trial, which is impermissible while considering a challenge to a summoning
order.
34. The petitioners have also sought to contend that the cheque was merely
This is a digitally signed order.
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a security cheque and that the liability was contingent upon future
recoveries. Whether a cheque issued pursuant to the Memorandum of
Understanding constituted a security cheque or represented a legally
enforceable debt is itself an issue which depends upon the construction of
the contractual terms, the conduct of the parties and the evidence that may
ultimately emerge during trial. Such questions cannot be conclusively
determined merely on the basis of rival assertions made before this Court.
35. It is equally well settled that while issuing process under Section 138
of the Negotiable Instruments Act, the learned Magistrate is only required
to be satisfied that the essential ingredients of the offence are prima facie
disclosed from the complaint and the accompanying material.
36. This Court finds no infirmity in the impugned order. The learned
Magistrate has considered the complaint and the documents before
recording satisfaction that sufficient grounds existed to proceed against the
accused. The defences sought to be raised by the petitioners are founded
upon their interpretation of the Memorandum of Understanding and their
own version of subsequent events. Those issues are matters of evidence and
cannot constitute a valid basis for quashing the complaint at the threshold.
37. Accordingly, this Court is of the considered view that no jurisdictional
error, perversity or manifest illegality is discernible in the impugned
summoning order dated 18.04.2026 warranting interference in exercise of
powers under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023.
38. The present petition is, therefore, dismissed. Needless to observe that
all observations made herein are only for the purpose of deciding the present
petition and shall not be construed as an expression on the merits of the case,
which shall be independently adjudicated by the learned Trial Court in
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accordance with law.
39. The order be uploaded on the website forthwith.
MADHU JAIN, J
AUGUST 3, 2026/prg/P
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