Sangha Erectors Private Limited & Ors. vs. Doosan Power System INDIA Private Limited
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Cause title — parties, addresses and appearances
O R D E R %
2026
The present petition challenges the order dated 04.10.2023 whereby Crl. Revision No. 589/2023 was dismissed as barred by limitation, as also the order dated 24.02.2023, directing the petitioners to pay interim compensation of Rs. 12,80,000/-, being 20% of the cheque amount, under Section 143A of the Negotiable Instruments Act, 1881 (‘NI Act’).
Learned counsel appearing for the respondent submits that there is no objection on their part if, stripped from objections pertaining to delay, the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/09/2026 at 12:05:31
case is decided on merits. Accordingly, the order dated 04.10.2023 dismissing the revision on the ground of delay stands set aside and the matter is being heard on merits for final adjudication.
The respondent’s case, in brief, is that it engaged petitioner no. 1 under a subcontract agreement dated 05.02.2019 for the ‘BOP Common Package of one Obra C Super Thermal Power Station Project’ for Rs. 6.40 crore plus GST. Pursuant to Clause 9.1 of the Special Terms and Conditions, the petitioners furnished an undated cheque for Rs. 64 lakh, being 10% of the contract price, as a performance bond. Upon termination of the agreement for default on 15.07.2021, the cheque was presented and dishonoured on 21.07.2021. The complaint under Section 138 of the NI Act followed, with notice under Section 251 Cr.P.C. framed on 26.04.2022. The trial is at the stage of complainant’s evidence and the order dated 24.02.2023 has not been complied with.
Learned counsel for the petitioners relies on Rakesh Ranjan Shrivastava v. State of Jharkhand1 and submits that the power under Section 143A of the NI Act is discretionary. It is contended that the cheque was furnished as security, no legally enforceable debt exists and its presentation was impermissible upon termination of the agreement. It is further submitted that arbitration proceedings, including a counter-claim, are pending and the parties are exploring settlement. The petitioners therefore oppose the direction to pay 20% of the cheque amount.
On 31.08.2026, learned counsel for the petitioners was directed to take instructions on depositing 10% of the directed amount within two weeks. On instructions, he submits that the petitioners are unwilling to make 1 2024 INSC 205. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/09/2026 at 12:05:31
such a deposit and seek to contest the matter on merits.
Learned counsel for the respondent opposes and submits that the order dated 24.02.2023 is a reasoned order rightly invoking Section 143A of the NI Act. It is contended that the cheque was furnished as a performance bond under Clause 9.1 and became payable upon termination of the agreement. The agreement, the petitioners’ signatures on the cheque and receipt of the demand notice are admitted.
I have considered the submissions made by learned counsel for the parties and also perused the record.
In Rakesh Ranjan Shrivastava (supra), the Supreme Court has held that the power under sub-section (1) of Section 143A of the NI Act is directory and not mandatory. The parameters governing the exercise of that discretion have been set out in paragraph 16 of the said decision, which reads as under:
“16. When the court deals with an application under Section 143A of the N.I. Act, the Court will have to prima facie evaluate the merits of the case made out by the complainant and the merits of the defence pleaded by the accused in the reply to the application under sub-section (1) of Section 143A. The presumption under Section 139 of the N.I. Act, by itself, is no ground to direct the payment of interim compensation. The reason is that the presumption is rebuttable. The question of applying the presumption will arise at the trial. Only if the complainant makes out a prima facie case, a direction can be issued to pay interim compensation. At this stage, the fact that the accused is in financial distress can also be a consideration… If the defence of the accused is found to be prima facie a plausible defence, the Court may exercise discretion in refusing to grant interim compensation… While deciding the prayer made under Section 143A, the Court must record brief reasons indicating consideration of all the relevant factors.”
In that context the Impugned Order reads as under:
“8. The present application u/s. 143A NI Act has been moved in summary/summons trial case and after framing of notice on 26.04.2022 to which all the accused pleaded not guilty. Hence, the requirements under the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/09/2026 at 12:05:31
said provision are being fulfilled and the procedural compliance is not in question.
The Hon’ble High Court of Delhi in JSB Cargo and Freight Forwarder Pvt. Ltd. & Ors. v. State & Ors. (2021 SCC OnLine Del 5425) (hereinafter referred to as ‘JSB Cargo case’) has held that the Section 143A NI Act is discretionary in nature and that the trial court should satisfy itself on the basis of cogent reasons to exercise the discretion in favour of the complainant. Same is reiterated by Hon’ble High Court of Karnataka in Vijay v. Shekharappa & Anr. (supra) as relied on by the accused. Further, it has also been held in JSB Cargo (supra) that the provision of Section 143A NI Act is not mandatory as the Section uses the word ‘may’. Bare perusal of the section itself leaves no room for confusion as to its discretionary nature as the usage of word ‘may’ is clear and distinct.
The purpose of the provision u/s. 143A NI Act is to provide relief to genuine complainants during the pendency of the trial and to address the issue of undue delay in final resolution of cheque dishonour cases so as to provide compensation to the honest payees in the midst of long trials. In the case in hand, no undue delay such can be attributable to the accused. However, the matter is still at the stage of Complainant’s Evidence, hence, it is at an initial stage of trial.
The primary defence taken by the accused is that the agreement in question has been terminated by the complainant and complainant was not entitled to present the cheque in dispute. The argument that the arbitration proceedings are already on the way and accused has filed their counter claim is immaterial as the present offence u/s. 138 NI Act is a separate and independent proceedings. While framing notice u/s. 251 CrPC, all the accused have stated in their defence that the cheque in dispute was issued by way of security. That the complainant terminated the contract and when they asked the complainant to return their security cheque, complainant instead of returning, presented the same in their bank. With regard to the signature on the cheque in dispute, it is admitted fact that accused no. 2 has signed the same and all the accused have also admitted the receiving of legal notice. Further, the agreement in question is also not disputed. As the transaction per se is not disputed, dispute is as to the existence of legally enforceable debt. This issue, undoubtedly, is a matter of trial which shall be decided after leading evidence from both sides. Hence, same cannot be decided at this stage of trial. Even an attempt to decide the same will lead to a mini-trial which is neither warranted nor allowed at this stage.
When the validity of the cheque itself is not disputed and further when the signature on the same is not disputed, a rebuttable presumption arises in terms of Sections 118(a) and 139 of the NI Act to the effect that the same was issued for a valid consideration and in discharge of legally enforceable debt or liability towards the complainant.
Hence, in such a scenario when the relation between the parties, business transaction in question and signature on cheque is admitted by the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/09/2026 at 12:05:31
accused and further, as already discussed above, the existence/non- existence of legally enforceable liability being a matter of trial, there leaves no room for confusion but to hold that the contentions of the accused at this stage hold no water. At this stage, the accused has not shown any tenable reason why the relief under the provision of Sec. 143A NI Act shall not be extended to the complainant.”
The submission that the power under Section 143A is discretionary is well founded. However, Rakesh Ranjan Shrivastava (supra) requires a prima facie assessment of the complainant’s case and the defence, supported by brief reasons. A perusal of the Impugned Order would reveal that the learned MM has undertaken such an exercise.
The Impugned Order recognises that Section 143A is discretionary and considers the petitioners’ defence that the agreement was terminated and the cheque was issued as security. The agreement, signature on the cheque and receipt of the legal notice are undisputed. The dispute is, thus, confined to the existence of a legally enforceable debt. The question of liability is to be adjudicated at trial and cannot be determined at this stage without entering into a mini-trial, which is neither warranted nor permissible. It may also be noted that under Section 139 of the NI Act, there exists a presumption that “the holder of a cheque received the cheque...for the discharge, in whole or in part, of any debt or other liability.”
No case of financial distress has been pleaded. The pendency of arbitration proceedings is also of no assistance, the proceedings under Section 138 of the NI Act being independent. The petitioners have also declined the opportunity to deposit even 10% of the directed amount.
Bearing in mind the aforesaid facts and circumstances, the Court does not find any justification to interfere into the order dated 24.02.2023. 14. Accordingly, the petition fails and is hereby dismissed, along with the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/09/2026 at 12:05:31
pending application. PURUSHAINDRA KUMAR KAURAV, J SEPTEMBER 2, 2026/aks/ksr This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 09/09/2026 at 12:05:31
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