The Delhi High Court has dismissed a batch of quashing petitions filed under Section 482 of the erstwhile Code of Criminal Procedure, 1973 (now the BNSS, 2023), thereby upholding summoning orders issued in complaints filed by PTC India Financial Services Ltd. (“PFS”) under Sections 138 and 141 of the Negotiable Instruments Act, 1881. The petitions were filed by NSL Energy Ventures Private Limited (“NEVPL”) and its Directors challenging their prosecution for dishonour of post-dated cheques issued towards repayment of a sanctioned financial facility.
PFS had extended a Bridge Loan of ₹125 crore to NSL Nagapatnam Power and Infratech Limited for development of a 1320 MW thermal power project in Odisha. As part of the security structure, post-dated cheques were issued by NEVPL, a related entity. Following persistent defaults, the cheques were presented for encashment and were returned dishonoured. PFS thereafter instituted complaints before the Metropolitan Magistrate, Patiala House Courts, leading to issuance of summoning orders against the Accused Persons.
Aggrieved by the issuance of summoning orders, the Accused approached the Delhi High Court seeking quashing under Section 482. They contended that the Bridge Loan Agreement had been novated through subsequent correspondence relating to a proposed conversion of the Bridge Loan into a Term Loan; that payments made by them constituted discharge of liability; and that certain Directors were not responsible for the conduct of the business and therefore could not have been summoned under Section 141 of the NI Act.
Justice Neena Bansal Krishna rejected these arguments. On the issue of vicarious liability, the Court undertook a role-based scrutiny of each Director and reaffirmed the settled principles under Section 141 NI Act. Relying on Pooja Ravinder Devidasani v. State of Maharashtra (2014) 16 SCC 1; Chitalapati Srinivasa Raju v. SEBI, AIR 2018 SC 2411; and Kamal Kishor Shrigopal Taparia v. India Energen Pvt Ltd, 2025 INSC 223, the Court held that Directors who were in charge of and responsible for the conduct of business can be summoned, and that signatories to the cheques bear direct statutory liability.
The Court accordingly upheld the summoning orders against Directors who had signed the impugned cheques. However, it quashed the proceedings against one Director who was shown as a Non-Executive Director in Form DIR-12 and was neither involved in day-to-day affairs nor a signatory to the cheques.
On the plea of novation, the Court held that no new agreement had come into existence: there was no offer, acceptance or fresh consideration to substitute the existing Bridge Loan Agreement. The part-payments relied upon by the Accused were merely towards outstanding arrears and did not indicate novation. The original Bridge Loan Agreement, therefore, remained fully operational, rendering the post-dated cheques representative of a valid and legally enforceable debt.
In view of these findings, the Court affirmed that the complaints under Sections 138 and 141 of the NI Act were maintainable against NEVPL and the signatory Directors. The batch of quashing petitions was accordingly dismissed.
Appearances:
For the Petitioner: Mr. Pramod Kumar Dubey, Sr. Advocate with Mr. Abhishek Saket,
Mr. Abhigyan, Mr. Nishaank Maitoo, Ms. Amrita Vatsa, Mr. Rupraj Banerjee, Mr. Rama Chanduin B. Siddhartha, Mr. Devrishi Tyagi and Mr. Manish Madhukar, Advocates.
For the Respondents: Mr. Shoaib Haider, APP for the State. Mr. Siddharth Agarwal, Sr. Advocate with Mr. Sidharth Sethi, Ms. Shreya Sircar and Mr. Kunal Saini, Advocates for R-2.
