Final Order 11

Order Details: COPY OF JUDGMENT
Pdf Text: CA No. 146/2025
IN THE COURT OF SH. SYED ZISHAN ALI WARSI,
ADDL. SESSIONS JUDGE-04, NEW DELHI DISTRICT,
PATIALA HOUSE COURTS: NEW DELHI
Criminal Appeal No. 146/2025
DLND010031222025
IN THE MATTER OF:
M/s. Ved Communication
Through its Sole Proprietor Ms. Dakshata Rajesh Singh,
4/G, Shubh Akshay CHS,
Next to Times of India, Bhaskar Colony,
Napuada, Thane West, Maharashtra – 400601.
… Appellant
Versus
M/s HT Media Limited
Through its Authorized Representative
Hindustan Times House,
18-20, KG Marg, New Delhi -110001
… Respondent
Page 1 of 27
-- 1 of 27 --
CA No. 146/2025
Date of Institution : 06.05.2025
Date of arguments : 18.02.2026
Date of Judgment : 14.03.2026
JUDGMENT
1. The present appeal is u/s 415 BNSS read with Section
374 CrPC against judgment dated 22.01.2025 whereby the appellant
has been convicted for the offence punishable u/s 138 NI Act and
order on sentence dated 26.03.2025 whereby the appellant has been
sentenced to pay compensation of Rs.36,00,000/- only (Rupees Thirty
Six Lacs only) to the complainant u/s 357(1)(b) Cr.P.C. within 60
days, in default appellant is sentenced to simple imprisonment for one
month.
2. Brief facts leading to the filing of complaint under
Section 138 of Negotiable Instrument Act (hereinafter referred to NI
Act) is that the accused / appellant is an advertising agency who had
approached the complainant / respondent for promotion/sponsorship
of one of their client namely R. K. Homes Solution Marketing through
Page 2 of 27
-- 2 of 27 --
CA No. 146/2025
Radio Station and the accused had issued release orders and the
complainant duly promoted their client on its radio station as desired
by them and also raised the invoices for the same in their name. It is
also stated that the broadcast certificates for promotion via FCT were
also duly issued by the complainant and never any issue or objection
was raised by any of the accused or the agency in respect of the said
broadcast. As the accused failed to discharge their obligations and
liabilities and failed to clear the invoices of the complainant and in
partial discharge of their liability, towards the dues, the accused had
issued a cheque No. 000165 dated 06.02.2019 drawn on Kotak
Mahindra Bank, Thane, Maharashtra for a sum of Rs.23,33,184/- to
the complainant / respondent. However, when the cheque was
presented by the complainant / respondent in his bank, the same was
returned dishonoured with the remarks "payment stopped by drawer"
vide cheque return memo dated 27.03.2019. Thereafter a legal demand
notice dated 06.04.2019 was sent by the complainant / respondent to
the accused / appellant to make the payment of the cheque amount
within 15 days from the receipt of notice. The notice has been legally
served upon the accused persons / appellants, however, the accused
had not made the payment of the cheque amount within the statutory
period from the date of service of notice. The complaint u/s 138 N.I.
Page 3 of 27
-- 3 of 27 --
CA No. 146/2025
Act has been filed which resulted in the aforesaid conviction and
sentence of the appellant.
3. In order to prove his case, the complainant’s AR Sh.
Deepak Arora has stated that he tendered his pre summoning evidence
by way of affidavit Ex.CW1/X and he relied on the following
documents.
(i) Ex.CW1/1(OSR): Copy of Certificate of incorporation of the
complainant company,
(ii ) Ex.CW1/2(OSR): Copy of authorization in favour of the AR,
(iii) Ex.CW1/3: Copy of sponsorship deal,
(iv) Ex.CW1/4: Copy of invoices, broadcasting certificates,
(v) Ex.CW1/5: Copy of statement of account,
(vi) Ex.CW1/6: Emails exchange between the parties,
(vii) Ex.CW1/7: Cheque no. 000232 dated 31.01.2019 drawn on
HDFC Bank,
(viii) Ex.CW1/8: Returning memo dated 27.03.2019,
Page 4 of 27
-- 4 of 27 --
CA No. 146/2025
(ix) Ex.CW1/9: Legal notice dated 06.04.2019,
(x) Ex.CW1/10: E-mail service receipt,
(xi) Ex.CW1/11: Postal receipts,
(xii) Ex.CW1/12: Tracking reports,
(xiii) Ex.CW1/13: Certificate under section 65B of the Evidence Act,
(xiv) Ex.CW1/14: Corporate information regarding accused company,
(xv) Ex.CW1/15: Document regarding bank account of the
complainant.
4. In the statement of accused u/s 313(1)(b) CrPC r/w
Section 281 Cr.P.C. recorded on 31.01.2024 without oath wherein the
accused admitted that the release order was issued by the accused,
therefore, invoices Ex.CW1/4 were also issued in the name of the
accused. He stated that signatures on the cheque belongs to him but he
did not fill the particulars of the cheques. He had received the legal
demand notice. The cheque in question was given as a security cheque
to the complainant for a release order of an advertising campaign for
his client but the cheque in question was misused by the complainant.
Page 5 of 27
-- 5 of 27 --
CA No. 146/2025
The advertisement given by the complainant company of his client
namely R.K. Homes Solutions Pvt. Ltd. He had no liability towards
the cheque in question. The accused was only an advertising agency
and at the time of booking of the ad, the advertising agency i.e. the
accused was required to give a security cheque to the complainant and
then only the ad could be booked. The cheque in question was given
as a security cheque at that time. The meeting was conducted between
the complainant and the client R.K. Homes Solutions at R.K. Homes
office. Thereafter, as per the willingness of accused, he examined
himself as DW-1 and was cross-examined by Ld. Counsel for the
complainant.
5. On the basis of the material and evidence adduced by the
parties, the Ld. JMFC convicted the appellant for the offence u/s 138
NI Act.
GROUNDS OF APPEAL
6. The appellant has challenged the impugned judgment
and order on sentence on following grounds which are reproduced
herein below:
Page 6 of 27
-- 6 of 27 --
CA No. 146/2025
A. Because the impugned judgement and order are perverse and
unsustainable in the eyes of Law, being against settled principles of
Law and based on conjectures and surmises.
B. Because the impugned order is against law and fact of record and
as such is liable to be set aside.
C. Because the Ld. JMFC has not correctly appreciated the facts and
the averments stated in the legal notice, complaint filed by the
respondent and also the cross examination conducted by the counsel
for the appellant and passed the impugned judgement dated
22.01.2025 of conviction against the appellant.
D. Because the Ld. JMFC failed to appreciate the fact that, since the
'Ad-Campaigns' were broadcasted for the client & the appellant was
merely an agent who facilitated business for the respondent, therefore
he wasn't liable to pay a single penny.
E. Because the Ld. JMFC failed to appreciate the applicable
judgments relied upon by the appellant in its Reply to the 'Application
U/s 143(A) of the NI Act, 1881' filed by the respondent.
F. Because the Ld. JMFC overlooked the fact that the appellant hasn't
disputed the factum of issuance of the cheque regarding the complaint
and not the amount specifically, therefore the amount has been written
Page 7 of 27
-- 7 of 27 --
CA No. 146/2025
in the cheque by the respondent before depositing it with their bank
which amounts to misuse of cheque & misappropriation of the
property entrusted by the appellant to the respondent.
G. Because the Ld. JMFC overlooked the fact that the amount of
release orders and the amount of work done was different, and the
reason for its client not making payment to it was that, a
representative working in the 'Accounts Department of Red FM-
(Third Party Station) had disclosed the commission amount as well as
the Invoice raised by the Appellant meant for its client was disclosed
to the client directly, therefore the client of the appellant refused to
pay a single penny and after receiving no payments & further
instructions from the client, the appellant had instructed the
respondent to stop the 'Ad-Campaigns' immediately, therefore the
'Blank Cheque' entrusted as 'Security Cheque' by the appellant to
respondent has been grossly misused after putting the amount as per
their own convenience & it wasn't issued as a 'legally enforceable debt
or liability'.
H. Because the Ld. JMFC overlooked the fact that the AR of the
Complainant company in its Cross-Examination falsely deposed as
work worth Rs. 30 Lacs was done, which is a highly inflated figure
and contrary to the amount of cheque in question i.e., 23,33,184/-
Page 8 of 27
-- 8 of 27 --
CA No. 146/2025
therefore at no point the credibility of the cheque amount can be
called as reliable & hence the Ld. JMFC overlooked as to how the AR
of the Complainant company has blatantly lied on 'OATH' in its
Cross-Examination.
I. Because the Ld. JMFC overlooked the defence taken by the DW-1
(Husband of the Appellant) about registration of FIR, possession of
the security cheques of its client & Insolvency proceedings against its
client before the NCLT
It is prayed that the judgment dated 22.01.2025 and order
on sentence dated 26.03.2025 be set aside.
ARGUMENTS ON BEHALF OF LD. COUNSEL FOR THE
APPELLANT:
7. Ld. Counsel for the appellant submits that the cheques
were not issued for discharge of any legally enforceable debt or
liability but the cheque is of proprietorship firm as the husband is
running business in wife’s name i.e. appellant. The payment was
stopped by drawer as the cheque was issued as security cheque for a
release order of advertising campaign for a client and a cheque has
Page 9 of 27
-- 9 of 27 --
CA No. 146/2025
been misused. It is also submitted that the name of the principal i.e.
R.K. Home has already been disclosed in the release order and by
virtue of section 230 of the Indian Contract Act agent is not liable for
the act of principal. In the evidence of CW1 he has admitted the
relation of principal and agent in his cross examination. Thus the
appellant is not liable under Section 138 of the Negotiable Instrument
Act and entitled for acquittal.
7.1. During arguments, Ld. Counsel for the appellant has
relied on certain judgments:
(a) Marine Container Services South Pvt. Ltd. Vs. Go Go Garments
{(1998)3SCC247} & MANU/SC/0991/1998
(b) Nand Lal Vs. Dhian Singh and Ors. {2025:HHC:12863-DB} &
MANU/HP/0665/2025
(c) Mahesh Edible Oil Industries Ltd. Vs. Ranjit Kr. Modak and Ors.
{2012(111)AIC 339} & MANU/GH/0429/2011
(d) Virender Khullar Vs. American Consolidation Services Ltd. and
Ors. {(2016)15SCC308} & MANU/SC/0909/2016
Page 10 of 27
-- 10 of 27 --
CA No. 146/2025
ARGUMENTS ON BEHALF OF LD. COUNSEL FOR THE
RESPONDENT:
8. During arguments, Ld. Counsel for the respondent
submitted that DW1 (husband of accused) during his cross
examination admitted that the accused firm takes commission for their
work from their clients for every release order so issued by them. It is
also admitted by him that the release order was issued in the name of
accused firm which no where mentioned that the payment for the
work was to be made by the client. It is also admitted that the tax
invoice issued by the complainant was also in the name of accused
firm and the complainant company did advertise for their client until
the advertising campaign was cancelled by the accused firm and for
every release order so issued by them, they raised corresponding
invoices with their client and for the same the said client had also
given cheques to the accused firms and the accused has filed FIR
against their client and the accused has also claimed the amount due to
them qua the present advertising campaign. It is also submitted that
there are two separate independent agreements and transactions one is
between the complainant and the accused and the other was between
accused and his client and both the contracts are independent of each
other as the parties in each of their agreements are principals in their
Page 11 of 27
-- 11 of 27 --
CA No. 146/2025
own capacity. There was no tripartite agreement and no relation of
principal and agent exists as there was no agency. Accused
independently raised invoices against R.K. Home which are none of
the concern of the complainant / respondent and also claiming through
various litigations from their client i.e. R.K. Homes independently
without making the complainant / respondent a party in those
litigations. The monetary dealings between R.K. Homes and the
accused is not on commission basis while on principal to principal
basis. Thus Section 230 of the Indian Contract Act has no application
in the present case as no relationship of agency exists in the present
case.
ANALYSIS AND FINDINGS
9. Heard Ld. Counsel for Appellants, Ld. Counsel for
complainant/respondent and perused the appeal file as well as the Trial
Court Record.
10. Before proceeding further, it is essential to consider
Section 138 of NI Act which is reproduced as follows:
Page 12 of 27
-- 12 of 27 --
CA No. 146/2025
“138. Dishonour of cheque for insufficiency, etc., of funds in the
account.—
Where any cheque drawn by a person on an account maintained
by him with a banker for payment of any amount of money to
another person from out of that account for the discharge, in
whole or in part, of any debt or other liability, is returned by the
bank unpaid, either because of the amount of money standing to
the credit of that account is insufficient to honour the cheque or
that it exceeds the amount arranged to be paid from that account
by an agreement made with that bank, such person shall be
deemed to have committed an offence and shall, without
prejudice to any other provisions of this Act, be punished with
imprisonment for a term which may be extended to two years, or
with fine which may extend to twice the amount of the cheque, or
with both:Provided that nothing contained in this section shall
apply unless—
(a) the cheque has been presented to the bank within a period of
six months from the date on which it is drawn or within the
period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the
case may be, makes a demand for the payment of the said amount
of money by giving a notice in writing, to the drawer of the
cheque, [within thirty days of the receipt of information by him
from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the
said amount of money to the payee or, as the case may be, to the
holder in due course of the cheque, within fifteen days of the
receipt of the said notice.”
Page 13 of 27
-- 13 of 27 --
CA No. 146/2025
Explanation- For the purposes of this section, “debt or other
liability” means a legally enforceable debt or other liability.
11. Thus, the essential ingredients of Section 138 NI Act are-
(i) That the person must have drawn a cheque on an account
maintained by him in a bank for payment for a certain sum of money
to another person from out of that account for the discharge of any
legally enforceable debt or liability;
(ii) Cheque has been presented to the bank within a period of
three months from the date on which it is drawn or within the period
of its validity whichever is earlier;
(iii) That cheque has been returned by the bank unpaid either
because of the amount of money standing to the credit of the account
is insufficient to honour the cheque or that it exceeds the amount
arranged to be paid from that account by an agreement made with the
bank;
(iv) The payee or the holder in due course of the cheque has
made a demand for the payment of the said amount of money by
giving a notice in writing, to the drawer of the cheque, within 30 days
of the receipt of information by him from the bank regarding the
return of the cheque as unpaid; and
Page 14 of 27
-- 14 of 27 --
CA No. 146/2025
(v) The drawer of such cheque fails to make payment of the
said amount of money to the payee or the holder in due course of the
cheque within 15 days of the receipt of the said notice.
12. These essential ingredients were also laid down by the
Hon’ble Supreme Court in the case of
Kusum Ingots and Alloys Ltd.
Vs. Pennar Peterson Securities Ltd. (2000) 2 SCC 745.
13. In the present case, the appellants had admitted that, the
cheque was signed by him but given as security cheque. This fact is
also not disputed that the cheque was returned back dishonoured with
the remarks “payment stopped by drawer” vide cheque return memo
dated 27.03.2019. It is also not disputed that legal demand notice was
not issued or received by the accused / respondent. The complaint is
also filed before the Ld. Trial Court within the statutory time period.
Thus, essential ingredients for section 138 N.I. Act are satisfied except
for the disputed fact, i.e. defence, that the cheque was issued not for
legally enforceable debt or liability but as an agent, as a security
cheque and the accused / respondent is not liable for conviction u/s
138 N.I. Act by virtue of Section 230 of the Indian Contract Act.
Page 15 of 27
-- 15 of 27 --
CA No. 146/2025
14. Before proceedings further it is essential to consider
section 230 of the Indian Contract Act and the same is reproduced as
follows:-
“230. Agent cannot personally enforce, nor be bound by, contracts on
behalf of principal.—
In the absence of any contact to that effect an agent cannot personally
enforce contracts entered into by him on behalf of his principal, nor is
he personally bound by them. Presumption of contract to contrary.—
Such a contract shall be presumed to exist in the following cases:—
(1) where the contract is made by an agent for the sale or purchase of
goods for a merchant resident abroad;
(2) where the agent does not disclose the name of his principal;
(3) where the principal, though disclosed, cannot be sued.”
15. On a perusal of section 230 of the Indian Contract Act the
first thing is to be considered whether the defence taken by the
Appellant / accused is established by him / her via evidence or not i.e.
the relationship of principal and agent between R.K. Homes and the
appellant / accused is established or not and at the same time the
complainant / respondent has the knowledge of agency or not.
Page 16 of 27
-- 16 of 27 --
CA No. 146/2025
16. On perusal of the record i.e. Ex.CW1/3 Advertisement
Release Order dated 28.11.2018 the client name is written as R.K.
Home Solution Marketing and Consultancy Private Limited and the
same and tax invoice Ex.CW1/4 is toward charges against R.K Home
Sponsorship activity and advertiser is also shown as R.K. Home
Solution Marketing at Mumbai except for these there is no contract or
agreement on record to show that the appellant / accused has disclosed
the name of the principal to the complainant / respondent also in the
present case the cheque was signed i.e. Ex.CW1/7 is signed by D.R.
Singh i.e. appellant / accused (signing of cheque is admitted by the
accused) and it is no where indicated that they are acting as an agent
for the named principal i.e. R.K. Home Solution Marketing at
Mumbai. Further, no evidence or document brought on record by the
appellant / accused that the complainant was in the knowledge of the
fact that the accused / appellant were acting as agents. On the other
hand the raising of release order / invoices alongwith corresponding
tax invoices indicates that there were separate and independent
dealing between the complainant and accused on one hand and on the
other hand between accused and R.K. Home i.e. each one is acting
Principal of himself and no relationship of agency is establish by
credible evidence. In cross examination of DW1 (husband of the
Page 17 of 27
-- 17 of 27 --
CA No. 146/2025
accused) it is stated that legal proceedings that is civil, FIR,
proceedings before NCLT is pending between the accused and his
client, however, the respondent has not been made a party in those
proceedings. Even the term used in the present case by the appellant /
accused is commission agent, that also does not establish the
relationship of agency as no terms and conditions are on record with
respect to the said purpose of agency. In cross examination of DW1,
he has stated that there is no legal bar of restrictions on the media
house / publication house dealing directly with the customer and he
also admitted that there is no written agency agreement with the
complainant company also said they worked as independent
commission agent with all media houses. Thus it clarifies that the
appellant / accused was acting independently.
17. It is also relevant that in Notice u/s 251 CrPC the
appellant / accused has not claimed any relationship of agency and in
cross examination of DW1 it is stated by him that there was no written
agency agreement with complainant company as they worked as
independent commission agent with all media houses. Thus it is
established that the accused / appellant was acting in its independent
agency and not as an agent of its client R.K. Home Solution
Page 18 of 27
-- 18 of 27 --
CA No. 146/2025
Marketing. Thus, the appellant / accused failed to established the
relationship of agency the case laws relied by Ld. Counsel for
appellant / accused is also not attracted in the present case as fact and
circumstances of the present case are different.
18. As the accused / appellant has admitted the signatures on
the cheque and the complainant has proved the original cheque,
original return memo and the legal notice as well as its delivery as
well as filing the complaint in the statutory period through his AR’s
testimony and his AR’s testimony remained unrebutted in cross-
examination and the relationship of principal and agent was not
established by the accused / appellant. The presumption u/s 118A and
139 of the NI Act has to be raised against the accused.
19. The provisions under Section 118 and 139 of NI Act are
reproduced as follows:
“118. Presumptions as to negotiable instruments.—Until the
contrary is proved, the following presumptions shall be
made:— (a) of consideration:—that every negotiable
instrument was made or drawn for consideration, and that
every such instrument, when it has been accepted, indorsed,
negotiated or transferred, was accepted, indorsed, negotiated
Page 19 of 27
-- 19 of 27 --
CA No. 146/2025
or transferred for consideration; (b) as to date:—that every
negotiable instrument bearing a date was made or drawn on
such date; (c) as to time of acceptance:—that every accepted
bill of exchange was accepted within a reasonable time after
its date and before its maturity; (d) as to time of transfer:—
that every transfer of a negotiable instrument was made
before its maturity; (e) as to order of indorsements:—that
the indorsements appearing upon a negotiable instrument
were made in the order in which they appear then on; (f) as
to stamp:— that a lost promissory note, bill of exchange or
cheque was duly stamped; (g) that holder is a holder in due
course:—that the holder of a negotiable instrument is a
holder in due course: provided that, where the instrument
has been obtained from its lawful owner, or from any person
in lawful custody thereof, by means of an offence or fraud,
or has been obtained from the maker or acceptor thereof by
means of an offence or fraud, or for unlawful consideration,
the burden of proving that the holder is a holder in due
course lies upon him.”
“139. Presumption in favour of holder.—It shall be
presumed, unless the contrary is proved, that the holder of a
cheque received the cheque of the nature referred to in
section138 for the discharge, in whole or in part, of any debt
or other liability.”
20. It is also relevant to consider that the Hon’ble Supreme
Court in
Basalingappa v. Mudibasappa; (2019) 5 SCC 418; decided on
09.04.2019, summarized the law. The following was laid down in para
25: which is reproduced as below:
Page 20 of 27
-- 20 of 27 --
CA No. 146/2025
"25. We have noticed the ratio laid down by this Court in the above
cases on sections 118(a) and 139, we now summarise the principles
enumerated by this Court in following manner:
25.1. Once the execution of cheque is admitted section 139 of the
Act mandates a presumption that the cheque was for the
discharge of any debt or other liability.
25.2 The presumption under section 139 is a rebuttable
presumption and the onus is on the Accused to raise the probable
defence. The standard of proof for rebutting the presumption is
that of preponderance of probabilities.
25.3 To rebut the presumption, it is open for the Accused to rely
on evidence led by him or the Accused can also rely on the
materials submitted by the Complainant in order to raise a
probable defence. Inference of preponderance of probabilities
can be drawn not only from the materials brought on record by
the parties but also by reference to the circumstances upon which
they rely.
25.4 That it is not necessary for the Accused to come in the
witness box in support of his defence, section 139 imposed an
evidentiary burden and not a persuasive burden.
25.5 It is not necessary for the Accused to come in the witness
box to support his defence.”
21. Thus, in the light of aforesaid discussion, the
presumption u/s 118 and 139 NI Act was drawn against the
Page 21 of 27
-- 21 of 27 --
CA No. 146/2025
appellant/accused and accused/appellant has failed to prove anything
contrary on the basis of preponderance of probabilities by way of
evidence. As the evidence of the complainant found credible and
truthful and left unrebutted in cross examination. All ingredients of
Section 138 NI act is fulfilled by the complainant and accused failed
to rebut the presumption u/s 139 NI Act. This court is not in
agreement with the grounds of appeal as well as arguments of the
counsel for the appellant/accused.
22. Further, the observations and findings of the Ld. Trial
Court in the opinion of this court is made after proper appreciation of
the evidence on record as well as on well established legal principals
as can be seen from the following paras of the Ld. Trial Court’s
judgment which is reproduced as below:
“16. FIRSTLY, the cheque Ex. CW1/7 which bears the signa-ture of
the accused and is of an amount of Rs. 23,33,184/- was presented by
the complainant in his bank which returned back dishonoured with the
remarks "payment stopped by drawer" vide cheque return memo dated
27.03.2019. The signatures on the cheque as well as the factum of
issue of cheque in question for the amount so mentioned therein has
Page 22 of 27
-- 22 of 27 --
CA No. 146/2025
been admitted by the accused. As per Section-139 of the NI Act it
shall be presumed that the holder of the cheque received the cheque in
discharge of any debt or liability, unless contrary is proved. Thus, as
per law it shall be presumed that the cheques was issued by the
Accused in favour of the Complainant for the discharge of any debt or
liabil-ity. However, the said presumption is a rebuttable presumption
and the onus its on the accused to rebut the same.
17.
Thus, now what has to be seen from the facts of the case
is whether or not the Accused has been able to dispel the presumption
under Section-139 of the NI Act.
i. It is the defence of the accused that the cheque in ques-tion was
given as a security to the complainant and she even urged the
complainant vide email dated 18.02.2019 (Mark X) not to use the said
security cheque. The said copy of email has been filed without the
certificate of Section-65B of Indian Evidence Act and is hence
inadmissible. However, even if the cheque is taken to be as a security
cheque, then if at the date of presentation of cheque the accused owes
the complainant the amount so mentioned in the cheque, it is
equivalent to 'a cheque issued for a legally enforceable debt' and
dishonour of such a cheque is an offence un-der Section-138 of NI
Act. The same was held by Hon'ble Supreme Court of India in the
Page 23 of 27
-- 23 of 27 --
CA No. 146/2025
case of Sripati Singh v. State of Jharkhand & Anr, 2021 SCC Online
SC 1002.
ii. It is further the defence of the accused that she did not owe any
liability to the complainant neither at the time of giving the cheque
and nor at the time of presentation of it and hence the cheque does not
represent a legally enforceable debt or liability. First of all, it is
admitted by the accused that the complainant company did advertise
for their client R.K. Homes Pvt Solutions ltd un-til the advertising
campaign got cancelled. Thus, it is not disputed that the work was
done by the complainant (though partially until cancellation).
However, as per the accused the said work was done by the
complainant 'for' the client and therefore it is 'the client' who is li-able
to make the payment to the complainant and not accused. It is further
stated that the accused is merely a commission agent liasioning
between the complainant and the client but since the client did not
payment to them (accused) they could not in turn make the payment
to the complainant. Therefore, the plea of the accused is that since the
accused firm was merely acting as an agent of the client so they are
not personally li-able for the debt of the principal as per Section-230
of Indian Contract Act.
Page 24 of 27
-- 24 of 27 --
CA No. 146/2025
iii. Now, lets see if Section-230 of Indian Contract Act is applicable in
the present case. Use of the word 'agent', as in the present case
commissioning agent, is not conclusive proof that relationship of
agency exists between the parties. The true nature of relationship is to
be deter-mined by the Court which maybe done by examining the
dealings between the parties. It is admitted by the accused that the
release order as well as the tax invoice was issued in the name of the
accused firm. Further-more, it is also admitted that for every release
order so issued by them, they raised corresponding invoices with their
client and for the same the said client had also given cheques to them.
So, summing it up there was an advertisement release order issued by
the accused and a corresponding tax invoice raised by the complainant
in name of accused firm pursuant to which the complainant also ran
the advertising campaign (until it got can-celled). Moreover, the
accused was raising corresponding invoices with the client as well.
So, there were two independent transactions: one between the
complainant & accused and the other between the accused & client.
And since the accused firm was rendering its services, they were
earning commission for the same. Apart from the release order and tax
invoice which were in the name of accused firm, it was the accused
firm which gave its cheque to the complainant as a security/guarantee
Page 25 of 27
-- 25 of 27 --
CA No. 146/2025
of payment by the client. There is no evidence on record which shows
that there were any direct dealings between the complainant and the
client (principal, as alleged). Thus, in light of the above-mentioned
documentary evidence and the admissions of the accused it is very
much clear that the amount so mentioned in the cheque in question
was actually 'due by the accused to the complainant and hence,
Section-230 of Indian Contract Act is not applicable in the present
case.
The amount so mention on the cheque in question is
not disputed by the accused. Furthermore, since factum of
issuance of cheque and tax invoices is admitted by the
accused along with the fact that the complainant did
complete the work (until it got cancelled), it means that the
cheque in question does represent a legally enforceable debt
or liability at the time of presentation of cheque.”
23. In view of the above discussion and reasoning, this Court
does not find any merit in the appeal and the case laws relied by Ld.
Counsel for the appellant is not applicable to the facts and
circumstances of the present case. Accordingly, present appeal is
dismissed. The impugned judgment dated 22.01.2025 and order on
sentence dated 26.03.2025 are upheld. Parties to bear their own cost of
appeal.
Page 26 of 27
-- 26 of 27 --
CA No. 146/2025
TCR be sent back with copy of this judgment.
Appeal file be consigned to Record Room after necessary
compliance.
Announced in the SYED ZISHAN ALI WARSI
open court on 14.03.2026 ADDL. SESSIONS JUDGE-04,
NEW DELHI DISTRICT,
PATIALA HOUSE COURTS,
NEW DELHI/ 14.03.2026
Page 27 of 27
-- 27 of 27 --