W.P.(CRL) 2473/2017 & W.P.(CRL) 2476/2017 Page 1 of 24

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Reserved on: 18

th

December, 2025

Pronounced on: 10

th

March, 2026

+ W.P.(CRL) 2473/2017 & CRL.M.A. 14213/2017

SUBHASH C. SAHNI

.....Petitioner

Through: Mr. Dayan Krishnan, Senior

Advocate with Mr. Rajiv Tyagi,

Mr. Sridhar Kale, Mr. Rahul Tyagi

and Mr. Rohit Gupta, Advocates

versus

STATE & ANR.

.....Respondent

Through: Mr. Sanjeev Bhandari, ASC with

Mr. Arjit Sharma and Ms. Sakshi Jha,

Advocates for the State

Mr. Yashvir Sethi, Mr. Amit Kumar

Singh, Mr. Varun Maheshwari,

Mr. Manan Soni and Mr. Pranav

Sharma, Advocates for R-2

+ W.P.(CRL) 2479/2017 & CRL.M.A. 14242/2017

SUBHASH C. SAHNI

.....Petitioner

Through: Mr. Dayan Krishnan, Senior

Advocate with Mr. Rajiv Tyagi,

Mr. Sridhar Kale, Mr. Rahul Tyagi

and Mr. Rohit Gupta, Advocates

versus

STATE & ANR.

.....Respondent

Through: Mr. Sanjeev Bhandari, ASC with

Mr. Arjit Sharma and Ms. Sakshi Jha,

Advocates for the State

W.P.(CRL) 2473/2017 & W.P.(CRL) 2476/2017 Page 2 of 24

Mr. Yashvir Sethi, Mr. Amit Kumar

Singh, Mr. Varun Maheshwari,

Mr. Manan Soni and Mr. Pranav

Sharma, Advocates for R-2

CORAM:

HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA

J U D G M E N T

NEENA BANSAL KRISHNA, J.

1. The aforesaid two Petitions have been filed under Section 482 Cr.P.C

read with Article 227 of the Constitution of India for quashing the

Complaint Case No.2216/2016 and 9984/2016 under Section 138 NI Act

along with all the subsequent Order, including Order dated 05.05.2017.

2. Briefly stated, the Respondent/Complainant had filed three

Complaints under Section 138 NI Act in respect of three cheques which

when presented for encashment, were dishonoured, as detailed under :

Cheque No. Date Amount

616102 25.09.2014 Rs.20 lakhs

616104 26.12.2014 Rs.35 lakhs

616105 20.04.2015 Rs.40 lakhs

3. The Petitioner was summoned, vide Order dated 09.12.2015. The

Petitioner filed an Application under Section 245 Cr.P.C for discharge,

which has been dismissed, vide Order dated 05.05.2017.

4. The Petitioner has stated that he is a Non Resident Indian, having

obtained his Engineering Degree from BITS, Pilani and Masters in

Engineering from Illinois Institute of Technology, Chicago, USA. He is

settled in USA, for the last 40 years.

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5. Respondent No.2, Sh. Anil Sethi, his nephew, is a school dropout and

an uneducated person who had lost his father at an early age. Being the

maternal uncle of the Respondent/Complaint, with a view to help him

establish in life, Petitioner formed a Company in India, under the name and

style of CompuAction Financial Services India Private Limited; obtained the

Membership of the National Stock Exchange in the name of the Company

and nominated the Respondent as the full time Director of the Company. He,

as the Director in the Company, was managing the entire affairs, on his own.

For the services rendered to the Company, he was entitled to draw monthly

remuneration.

6. The Petitioner, being a citizen of USA, was a Director of the

Company but was represented through his proxy. He seldom visited India

and had given a free hand to the Complainant, to run the Indian business and

had left all his Indian business, properties, bank accounts, operation, petty

cheque payments etc., in the care of the Respondent/Complainant.

7. Although, the Petitioner had good intentions to help the Respondent

to establish himself in his life by setting up a Company for him, the

Complainant possibly thought that he could do better in life without the

experience, financial backing and the protective shield of the Petitioner, the

maternal uncle.

8. The Respondent took unlawful advantage of the complete faith and

trust that was placed in him by the Petitioner. He started mismanaging the

business of the Company by manipulating the Book of Accounts, opening

fake Account of Customers, wrongly advising the Company’s customers,

mis-utilizing and mis-appropriating the funds of the customers as well as of

the Company and causing financial losses to the Company. In the year 1985,

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the net worth of the Company was Rs.2 Crores, which came to down to

Rs.56 lakhs in the year 2014. As on 31.03.2014, the Company had lost

almost 75% of its net worth, customer base and business, due to the

fraudulent acts and misdeeds of the Complainant.

9. On or about August, 2014 when the Petitioner visited India and

reviewed the business of the Company and posed some tough questions to

the Respondent on the reasons for dwindling fortunes of the Company, the

Complainant instead of answering the queries, manhandled the Petitioner

and left the Company by threatening to teach everyone a lesson.

10. Eventually, in the Annual General Meeting of the Company on

22.09.2014, the Complainant, along with group of men, came to the

registered office of the Company and caught hold of the Petitioner by his

collar and threatened him with dire consequences. The Petitioner left for

USA in the night of 23/24.09.2014.

11. Thereafter, the Company passed Resolution dated 15.01.2015

whereby the Respondent was removed from the Directorship of the

Company. The Complainant who was having the personal cheque book of

the Petitioner, thus filled in the aforesaid three cheques with the dates,

25.09.2014, 26.12.2014 and 20.04.2015 in the sum of Rs. 20 lakhs, Rs.35

lakhs and Rs.40 lakhs respectively.

12. The Petitioner has further explained that in the year 2013, RBI had

ordered the cancellation of old MICR Cheque Books, to be replaced with

new Cheque Books. These old cheques have been utilized by the

Complainant, to draw the aforesaid three cheques from his old MICR

Cheque Book of year 2004-05, which had been left by the Petitioner with

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the Complainant, trusting him as he was the nephew. The cheques on

presentation, were dishonoured.

13. The Petitioner further asserted that the HDFC Account was being

handled by the Respondent/Complainant and was fully aware that there was

hardly any balance in the said Account. The three cheques with a malicious

intent, have been forged in order to implicate the Petitioner, in these false

cases.

14. The Respondent had alleged in his Complaint that he was entitled to

10% of gross brokerage as commission, besides the monthly remuneration.

The Complainant alleged that these Cheques were issued by the Petitioner

for the payment of the Director’s remuneration, in the form of commission

allegedly due to the Complainant on brokerage and other income, earned by

the Company.

15. The Petitioner filed the copy of Profit & Loss Account and Balance

Sheets of the Company before the learned M.M., to reflect the Profit and

Losses. The Petitioner explained that the financial Statements of the

Company shows that the Complainant had been paid Director’s

Remuneration of Rs.2,08,800/- during the Financial Year 2011-12 to 2013-

14; the Director’s Remuneration of Rs.34,320.30/- during 2004-05 and

Rs.23,332.50/- during the Financial Year 2005-06 and Remuneration of

Rs.1,76,800/- in Financial Year 2008-09 and Rs.1,72,800/- during the

Financial Year 2009-10. All the Balance Sheets had been prepared under the

supervision of the Complainant, being the Resident Director and Whole

Time working Director of the Company. All the Balance Sheets had been

signed by the Respondent/Complainant.

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16. Based on these figures of brokerage and profits, it is clear that the

three Cheques aggregating to Rs.95,00,000/- which the Complainant

claimed to have been issued as 10% Commission on brokerage due to him,

is clearly fabricated and forged. Even as per the records of the Company

which has earned gross brokerage of Rs.1,86,29,153.22/- during the last 10

years. The Cheque amounts do not add up to 10% commission, as claimed in

the Complaint, reflecting that no such amount was due and payable by the

Petitioner to the Respondent.

17. Moreover, under Section 209 of the Companies Act, the Company is

required to record all transactions relating to income and expenditure

incurred during the year, in its Books of Accounts. The payment of

remuneration to the Complainant by the Company, was an item of expense

which has been duly recorded in the Books of Accounts. In none of the

Profit & Loss Accounts or Balance Sheets, is there any entry regarding

either the payment of any commission to the Complainant or any

commission having accrued or payable to the Complainant, from the

Company. The Accounts of the Company have been audited by an

independent Auditor, to certify that they present a thorough and fair affairs

of the Company.

18. The Complainant has been at the helm of the affairs of the Company,

for the last 15 years and has been signing all the staff Payroll and business

cheques, including his monthly salary cheque. There is no explanation as to

why would he waited for 19 years, for signing the cheque towards his

alleged commission. The Complainant had completely forgotten to record

his remuneration by way of alleged commission from the Company, in the

Book of Accounts. He also did not remember to instruct the Accountants of

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the Company or the Auditors, to record his due commission in the Books of

Accounts of the Company. The Company’s records available for the last 7

years do not borne out that the Complainant was entitled to any commission

on the brokerage and commission from the Company.

19. Strangely, it was only on the termination of his relationship with the

Company, that he remembered of his commission. Further, he had to turn to

the Petitioner to sign the personal cheques for himself, towards his

commission allegedly due from the Company. As it is the admitted case of

the Complainant, that the debt was due from the Company and not from the

Petitioner.

20. The falsity of the Complaint is also evident as the impugned cheques

have been issued from the personal account of the Petitioner, for the

payment of Director’s Remuneration in the form of Commission to the

Complainant, even though the Petitioner had no personal liability for the

alleged dues of the Company.

21. The Petitioner has further stated that the Complainant had prevented

the Petitioner from conducting the meeting at the Office on 22.09.2014 and

had posed stiff resistance and adopted muscle power at the General Meeting

of the Company and yet, it is the make-believe case of the Respondent that

the Petitioner amicably issued the three cheques aggregating to

Rs.95,00,000/-. Allegedly, the three cheques are dated from 25.09.2014

onwards, while the Petitioner had left for USA in the night of

23/24.09.2014.

22. Moreover, the Notice issued under Section 138 NI Act on behalf of

the Complainant, does not cite any decision or Resolution passed by the

Company, entitling him to 10% brokerage or commission on transactions of

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the Company, aside from monthly remuneration, as per the alleged

Settlement between the Complainant and the Petitioner. There is no proof of

alleged Settlement with the Petitioner, produced by the Complainant.

23. It further deserves to be emphasized that in the last 19 years, no

Commission or the brokerage by the Company, was ever paid by the

Company to the Complainant. There is no document produced by the

Complainant to show that he was ever titled to any brokerage or the

Commission from the Company.

24. The Petitioner further claimed that he never received any Notice for

Dishonour of the Cheque No.616104 dated 10.07.2015 for Rs.35 lakhs, from

the Complainant.

25. The Petitioner has asserted that learned M.M had passed Summoning

Order dated 09.12.2015 in a mechanical manner, without examining whether

the Complaint discloses the offence under Section 138 NI Act, though the

Petitioner has appeared and obtained the Bail from the Court.

26. Thereafter, the Petitioner moved an Application under Section 251

read with Section 245 Cr.P.C for discharge, but the same was dismissed

vide Order dated 05.05.2017 arbitrarily, without considering the judgments

of the Supreme Court and this Court. The learned M.M erroneously

observed that Section 251 of the Code, did not contemplate any indulgence

at the stage of framing of Notice or that the Accused was not without

remedy and he could approach this Court under Section 482 Cr.P.C, by

placing reliance on Subramanium Sethuraman vs. State of Maharashtra and

Anr., AIR 2004 C 4711.

27. It was, therefore, submitted that the Complaint under Section 138 NI

Act is liable to be quashed.

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28. The main grounds agitated are that the averments made in the

Complaint and the material placed on record, do not disclose the do not

satisfy the ingredients under Section 138-142 NI Act and commission of

offence. Therefore, the Summoning Order dated 09.12.2015 is liable to be

set aside.

29. Furthermore, it is nowhere asserted in the Complaint that the cheques

had been issued in discharge of lawful debt due to the Complainant. The

claim of the Director of the Company is only against the Company and not

against the Directors as they are not personally liable for the debts of the

Company. Moreover, the presumption under Section 139 NI Act, does not

arise against the Petitioner as he did not owe any debt to the Complainant.

30. Furthermore, the Petitioner is a Non Resident Indian, while the

Complainant was a whole Director of the Company. If the amount as alleged

was actually due to him, he would have withdrawn the same from the

Company at any time and not after he was terminated from the Directorship

of the Company. These facts throw much light on the lack of bona fide of

the Complainant.

31. Reliance is placed on Adalat Prasad vs. Roop Lal Jindal, (2004) 7

SCC 338; Bhushan Kumar vs. State of NCT of Delhi & Ors., (2012) 5 SCC

424 and S.K. Bhalla vs. State & Ors., 2011 (180) DLT 219. Moreover,

Section 245(2) Cr.P.C provides that Accused may be discharged at any

previous stage by the Magistrate if the grounds of charge are found to be

groundless. Reliance is placed on Cricket Association of Bengal vs. State of

West Bengal, (1971) 3 SCC 239. Sub-Section (2) of Section 245 empowers

the Magistrate to discharge the Accused any previous stage.

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32. It is further contended that the cheques were not for discharge of any

debt or liability to attract Section 138. Reliance is placed on Indus Airways

Private Limited vs. Magnum Aviation Private Limited (2014) 2 (12) SCC

539 and Gajendra Nagpal vs. Jagdeep Bhatia & Ors. 2016 SCC OnLine Del

1994 (2016) 229 DLT (CNA) 14.

33. Furthermore, the Petitioner had noticed withdrawals from his personal

account, even though he had not signed any cheques for the said amounts,

although no major amounts had been withdrawn. It appears that the

Respondent had been forging his signatures on the cheques, the chances of

the Respondent forging the signatures on the aforesaid cheques, cannot be

overruled.

34. The present Petition is an abuse of process of law. In the hindsight, it

appears that the Complainant had been planning for his fraudulent action for

some time and the Complainant is in continuation of such actions.

35. It is, therefore, submitted that the Complaint and all the subsequent

Orders therein are liable to be quashed.

36. The Respondent No.2/Complainant filed his Reply to the Petition,

wherein it was asserted that the Petition has been filed to involve the

Respondent in false and frivolous legal proceedings, so as to compel him to

forgo his claim and not to pursue the legal cases filed by him, in the Court of

learned M.M.

37. After the framing of Notice, Application under Section 145 NI Act

had been conceded by the Petitioner and the matter is fixed for cross-

examination of the Respondent. The Petitioner intends to compel this Court

to accept the defence of the Petitioner, without going through the scrutiny of

the Trial Court by way of evidence.

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38. There is a presumption of debt and the cheque in question, was given

in discharge of the debt. At the time of framing of Notice, the defence of the

petition is not required to be looked into. The Complainant had successfully

proved prima facie case, for which the Petitioner has been summoned and

the Revision Petition filed against the Order of Summoning, had been

disposed of.

39. The Application filed by the Petitioner for recall of Order of

Summoning has also been dismissed by the Trial Court. Three Writ Petitions

were filed for challenging the Summoning Order. However, the Writ

Petition pertaining to cheque dated 25.09.2014 for the sum of Rs.20 lacs,

was withdrawn on 13.02.2018 while the aforesaid two Writ Petitions are in

respect of cheque bearing No. 616104 dated 26.12.2014 for the sum of

Rs.35 lacs and the cheque bearing No.616105 dated 20.04.2025 for the sum

of Rs.40 lacs.

40. There is no legal or fundamental right of the Petitioner involved in the

present proceedings, nor is there any irregularity or illegality in the Orders

of the Court.

41. A similar Petition filed by the Petitioner was dismissed as withdrawn

as it was not maintainable. The present Petition is similar in nature and

contains similar points of facts and law, which has already been disposed of

by this Court.

42. On merits, it is asserted that the Petitioner was a frequent visitor to

India and had been running his business and owned various properties, in

India. The Complainant had joined the business of Iron Wires owned by his

father, who died on 16.10.1984. The Complainant is continuing that

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business and is also running his business in the name and style of M/s Sethi

Steel Industry.

43. The Company was incorporated by the Petitioner, in 1995 and

appreciating the knowledge, hard work and sincerity of the Respondent, he

was made the Director in the Company. Various communications made by

the Petitioner are witness to his appreciation of the hard work.

44. It is claimed that the overall business of the Company was managed

by the Petitioner who had complete control over the business. He had been

frequently visiting India and all the paperwork including Books of Account,

Balance Sheets and other records, were being prepared by the staff on the

instructions of the Petitioner. All details with regard to the transactions made

by the clients, were forwarded to the Petitioner.

45. It is denied that the Petitioner used to rely upon the Respondent for

his business or properties or Bank Accounts operations or any cheque

payments. It is denied that he took unlawful advantage of any faith or trust

of the Petitioner.

46. It is claimed that the Company was 100% owned by the Petitioner and

was being personally managed by him, which is confirmed in

communication dated 22.09.2014, sent to the customers. It is denied that he

had any reason to misuse the trust. He also denied that freehand autonomy

or independence that was available to the Complainant, was ever used to

mismanage the affairs of the Company or to manipulate the Books of

Account or to open fake Accounts or give wrong advice to the customers.

The Petitioner himself was improperly withdrawing the amounts by

reflecting fake and false expenses.

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47. The record of the business had not been properly maintained and the

business was shown for mala fide and illegal nuisance.

48. The Petitioner since 1995, has put hard work and performed his duties

with utmost care and dedication, which has resulted in the expansion of the

business and the enhancement of profits earned by the Company. It is

improper to insult the Complainant by asserting that he had not sense of

right and wrong in the life.

49. The Complainant states that through Letter dated 01.08.1997, the

Petitioner had offered to pay 10% of gross brokerage and 50% of other

financial income. According to the averments made in the Complaint, when

the Petitioner came to India in May, 2014, he found that the

brokerage/commission amount due to the Complainant/Anil Sethi, was very

heavy. In August, 2014, the Petitioner had no reason or occasion to review

the business of the Company or to pose tough questions to the Complainant.

It is only when the Respondent asked him to pay the said amount, the

Petitioner turned dishonest and called a meeting of Directors on 22.09.2014,

vide Notice dated 01.09.2014.

50. The Complainant claimed that the Accused adopted adamant and

callous attitude, towards the Complainant. When he reached for the Meeting

on 22.09.2014, he had to call the Police because of the misbehaviour of the

Petitioner/Accused. He denied that he ever extended any threats. It was

claimed that it was the Petitioner who on his visit to the office of the

Company and manhandled the Complainant.

51. The Complainant was given an assurance that they would talk later

and settled the account of commission and other income. Before leaving

India, The parties met in the evening and the account was settled in respect

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of amount of commission/brokerage and other income of the Company.

Three cheques dated 25.09.2014, 26.12.2014 and 20.04.2015 for the sum of

Rs.20 lacs, Rs.35 lacs and Rs.40 lacs, respectively, were drawn in favour of

the Complainant, for the payment of the amount of commission of the

Complainant on brokerage and other income of the Company, along with

communication dated 22.09.2014.

52. It is claimed that there was no occasion for the Petitioner to have

removed the Respondent from the Directorship of the Company.

53. It is denied that the cheques were ever left in the custody of the

Complainant and also denied that the cheques were ever stolen by him. The

business of the Company was completely controlled by the Petitioner and

Respondent had no concern with the same. He denied having ever forged

any cheques of the Petitioner or intended to implicate him in criminal cases.

54. The Order of Reserve Bank of India is denied for want of knowledge.

All other averments made in the Complaint have been denied. It is submitted

that there is no merit in the Petition and that the Petition is liable to be

dismissed.

55. Witten submissions have been filed on behalf of the Petitioner, on

similar lines as the averments contained in the Petition.

56. Learned Counsel for the petitioner aside from re-agitating the

assertions contained in the Petition, contented that the Petitioner was

residing outside the jurisdiction of the Court, but there was no compliance of

Section 202 Cr.P.C.

57. There is no quantified amount of alleged 10% brokerage. Moreover,

no documents have been filed to support this alleged debt. On the other

hand, the Balance Sheets disprove the claim of the Complainant.

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58. Moreover, the cheques were personal to the Petitioner and there was

no personal contact between the Petitioner and the Complainant. The alleged

debts, if any, were due from the Company and not from the Petitioner.

59. The Legal Notice had been duly served upon the Petitioner to which a

Reply had been given. The Complainant was finally removed from the

Directorship in January, 2015 after which the cheques have been

manipulated.

60. Learned Counsel for the Respondent on the other hand, refuted

the arguments of the Petitioner. It was submitted that the Complainant was

inducted as a Director on 01.08.1997 and his remuneration was fixed as 10%

brokerage and 50% of the earnings of the Company.

61. The Revision Petition that was filed by the Petitioner to challenge the

Complaint and the Summoning Order, was decided on 19.09.2025. There

were various documents filed along with the Revision Petition. The

Covering letter dated 22.09.2014 given by the Petitioner to the Complainant,

reflects admission of the outstanding liability of the Petitioner.

62. The cheques have been issued towards the legally enforceable debt

and liability i.e. the amounts due to the Complainant as his remuneration to

be a Director in the Company. Moreover, the Petitioner had stood as a

Guarantor and, therefore, is liable for the payments for the cheque amounts.

The Petition is, therefore, liable to be dismissed.

Submissions heard and record perused.

63. It is not disputed that the Petitioner/Accused/maternal uncle of

Complainant/Respondent No.2 Anil Sethi, is a resident of USA, for the last

14 years. The Petitioner had set up a Company in the name and style of

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CompuAction Financial Services India Private Limited and had obtained the

membership of National Stock Exchange.

64. The Petitioner explained that though he was the Director, he was

represented through his proxy. The Respondent had been nominated as the

Director of the Company and was having a free time to run the Indian

business and had a full control over the properties, Bank Accounts

operations, petty cheque payments, etc., pertaining to the business of the

Company.

65. The first challenge to the two Complaints is that there was no legally

enforceable debt and the Cheques in question, had been manipulated by the

Complainant.

66. The Complainant himself had stated in his Complaint that when the

Accused/Petitioner came to India in May, 2014, he was not happy with the

heavy amounts due towards commission/brokerage and had even called a

Board Meeting on 22.09.2014 vide Notice dated 01.09.2014. However, the

Meeting was disrupted and the Board Meeting could not take place.

67. In this context, it is pertinent to refer to the Notice dated 24.12.2014

issued for and on behalf of CompuAction Financial Services India Private

Limited to the Complainant Anil Sethi informing him that the Notice dated

11.08.2014 was received from the shareholders of the Company, for his

removal from the office of Director.

68. From these facts, it emerges that differences arose since May, 2014

between the Complainant and the Accused, in regard to the mismanagement

of the Company to the extent that a Letter had been written by the Petitioner

to the Company, about loss of faith in the Complainant and his removal; so

much so that the Board Meeting scheduled for 22.09.2014, was disrupted

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and could not be held, though eventually, the General Body Meeting was

scheduled for 15.01.2015. Thereafter, the Board Meeting was held on

15.01.2015 and the Board Resolution was passed to remove the

Complainant from the position of the Director.

69. It is in this backdrop, that the case of the Complainant needs to be

considered. The Complainant has claimed that after the disruption of the

Board Meeting on 22.09.2014, he and the Petitioner met in the evening and

all the disputes were resolved and the three impugned Cheques for a total

sum of Rs.95 lacs, had been given towards his commission/brokerage. The

Complainant, therefore, alleges that these three cheques were towards the

legally enforceable liability of the commission and the brokerage, that was

payable to him.

70. The first question which arises is what is the basis for claiming the

amounts towards the commission/brokerage. Section 196(4) of the

Companies Act reads as under:-

“(4) Subject to the provisions of Section 197 and Schedule

V, a managing director, whole-time director or manager

shall be appointed and the terms and conditions of such

appointment and remuneration payable be approved by the

Board of Directors at a meeting which shall be subject to

approval by a resolution at the next general meeting of the

company and by the Central Government in case such

appointment is at variance to the conditions [specified in

Part I of that Schedule]:

Provided that a notice convening Board or general meeting

for considering such appointment shall include the terms

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and conditions of such appointment, remuneration

payable and such other matters including interest, of a

director or directors in such appointments, if any:

Provided further that a return in the prescribed form shall

be filed within sixty days of such appointment with the

Registrar.”

71. In a Company, the regulation and the payments to be made to the

Directors, are subject to a valid Board Resolution. The Complainant had not

placed on record any Board Resolution, which is mandatory requirement

under Section 196, to show that he was entitled to 10% of gross

commission/brokerage on the transactions and other income of the

Company, aside from monthly remuneration.

72. Interestingly, the Petitioner has consistently questioned the

entitlement of the Complainant to such amounts, as claimed by him. The

Complainant had not placed any document or letter or any Board

Resolution, along with the Complaint or initially in this Writ Petition.

Subsequently, by way of additional documents, he filed a Letter dated

01.08.1997 issued on the Letter Head of the Company, stating as under:-

Aug 1, 1997

“Dear,

Anil Sethi

I am pleased to convey the satisfaction of the company

about your performance since you have been included

in the board of the directors of the company and made

responsible to manage all the affairs of the company

under the supervision of Subhash C. Sahni.

It has been resolved that you shall be entitled to 10%

of the gross brokerage and 50% of the other income

and financing income to the company in addition to

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the fixed remuneration of the directors in a financial

year.

Please send a signed copy of this letter confirming the

acceptance of these terms and conditions for the

records of the company.

Signed

-----.”

73. The bare perusal of this Letter shows that it does not refer to any

Board Resolution, but bears the individual signature of the Petitioner. It

states that the Complainant would be entitled to 10% of gross brokerage and

50% of the other income and financial income to the Company, in addition

to fixed remuneration as a Director in the financial year.

74. The perusal of this Letter shows that it does not have any stamp of the

Company, below the signatures of the Petitioner. Also, it does not refer to

any Board Resolution. Furthermore, bare perusal of this Letter shows that

this was one blank Letter Head signed by the Petitioner and given to the

Complainant on account of his being a resident of USA, which has been

manipulated and prepared into this Letter, stating the remuneration payable

to the Director.

75. Here, it may also be relevant to note that the Petitioner may have had

the overall control, but was not a named Director and he had no personal

authority, to fix the Brokerage of the Complainant, on behalf of the

Company. This letter on the face of it, is of little significance, to establish

the alleged entitlement.

76. Another significant fact is that this Letter did not find mention

anywhere at earlier point of time, till it got filed along with the Application

for placing on record Additional Documents on 15.12.2025, in these Writs.

W.P.(CRL) 2473/2017 & W.P.(CRL) 2476/2017 Page 20 of 24

77. Even otherwise, such Letter is not tenable, in view of Section 196

Companies Act; the petitioner could not have agreed to bind the Company to

pay any Commission/Brokerage as an individual; a Board Resolution was

mandatorily required, which admittedly does not exist.

78. In this context, it is also pertinent to mention that according to the

Complainant after the disputes which arose on 22.09.2014, the petitioner

met the Complainant in the evening, and handed over the three cheques

vide Letter dated 22.09.2014, copy of which has also been filed on

15.12.2025. Pertinently, the Letter dated 22.09.2014 is also interestingly

worded, which states as under:-

Sep 22,2014

Dear,

Anil Sethi

I can understand your insecurity on the account of

the events which happened today in the office.

Due to personal reasons which I cannot convey to you,

our business association for future is not. possible. I

appreciate all what you had done for the company and

personally for I me and my family.

No amount of money is sufficient to discharge the debt

or what I and my company’s owe to you.

Since, our turnover has reached to good heights due

to your contribution to the company and since I have

come to India for a short stay, and I understand that

amount payable to you shall not be less than 1 crore.

However, since our company is being under the

process of change over, I would be grateful if you

accept these three cheques of HDFC bank

W.P.(CRL) 2473/2017 & W.P.(CRL) 2476/2017 Page 21 of 24

maintained by me towards the settled amount. I

assure you that if anything else is left then I will be

carrying the liability to pay without any delay.

Signed

---

79. Needless to state that this Letter, as the earlier letter of 1997, did not

find any mention since the filing of the Complaint in 2015, till 2025.

Interestingly, from the bare perusal of this Letter dated 22.09.2014, it is

evidently created again, on a blank paper having signatures of the Petitioner,

which has been subsequently manipulated.

80. This stands confirmed as both the Letters dated 01.08.1997 and

22.09.2014 are prepared on a same computer, with the same font and the

same font size, reflecting that they have been prepared on blank papers

bearing the signatures of the Petitioner at the same time, though the dates

are about seventeen years apart. These two Letters do not find mention in

the Complaint, or till 2025.

81. In this context, it may be noted that the entire management of the

Company was with the Complainant, who had the access to the cheque

books, documents, letters, etc., and as asserted by the Petitioner, it is evident

that the blank cheques that were in his power and possession, have been

manipulated by him.

82. Considering the manner and the content, they are evidently

subsequently prepared documents and do not inspire any confidence.

83. It is not a private enterprise or a proprietorship concern, where the

things could have been decided unilaterally. It is a private limited Company

which is governed by the provisions of the Companies Act and every

W.P.(CRL) 2473/2017 & W.P.(CRL) 2476/2017 Page 22 of 24

decision taken and the amounts paid towards the remuneration of the

Directors, is necessarily required to be documented by a Board Resolution.

84. In the normal course of events, when there is a dispute inter se the

parties and when as per the Complainant himself, there were huge amounts

due on account of commission/brokerage, it is highly unlikely that the

Petitioner would acknowledge the great heights to which the Company has

been taken due to the efforts of the Complainant is unlikely. Also, what the

Letter states is that “I understand that amount payable to you shall not be

less than Rs.1 crore.”

85. Herein also, there is no reference to any Statement of Accounts. This

Letter on the face of it, is against the prudence of a reasonable man. If

differences got settled and sorted out and Parties had a Settlement on

22.09.2014, there would not have been any subsequent Board Meeting and

removal of the Complainant from the Company, vide Resolution dated

15.01.2015. In this background of there being a persistent dispute, it is

absolutely incomprehensible that the Petitioner would have given the three

Cheques.

86. The Complaint is conspicuously silent about there being any entries

ever made in the Balance Sheets in regard to the commission/remuneration

paid to him. The Balance sheets and the statement of accounts are required

to be audited, but there is nothing placed on record by the Complainant to

corroborate his entitlement to the commission and the brokerage, as alleged

by him. The audited Accounts filed by the petitioner, do not calculate to the

commission/brokerage claimed by the Complainant. Even if the duly audited

Accounts filed by the Petitioner, are ignored, then too, the Complainant has

W.P.(CRL) 2473/2017 & W.P.(CRL) 2476/2017 Page 23 of 24

not disclosed any calculation by which this amount has become payable to

him.

87. As has been rightly contended by the Petitioner, the Complainant had

every opportunity in the last 19 years, to have credited the Company

Account towards his Brokerage/commission and he did not need to wait till

the emergence of dispute, to assert his alleged dues.

88. The Complaint is absolutely vague and silent about the period over

which such brokerage/commission, has become due and payable.

89. It is, therefore, concluded that there is no Board Resolution by virtue

of which the entitlement of the Complainant to the commission/brokerage,

has been fixed. This Company had been existing since 1997 and the

complete control and management was with the Complainant.

90. The Complainant has failed to explain how and when the brokerage

amounts have become due and payable to him. There are no document and

no other material on record to show the manner in which Rs.95 lacs, are

alleged to be due to the Complainant towards his commission/brokerage.

91. The primary onus was on the Complainant, to have stated the relevant

data to show that the alleged cheques were issued towards the legally

enforceable debt, and that the alleged debt has arisen in the last three years

of presentation of the cheque.

92. The Complaint under Section 138 NI Act is maintainable, if the

cheque is issued towards a legally enforceable debt. Here is a case where

neither the Complainant has been able to explain that there indeed existed a

debt or that the amount claimed, was legally enforceable.

93. In this regard, it is also significant to note that the liability claimed by

the Complainant, was for the dues payable by the Company. Even if there

W.P.(CRL) 2473/2017 & W.P.(CRL) 2476/2017 Page 24 of 24

was a liability, it was against the Company which had to be discharged, from

the Account of the Company. The Petitioner was in no way responsible or

liable to satisfy the debts of a Company. It is thus, not shown that the

Petitioner had any liability towards which the alleged cheques, could have

been appropriated.

94. With the basic particulars missing, the Complainant cannot rely on

Section 139 NI Act, to assert that there is a presumption about there being a

legally enforceable debt, in respect of the dishonoured cheques. The

presumption would arise if there are fundamental basic facts pleaded to

show how there was an existence of legally enforceable debt.

95. In this case, aside from bald assertions, the Complaint is completely

bereft of the requisite facts to explain the debt or it being legally

enforceable. It is also a blatant abuse of process of law, wherein the

Complainant has gone to the extent of preparing manipulated Letters. It is a

fit case for quashing of the Complaint and the Summoning Order and the

proceedings emanating therefrom.

96. The Complaint under Section 138 NI Act is hereby, quashed and the

Petitions are allowed.

97. The Petitions along with pending Applications are accordingly

disposed of.

(NEENA BANSAL KRISHNA)

JUDGE

MARCH 10, 2026

VA/N