The Calcutta High Court has upheld the conviction of a construction company and its directors in a proceeding under Section 138 of the Negotiable Instruments Act, 1881, ruling that a mere “bald allegation” of coercion, unsupported by corroborative evidence, is insufficient to displace the statutory presumption of debt or liability.
In the judgment delivered on November 19, 2025, Justice Ajay Kumar Gupta dismissed the criminal revisional application filed by Ma Kreeng Construction Pvt. Ltd. and its directors. The Court affirmed the orders of the courts below, which had sentenced the directors to simple imprisonment and imposed a substantial compensation amount.
Case Background
The legal dispute originated from an agreement between the petitioners, Ma Kreeng Construction Pvt. Ltd. & Ors., and the complainant, Mr. Dipak Saha. The complainant and his wife had agreed to purchase an office space measuring approximately 2,500 sq. ft. at 118, Raja Dinendra Street, Kolkata, for a total consideration of Rs. 68,00,000.
The complainant alleged that despite receiving full payment, the petitioners failed to hand over possession or execute a conveyance deed. Consequently, the parties entered into a Refund Agreement on May 19, 2009, wherein the petitioners agreed to refund the amount along with compensation, totaling Rs. 1,10,00,000.
In partial discharge of this liability, the petitioners issued an account payee cheque bearing no. 092403 dated August 23, 2009, for Rs. 25,00,000. However, the cheque was dishonoured upon presentation with the bank remark “Exceeds arrangement.”
Following the statutory demand notice and failure to pay, the complainant initiated proceedings under Section 138 of the N.I. Act. On December 6, 2016, the Metropolitan Magistrate, 8th Court at Calcutta, convicted the petitioners. Petitioner No. 1 (the company) was directed to pay compensation of Rs. 10,00,000. Petitioner Nos. 2 and 3 were sentenced to three months of simple imprisonment and ordered to pay compensation of Rs. 20,00,000 each. This conviction was upheld by the Additional District and Sessions Judge, Bench-II, Calcutta, on July 28, 2017.
Arguments of the Parties
The petitioners approached the High Court challenging the conviction on two primary grounds:
- Coercion: They contended that the Refund Agreement and the subject cheque were obtained under duress and coercion. It was submitted that Petitioner No. 2 had even lodged a complaint with the police on May 19, 2009, regarding the incident.
- No Consideration: The petitioners argued that the initial consideration of Rs. 68,00,000 was never paid by the complainant, and thus, there was no legally enforceable liability.
Conversely, the counsel for the Opposite Party submitted that the issuance of the cheque and its dishonour were undisputed facts. They argued that the defence failed to prove its “concocted story” during the trial and asserted that a person cannot be debarred from prosecuting a complaint when the accused fails to discharge their liability.
Court’s Analysis
Justice Ajay Kumar Gupta, after examining the concurrent findings of the lower courts, found no merit in the revision petition. The Court observed that the petitioners admitted to the issuance of the cheque and its dishonour. The crux of the analysis focused on whether the defence had successfully rebutted the presumption under the N.I. Act.
On the Plea of Coercion: The Court noted that apart from a “bald allegation” and a police complaint, there was “no independent, reliable, or corroborative evidence” to substantiate the claim of coercion. The Court observed:
“Only lodging of a complaint, without any substantive proof of coercion, threat, or compulsion, cannot displace the statutory presumption, especially when the Petitioners chose to remain silent thereafter and did not take any concurrent step to challenge the validity of the agreement of the cheque.”
Relying on the Supreme Court decision in Kumar Exports v. Sharma Carpets (2009), the Court reiterated that a “mere bald plea is insufficient” and the accused must bring probable evidence on record to support their contention.
On the Plea of Non-Payment of Consideration: The Court rejected the petitioners’ argument that the complainant had not paid the initial Rs. 68,00,000. It was noted that the petitioners failed to produce bank statements or financial records to demonstrate the improbability of the liability. Citing Hiten P. Dalal v. Bratindranath Banerjee (2001), the Court held that the presumption operates unless the accused produces reliable material to show otherwise.
Furthermore, the Court pointed out that the petitioners had “expressly acknowledged liability amounting to Rs. 1,10,00,000” in the Refund Agreement dated May 19, 2009, which significantly weakened their defence.
Regarding minor discrepancies in the cross-examination about the place of signing, the Court relied on K.N. Beena v. Muniyappan (2001), stating that “technicalities cannot defeat the statutory presumption.”
Decision
The High Court dismissed the revisional application (C.R.R. 3120 of 2017), affirming the conviction and sentence passed by the Trial Court.
The Court directed Petitioner Nos. 2 and 3 to surrender before the Trial Court within 15 days from the date of the judgment to serve their sentence. The Court also noted that similar revision petitions concerning other cheques issued by the petitioners had already been dismissed by a coordinate bench in 2017.
A prayer for a stay of the operation of the judgment, made by the senior counsel for the petitioners after pronouncement, was considered and rejected by the Court.
Case Details:
- Case Title: Ma Kreeng Construction Pvt. Ltd. & Ors. v. Mr. Dipak Saha & Anr.
- Case Number: C.R.R. 3120 of 2017
- Coram: Justice Ajay Kumar Gupta
