- 1 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MS. JUSTICE J.M.KHAZI CRIMINAL PETITION NO. 9805 OF 2022 (482(Cr.PC) / 528(BNSS)) C/W CRIMINAL PETITION NO. 9769 OF 2022 CRIMINAL PETITION NO. 9770 OF 2022 CRIMINAL PETITION NO. 9829 OF 2022 IN CRL.P No. 9805/2022 BETWEEN: AHLUWALIA CONTRACTS (INDIA) LTD COMPANY REGISTERED UNDER PROVISIONS OF THE COMPANIES ACT 1956 HEAD OFFICE 1-77 OKHLA INDUSTRIAL AREA PHASE-I NEW DELHI-110020 REPRESENTED BY NARAYANA PRAKASH K …PETITIONER (BY SRI. SUNDARA RAMAN M V, ADVOCATE) AND: M/S NITESH HOUSING DEVELOPERS PVT LTD COMPANY REGISTERED UNDER PROVISIONS OF THE COMPANIES ACT 1956 LEVEL 7, NITESH TIMESQUARE NO.8, M G ROAD, BANGALORE-560001 REPRESENTED BY ITS MANAGING DIRECTOR …RESPONDENT (BY SRI. SIDDHARTH SUMAN, ADVOCATE) Digitally signed by REKHA R Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER THIS CRL.P IS FILED U/S.482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO a. QUASH THE IMPUGNED ORDER DATED 01.03.2017 PASSED IN C.C.NO.7104/2017 BY THE XXV ADDL.C.M.M,. BENGALURU (ANNEXURE-B) AND ETC., IN CRL.P NO. 9769/2022 BETWEEN: AHLUWALIA CONTRACTS (INDIA) LTD COMPANY REGISTERED UNDER PROVISIONS OF THE COMPANIES ACT 1956 HEAD OFFICE A-177 OKHLA INDUSTRIAL AREA PHASE-I NEW DELHI-110020 REPRESENTED BY NARAYANA PRAKASH K ...PETITIONER (BY SRI. SUNDARA RAMAN M V, ADVOCATE) AND: M/S NITESH HOUSING DEVELOPMENT PVT LTD COMPANY REGISTERED UNDER PROVISIONS OF COMPANIES ACT, 1956, LEVEL 7, NITESH TIMESQUARE, NO.8, M.G.ROAD, BENGALURU - 560001, REPRESENTED BY ITS MANAGING DIRECTOR. ...RESPONDENT (BY SRI. SIDHARTH SUMAN, ADVOCATE) THIS CRL.P IS FILED U/S.482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO a. QUASH THE IMPUGNED ORDER DATED 01.03.2017 PASSED IN C.C.NO.7105/2017 BY THE XXV ADDL.C.M.M, BENGALURU (ANNEXURE-B) AND ETC., - 3 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER IN CRL.P NO. 9770/2022 BETWEEN: AHLUWALIA CONTRACTS (INDIA) LTD COMPANY REGISTERED UNDER PROVISIONS OF THE COMPANIES ACT 1956 HEAD OFFICE A-177 OKHAL INDUSTRIAL AREA PHASE I NEW DELHI-110020 REPRESENTED BY NARAYANA PRAKASH K AUTHORIZED REPRESENTATIVE ...PETITIONER (BY SRI. SUNDARA RAMAN M V, ADVOCATE) AND: M/S NITESH HOUSING DEVELOPERS PVT LTD COMPANY REGISTERED UNDER PROVISIONS OF THE COMPANIES ACT 1956 LEVEL 7, NITESH TIMESQUARE NO.8, M G ROAD, BANGALORE-560001 REPRESENTED BY SWAMY.K ...RESPONDENT (BY SRI. SIDHARTH SUMAN, ADVOCATE) THIS CRL.P IS FILED U/S.482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO a. QUASH THE IMPUGNED ORDER DATED 01.03.2017 PASSED IN C.C.NO.7106/2017 BY THE XXV ADDL.C.M.M, BENGALURU (ANNEXURE-B) AND ETC., IN CRL.P NO. 9829/2022 BETWEEN: AHLUWALIA CONTRACTS (INDIA) LTD COMPANY REGISTERED UNDER PROVISIONS OF THE COMPANIES ACT 1956 HEAD OFFICE A-177 - 4 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER OKHLA INDUSTRIAL AREA PHASE-I NEW DELHI-110 020 REPRESENTED BY NARAYANA PRAKASH K ...PETITIONER (BY SRI. SUNDARA RAMAN M V, ADVOCATE) AND: M/S NITESH HOUSING DEVELOPERS PVT LTD COMPANY REGISTERED UNDER PROVISIONS OF THE COMPANIES ACT 1956 LEVEL 7, NITESH TIMESQUARE NO.8, M.G. ROAD, BANGALORE-560 001 REPRESENTED BY ...RESPONDENT (BY SRI. SIDDHARTH SUMAN, ADVOCATE) THIS CRL.P FILED U/S.482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO a. QUASH THE IMPUGNED ORDER DATED 01.03.2017 PASSED IN C.C.NO.7102/2017 BY THE XXV ADDL.C.M.M, BENGALURU (ANNEXURE-A) AND ETC., THESE PETITIONS, COMING ON FOR DICTATING ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MS. JUSTICE J.M.KHAZI ORAL ORDER In all these petitions filed under Section 482 of Cr.P.C, petitioner who is arraigned as accused No.1, is seeking quashing of the criminal proceedings initiated - 5 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER against him in C.C.Nos.7102/2017, 7104/2017 to 7106/2017 on the file of XXV ACMM Court, Bengaluru, for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 ('N.I Act' for short). 2. In support of the petitions, petitioner has contended that it is a company registered under the provisions of Companies Act and engaged in the business of construction. 3. Respondent is also a company registered under the provisions of Companies Act and engaged in real estate business. Respondent called tenders for construction and execution of housing project "Nithesh Columbus Square" in Bagalur Road, Bengaluru. Petitioner was awarded the contract for Rs.56,50,00,001/-. In this regard they have executed agreement dated 27.11.2010, signed on 10.01.2011. They have entered into supplementary agreement dated 31.10.2013. The work was to be completed within 24 months. Rs.5.62 Crores - 6 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER was paid as advance to the petitioner. Petitioner has issued various undated cheques as security for a total sum of Rs.4.45 Crores as detailed in the petitions. On account of various inactions on the part of respondent, the project delayed. After realizing the same, respondent agreed to pay Rs.6 Crores towards rate escalation, as encapsulated in the supplementary agreement dated 31.10.2013. However, respondent failed to make payment and therefore, petitioner could not complete the project and terminated the agreement. 4. However, to the utter shock and dismay of the petitioner, respondent has presented all the security cheques and on their dishonour for want of sufficient funds and issue of legal notice and despite suitable reply, respondent has filed complaints. In the meanwhile, arbitration proceedings are also initiated. Respondent also made a counter claim before the Hon'ble Arbitrator. On 14.05.2019, award came to be passed. As per the same, petitioner is liable to pay only a sum of Rs.29,53,708/- - 7 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER with interest. All the counter claims of respondent were set off against the dues payable to the petitioner. Against the said order, respondent filed Com.A.S.No.140/2019. It was dismissed on 30.06.2022. In the light of the same, respondent has clearly misused the cheques issued by the petitioner by way of security. As on the date of presentation of the cheques, the amount due was not as reflected in them. Even though petitioner tried to pay Rs.29,53,708/-, respondent is not accepting the same. Therefore, a cheque was sent vide letter dated 17.09.2022. In the light of the above facts and circumstances, the present petition is filed on the following: GROUNDS (i) The order passed by the trial Court taking cognizance for the offence punishable under Section 138 of N.I. Act is erroneous and unsustainable in law. There is no application of mind. Bare perusal of the complaint clearly indicate that there is no legally enforceable debt. - 8 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER Award of the Hon'ble Arbitrator is an adjudication of the entirety of the liability of the parties. The same is affirmed by the Commercial Court and demonstrate that there is no liability other than which is determined by the Hon'ble Arbitrator. Therefore, continuation of the criminal proceedings would amount to abuse of the process of the Court. The ingredients of the Section 138 of N.I. Act is not attracted. There was no agreement that in case of failure to complete the work, petitioner was liable to return the amount. When the liability as determined by the Hon'ble Arbitrator is less than the amount in the cheque, presentation of cheque for higher amount does not attract Section 138 of N.I. Act and hence, the petitions. 5. In support of his arguments, learned counsel for petitioner has relied upon the following decisions: (i) S.M.S.Pharmaceuticals Ltd. Vs. Neeta Bhalla and Anr. (S.M.S.Pharmaceuticals)1 1 (2007) 4 SCC 70 - 9 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER (ii) Ssangyong Engineering and construction Company Ltd Vs. National Highways Authority of India (NHAI) (Ssangyong Engineering)2 (iii) C.V.K. Balakrishnan and Anr. Vs. The State of Tamil Nadu and Anr. (C.V.K. Balakrishnan)3 6. On the other hand learned counsel for respondent has filed statement of objections stating that the petitions are misconceived and not maintainable either in law or on facts. Petitioner is guilty of suppression of true facts and as such liable to be dismissed. Petitions are not maintainable as being successive in nature and earlier petitions in Crl.P.No.8183-86/2017 were dismissed and petitioner has not made out any fresh grounds. The contention of petitioner that subsequent to the dismissal of the earlier petitions, arbitration proceedings were initiated is false and incorrect. The arbitration proceedings were initiated vide order dated 22.08.2017, whereas the Crl.P.No.8183-86/2017 were initiated on 16.10.2017. In 2 (2019) 15 SCC 131 3 SLP(Crl)No.1733/2023 DT:03.03.2023 - 10 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER the light of the same, the petitioner is not at liberty to file fresh set of petitions. 7. Petitioner through accused Nos.3 to 8 filed applications under Section 251 r/w 258 Cr.P.C to discharge or drop the proceedings, by suppressing dismissal of Crl.P.No.8183-86/2017. By order dated 09.04.2021, the said applications were rejected. They were challenged in Crl.RP.Nos.217-20/2021, 228-231/2021 and 253- 256/2021 before the Sessions Court. After the Sessions Court refused to grant stay, petitioner has come with these petitions, without disclosing the pendency of the said petitions. The grounds urged by the petitioner are his defence before the trial Court, which he may urge. The cheques were presented to realize the amount due from the petitioner. Therefore, the complaint is perfectly maintainable and pray to dismiss the petitions. 8. In support of his arguments, learned counsel for respondent has relied upon the following decisions: - 11 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER (i) Sri Krishna Agencies Vs. State of Andhra Pradesh and Anr. (Sri Krishna Agencies)4 (ii) M.C.Ravikumar Vs. D.S.Velmurugan and Ors. (M.C.Ravikumar)5 9. Heard arguments of both sides and perused the records. 10. It is not in dispute that the construction and execution of housing project Nithesh Columbus Square in Bagalur Road, Bengaluru was awarded to the petitioner for total sum of Rs.56,50,00,001/- and in this regard they have entered into agreement dated 27.11.2010 and supplementary agreement dated 31.10.2013. The work was supposed to be completed in 24 months and a sum of Rs.5.62 Crores was paid to the petitioner by way of advance. It is also not in dispute that in this regard petitioner has issued several cheques for a total sum of Rs.4.45 Crores by way of security. The petitioner has contended that for various reasons including inaction on 4 (2009) 1 SCC 69 5 SLP(Crl)No.12715/2022 Dt:23.07.2025 - 12 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER the part of respondent, the project was delayed. Petitioner has alleged that though realizing this aspect, respondent agreed to pay Rs.6 Crores towards rate escalation, it did not honour its promise and as such the project could not be completed. 11. Undisputedly, respondent has presented the cheques for various sums and on their dishonour, filed four separate complaints, which is sought to be quashed by the petitioner, on the ground that in the Arbitration proceedings, it is held that petitioner is liable to pay only a sum of Rs.29,53,708/- and therefore, as on the date of presentation of the cheques, the amount reflected on the said cheques was not due. 12. It is pertinent to note that earlier to the present petitioner approached this Court in Crl.P.No.8183- 86/2017 for the same relief and they came to be rejected. Petitioner has not chosen to disclose the said fact in the present petitions. The accused persons have also sought - 13 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER for discharge/drop of the proceedings in Crl.RP.Nos.217- 20/2021, 228-231/2021 and 253-256/2021 before the Sessions Court, which also came to be rejected. 13. Undisputedly, the award of the Hon'ble Arbitrator came to be challenged before the Commercial Court in Com.A.S.No.140/2019. Though the said suit came to be dismissed, the appeal filed by respondent is pending. Moreover, the respondent has presented several cheques for different amounts. Out of them, 2 cheques are for a sum of Rs.20 lakhs and Rs.25 lakhs, which is individually less than Rs.29,53,708/- for which award came to be passed. Even where it is held that the total amount due from the petitioner and other accused was less than Rs.4.45 Crores, for which the total cheques were presented, at least in respect of these 2 cheques, it could be held that the offence under Section 138 of N.I Act is committed. Of course, it is a matter for evidence and petitioner and other accused are required to prove their - 14 - HC-KAR NC: 2025:KHC:35240 CRL.P No. 9805 of 2022 C/W CRL.P No. 9769 of 2022 CRL.P No. 9770 of 2022 AND 1 OTHER defence at the trial. Therefore, they are not entitled for quashing of criminal proceedings initiated against them. 14. In the result, petitions fail and accordingly, the following: ORDER (i) Petitions filed by petitioner/accused No.1 under Section 482 Cr.P.C are rejected. (ii) The Registry is directed to send a copy of this order to the trial Court through e- mail. Sd/- (J.M.KHAZI) JUDGE RR List No.: 1 Sl No.: 34