Thane: The Additional Sessions Judge, Thane, D.R. Deshpande, dismissed the appeal of 60-year-old, Mumbai-based businessman Sanjeev Devprakash Malik, upholding his conviction and the substantial fine of Rs 1,46,50,000 in a cheque bounce case under Section 138 of the Negotiable Instruments Act.
The judgment, delivered on June 30, 2025, upheld the lower court's decision, which had also sentenced Malik to six months of rigorous imprisonment in default of payment.
Malik had appealed against the judgment dated May 17, 2023, passed by the Judicial Magistrate, First Class in the complaint filed by Sneha Pursawani, a 47-year-old Thane resident.
As per the complaint, the dispute had originated from an investment made by Pursawani in a housing project called "TL4 Tropical Lagoon" in Kavesar, Thane, through Mr. Malik's partnership firm, 'Soham Estate'. According to the complainant, she invested Rs 2 Crores with the understanding that she would be allotted three flats (Flat No.2104, 2204, and 2403) or, if the sale could not be executed within one year, it was agreed that Malik would refund the invested amount along with a 30% return, totaling Rs 2,60,00,000.
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When Mr. Malik allegedly failed to either provide the flats or refund the amount, a settlement was reached on March 16, 2018. Subsequently, Pursawani claimed Malik had issued three cheques from his personal Andhra Bank account, dated March 20, 2019, to cover the Rs 2.60 Crore liability: two cheques for Rs 1 crore each and third one for Rs 60 Lakh.
Meanwhile when Pursawani tried to encash the one of the Rs 1 crore instrument, it was dishonoured on May 17,2019 citing reasons of insufficient funds. Further when Pursawani had issued a demand notice to Malik on June 12, 2019, Malik failed to repay the amount within the stipulated 15 days, the original complaint was filed.
Malik in his defence had claimed that the cheques were issued merely as security and not in discharge of a legal liability. He contended that a settlement agreement prescribed mediation for dispute resolution, and therefore, he could not be prosecuted under the Negotiable Instruments Act.
Furthermore, it was argued that the partnership firm 'Soham Estate' had not been made a party to the complaint, making it unsustainable. He also claimed that the COVID-19 pandemic should be considered as a mitigating factor. However, the court, after careful consideration, rejected all these arguments.
The court while passing orders held that Malik himself admitted to issuing the cheque during his statement under Section 313 of the Code of Criminal Procedure, although he claimed it was for security. The court emphasized that the defence of the cheque being merely security was not established during the cross-examination of the complainant.
The court also clarified that a mediation clause in a civil contract does not preclude criminal proceedings under the Negotiable Instruments Act. Also with regard to the COVID-19 argument, the court held that such conditions were universally applicable and could not be used to absolve one party while disadvantaging the other.
The Additional Sessions Judge confirmed that the original court's imposition of a fine of Rs 1,46,50,000, which included a 30% return on the investment as per the settlement, was appropriate and not "interest upon interest" as argued by the appellant.
