“How Could Cheques Issued in 2020 Be Mentioned in a 2019 Contract?”: Delhi High Court Grants Injunction in Forged MOA Case, Slams Prima Facie Fabrication

“The impugned Memorandum of Agreements appear to be fabricated documents manufactured at a later stage”—Delhi High Court finds coercion, contradiction, and backdating in contract enforcement used to trigger NI Act prosecutions

In a notable ruling Delhi High Court, while dealing with serious allegations of coercion, forgery and abuse of process, restrained the defendants from acting upon or enforcing three disputed Memorandum of Agreements (MOAs) allegedly used to initiate Section 138 NI Act proceedings. Justice Amit Bansal, presiding over the matter in CS(OS) 452/2023, observed that glaring inconsistencies in documentation and evidence prima facie point to fabricated contracts created post-facto to launch coercive legal action.

At the heart of the plaintiff’s plea was a claim that he had handed over blank signed documents and cheques under pressure, which were then misused to manufacture loan agreements backdated to 2019. Based on these MOAs, multiple cheque bounce cases were filed against him and his family.

“The plaintiff has been able to make out a strong prima facie case that the impugned MOAs were manufactured after the fact, with the intent to extract unlawful gains and launch criminal prosecution,” observed the Court.

“Cheques that Didn’t Exist in 2019 Cannot Be the Basis of a 2019 Agreement” – Court Rejects Defence Argument

Justice Bansal gave detailed consideration to the claim that the MOAs, purportedly signed in March and August 2019, referenced specific cheque numbers that—according to bank-issued certificates—were not issued until late 2020. This discrepancy was fatal to the credibility of the MOAs.

“If the chequebooks containing the aforesaid cheques were issued on 15th October 2020 and 4th December 2020 respectively, how could the cheques which were part of the said chequebooks be handed over by the plaintiff to the defendants on or before 17th August 2019?” the Court questioned sharply.

The defendants’ argument that cheque numbers were mentioned for “security” purposes without actual handover was summarily rejected. The Court noted that the very text of the MOAs claimed the cheques were handed over on the date of agreement.

“There is no reason to doubt the genuineness of the certificates issued by HDFC Bank and J&K Bank. Their contents directly contradict the MOAs relied upon by the defendants,” Justice Bansal remarked, holding that the documentary evidence makes fabrication apparent at this interim stage.

“Interest Terms Change Overnight from 18% Simple to 2.5% Monthly Compound?” – Court Flags Unbelievable Disparity in Contract Versions

The Court further dissected the email exchanges between the plaintiff, defendant no.2, and their Chartered Accountant, which revealed that a draft MOU was circulated on 14 August 2019, offering either 50% profit share or 18% simple annual interest on investment. Yet, the final MOAs introduced compound interest at 2.5% per month, along with steep additional profits.

“It completely defies logic that when the parties were negotiating an agreement providing for simple interest @18% per annum, the terms were drastically changed a day thereafter to provide for compound interest @2.5% per month,” held the Court.

These material differences suggested that the impugned MOAs were not part of the actual course of business negotiations but instruments manufactured later to bolster criminal complaints.

“Prima Facie Fabrication Cannot Be Basis for Criminal Prosecution” – Court Protects Plaintiff from Misuse of NI Act

Acknowledging that the MOAs were being relied upon by defendants to pursue cheque bounce cases under Section 138 of the NI Act, the Court invoked the principle of irreparable harm. Justice Bansal observed:

“Balance of convenience is in favour of the plaintiff and irreparable loss, harm and injury would be caused to the plaintiff if on the basis of the impugned MOAs, the defendants continue to file and prosecute cases.”

Citing the potential for abuse of criminal process and the harm of coercive litigation based on prima facie forged contracts, the Court restrained all defendants from acting upon or enforcing the following MOAs until the final adjudication of the suit:

– MOA dated 20.03.2019 between the plaintiff and defendant no.1 (Rs. 15,00,000)
– MOA dated 17.08.2019 between the plaintiff and defendant no.1 (Rs. 1,15,00,000)
– MOA dated 17.08.2019 between the plaintiff and defendant no.3 (Rs. 40,00,000)

While the defendants argued that the plaintiff was merely responding to Section 138 complaints, the Court noted that serious questions about the authenticity and genesis of the MOAs must first be answered before such criminal cases can proceed.

“Observations Only for Interim Stage, Suit to Be Decided on Merits” – Court Sends Case for Trial

Concluding the interim application, the Court clarified that its findings are not binding at final trial, and have been made only for purposes of deciding interim relief.

Nevertheless, this judgment marks a strong signal from the High Court against the misuse of contractual documentation to launch criminal litigation, especially when evidence suggests that such documents were created in hindsight to gain unfair leverage.

The suit will now proceed before the Joint Registrar on 11 February 2026, where the parties are expected to lead full evidence.

Date of Decision: 11 December 2025