The Delhi High Court has dismissed a batch of 21 petitions filed by veteran actor Sh. Rajpal Naurang Yadav and Smt. Radha Rajpal Yadav, upholding their conviction and sentencing in a long-standing case under Section 138 of the Negotiable Instruments Act, 1881. Hon’ble Dr. Justice Swarana Kanta Sharma pronounced the common judgment on July 10, 2026, marking a critical juncture in a legal battle that stems from a 2010 financial arrangement for the film ‘Ata Pata Lapata’.
This decision, affecting a prominent figure in the Indian entertainment industry, concludes a complex series of civil and criminal proceedings. The multi-faceted dispute originated with a film financing deal for an amount of ₹5 crore, evolving into a significant legal entanglement over alleged non-repayment and dishonoured cheques.
The roots of ‘Ata Pata Lapata’ financial dispute
In 2010, M/s Murli Projects Private Limited, through its CEO Shri Madho Gopal Aggarwal, agreed to finance the film ‘Ata Pata Lapata’. The movie was being produced by M/s Shree Naurang Godavari Entertainment Limited.
The initial investment from M/s Murli Projects Private Limited was ₹5 crore, with an expected profit of ₹3 crore. This arrangement meant a total repayment of ₹8 crore was stipulated.
An agreement, dated May 30, 2010, formalized this arrangement. It included a repayment deadline of March 30, 2011, contingent on the film’s release. Sh. Rajpal Naurang Yadav and Smt. Radha Rajpal Yadav signed this agreement as guarantors.
The petitioners, however, maintain that this was an investment agreement, despite being titled an ‘Inter Corporate Loan Agreement’. They’ve argued this distinction has significant legal implications.
Escalating repayments and supplementary agreements
Delays in the film’s release led to several renegotiations of the repayment terms. The first supplementary agreement, dated September 21, 2011, extended the repayment deadline to December 31, 2011, and increased the total payable amount to ₹9,38,06,332.
Further delays necessitated a second supplementary agreement on April 4, 2012. This extended the deadline to September 30, 2012, with the amount escalating to ₹10,72,52,745.
Finally, a third supplementary agreement on August 9, 2012, pushed the repayment deadline to February 28, 2013, and revised the total amount to ₹11,10,60,350. This agreement is central to the ongoing legal battles.
Smt. Radha Rajpal Yadav, acting as a signatory for M/s Shree Naurang Godavari Entertainment Limited, issued eight post-dated cheques as security at this stage. The petitioners contend that the film’s release was a precondition for any payment, making liability contingent on that event. They also claim these were security cheques, never intended for encashment, and should have been returned upon payment.
The trajectory of legal battles
The dispute intensified with the initiation of both civil and criminal proceedings. The complainant company, M/s Murli Projects Private Limited, pursued legal action after the security cheques were presented and dishonoured.
In January-February 2013, during the pendency of a civil suit, M/s Murli Projects Private Limited presented seven of the eight security cheques for encashment. These cheques, each for ₹1.05 crore, were subsequently dishonoured with the remark ‘Funds Insufficient’.
This led to the filing of seven separate complaints under Section 138 of the Negotiable Instruments Act. These complaints were lodged against M/s Shree Naurang Godavari Entertainment Limited, Sh. Rajpal Naurang Yadav, and Smt. Radha Rajpal Yadav before the Additional Chief Metropolitan Magistrate (East), Karkardooma Courts, Delhi.
Interim court orders and contempt proceedings
Before the cheques were presented, on October 3, 2012, counsel for M/s Murli Projects Private Limited informed the Delhi High Court of their intention to amend a civil suit (CS(OS) No. 3037/2012) for recovery. The film ‘Ata Pata Lapata’ was slated for release on October 12, 2012.
The court then issued an interim order, prohibiting the defendants from creating any third-party interest in the film’s negative prints. They were also restrained from assigning its music, audio, video, CD/DVD/Internet, satellite, channel, and export/international rights without prior court permission. This order was vital for securing the complainant’s potential recovery.
The case demonstrates the complex interplay between civil and criminal remedies in commercial disputes, especially those involving dishonoured cheques. Petitions in such cases can challenge the very basis of liability.
Settlement attempts and their implications
A significant development occurred on April 21, 2013, when M/s Murli Projects Private Limited and M/s Shree Naurang Godavari Entertainment Limited executed a Consent Agreement. This aimed for a full and final settlement of their disputes.
Under this agreement, M/s Shree Naurang Godavari Entertainment Limited and M/s Naurang Godavari Pvt. Ltd. agreed to pay a total of ₹10.40 crore. A sum of ₹40 lakh had already been paid, leaving a balance of ₹10 crore to be paid in installments. For instance, ₹5 crore was due by July 31, 2013, and the final ₹1 crore by September 30, 2014.
To secure this settlement, M/s Shree Naurang Godavari Entertainment Limited issued four fresh post-dated cheques. The terms of the agreement stipulated that if any of these payments were not made, M/s Murli Projects Private Limited would be free to proceed with the criminal cases related to the earlier dishonoured cheques.
| Agreement Date | Repayment Deadline | Amount Payable (₹) | Purpose |
|---|---|---|---|
| May 30, 2010 | March 30, 2011 | 8,00,00,000 | Initial investment + profit |
| September 21, 2011 | December 31, 2011 | 9,38,06,332 | First extension due to film delay |
| April 4, 2012 | September 30, 2012 | 10,72,52,745 | Second extension due to film delay |
| August 9, 2012 | February 28, 2013 | 11,10,60,350 | Third extension, security cheques issued |
| April 21, 2013 | September 30, 2014 (final installment) | 10,40,00,000 | Consent Agreement settlement |
The 2016 consent decree and ongoing disputes
Despite the Consent Agreement, the legal tussle continued. On January 27, 2016, the Delhi High Court passed a consent decree in CS (OS) No. 3037/2012.
This decree ordered the recovery of money in favour of the complainant against the petitioners, in line with the April 21, 2013 Consent Agreement. Crucially, paragraph 5 of the order clarified that the original and supplementary agreements would not revive unless a breach of the consent agreement occurred.
The petitioners argue that this consent decree effectively superseded the earlier cause of action arising from the initial dishonoured cheques. They believe the pending complaints under Section 138 of the NI Act should have been withdrawn or dismissed by then. This is a common point of contention in cases related to the Negotiable Instruments Act.
However, the complainant’s persistent litigation indicated their stance was that the terms of the settlement agreement were not fully met. This led to the continuation of the criminal proceedings.
The Delhi High Court’s review of the conviction
The Delhi High Court, presided over by Hon’ble Dr. Justice Swarana Kanta Sharma, heard the batch of 21 petitions. These challenged the conviction and sentencing of Sh. Rajpal Naurang Yadav and Smt. Radha Rajpal Yadav.
The petitioners’ counsel, Mr. Saurabh Trivedi, Mr. Bhaskar Upadhaya, Mr. Kautilya Kumar Singh, and Mr. Surya Pratap Singh, argued their client’s case. They would have focused on the validity of the initial agreements and the implications of the subsequent settlements.
Conversely, Mr. Avneet Singh Sikka and Mr. S.K. Sharma, representing M/s Murli Projects Private Limited, presented the complainant’s position. Mr. Naresh Kumar Chahar, APP, appeared for the State.
Arguments concerning ‘sufficient cause’ and petitioner conduct
A key aspect of the court’s review involved assessing whether the petitioners had demonstrated ‘sufficient cause’ for their actions or inactions. This legal standard is critical in appellate proceedings.
The court also considered the conduct of petitioner no. 1, Sh. Rajpal Naurang Yadav, throughout the protracted legal proceedings. His previous legal history might have weighed on the court’s perception, including a 2018 sentence for non-repayment of a loan. This previous case related to cheque bounce cases.
Quashing of complaint cases under Section 138 NI Act
A substantial part of the current petitions sought the quashing of the complaint cases under Section 138 of the Negotiable Instruments Act. The petitioners had argued that the original cause of action was extinguished by the consent agreement.
The court had to weigh whether subsequent agreements and consent decrees indeed nullified the criminal liability arising from the initial dishonoured cheques. This is a recurring legal debate in cheque dishonour cases.
The court’s judgment also addressed whether there was any infirmity in an impugned judgment dated May 29, 2024. This specific judgment likely contributed to the ongoing conviction and sentencing.
Implications of the Delhi High Court’s verdict
The Delhi High Court’s judgment on July 10, 2026, serves as a significant reaffirmation of accountability under the Negotiable Instruments Act. It reinforces the legal sanctity of financial commitments and the serious consequences of their breach.
For Sh. Rajpal Naurang Yadav, a nationally recognized public figure, this decision carries personal and professional ramifications. His prior legal troubles underscore a pattern of financial disputes leading to judicial intervention.
The ruling also highlights the complexities involved when civil settlements intersect with ongoing criminal proceedings. Even with agreements to resolve disputes, if terms are breached, original criminal charges can stand.
Future outlook for the parties involved
With the conviction upheld, the petitioners, Sh. Rajpal Naurang Yadav and Smt. Radha Rajpal Yadav, face the imposed sentences. The judgment concludes a chapter in a persistent legal struggle dating back to 2010.
The case underscores the need for meticulous adherence to legal and financial agreements, particularly when involving large sums and multiple parties. It also demonstrates the judiciary’s commitment to enforcing financial discipline.
Legal experts will be studying the full 108-page judgment to ascertain its specific reasoning and potential precedential value. The decision was pronounced by Hon’ble Dr. Justice Swarana Kanta Sharma in Court No. 25 at 1:00 P.M. IST.
Frequently Asked Questions
What is Section 138 of the Negotiable Instruments Act?
Section 138 of the Negotiable Instruments Act, 1881, deals with penalties for the dishonour of cheques. It states that if a cheque is returned unpaid due to insufficient funds, the drawer can be punished with imprisonment for a term which may extend to two years, or with a fine which may extend to twice the amount of the cheque, or both.
Who are the key parties involved in this Delhi High Court judgment?
The petitioners in this case are Sh. Rajpal Naurang Yadav and another individual, while the primary respondents are M/s. Murli Projects Pvt. Ltd. The proceedings also involve the State.
What was the film at the center of this financial dispute?
The financial dispute originated from an investment made for the film ‘Ata Pata Lapata’. The initial agreement involved M/s Murli Projects Private Limited financing the film produced by M/s Shree Naurang Godavari Entertainment Limited.