Supreme Court accepts Rajpal Yadav's proposal to sell ancestral property to clear dues in cheque bounce case

The Supreme Court on Wednesday accepted the proposal by Rajpal Yadav to sell off his ancestral property to pay his dues arising from a cheque bounce case connected to a loan taken for a 2012 movie.

A Bench of Chief Justice of India (CJI) Surya Kant, Justice Joymalya Bagchi and Justice V Mohana also took into account the fact that Yadav has made arrangements by way of demand drafts to make immediate payment of ₹2 crore.

Under the same, Yadav produced demand drafts worth ₹1.15 crore while another ₹85 lakh will be paid by a prospective buyer of Yadav's property by October 12.

The Court noted the same in its order and also said that it will lay down a schedule for paying the balance amount,

"The petitioner has finally brought demand drafts in the sum of ₹1.15 crore, which shall be deposited with the Registry during the course of the day. As regards ₹85 lakh, the petitioner claims that the prospective buyer of his property is present in Court. Anant Prakash Yadav is present in Court and he is willing to pay a sum of ₹85 lakh. He is willing to deposit the sum of ₹85 lakh by way of demand draft with the registry on Monday. On doing so, we will give him specific conditional relief on day-to-day terms," the order said.

The Court was hearing Rajpal Yadav’s plea in a long-running cheque bounce case arising from a loan taken for his 2012 film Ata Pata Laapata.

The case concerns a ₹5 crore amount received by Yadav and wife from a private entity named Murli Projects in connection with a film being produced by Yadav.

The parties entered into four agreements as the film could not be completed within the agreed timelines.

Under the third agreement, Yadav gave eight security cheques to Murli Projects. The third agreement was subsequently replaced by a fourth agreement, described as a consent agreement dated April 21, 2013. According to Yadav’s plea, the consent agreement provided for the return of the eight security cheques and issuance of four fresh cheques of ₹10 crore each.

Yadav has alleged that Murli Projects did not return the eight security cheques and instead presented seven of them, which were dishonoured. This led to the criminal complaints against Yadav and his wife.

In May 2024, a sessions court convicted Yadav and sentenced him to six months' jail.

The Delhi High Court later suspended his sentence after his counsel assured the Court that the dispute would be settled. The matter was even referred to the Delhi High Court Mediation Centre.

However, the High Court later observed that despite repeated assurances and several adjournments sought for settlement, the actor failed to make the promised payments. The High Court noted that Yadav had not deposited amounts he had assured the Court he would pay, including ₹2.5 crore that he had sought permission to pay in instalments.

In February 2026, the High Court directed Yadav to surrender before jail authorities for failing to comply with its earlier orders. His subsequent plea seeking an extension of time to surrender was also rejected. Yadav ultimately surrendered on February 5 and remained in jail until the High Court later granted him an interim suspension of sentence after he deposited ₹1.5 crore with the complainant.

However, since he failed to deposit the remaining amount despite several undertakings, the Court sentenced him to imprisonment for three months.

This has now been challenged before the Supreme Court.

According to Yadav's plea, the subsequent consent agreement made the earlier cheques invalid and the complaints based on those cheques were, therefore, not maintainable under Section 138 of the Negotiable Instruments Act.

The Court had on September 8 exempted him from surrendering subject to his depositing the money by September 9.

On September 15, the Court granted him extension of two more weeks and asked him to deposit the money by October 5.

The counsel for Yadav told the Court today that he has ₹1.15 crore which he is ready to pay and a buyer of Yadav's ancestral property, who is present in Court, is ready to pay another ₹85 lakh as advance.

"We have ₹1.15 crore already. We also have a buyer of the ancestral property. The only difficulty is that Pitru Paksha is going on and people do not want to get the registration done. The buyer is also present in Court. He is ready to come forward and pay ₹85 lakh so as to reach ₹2 crore. He does not want to go in for registration of the sale documents at this point. He wants Navratri to commence, which is from Monday onwards. But he is ready to pay ₹85 lakh in advance," the counsel said.

However, the Court pointed out that the liability is more than ₹2 crore.

"What will be the total sale consideration? Because the liability is much more than ₹2 crore," CJI Kant asked.

"The property value is worth more than ₹30 crore," the counsel replied.

"So the buyer has sufficient capacity to pay?" asked CJI Kant.

"Yes," Yadav's counsel said.

The complainant's counsel agreed to the proposal and also said that if payment of ₹2 crore is made now, then three months time may be given to Yadav for paying the balance money.

"If he is ready to pay ₹2 crore, then for the balance, three months’ time may be given. I am agreeable even for that. Sixteen years (have passed)," the complainant's counsel replied.

"He will give you ₹1.15 crore today. On Monday, through RTGS, ₹85 lakh will come to your account. Then, for the remaining amount, we will lay down a schedule. We will take an undertaking from the buyer also," the CJI proposed.

At the same time, Justice Bagchi took exception to Yadav's conduct up until now and even warned that the bench is inclined to enhance the sentence of imprisonment against Yadav from three months to two years.

However, the bench said it was accommodating him only to ensure that the complainant gets back the money owed.

"We are not satisfied with this. This conduct does not satisfy us...consider that we are neither impressed by your bona fides nor the merits of the case. We are only giving the accommodation in order to give equitable relief to the complainant," Justice Bagchi remarked.

The matter will be heard again after two days.

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