Giving evidence on the second day of the trial of 52-year-old Edward Tenniswood, Patrick Francis said he was smoking a cigarette on Marlborough Road, next to Stanley Road, on the evening Ms Chipchase, aged 20, went missing.
Mr Francis said his friend had pulled over to take a call on his mobile phone shortly before 2am on Saturday, January 30.
The court heard Mr Francis saw a woman, who he described as “in her twenties” and an “older man” walking along the pavement.
Mr Francis said: “The woman seemed as if she was drunk. She was holding on to the railing. He was right by her side.
“He did not turn round and look at me.”
The jury were told by Mr Francis that he then saw the man “leading the woman by the arm” across the road.
He said they then walked down Stanley Road and entered a property.
Mr Francis said: “The man opened the door and then guided her in with his arm. She went in first he went in after.”
The court heard that Mr Francis contacted police after he recognised Ms Chipchase’s image on the news coverage of the missing appeal for her the next day.
Earlier, the jury heard evidence from the four friends that India went to NB’s with the night before her body was found.
Alice Lewis, aged 18, said the night out had not been planned but the group had decided to go into the town centre after drinking at The Collingtree pub.
Ms Lewis said the group drunk more alcohol in NB’s and spent time in different parts of the nightclub.
She said at one point in the night India had got upset because she could not get in touch with her boyfriend.
The jury was told by Ms Lewis that she was at the bar with India and then turned around and “she had gone”.
Ms Lewis said she does not have any other recollection of what happened on the night.
A statement was read from Harry Moylan, another of member of the group who went to NB’s.
Mr Moylan said him and Ms Lewis had been looking for India for half an hour between 12.45am and 1.15am after they lost contact with her.
He said Ms Lewis rang India’s phone but did not get an answer.
Tenniswood, of Stanley Road, Northampton, denies rape and murder. The trial continues.