Gujarat High Court
S P Velayutham vs Pavankumar Singhal - Thro' P O A Holder, ... on 25 April, 2022
Author: Nikhil S. Kariel
Bench: Nikhil S. Kariel
R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 7077 of 2010
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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S P VELAYUTHAM
Versus
PAVANKUMAR SINGHAL - THRO' P O A HOLDER, MANUBHAI ALJIBHAI &
1 other(s)
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Appearance:
MR SHALIN MEHTA, SR. ADVOCATE with MR HEMANG M SHAH(5399) for the
Applicant(s) No. 1
for the Respondent(s) No. 1
MR H M SHAH(3997) for the Respondent(s) No. 1
MS M D MEHTA, APP for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
Date : 25/04/2022
ORAL JUDGMENT
1. Heard learned Senior Advocate Mr. Shalin Mehta with learned Advocate Mr. Hemang M. Shah for the applicant, learned Advocate Mr. H.M. Shah for the respondent No.1 and learned APP Ms. M.D. Mehta for the respondent No.2-State.
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2. By way of this application the applicant prays for quashing of the Criminal Case being C.C. No. 16665 of 2009 filed before the learned Judicial Magistrate First Class, Ahmedabad (Rural) at Mirzapur by the respondent No.1 herein under the provisions of Section 138 of the Negotiable Instruments Act, 1881, (for short "NI Act").
3. Brief facts leading to filing of the present application being that the applicant was owner of a parcel of land situated in Bangalore and whereas the said land had been purchased by the accused-applicant herein from the complainant vide registered sale deed dated 25.09.2006. It is the case of the complainant that insofar as the consideration with regard to sale of land in question, the accused had given a cheque bearing No.243753 drawn on HDFC Bank, Madipakkam Branch, Chennai, for an amount of Rs.1,68,00,000/- dated 01.11.2008 and whereas the said cheque upon being presented on 05.12.2008, had been returned by the drawee bank with the endorsement of insufficient balance. It is the case of the complainant that he had given notice to the accused-applicant as required under the provision of Section 138 of the NI Act, and whereas the accused having received the said notice, had given absolutely irrelevant reply and therefore, the impugned complaint came to be filed.
4. Learned Senior Advocate Mr. Shalin Mehta on behalf of the applicant-accused assails the complaint inter alia on the ground that on the date when the cheque was presented, there was no existing enforcable debt or liability, and whereas according to learned Senior Advocate, since that being the case, the provisions of Section 138 of the NI Act would not be attracted. Learned Senior Advocate would submit that while it is undoubtedly true that the applicant-accused had purchased a property from the complainant, it is equally that the cheque for Rs. 1,68,00,000/- had been given to the complainant on condition that the said cheque was to be encashed only after getting D.C. conversion of the land in question. Learned Page 2 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 Senior Advocate relies upon a receipt dated 27.09.2006 by the complainant and witnessed by one Mr. K. Nanda Kumar amongst others, who is stated to be facilitator as regards the transaction between the parties. Learned Senior Advocate would submit that on the day when the cheque had been presented, the complainant had not got D.C. conversion of the land, which was one of the responsibilities which was to be performed by the seller of the land in question. Learned Senior Advocate would submit that since the condition required for presenting the cheque having not been fulfilled, on the date the said cheque had been presented, there was no debt or liability, due to the complainant, and therefore the provisions of Section 138 of the NI Act would not be attracted. Learned Senior Advocate would further submit that the complainant - respondent No.1, had filed an affidavit-in- reply after filing of the present application and whereas in the affidavit-in- reply, it is mentioned that the D.C. conversion had been obtained by the complainant long back on 19.06.2004. Learned Senior Advocate would submit that it is for the first time that the applicant had been informed of existence of D.C. conversion as far as back in the year 2004. Learned Senior Advocate would submit that as such if the exchange of notices between the parties are perused, it is not the case of the complainant any time prior to filing of the affidavit-in-reply that D.C. conversion had been available.
4.1 Learned Senior Advocate would draw the attention of this Court to notice dated 17.12.2008 issued by learned Advocate for the complainant, wherein he has informed the accused-applicant as regards the cheque in question having been dishonoured and calling upon the applicant-accused to make good the amount within a period of 15 days from date of receipt of the notice. Learned Senior Advocate would thereafter draw the attention of this Court to the reply by learned Advocate for the applicant dated 31.12.2008 and would submit that the first issue raised in the reply is that the cheque was to be deposited by the complainant only after D.C. conversion with regard to the land had been obtained. Learned Senior Page 3 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 Advocate would further submit that apart from a dispute raised in the reply notice with regard to some amount being given to the facilitator referred to hereinabove, it is further mentioned that only after the complainant had obtained D.C. conversion and Patta in the name of the accused-applicant and delivers the said documents to the accused-applicant, the cheque was to be deposited. Learned Senior Advocate at this stage would also draw the attention of this Court to a specific averment made in the notice that prior to the cheque being presented, an amount of Rs. 47,87,400/- had been paid to the complainant vide cheque bearing No. 004024 drawn on Axis Bank, Vijaynagar, (Karnataka) Branch, Bangalore, and whereas the said cheque is stated to have been encashed by the complainant and whereas it was mentioned that upon the said cheque being encashed, the cheque in dispute was to be returned to the applicant-accused. Learned Senior Advocate would further draw the attention of this Court to the final portion of the notice in question, wherein it is mentioned by the learned Advocate for the applicant that the applicant is willing to pay the balance amount immediately, if the complainant complies with the conditions made under the letter/receipt addressed to the applicant-accused dated 27.09.2006, written by the complainant, and whereas it was requested that upon D.C. conversion and the Patta being transferred in the name of the applicant and returning of the subject cheque, the balance amount would be paid. Learned Senior Advocate would thereafter draw the attention of this Court to a notice to reply (rejoinder) by the learned Advocate for the complainant dated 23.01.2009. Learned Senior Advocate would submit that in the said rejoinder, while it is mentioned that the complainant has already taken necessary steps for D.C. conversion, it is only after having talked with the accused-applicant that the cheque had been deposited. It is also denied that the complainant had assured that he would return the subject cheque in question and whereas the crux of the rejoinder notice being that the complainant has denied writing any letter dated 27.09.2006 i.e. the receipt in question. Learned Senior Advocate would further draw the attention of this Page 4 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 Court to a final reply by the accused-applicant through his learned Advocate dated 07.02.2009, wherein while referring to the transaction with regard to the amount of Rs. 47,87,400/- referred to hereinabove, it is informed to the complainant that he had not obtained the Khata and D.C. conversion with regard to the land in question and therefore he is not entitled to claim the further amount. Learned Senior Advocate referring to the exchange of notices, would submit that as such the main aspect that could be noticed from the exchange of notices is the fact that while the applicant-accused had relied upon the document dated 27.09.2006, wherein the fact of the cheque being presented only after the contingency mentioned in the document i.e. after obtaining D.C. conversion, was denied by the complainant, but at the same time, the complainant has not very specifically stated anywhere in the notices that the D.C. conversion was already obtained, and therefore, the accused-applicant herein was liable to make the payments. Learned Senior Advocate would thereafter draw the attention of this Court to the criminal complaint filed by the present respondent No.1 and whereas even in the complaint, it is not specifically mentioned by the complainant that since D.C. conversion has already been obtained, the applicant-accused was liable to make the payment or that upon D.C. conversion being obtained, the complainant was entitled to present the cheque for encashment.
4.2 Learned Senior Advocate would thereafter rely upon the decision of the Hon'ble Apex Court in case of Indus Airways Pvt. Ltd. and Others vs Magnum Aviation Pvt. Ltd. and Another, reported in (2014) 12 SCC 539, more particularly Para Nos. 8, 9, 10, 11, 12, 13 and 15. The said paragraphs being relevant for the present purpose, the same are reproduced hereinbelow for benefit.
"8. The interpretation of the expression 'for discharge of any debt or other liability' occurring in Section 138 of the N.I. Act is significant and decisive of the matter.Page 5 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022
R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022
9. The explanation appended to Section 138 explains the meaning of the expression 'debt or other liability' for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an exiting debt or liability. The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability.
10. In Swastik Coaters , the single Judge of the Andhra Pradesh High Court while considering the explanation to Section 138 held:
"........Explanation to Section 138 of the Negotiable Instruments Act clearly makes it clear that the cheque shall be relateable to an enforceable liability or debt and as on the date of the issuing of the cheque there was no existing liability in the sense that the title in the property had not passed on to the accused since the goods were not delivered. ........"
11. The Gujarat High Court in Shanku Concretes dealing with Section 138 of the N.I. Act held that to attract Section 138 of the N.I. Act, there must be subsisting liability or debt on the date when the cheque was delivered. The very fact that the payment was agreed to some future date and there was no debt or liability on the date of delivery of the cheques would take the case out of the purview of Section 138 of the N.I. Act. While holding so, Gujarat High Court followed a decision of the Madras High Court in Balaji Seafoods.
12. In Balaji Seafoods, the Madras High Court held:
Page 6 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 "7. Section 138 of the Negotiable Instruments Act makes it clear that where the cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence under Section 138 of the Act. The explanation reads that for the purposes of this section, 'debt or other liability' means a legally enforceable debt or liability."
13. The Kerala High Court in Ullas had an occasion to consider Section 138 of the N.I. Act. In that case, the post-dated cheque was issued by the accused along with the order for supply of goods. The supply of goods was not made by the complainant. The accused first instructed the bank to stop payment against the cheque and then requested the complainant not to present the cheque as he had not supplied the goods. The cheque was dishonoured. The single Judge of the Kerala High Court held:
".........Ext.P1 cheque cannot be stated to be one issued in discharge of the liability to the tune of the amount covered by it, which was really issued, as is revealed by Ext. D1, as the price amount for 28 numbers of mixies, which the complainant had not supplied. ....."
xxx xxx xxx
15. The above reasoning of the Delhi High Court is clearly flawed inasmuch as it failed to keep in mind the fine distinction between civil liability and criminal liability under Section 138 of the N.I. Act. If at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition then purchaser may have to make good the loss that might have occasioned to the seller but that does not create a criminal liability under Section 138. For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. We Page 7 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 are unable to accept the view of the Delhi High Court that the issuance of cheque towards advance payment at the time of signing such contract has to be considered as subsisting liability and dishonour of such cheque amounts to an offence under Section 138 of the N.I. Act. The Delhi High Court has traveled beyond the scope of Section 138 of the N.I. Act by holding that the purpose of enacting Section 138 of the N.I. Act would stand defeated if after placing orders and giving advance payments, the instructions for stop payments are issued and orders are cancelled. In what we have discussed above, if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability."
4.3 Learned Senior Advocate would submit that the Hon'ble Apex Court, has inter alia in the above judgment laid down the law that for attracting an offence under Section 138, there should be legally enforcable debt or other liability subsisting on the date of drawl of the cheque. Learned Senior Advocate would submit in this regard that since the presentation of the cheque in question was covered by the receipt dated 27.09.2006 issued by the complainant, and whereas since the terms of the said receipt indicated that the cheque was to be presented only upon the condition in question i.e. getting of D.C. conversion being fulfilled, and since it is not the case of the complainant that he had deposited the cheque after the D.C. conversion was obtained, therefore as on the date in question, there was no enforcable debt or liability subsisting and thus according to learned Senior Advocate, a criminal liability under Section 138 of the NI Act was not made out.
4.4 Upon this Court calling upon the learned Senior Advocate to make submissions on decision of the Hon'ble Apex Court in case of Sampelly Satyanarayana Rao Vs. Indian Renewable Energy Development Agency Limited, reported in (2016) 10 SCC 458, would submit that in the said Page 8 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 judgment, while the Hon'ble Apex Court had distinguished, the earlier decision of the Hon'ble Apex Court, on facts, the Hon'ble Apex Court in the later decision, has not laid down the law that the aspect with regard to the existing enforcable debt or liability could only be decided at the stage of trial. Learned Senior Advocate in this regard relies upon the observations of the Hon'ble Apex Court, made at Para 14 of the said decision, wherein the Hon'ble Apex Court has relied upon the earlier decision of the Hon'ble Apex Court in Suryalakshmi Cotton Mills Ltd. Vs. Rajvir Industries Limited, reported in (2008) 13 SCC 678. The observation of the Hon'ble Apex Court which is relied upon by the learned Senior Advocate being that "... It, however, does not mean that documents or unimpeachable character should not be taken into consideration at any cost for the purpose of finding out as to whether continuance of the criminal proceedings would amount to an abuse of process of court or that the complaint petition is filed for causing mere harassment to the accused...". Learned Senior Advocate reply upon the above observation would submit that documents of unimpeachable character could be taken into consideration by this Court while considering the petition for quashing of the complaint, more particularly with regard to complaint being filed under Section 138 of the NI Act.
4.5 Insofar as decision of the Hon'ble Apex Court in case of Sunil Todi and Others Vs. State of Gujarat and Another, reported in 2021 SCC Online SC 1174, learned Senior Advocate would submit with regard to the said decision also that while the Hon'ble Apex Court has inter alia explained the difference between facts in case of Indus Airways Pvt. Ltd. (supra) as compared to the facts of case before the Hon'ble Apex Court, at the same time according to learned Senior Advocate, the observations of the Hon'ble Apex Court at Para 30, would favour the case of the present applicant. The same is relied upon by the learned Senior Advocate.
4.6 Having regard to the above submissions, more particularly reiterating the submission that on the date when the cheque had been presented, there Page 9 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 was no existing any liability between the complainant and the accused, learned Senior Advocate would submit that the impugned complaint may be quashed by this Court.
5. This application is vehemently opposed by learned Advocate Mr. H.M. Shah for the original complainant. At the outset learned Advocate Mr. Shah would submit that the fact of the document dated 27.09.2006 is itself disputed by the present respondent No.1. Learned Advocate would submit that upon receiving the reply to notice under Section 138 of the NI Act issued by the present complainant, in which reply the applicant has relied upon the document dated 27.09.2006, in rejoinder, the respondent- complainant had questioned the very existence of the said document. Learned Advocate would further submit that as such the complainant had also complained to the Police Inspector, Vijaynagar Police Station, Bangalore with regard to the said document in question and whereas learned Advocate would submit that though the said complaint has been registered as FIR being C.R. No.I- 316 of 2010, with the Vijaynagar Police Station, Bangalore, but the later details, are not available with the complainant. Learned Advocate Mr. Shah would further submit that as such apart from this document, there is no other document whereby the applicant could contend that the cheque was given as a payment to be deposited upon the contingency of D.C. conversion being obtained by the present complainant. Learned Advocate would further submitted that in absence of the said document, the applicant could not be heard to contend that on the date when the cheque had been presented, there was no existing liability. Learned Advocate would further emphasis that as such all these issues as to whether there was any existing liability or not, whether the parties had an agreement etc. are all issues which could only be decided by the learned Trial Court after leading of evidence. Learned Advocate would submit that under such circumstances, this Court may not consider the present application and may relegate the present complaint to the learned Trial Court to decide the same after leading of evidence.
Page 10 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 5.1 Insofar as the decision of the Hon'ble Apex Court in Indus Airways
Pvt. Ltd. (supra) relied upon by the learned Senior Advocate for the applicant, learned Advocate Mr. H.M. Shah would, referring to Para Nos. 4, 5 and 6 of the said decision, submit that the facts of the case before the Hon'ble Apex Court and the facts of the present case are totally different and whereas under such circumstances, the observations of the Hon'ble Apex Court ought not be relied upon by the learned Senior Advocate for the applicant. Furthermore, learned Advocate Mr. Shah has relied upon the decision of the Hon'ble Apex Court in case of Rajeshbhai Muljibhai Patel and Others Vs. State of Gujarat and Another, dated 10.02.2020 in Criminal Appeal Nos. 251-252 of 2020. Learned Advocate Mr. Shah seeks to rely upon the observations of the Hon'ble Apex Court at Para 20 of the said decision, where the Hon'ble Apex Court has inter alia observed that when disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the NI Act ought not to have been quashed by the High Court in exercise of jurisdiction under Section 482 of the Code of Criminal Procedure. Learned Advocate Mr. Shah would submit that in the instant case, the parties ought to be relegated, to the Trial Court for adducing evidence as regards the stand taken by them and whereas it would be the learned Trial Court, where evidence has been led, would be competent to decide the issue raised in the present application. Learned Advocate would therefore submit that the present application may be rejected by this Court.
6. In rejoinder, learned Senior Advocate Mr. Mehta would rely upon an additional affidavit filed on behalf of the applicant. Learned Senior Advocate would submit that as far as the FIR preferred by the present complainant is concerned, it appears that the Investigating Officer had filed a 'B' Summary Report before the learned Additional Chief Metropolitan Magistrate, Bangalore. Learned Senior Advocate would submit that the said 'B' Summary Report had been submitted on 08.02.2011 and the complainant Page 11 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 had thereafter sought time for filing of protest petition and whereas from the Rojkam which is annexed with the application, it appears that the complainant had been given various opportunities and ultimately since no protest petition had been filed by the complainant, the 'B' Summary Report filed by the Investigating Officer came to be accepted by the learned Magistrate vide order dated 28.08.2012. Learned Senior Advocate would emphasis on the fact that the complainant has never challenged the acceptance of the 'B' Summary Report. Learned Senior Advocate would submit that in view of the fact that the 'B' Summary Report has been accepted and since there is no question with regard to the genuineness of the document in question i.e. the receipt dated 27.09.2006 stated to have been issued by the complainant, therefore the said document which is unimpeachable in character, may be relied upon by this Court and whereas from the document since it clearly appears that the cheque in question could be presented only after the contingency i.e. of getting D.C. conversion, clear, and since it is not the case of the complainant that the cheque had been presented after the D.C. conversion was made available, therefore on the date in question, there was no debt or other liability, existing, between the accused and the complainant and hence learned Senior Advocate would submit that the impugned complaint may be quashed by this Court.
6.1 Insofar as the decision in case of Rajeshbhai Muljibhai Patel (supra), learned Senior Advocate would draw the attention of this Court to the observations made by the Hon'ble Apex Court at Para 5 of the said decision where the Hon'ble Apex Court has noted that the accused, upon the appellant No.3 demanding his legal outstanding debt, had promised to refund the the amount in question i.e. Rs. 1,20,00,000/- by issuing four cheques of Rs.30,00,000/- in favour of the appellant No.3. It appears that all the cheques had been dishonoured on the ground of payment stopped by the drawer. Learned Senior Advocate would submit that again there was no document before the Hon'ble Apex Court of an unimpeachable character as Page 12 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 in the present case. Learned Senior Advocate would therefore submit that the facts of the case before the Hon'ble Apex Court and the facts of the present case being totally different, the observations of the Hon'ble Apex Court, may not constitute a law which would binding on this Court, more particularly with regard to the substantial difference in the facts. Having regard to such submissions, learned Senior Advocate would request that the impugned complaint may be quashed by this Court.
7. Heard learned Advocates for the parties who have not submitted anything further.
8. From the submissions of the learned Advocates and upon perusal of the documents, the question which arises for consideration of this Court is whether the complaint in question with regard to a cheque issued by the applicant, which had been dishonoured, could be permitted to proceed, more particularly in view of the submission that on the date when the cheque had been presented, there was no debt or liability due to the complainant to be paid by the applicant.
9. This Court in this regard would note that while existence of a transaction between the parties is an admitted position i.e. the accused- applicant having purchased the land from the complainant, the question is with regard to the cheque in question, which according to the learned Senior Advocate for the applicant, could have been presented for payment only after the contingency as mentioned in the receipt dated 27.09.2006 was fulfilled. Insofar as the said issue is concerned, at the outset, it is required to be observed that the learned Advocate for the complainant had questioned the very genuineness of the said document, more particularly according to the learned Advocate, the signature on the said receipt, not belonging to the complainant. In the considered opinion of this Court, it would not be open for the complainant to take such a contention, more particularly in view of Page 13 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 the fact that even in the FIR filed by the respondent No.1, more particularly with regard to the very selfsame document i.e. receipt dated 27.09.2006, the Investigating Officer had filed the 'B' Summary Report i.e. with regard to mistake of facts. It would be further pertinent to note that the learned Advocate for the complainant, upon the said report being filed, had sought for grant of time and whereas it also appears that even a copy of the notice with regard to acceptance of the 'B' Summary Report, had also been issued to the power of attorney holder on behalf of the complainant. It appears that inspite of such a position, it appears that from the date the 'B' Summary Report came to be submitted i.e. 26.05.2011, till 28.08.2012, the complainant had not filed any protest petition. It further appears that even with regard to the order dated 28.08.2012, whereby the learned Chief Metropolitan Magistrate had been pleased to accept the 'B' Summary Report, the complainant had not taken any further steps. It thus appears that at some point of time, the complainant had questioned the veracity of the document in question and whereas later on, he had given up the said claim. It further appears that as of now there is nothing on record to show that the complainant had questioned or was questioning the genuineness of the receipt in question dated 27.09.2006. Under such circumstances, in the considered opinion of this Court, the veracity of the said document not being in doubt, this Court proposes to rely upon the said document.
10. In this regard, it is required to be mentioned that from day one, the case of the applicant being that as per the document/receipt/letter dated 27.09.2006, only upon the complainant and his party, obtaining D.C. conversion, the cheque in question could be presented for payment, the said fact being cleared from the reply notice to notice under Section 138 of the NI Act issued by the learned Advocate for the complainant. It also appears that all through out it is the case of the applicant that while he admits that upon the D.C. conversion is obtained, he is liable to the make payment, at the same time such payment would be subject to deducting the payment Page 14 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 already given earlier under the same head i.e. of getting D.C. conversion. Be that as it may, while the complainant has at the first instance questioned the veracity of the document dated 27.09.2006, but it also appears that genuineness of the documents had not been finally decided, more particularly the complainant having initiated proceedings with regard to questioning the genuineness of the document in question, but having left the said proceedings in the midway. In this view of the matter, this Court is inclined to accept the said document as being entered into between the parties and being binding upon the parties. A perusal of the said document i.e. receipt dated 27.09.2006 clearly reveals that with regard to the present cheque in question valued at Rs. 1,68,00,000/-, the same was to be encashed only after getting D.C. conversion of the lands referred to above i.e. the subject lands, the condition attached with presentation of the cheque being that the D.C. conversion was to be obtained, until the complainant would have fulfilled the said condition, the said cheque could not have been deposited. It is pertinent to mention here that even in case of Sunil Todi (supra) , the Hon'ble Apex Court has inter alia observes at Para 30 that "... However, if the sum payable depends on a contingent event, then it takes the color of a debt only after the contingency has occurred...". In the considered opinion of this Court, for the complainant to claim that there was an existing date or liability, the contingent event i.e. the D.C. conversion being obtained, was required to be specifically stated.
11. At this stage, it would be required to be mentioned that the facts of the instant case, appear to be slightly strange inasmuch as, while in the exchange of notices, the complainant never submits that the D.C. conversion was already available as far as back in the year 2004 itself, and whereas it also appears that even in exchange of notices while the principal contention which was taken by the accused-applicant being that the D.C. conversion was not done, in the rejoinder notice, or even in the complaint filed before the learned Magistrate, it is not the case of the complainant that Page 15 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 since the D.C. conversion was obtained, therefore, the complainant was entitled to present the cheques, more particularly on the date of the presentation, there existed a debt or liability, due to the complainant to be paid by the applicant-accused. The complaint, specifying as if the cheque in question was only one of the cheques with regard to consideration amount and whereas as noted hereinabove, the cheque while it was undoubtedly one of the cheques with regard to entire consideration amount to be paid by the applicant-accused to the complainant, the said cheque could have been presented only upon the contingency being fulfilled and having been presented prior thereto, in the considered opinion of this Court, there was no debt or liability, existing on that date, which would attract the rigors of Section 138 of the NI Act.
12. This Court also seeks to rely upon the decision of the Hon'ble Apex Court in Indus Airways Pvt. Ltd. (supra), relied upon by learned Senior Advocate for the applicant. It appears that in the said decision, the Hon'ble Apex Court has inter alia laid down the law that for a criminal liability to be made out under Section 138 of the NI Act, there should be a legally enforcable debt or other liability subsisting on the date of drawl of the cheque. The Hon'ble Apex Court in the said decision, had also affirmed the law laid down by the learned Andhra Pradesh High Court, this Court as well as the learned Madras High Court, where the learned High Courts had inter alia observed that while the cheque being relatable to an enforcable debt or liability and on the date of issuance of cheque there was no existing liability in the sense that property had not been passed to the accused, and under such circumstances on the date of delivery of the cheque, there was no existing debt which would bring the transaction within the purview of Section 138 of the NI Act. Undoubtedly in the instant case since the cheque was given, to be presented upon a contingent event accruing or a contingent condition being fulfilled, the observations of the Hon'ble Apex Court would be applicable mutatis mutandis to the situation inasmuch as until the Page 16 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 condition was fulfilled by the complainant, and if the cheque had been presented before the said date, then it could be clearly stated that the cheque was not for enforcement for any existing debt or liability and under such circumstances, no criminal liability under Section 138 of the NI Act could be fastened on the accused-applicant.
13. Insofar as the submission made by learned Advocate Mr. Shah for the respondent No.1 that the facts of the case before the Hon'ble Apex Court in case of Indus Airways Pvt. Ltd. (supra) were different then the fact of the present case, in the considered opinion of this Court, the Hon'ble Apex Court, after having discussed the factual issue, had laid down a legal proposition, which, has to be made applicable to the facts of each case, depending on the aspect as to whether the legal proposition could be made applicable or not. In the considered opinion of this Court, the facts of the said case, may not have any relevance insofar as the legal proposition that had been laid down by the Hon'ble Apex Court.
14. Insofar as the decision of the Hon'ble Apex Court in case of Rajeshbhai Muljibhai Patel (supra), which is relied upon by the learned Advocate for the respondent No.1, this Court notes that while the observations of the Hon'ble Apex Court at Para 20, as relied upon by the learned Advocate, being that the accused therein had a raised the defence that there was no legally enforcable debt and in such context, the Hon'ble Apex Court had inter alia observed that when disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the NI Act ought not to have been quashed by the High Court. In the considered opinion of this Court, as noted hereinabove, till the complainant, had disputed existence of the receipt dated 27.09.2006 by filing a complaint, the said document, could be stated to be a disputed document, but in view of the fact that subsequently, the learned Magistrate concerned accepting the 'B' Summary Report and the Page 17 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022 R/CR.MA/7077/2010 JUDGMENT DATED: 25/04/2022 complainant not having challenged either the 'B' Summary Report or the order of the learned Magistrate accepting the 'B' Summary Report, it would not be open for the complainant after around 10 years of the learned Magistrate accepting the 'B' Summary Report that the document in question is not genuine. While it is true that the complainant at the first instance had questioned the veracity of the document in question, at the same time it also would be required to be noted that as far as the applicant is concerned, at the first instance, in reply to the notice under Section 138 issued by the complainant, the receipt dated 27.09.2006 was the first document to have been relied upon by the applicant-accused. Under such circumstances, in view of the discussion as hereinabove, in the considered opinion of this Court, when the cheque had been presented, by the complainant, there was no legally enforcable debt or liability subsisting on that date, due to the complainant from the applicant-accused, and therefore in the considered opinion of this Court, criminal liability under Section 138 of the NI Act not being made out, the impugned complaint deserves interference.
15. Having regard to the above discussion, reasoning and finding, the present application deserves to be allowed. Hence, the impugned complaint being Criminal Case No. 16665 of 2009 pending before the learned Judicial Magistrate First Class, Ahmedabad (Rural) at Mirzapur, is hereby quashed and set aside. Rule is made absolute to the aforesaid extent. Direct service is permitted.
(NIKHIL S. KARIEL,J) BDSONGARA Page 18 of 18 Downloaded on : Sat Dec 24 15:35:49 IST 2022