Bombay High Court
Vijay S/O Pundlikrao Mohare vs Smt Vishakha Deepak Bhosle on 4 March, 2020
Author: S.M. Modak
Bench: S.M. Modak
apeal.126.12.jud 1/36
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
CRIMINAL APPEAL NO.126 OF 2012
Appellant : Vijay Pundlikrao Mohare,
Aged about 65 years, Occupation - Retired,
R/o 73-A, Old Subhedar Layout, Nagpur.
-- Versus --
Respondent : Smt. Vishakha Deepak Bhosle,
Aged about 41 years, Occupation - Business,
In the name and style of
M/s Vishakha Construction,
R/o RG-1, Shubham Apartments,
Landmark Complex, Gopal Colony,
Narendra Nagar, Nagpur.
with
CRIMINAL APPEAL NO.127 OF 2012
Appellant : Vijay Pundlikrao Mohare,
Aged about 65 years, Occupation - Retired,
R/o 73-A, Old Subhedar Layout, Nagpur.
-- Versus --
Respondent : Smt. Vishakha Deepak Bhosle,
Aged about 41 years, Occupation - Business,
In the name and style of
M/s Vishakha Construction,
R/o RG-1, Shubham Apartments,
Landmark Complex, Gopal Colony,
Narendra Nagar, Nagpur.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Shri A.D. Patil, Advocate for the Appellant.
Shri V.G. Bhamburkar, Advocate for the Respondent.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
CORAM : S.M. MODAK, J.
RESERVED ON : 12th DECEMBER, 2019.
PRONOUNCED ON : 4th MARCH, 2020.
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ORAL JUDGMENT :
The issue involved in these appeals is "what will the effect of non-compliance of some of the terms on the liability created as per four cheques. The connected issues are whether the presumption under Section 139 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act' for short) has been rebutted and in order to refute the accused's grievance of non- compliance of the terms of the agreement, whether the complainant is justified in simply relying upon contents of the agreement without giving oral evidence.
02] Four cheques were issued after execution of Agreement to Sale, dated 04/10/2005 [Exh.57]. They were issued by the accused/respondent in favour of the appellant/complainant. The parties will be referred to as per their original status. The complainant filed one case bearing S.C.C. No.16740/2006 for non- payment towards three cheques. S.C.C. No.77/2006 was filed in respect of non-payment of one cheque. The grievance of the accused is "the complainant has not cooperated in obtaining N.O.C. from the Town Planning Department. Even accused sought the complainant's cooperation vide letter, dated 24/06/2006 ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:09 ::: apeal.126.12.jud 3/36 [Exh.60]. Whereas, complainant contend that entire responsibility is of accused.
03] The complainant has deposited three cheques for realization prior to receipt of the said letter. Whereas, admittedly, the fourth cheque was deposited after receipt of the said letter. All the four cheques were dishonoured for the reason "stopped payment by the drawer". Vide letter dated 07/02/2006, the accused informed to his banker to stop the payment. For the first three cheques, the complainant issued a notice, dated 25/07/2006 [Exh.45]. The accused denied the liability and informed the complainant vide reply, dated 03/08/2006 [Exh.47]. As there was a failure to make the payment, the complainant filed S.C.C. No.16740/2006 for three cheques. The forth cheque was deposited and the outcome was the same i.e. it was dishonoured. There was a demand to pay as per the notice dated 21/09/2006 [Exh.28]. The accused denied the liability vide reply dated 05/10/2006 [Exh.31], as there was a failure to pay, S.C.C. No.77/2006 was filed. 04] The complainant examined himself. The accused examined representative from Sub-Registrar Office. This was in case of S.C.C. No.16740/2006. Whereas, the complainant filed a separate affidavit of S.C.C. No.77/2006. The accused has chosen ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:09 ::: apeal.126.12.jud 4/36 not to cross-examine separately in this case, but adopted the cross-examination taken in the first case. No witnesses were examined in this case.
05] After trial, the learned Magistrate, Nagpur was pleased to convict the accused for the offences punishable under Section 138 of the N.I. Act in both these cases. It is the turn of the accused to take the matter to the District Court. She filed two separate appeals i.e. Criminal Appeal No.161/2009 (for three cheques) and Criminal Appeal No.162/2009. She succeeded in the appeals. The appellate Court was pleased to set aside the judgment, vide order dated 30/07/2011. It is the correctness of judgment in these two appeals, which is challenged before this Court. 06] Learned Advocate Shri Patil argued for the complainant, whereas learned Advocate Shri Bhambhurkar argued for the accused. They also relied upon some of the judgments. With their assistance, I have perused the record. The case mainly rests on the documentary evidence. The accused while cross-examining the complainant had shown him various documents. They were admitted by the complainant and accordingly they were exhibited in the evidence. Some of the documents (photocopies) filed before the trial Court were not exhibited. In spite of that, the first ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:09 ::: apeal.126.12.jud 5/36 Appellate Court has considered them. On this specific point, even I have heard both the learned Advocates on 24/01/2020. They were admitted this position. In view of that, I am unable to consider that document and the relevant observations by the first appellate Court also cannot be considered. I will deal with them in subsequent part of my order.
JUDGMENT OF APPELLATE COURT 07] The first appellate Court has passed his judgment mainly on the following grounds:
(a) The complainant has not transferred the property in favour of the accused and as there is no transfer of title, the liability will not become a liability as contemplated in the Act.
(b) There is no case of advancing a friendly loan and as such the liability cannot become a debt.
(c) The complainant has not explained for what purpose the four cheques were issued.
(d) The complainant has not cooperated in obtaining Town Planning sanction.
(e) As per the Deed of Assignment, the complainant has ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:09 ::: apeal.126.12.jud 6/36 agreed to assign the rights in favour of the accused, but it has not been done (this finding is not supported by proved Deed of Assignment before the trial Court).
(f) The original owner has cancelled the Power of Attorney granted in favour of the accused.
SUBMISSIONS 08] The learned Advocate for the complainant emphasized on the following points :
(a) Fulfillment of the obligations by the complainant when he executed Agreement to Sale [Exh.57] and Agreement of Development and Sale - Tri-Party Agreement [Exh.58] in favour of the accused.
(b) Cancellation of Power of Attorney given to him by the owner on 24/01/2006 [Exh.56] and corresponding execution of fresh Power of Attorney by the owner in favour of the accused [Exh.59].
(c) Thereafter, nothing remains to be done from the side of complainant.
(d) The grievance for non-cooperation in obtaining Town Planning sanction is without any basis.::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:09 ::: apeal.126.12.jud 7/36
(e) Complainant's responsibility is only to advise the accused in obtaining Town Planning sanction, whereas all the expenses are to be borne by the accused (a term on page No.3 on the agreement dated 04/10/2005).
09] As against this, the learned Advocate for the accused has made following submissions :
(a) Non-disclosure by complainant about the previous transaction of sale by the owner in favour of Maa Vaishnavi Gruh Nirman Sahakari Sanstha Maryadit.
(b) Cancellation of Power of Attorney executed in her favour by the complainant.
(c) Not transferring the title as agreed as per Deed of Assignment.
(d) Not-cooperating in obtaining Town Planning sanction.
10] As said above, the case mainly rests on documentary evidence. According to the complainant, even though dispute pertains to property, the liability is created as per the written agreement and the drawer of the cheque is liable to be punished if the cheques are issued in pursuance of the agreement. He relied upon the following judgments :
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(1) M/s Womb Laboratories Pt Ltd vs Vijay Ahuja and another (Criminal Appeal Nos. 1382-1386 of 2019 arsing out of SLP (Cri.) Nos. 1365-1366/2019).
(2) Sampelly Satynarayana Rao vs Indian Renewable Energy Development Agency Limited (Criminal Appeal No.867/2016 arsing out of S.L.P. (Cri.) No. 5410/2014).
(3) Ripudaman Singh vs Balakrishna (Criminal Appeal No.483/2019 arsing out of SLP (Cri.) No.4608/2016).
11] When cheques are dishonoured due to stop payment instructions, still there is a liability fastened as per the provisions of Section 138 of the N.I. Act. In support of the said contention, the complainant relied upon the judgment in case of M/s. MMTC Limited (page 20, paragraph 23).
12] As against this, learned Advocate Shri Bhambhurkar for the accused relied upon a judgment in case of Venkatesh Bhat , A vs. Rohidas Shenoy, reported in 2010 CRI.L.J. 1061 (Karnataka High Court) (Page 20 paragraph 23).
ABOUT CITATIONS 13] It is true that the observations in case of Venkatesh Bhat (supra) can be distinguished as facts are different. The ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 9/36 acquittal by the Magistrate Court was not interfered with by the High Court of Karnataka. The main reason was legality of the agreement and factum of issuance of cheque voluntarily was under
cloud. There was a grievance of obtaining signatures on the agreement by using threat. This is not the case before us. The accused has never pleaded that she signed on all the agreements and issued cheques in voluntarily.
14] Though many of the judgments (except one) relied upon by the complainant, were delivered at a pre-trial stage.
Certainly I will look into the observations made therein.
15] In case of M/s. Womb Laboratories (supra), it has been observed "handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques". This issue was raised on behalf of the accused at a pre-trial stage and it was turned down and left open to be decided at a trial stage. Even if, it is held that cheques issued by way of security, it will be governed as per the provisions of the N.I. Act. Still entire evidence needs to be looked into and this observation will be useful to the complainant only if he will succeed on other issues.::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 10/36
16] Whereas, in case of Sampelly Rao (supra), the Hon'ble Supreme Court differentiated into the contingency of issuing the cheques when the liability is admitted at the initial stage and the contingency in which the cheques are issued but it's encashment is depending upon happening of certain events. In that case, the cheques are issued for repayment of loan which is admitted liability and accordingly quashing was not allowed. In that case, the Hon'ble Supreme Court referred to the observations in case of Indus Airways Private Limited vs. Magnum Aviation Private Limited.
17] Whereas, in case of Uttam Ram vs. Devinder Singh Hudanand & another, (Criminal Appeal No.1545/2019 arising out of SLP (CRI) No.3452/2019), the Hon'ble Supreme Court convicted the appellant by reversing the acquittal by the trial Court and by the High Court. On the basis of evidence, the Hon'ble Supreme Court refused to give importance to certain discrepancies and given weightage to admitted liability arising out of a written document.
The evidence of a witness, in whose presence cheque was given, was given more credence. It is pertinent to note that the account was settled prior to giving of cheque. The defence of accused about cheque being lost was negated. The conclusion drawn by the Hon'ble Apex Court is on the basis of the facts of that case. It ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 11/36 is no doubt true that the Hon'ble Apex Court has considered the importance of a presumption laid down under Section 139 of the N.I. Act. Ultimately, whether the presumption is rebutted or not is a question of fact.
18] The principles laid down above will be certainly useful while appreciating the evidence adduced before the trial Court.
EVIDENCE BEFORE THE TRIAL COURT 19] Basically in this case, three persons are involved. One is the original owner Shakuntala Bhamode, second is the complainant Vijay Mohare (who has agreed to purchase the land from the owner) and third is the accused, who has agreed to purchase the land (initially from the complainant and later on from the owner). Admittedly, no sale-deed is executed by the complainant in favour of the accused or sale-deed is executed by the owner through the complainant. The sale-deed was executed in between Maa Vaishnavi Gruh Nirman Sahakari Sanstha Maryadit.
and the accused later on on 8 th June, 2007. Said Maa Vaishnavi Gruh Nirman Sahakari Sanstha Maryadit. purchased the land in question from the original owner vide sale-deed, dated 06/11/2006.
Both these sale-deeds were not proved through parties till the first appellate Court has referred to them to certain extent.::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 12/36
20] Initially, the original owner executed the following documents with the complainant:
Sr.No. Date & Exhibit Nos. Particulars
1 04-03-2004 (Exh.52) Nissar Patra
2 05-04-2004 (Exh.53) Agreement to Sale.
3 05-04-2004 (Exh.55) General Power of Attorney
4 05-04-2004 (Exh.54) Kabja Patra.
21] The owner agreed to sell the land to the complainant
for Rs.6.00 lakhs. On the basis of these documents, the
complainant executed two sets of documents with the accused.
They are as follows :
(i) First Set of Documents (a) Copy of Agreement to Sale at executed on 04/10/2005 Exh.57
(ii) Second set of documents (a) Original owner cancelling the executed on 24/01/2006 power of attorney given to the complainant Exh.56
(b) Deed of Agreement of Development-cum-Sale (Tri-party Agreement) and original owner, complainant and the accused are the parties [Exh.58]
(c) General Power of Attorney by the owner in favour of the accused [Exh.59]
(d) Deed of Assignment dated 24/01/2006 in between the complainant and the accused (not exhibited).::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 13/36
For appreciating the issue raised by both the sides, it will be material to consider the contents of the proved documents. CONTENTS OF AGREEMENT TO SALE, DATED 04/10/2005
(a) Consideration was Rs.25.00 lakhs.
(b) Three cheques amounting to Rs.12.50 lakhs were issued (it is not the subject matter of two cases).
(c) Remaining Rs.12.50 lakhs was to be paid within nine months.
(d) If the cheques were not enchased, the agreement will be deemed to be cancelled (first appellate Court has given importance to this clause).
(e) Postdated cheques for remaining amount of Rs.12.50 lakhs were agreed to be delivered at the time of executing the Power of Attorney and Agreement to Sale and Development.
(f) Responsibility to measure the land of complainant and responsibility to get sanction of Town Planning is on the accused. The complainant has agreed to guide her.
(g) After receiving Rs.12.50 lakhs, the complainant has agreed to get cancelled Power of Attorney in his favour executed by the owner and agreed to get executed Power ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 14/36 of Attorney in his favour from the owner (this term is written by hand).
(h) At the same time, the complainant has agreed to get executed an agreement for sale and development in between the owner and the accused for Rs.6.00 lakhs. So also, the complainant has agreed to execute mutual settlement agreement for remaining Rs.6.50 lakhs (this is also hand written).
AMOUNT OF CHEQUES 22] There is no dispute in between the parties about realization of the first three cheques issued for Rs.12.50 lakhs. Admittedly, the four cheques in question were not issued at the time of execution of these agreements. But, they were agreed to be issued at the time of execution of further agreement. It did happen that those four cheques were issued subsequently. The amount of those four cheques is Rs.13.90 lakhs. Even though it is higher than the remaining amount of consideration of Rs.12.50 lakhs. I do not find any controversy raised on behalf of the accused while defending the cases. The learned Counsel for the complainant tried to explain during oral agreement why there is an increase of Rs.90,000/-. According to him, this Rs.90,000/- includes ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 15/36 remaining amount of cheque dishonoured from initially issued three cheques and it also includes an amount of compensation agreed to be paid by the accused due to dishonour of the earlier cheques. As there is no dispute about the amount of Rs.13.90 lakhs, there is no occasion for me to go into that issue.
DOCUMENTS EXECUTED ON 24/01/2006 23] As agreed in the agreement dated 04/10/2005, the complainant has fulfilled some of his promises in the following way :
(a) Got cancelled the Power of Attorney from the original owner executed in his favour by a deed [Exh.56].
(b) Instrumental in executing a Tri-party Agreement and Deed of Agreement of Development and Sale [Exh.58].
(c) Got instrumental in executing a power of attorney by the original owner in favour of the accused [Exh.59].
ISSUANCE OF CHEQUE 24] On this background, accused issued following cheques in favour of the complainant. The details of cheques, cases and appeals are as follows :
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S.N. Cheque Date Amount Case No. First Present Nos. (in Rs.) Appeal Appeal 1 206202 10-02-2006 1,40,000/- SCC No. Cri.Appeal Criminal 16740/2006 No.161/09 Appeal No.126/12 2 206203 24-04-2006 5,00,000/- SCC No. Cri.Appeal Criminal 16740/2006 No.161/09 Appeal No.126/12 3 206204 24-06-2006 3,00,000/- SCC No. Cri.Appeal Criminal 16740/2006 No.161/09 Appeal No.126/12 4 206205 24-08-2006 4,00,000/- SCC No. Cri.Appeal Criminal 77/2006 No.162/09 Appeal No.127/12 25] As said above, the first three cheques were deposited earlier to receipt of letter dated 24/06/2006 [Exh.60] protesting about non-cooperation by the complainant in obtaining Town Planning sanction. There is a reason to believe that cheques were deposited earlier to receipt of that letter. But, there is a reason to believe that notice dated 25/07/2006 at Exh.45 was issued after receipt of this letter.
26] Whereas, admittedly notice dated, 05/10/2006 [Exh.28] in respect of dishonour of single cheque was issued after receipt of protest letter, dated 24/06/2006 [Exh.60]. The material issue is, whether the findings of the first appellate Court "about presumption rebutted by the accused" is correct or not and whether it is supported by the evidence or not. And, whether the ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 17/36 first appellate Court has committed any mistake in appreciating the evidence.
SCOPE OF APPEAL 27] It is true that the trial Court convicted the accused, whereas the first appellate Court reversed that decision. Against the decision of acquittal in a complainant case, the appeal lies to this court under the provisions of sub-section (4) to Section 378 of the Code of Criminal Procedure. Be that the order of Magistrate Court or of Additional Session Judge. It is also true that there is a maxim followed "judgment of acquittal reinforces the presumption of innocence". This is not applicable in full force when there is a special defence taken by the accused or when case rests on documentary evidence. Present appeal falls under second category. Hence, this Court can certainly re-appreciate the evidence and ascertain the correctness of the finding with a wide approach.
CONSIDERATION 28] The defence taken by the accused is already reiterated in earlier part of the judgment. The complainant is the sole witness. Accused examined a representative from Sub-Registrar Office. The original owner cancelled the Power of Attorney granted ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 18/36 in favour of the accused unilaterally. This compelled the accused to file civil suit against the original owner. The accused was cautious enough to give lis pendens notice to the Office of Sub-Registrar, Saoner. To prove this fact, defence witness was examined. This happened in S.C.C. No.16740/2006. Whereas, in S.C.C. No.77/2006, accused has adopted earlier cross-examination and not examined defence witnesses independently.
CERTAIN INCORRECT FINDINGS 29] With the assistance of both the learned Advocates, I have read the findings given by the trial Court as well as by the appellate Court. It is no doubt true that the case is mainly based on documentary evidence. The trial Court, while holding accused guilty, has considered contents of some of the documents and has given them predominance over oral evidence. That is to say the trial Court observed thus -
"when a transaction has been reduced in writing, either by requirement of law, or agreement of the parties, the writing becomes the exclusive memorial thereof, and no extrinsic evidence is admissible either to prove independently the transaction, or to contradict, very add to, or subtract from the terms of the documents ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 19/36 through the contents of such document may be proved either by primary or secondary evidence. All parol testimony of conversations held between parties, or declarations made by either of them where before or after or at the time of, the completion of a contract, will be rejected, because such evidence would tend to substitute a new and different contract for the one really agreed upon. Extrinsic evidence as to what transpired subsequent to a written contract is not admissible for ascertaining its terms."
30] These observations were made by the trial Court while making comments on commitment of complaint to get Town Planning sanction. On this issue, I do not find any observations by the appellate Court. The trial Court committed one mistake. It was observed in paragraph 11 that "In the present case, it has not come on record that the complainant was aware of the stop payment directions prior to the presentation of the cheques.". However, the trial Court has forgotten one fact that the protest letter [Exh.60] (though not received prior to deposit of three cheques) was received prior to deposit of forth cheque. 31] At the same time, the appellate Court went on to observe about Deed of Assignment, dated 24/01/2006. In ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 20/36 paragraph 13 of the impugned judgment, the appellate Court observed thus :
"From the evidence came on record, it appears that on 24/01/2006, agreement for assignment executed between them about said field Rs.12,10,000/- paid by the appellant to the respondent and Rs.13,40,000/- to be paid on or before 24/08/2006 transaction will be completed on or before 24/08/2006 by appellant and respondent was to be executed sale deed in favour of the appellant. The amount paid for agreed consideration is towards consent money relating to said property."
32] It is a matter of record that the Deed of Assignment is not proved before the trial Court. Specifically on this issue, I have heard the arguments of both the learned Advocates on 24/01/2020. Fairly they have admitted that the Deed of Assignment is not proved during evidence. Furthermore, the appellate Court made certain comments on subsequent development. There are two sale-deeds referred during oral arguments before me. They are as follows :
1) Sale-Deed dated 06/11/2006 in between the original owner and Maa Vaishnavi Gruh Nirman Sahakari Sanstha Maryadit.::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 21/36
2) Sale-Deed dated 12/06/2007 in between Maa Vaishnavi Gruh Nirman Sahakari Sanstha Maryadit and the accused.
33] Accused wants to make a point that complainant has not transferred land in favour of the accused, but accused herself got it transferred from Maa Vaishnavi Gruh Nirman Sahakari Sanstha Maryadit. In such a manner, the accused has not fulfilled his promises. The appellate Court in paragraph 21 of the judgment observed :-
"It appears that subsequent development were happened between them in respect of the said field. But, it was not brought in the light by the respondent but same pointed out by the appellant. The respondent suppressed the subsequent development."
Furthermore, in paragraph 26, the appellate Court observed :-
"It appears that appellant got a title and possession of the said field from the said Society and not from respondent therefore possibility to execute sale deed between the appellant and respondent is end. The appellant paid consideration and purchased the said field. Therefore, no outstanding consideration in ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 22/36 respect of the said field therefore the cheques issued cannot be considered as a remaining consideration but they were issued for security.
Therefore, they cannot considered for remaining consideration in respect of the said field."
34] But, the appellate Court lost sight of the fact that the subsequent sale-deeds were not tendered in evidence. So also, it is not admitted fact. What I gather is, the appellate Court was influenced by the oral arguments canvassed before him and while doing that, the evidence before the trial Court was not perused. Even, the oral arguments before me also tempted me to decide the appeal on factors which are not part of record. But, I have not succumbed to that and decided these appeals on the basis of strict record. With this view in mind, I have read the record. 35] On reading them, I find that some of the observations of the trial Court are right. But, on certain aspects, I do not agree with the trial Court. So the conclusion about guilt drawn by the trial Court is not acceptable to me. I will give reasons for that. Whereas, I also do not agree with some of the observations of the appellate Court. Still, I agree to the conclusion about acquittal drawn by the appellate Court. I am not intending to interfere in the impugned judgment. I will give reason for that.
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ISSUANCE OF THE CHEQUES 36] The trial Court held that it was not towards future liability. In para No. 12 it has been observed :
"It is the contention of the accused that she had issued blank signed cheques as security for future transaction. It is requisite to note that the complainant has duly performed his part of the contract mentioned in para 4 on page no.3 in agreement to sale at Exh.57. The accused had entered into the agreement of development and to sale on 24.01.2006 at Exh.58 with the original owner and complainant also party to said agreement as consenter. Upon perusal of the said Development and agreement of sale at Exh.58 it is seen that there is no mention in respect of post dated cheques, issued as consideration to the complainant which were referred to in the agreement to sale between the complainant and accused at Exh.57 last line of para 2 namely."
37] It has been further observed in para No. 14 by the trial Court as "There is no mention, in the development and agreement to sale at Exh.58 about the cheques at Exh.38 to Exh.40. The accused has failed to specify for which future transaction the said cheques were given blank as security. So also in the notice dated 07/02/2006 at Exh.51, letter dated 24/06/2006 at Exh.60 and the ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 24/36 reply to the notice dated 03/08/2006 at Exh.47 she has failed to mention that the cheques were given blank as security for future transaction."
Whereas, the appellate Court observed in paragraph 16 that -
"It appears from, complaint that appellant issued a cheques as mentioned in above para but in the complaint and evidence of respondent there is no mention that what purpose appellant issued the said cheques to respondent whether they were for remaining consideration or part consideration in that respect pleading is not specific that they were for remaining consideration".
38] I do not agree to this factual findings recorded by the appellate Court, because in the affidavit, the complainant has deposed -
"Thus, accused entered into agreement to purchase said land from the deponent for the valuable consideration of Rs.25,50,000/- (Rupees Twenty Five Lacs & Fifty Thousand Only) and agreement to sale between deponent and accused reduced in writing on 04/10/2005 and the accused has paid the part payment of Rs.12,10,000/- and as per term and condition of ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 25/36 the said agreement accused would be liable to pay balance consideration amount of Rs.13,40,000/- within nine months from the date of agreement. That towards the part payment accused issued cheques in favour of complainant for different amount and of different dates".
The appellate Court further observed -
"The cheques were used before completing of transaction or executing sale- deed, in any agreement there are no numbers of post dated cheques given to consider that they were for remaining consideration.
Therefore, it cannot be said that the cheques were issued for consideration but can be said that they were issued for security as well as before execution of sale deed cannot claim of bounced cheques amount as a consideration".
It has been further observed -
"However, she informed about the "stop payment" to the respondent. Therefore, the said cheques issued for future liability as a security because previous cheques returned after paying the amount in cash. Therefore, subsequently cheques also issued for security for future liability."::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 26/36
39] The appellate Court in paragraph 32 rightly observed "In this case, there is no debt due against the accused as a friendly loan or other amount which come in the term of debt, therefore, the case is not come in term of debt". While dealing with the issue whether the amount will fall under the category 'other liability' the appellate Court observed -
"Therefore, the sale transaction between the parties came to end. Shakuntala sold the said field to another person than appellant therefore the transaction between appellant and respondent is end and no chances to complete sale transaction in future on the base of agreement between them. Therefore, bounced cheques cannot come in the term of other liability."
TRANSFER OF TITLE 40] While concluding that the amount will not fall under 'other liability', the appellate Court weighed the circumstances in favour of the accused. One is the property not transferred by the complainant in favour of the accused. Second is, society transferring the title in favour of the accused. ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 27/36 41] I do not agree to this conclusion drawn by considering these two circumstances. Because, we cannot consider it as a lapse on the part of the complainant and there is no documentary evidence suggesting that responsibility on the complainant. The second circumstance also cannot be considered for the same reason. The sale-deed is not on record. Whereas I agree to the observations made by the trial Court about fulfillment of the promises by the complainant. Trial Court observed "Thus the complainant has complied with his part of the agreement to sale entered with the accused at Exh.57 at para 4 page No.3". While making this observations, trial Court has considered certain factors. One is Deed of Cancellation of Power of Attorney in between owner and the accused [Exh.56]. Second is execution of General Power of Attorney by the owner in favour of the accused [Exh.59]. On this background, trial Court rightly concluded about fulfillment of promises by the complainant. This has not been looked in to by the appellate Court.
CANCELLATION OF POWER OF ATTORNEY 42] On this aspect, the appellate Court considered this factor while answering the issue of liability against the ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 28/36 complainant. Power of Attorney is cancelled in two modes. One is, by the original owner given in favour of the complainant. Fact of cancellation is correct but its correlation to hold non-proof of liability is not correct. Because this cancellation is mutual in between owner and the complainant. Second is cancellation by owner granted in favour of the accused. It is considered by the appellate Court and not rightly. Because there is no evidence on record to that effect. Whereas, the findings of trial Court are correct. Accused examined representative from the Sub-Registrar Office. Through her notice of lis pendens is proved. Trial Court rightly observed that accused has not entered into witness box. Hence contents of sale-deed dated 06/11/2006 at Exh.77 cannot be read (para 13). These are correct observations. I am also not inclined to consider it as a factor against the complainant.
TOWN PLANNING NO OBJECTION CERTIFICATE 43] This issue was harped upon by the accused before this Court. I do not find any observations of the appellate Court. Trial Court has opined about this issue in paragraph 8. Trial Court has also reproduced the contents of the Agreement to Sale at Exh.57 (para 8). I am also reproducing it for ready reference as - ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 29/36
"lnj tfeuhP;k lanHkkZr tfeuhps rarksrar eksteki d:u ns.;kph tckcnkjh ikVhZ ua 1 ps jkghy- Vkmu IyWfuax eatwj d:u ?ks.;kph tckcnkjh ikVhZ u-a2 ph jkghy- R;klkBh ;s.kkjk loZ [kpZ ikVhZ ua-2 djrhy- ikVhZ ua-1 R;klkBh QDr ekxZn"kZu djrhy- ojhy tfeuhps lanHkkZr loZ dkxni=s teowu vkf.k feGowu ns.;kph tckcnkjh ikVhZ ua 1 ph jkghy- R;klkBh ykx.kkjk [kpZ gh ikVhZ ua-1 djrhy- QDr Vkmu Iykfuax udk"kk eatwjhpk [kpZ ikVhZ ua-2 yk jkghy-"
44] Trial Court has differentiated in between responsibility of the complainant and the accused. It is true that the responsibility of the complainant is only to give guidance whereas that of accused is to incur all expenses. It is true that accused vide letter dated 24/06/2006 [Exh.60] has protested about non- cooperation of the complainant. She has laid emphasis on the importance of sanction in development of the property. 45] The bifurcation of responsibilities done by the trial Court is correct. The job of the complainant is only to give guidance. So, whether the complainant is to be blamed if he has not given guidance? Whether his failure is sufficient to relieve the accused from his responsibility to honour the commitment of cheques? Trial Court has answered in the negative. Whereas the appellate Court has not given any opinion. Trial Court has given its finding on the ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 30/36 basis of documents. Trial Court has also said that prior to deposit of cheques (that is first three), the complainant was not aware of stop payment instructions. It is a matter of record that letter stopping payment given to drawee bank is not exhibited. Cheque return memo only refers about it. The said letter is not sent to the complainant. What is sent, is protest letter about non-cooperation. 46] It is true that the trial Court has minimized the responsibility of the complainant only in giving advise. But trial Court has not said anything about what advise given by the complainant. For that purpose, we can go through the contemporaneous record. It includes notice dated 25/07/2006 [Exh.45] and the affidavit of evidence. But surprisingly in both of them, the complainant has not said anything. The complainant has even not referred to the letter dated 24/06/2006 [Exh.60]. So when the complainant has not said anything about 'any advise given' will it be proper to give him benefit of fulfilling that promise. The answer is certainly 'no'. Whether the complainant has given the advise or not is a question of evidence. Even the complainant does not say that he has replied to that letter. The complainant had only chosen not to make any comment on that letter. This inaction of the complainant certainly goes against him. Appellate Court has ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 31/36 not paid attention to this aspect (in stead it commented on certain issues which is not a part of record).
DEBT/LIABILITY 47] It is true that it has been interpreted in the case of M/s. Womb Laboratories (supra) that cheques issued as security are also covered by the provisions of N.I. Act. Accused has agreed to pay remaining amount of Rs.12,50,000/- (later on increased to Rs.13,90,000/-) within 9 months. (as per agreement dated 04/10/2005) [Exh.57]. There is a clause in that agreement. It says of cancellation of the agreement if cheque not encashed. The appellate Court has given benefit of this clause to the accused. It is not correct. Because the accused himself is the drawer of the cheques and he cannot take the benefit of her own wrong of dishonouring the cheque and pleading for recession of the agreement.
48] There may be various kinds of agreements consisting of promises and sets of promises. The agreement at Exh.57 consists of promise given by the accused to pay Rs.12,50,000/- within 9 months. There was also a promise on behalf of complainant to guide the accused in obtaining town planning sanction. The complainant has fulfilled the promise of (a) cancelling his power of ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 32/36 attorney; (b) fresh power of attorney in favour of the accused and
(c) executing agreement for sale and development. It is very well true that fulfillment of promise by the complainant is correlated to fulfillment of corresponding promise by the accused. 49] Basically, the accused has made grievance of non- fulfillment of two promises by the complainant. One is not transferring the title. As said above deed of assignment (which contains this promise) is not exhibited. This restrains me from making any observation. Appellate Court has not put that restraint on him.
50] At this juncture it will be useful to consider the ratio laid down in case of Sampelly Satyanarayan Rao (supra). When cheques were issued towards discharge of existing debt/liability, Section 138 of N.I. Act was attracted. The Hon'ble Supreme Court referred to the case of Indus Airways Pvt. Ltd. (supra). In that case there was a contract for purchase of Aircraft parts. One of the terms of contract was to make full payment in advance. Accordingly, cheques were issued. Subsequently, the purchaser cancelled the purchase orders and requested for return of both the cheques. Supplier though initially agreed, subsequently deposited the cheques. Therefore, the complaint was filed for the offence ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 33/36 under Section 138 of the N.I. Act. The question arose before the Hon'ble Supreme Court was, "Whether post dated cheques issued by the appellant/purchaser as an advance payment could be considered in discharge of debt or liability?. It has been answered in the negative. The Hon'ble Supreme Court held in paragraph 15-
"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 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..........."::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 34/36
Furthermore, it has been held that -
"15.............. The Delhi High Court has travelled beyond the scope of Section 138 of the NI Act by holding that the purpose of enacting Section 138 of the NI 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".
51] I think these observations are perfectly applicable to this case. If there is non-fulfillment of terms of the agreement, it will certainly affect the liability created by the cheques. In such a scenario, there can be civil liability and in no case criminal liability can be fastened. So there was a liability created as per cheques, but it got affected due to subsequent non-fulfillment of the promise of giving advise in obtaining town planning sanction. In this manner the accused has succeeded in rebutting the presumption. ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 35/36 52] There is one more reason to blame the complainant. In spite of protest letter at Exh.60 received by him, he went on to deposit fourth cheque. He has not cared to reply Exh.60. He has not cared to justify his act of depositing fourth cheque in spite of receipt of protest letter. Due to this lapse, he cannot expect the Court to assist him only by interpreting the documents. The terms of the document can certainly help the complainant provided he must come with some explanation about the grievances made in protest letter. It has not happened.
REASON FOR DISHONOUR 53] Complainant relied upon the judgment of M/s M.M.T.C. Ltd. and another vs. M/s Medchl Chemicals and Pharma Private Ltd. and another (in SLP (Cri.) 289-290 of 2000). Even if cheque is dishonoured for stop payment instructions, Section 138 of N.I. Act get attracted. It is no doubt true that there is no evidence adduced by the accused that there was sufficient balance. Even stop payment letter is not proved. But the accused succeeded in proving that there was bonafide dispute about liability. This will certainly takes the accused out of ambit of the provisions of Section 138 of N.I. Act.
::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 ::: apeal.126.12.jud 36/36 54] For all these discussion I am not inclined to interfere in the findings recorded by the appellate Court. Some of the findings are not acceptable to me. I have expressed my opinion. However the conclusion drawn by the appellate Court cannot be faulted. The parties may be having a recovery suit pending, having a money claim by the complainant and counter claim by the accused. But it does not influence me in taking decision. So too both the parties can make respective submissions before Court seized with money suit and that Court can decide the suit on the basis of evidence before him. Therefore, I find no reason to interfere in the impugned judgment. Hence the following order is passed :
ORDER I. Both the appeals stand dismissed.
II. Parties to bear their own costs.
(S.M. Modak, J.) *sandesh ::: Uploaded on - 04/03/2020 ::: Downloaded on - 05/03/2020 09:51:10 :::