Delhi District Court
2462031 5 vs . on 30 September, 2021
IN THE COURT OF METROPOLITAN MAGISTRATE (NI-05),
WEST, TIS HAZARI COURTS, NEW DELHI
Presided over by- Sh. Devanshu Sajlan, DJS
Case No. - 13701/2016
Unique Case ID - DLWT020004182009
No.
In the matter of :-
HARJINDER KAUR
WZ- 13, Meenakshi Garden
Tilak Nagar, New Delhi
... Complainant
VS.
1. MS DARINTECH CONSTRUCTION P LTD
Having Its Office at A-1/292, Safdarjung Enclave,
New Delhi
... Accused no. 1
2. RAHUL PURI
r/o A-1/292, Safdarjung Enclave
New Delhi
... Accused no. 2
3. TRIPTA PURI
R/o A-1/292, Safdarjung Enclave
New Delhi
... Accused no. 3
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:13:25
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 1 of 25
1. Name of Complainant : Smt. Harjinder Kaur
2. 2. 1. Darintech Construction P. Ltd
Name of Accused : 2. Sh. Rahul Puri
3. Smt. Tripta Puri
3. Section 138, Negotiable
Offence complained of or proved :
Instruments Act, 1881.
4. Plea of Accused : Not Guilty
5. Date of Filing : 04.12.2009
6. Date of Reserving Order : 22.09.2021
7. Date of Pronouncement : 30.09.2021
8. 1. Darintech Construction P. Ltd -
Convicted.
Final Order :
2. Sh. Rahul Puri - Acquitted
3. Smt. Tripta Puri - Convicted
Argued by: Smt. Kamlesh Mahajan, learned counsel for the complainant.
Sh. Daviender Hora, learned counsel for the accused persons
_____________________________________________________________________
TABLE OF CONTENTS
A. Factual Matrix .......................................................................................... 3
B. Pre-Summoning Evidence & Notice ..........................................................5
C. Complainant's Evidence ............................................................................6
D. Statement of Accused ................................................................................ 7
E. Ingredients of Offence and Discussion ......................................................8
Contentions in relation to non-fulfilment of second ingredient
I. Contention: Non-compliance of the Dues Agreement dated 11.08.2008
IA. Relevant Clauses of the Registered Sale Deed Ex. CW1/1
IB. Relevant Clauses of the Dues Agreement Ex. CW1/2
IC. Position of Law: Modification of a registered sale deed can only be
done by way of a subsequent registered deed
Digitally
signed by
DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:13:35
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 2 of 25
ID. Position of Law: A document barred by a statute to be admissible in
evidence cannot be admitted in evidence even if admitted by the
opposite party
IE. Conclusion: Accused Company is liable to pay consideration
amount in absence of admissibility of Dues Agreement
F. Conclusion ................................................................................................... 23
_____________________________________________________________________
BRIEF STATEMENT OF REASONS FOR THE DECISION:-
A. FACTUAL MATRIX
1. The present complaint has been filed by Smt. Harjinder Kaur (hereinafter
"complainant") against (i) M/s Darintech Construction Pvt Ltd. (hereinafter
"accused company"), (ii) Sh. Rahul Puri (hereinafter "accused no. 2") and (iii) Smt.
Tripta Puri (hereinafter "accused no. 3") (hereinafter collectively "accused
persons") under section 138 of the Negotiable Instruments Act, 1881 (hereinafter
"NI Act").
2. The substance of allegations, as contained in the complaint, are as follows:
(a) The complainant claims that the accused number 2 and 3, for and on behalf of
accused company, entered into a registered sale deed with the complainant dated 11
August 2008 for sale of 50% undivided share in the property bearing number B-7/20,
Safdarjung Enclave Extension, New Delhi forming part of erstwhile Khasra number
635/69/2, 636/69/2 and 637/69/2, village Hamayun Pur, Delhi admeasuring 550
square yards (hereinafter "Concerned Property").
(b) The total sale consideration for the purchase of the Concerned Property was Rs.
1,75,00,000. The said consideration, as per the registered sale deed (pg. 25 and 26)
was paid by the accused company in the following manner:
Digitally
signed by
DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:13:44
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 3 of 25
(i) INR 15,00,000 vide pay order no. 695551 dated 22.08.2006
(ii) INR 2,50,000 vide cheque number 962514 dated 11.08.2006 (drawn on
Oriental Bank of Commerce, Hauz Khas, New Delhi)
(iii) INR 2,50,000 in cash
(iv) INR 60,00,000 vide cheque number 0066458 dated 09.08.2008 (drawn on
Oriental Bank of Commerce, Vishal Enclave, New Delhi)
(v) INR 45,00,000 vide cheque number 0066459 dated 09.08.2008 (drawn on
Oriental Bank of Commerce, Vishal Enclave, New Delhi)
(vi) INR 50,00,000 vide cheque number 246203 (drawn on Oriental Bank of
Commerce, Vishal Enclave, New Delhi). (During final arguments, both sides
have mutually submitted that there is a minor clerical error in the sale deed in
relation to this cheque number. As per learned counsels from both sides, the
correct cheque number, which was handed over to the complainant at the time
of registration of the sale deed, is 246206 ("cheque in question"). This
clerical error has been mentioned in the legal notice, complaint and the
evidence affidavit of the complainant as well and admitted by the accused
company.
(c) It has been alleged that the cheque in question was presented for encashment, which
was returned unpaid vide return memo dated 19.08.2009. After assurance from
accused no. 2 and 3, the cheque in question was presented again for encashment on
14.10.2009 but it was again dishonored on 16.10.2009 vide return memo dated
16.10.2009 for the reason "exceeds arrangements". Thereafter, the complainant sent a
legal notice dated 27.10.2009 for payment of the cheque amount. The accused
company sent a reply dated 23.11.2009 and denied any liability to pay the cheque
amount. Therefore, the complainant filed the present case.
Digitally signed
by DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:13:52 +0530
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(d) Accused company's stance, on the contrary, is that simultaneously with the registered
sale deed, a Dues Agreement dated 11 August 2008 was also executed. As per the
said agreement, the cheque in question was a conditional cheque which was to be
encashed only after the compliance of the following conditions:
(i) The complainant will clear all claims and liabilities in relation to the
Concerned Property from the relative departments within a period of twelve
months;
(ii) The complainant will get the Concerned Property mutated in the name of the
accused company;
(iii) The complainant will clear all the MCD taxes, or any kind of government
dues or taxes pending towards the Concerned Property and also get new MCD
building plan sanctioned from MCD.
(e) It has been submitted on behalf of the accused company that the complainant failed to
abide by the aforesaid compliances within twelve months of execution of the Dues
Agreement. Further, it has been submitted that after execution of the registered sale
deed, the accused company became aware that there are various disputes and
litigation pending in relation to the Concerned Property. Accordingly, it has been
submitted that since the complainant failed to comply with the terms of the Dues
Agreement, there is no legal debt owed to the complainant.
B. PRE-SUMMONING EVIDENCE & NOTICE
3. Pre-summoning evidence was led by the complainant and on finding a prima facie
case, the accused persons were summoned to face trial vide order dated 21.12.2009.
On appearance, the accused persons were served with the notice of accusation under
Section 251, Code of Criminal Procedure, 1973 (hereinafter "CrPC") on
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:14:00
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 5 of 25
16.09.2011, to which the accused persons pleaded not guilty and claimed trial. The
following plea of defence was taken by the accused persons jointly at this stage:
We do not plead guilty and claim trial. The cheques in question were given
as security to the complainant for advance payment of the transaction that is
mutation of a property and clearance of all the dues in respect of the property
B-7/20, Safdarjung Enclave Extension. There were certain compliance which
was to be made by the complainant which has not been done till date.
Accused number two is neither the director of the company nor signatory of
the cheque. The complainant had given two legal demand notice and the
earlier notice was dated 18.09.2009 which was duly replied on 20.10.2009
wherein we had denied our liability. There were certain settlement talks
already under going between the complainant and our company which failed.
The complainant however did not return the cheque which was given as
security and presented the same for encashment and served another legal
demand notice which is dated 27.10.2009. The said notice was also replied
by us on 23.11.2009 wherein we had once again denied our liability. This is
false and frivolous complaint filed against us. There is no liability against us
in respect of the present complaint.
4. Thereafter, the accused moved an application u/s 145(2) NI Act which was allowed
vide order dated 01.03.2013 and the complainant was allowed to be cross-examined
by the accused.
C. COMPLAINANT'S EVIDENCE
5. During the trial, the complainant has led the following oral and documentary
evidence against the accused to prove her case beyond reasonable doubt:-
Oral Evidence
CW1 Harjinder Kaur (Complainant) (tendered her evidence by
way of affidavit and the same is exhibited as CW1/X)
Documentary Evidence
Ex.CW1/1 Registered Sale Deed
Ex.CW1/2 Dues agreement
Ex.CW1/3 Legal notice dated 29.01.2009
Ex.CW1/4 Cheque in question bearing No. 246206 dated 14.08.2009
Ex.CW1/5 Deposit Slip dated 17.08.2009
Digitally
signed by
DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:14:08
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Ex.CW1/6 Return memo dated 19.08.2009
Ex.CW1/7 (colly) Deposit Slip dated 14.10.2009 & Return memo dated
16.10.2009
Ex.CW1/8 (colly) Legal notice dated 18.09.2009 alongwith postal receipt
and reply of the accused dated 20.10.2009
Ex.CW1/9 Legal notice dated 27.10.2009
Ex.CW1/10 Three postal receipts
Ex.CW1/11 Reply of legal notice by the accused dated 23.11.2009
D. STATEMENT OF ACCUSED
6. Thereafter, before the start of defence evidence, in order to allow the accused persons
to personally explain the circumstances appearing in evidence against them, their
statement under Section 313 CrPC was recorded without oath. In reply, the accused
denied all the allegations against them and took the same plea of defence which they
took while framing of Notice under section 251 CrPC.
7. Thereafter, the accused persons have led the following oral and documentary
evidence to raise a probable defence:
Oral Evidence
DW1 Arvind Kumar Bhartiya (Junior Technical Assistant,
Registrar of Companies)
DW2 Rajiv Puri
DW3 Rahul Puri (accused no. 2)
DW4 Sampuran Singh Sandhu, Head Clerk, Property Tax
Dept., SDMC, South Zone, RK Puram
DW5 Krishan Kaushik, UDC, EE (BLDG), South Zone, RK
Puram
Documentary Evidence
Ex.DW1/A Attested copy of certificate of incorporation of the
accused company
Ex.DW1/B Attested copy of details of directors of the accused
company
Ex.DW1/C (colly) Form 32 in respect of Rahul Puri, Rajeev Puri, Tripta Puri
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:14:16
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 7 of 25
and Simon W. Park
Ex.DW1/D Authority Letter
Ex.DW3/A (colly) Certified copy of court proceedings of different litigations
pertaining to the Concerned Property
8. Upon completion of defence evidence, the matter was listed for final arguments.
9. After listening to final arguments from both sides, the matter was reserved for
pronouncement. I have heard the learned counsels on both the sides and have given
my thoughtful consideration to the material appearing on record.
E. INGREDIENTS OF OFFENCE AND DISCUSSION
10. Before dwelling into the facts of the present case, it would be pertinent to discuss the
legal standards required to be met by both sides. In order to establish the offence
under Section 138 of NI Act, the prosecution must fulfil all the essential ingredients
of the offence, as highlighted below:-
First Ingredient: The cheque was drawn by a person on an account maintained by
him/her for payment of money and the same is presented for payment within a period
of 3 months from the date on which it is drawn or within the period of its validity;
Second Ingredient: The cheque was drawn by the drawer for discharge of any
legally enforceable debt or other liability;
Third Ingredient: The cheque was returned unpaid by the bank due to either
insufficiency of funds in the account to honour the cheque or that it exceeds the
amount arranged to be paid from that account on an agreement made with that bank;
Digitally signed
by DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:14:24 +0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 8 of 25
Fourth Ingredient: A demand of the said amount has been made by the payee or
holder in due course of the cheque by a notice in writing given to the drawer within
thirty days of the receipt of information of the dishonour of cheque from the bank;
Fifth Ingredient: The drawer fails to make payment of the said amount of money
within fifteen days from the date of receipt of notice.
11. In addition to the above, the conditions stipulated under Section 142 NI Act have to
be fulfilled.
12. Notably, the first, third, fourth and fifth ingredient have been duly proved without
there being any real controversy regarding the same:
(a) The complainant has proved the original cheque, Ex. CW1/4, which the accused
persons have not disputed as being drawn on the account of the accused company.
(b) The cheque in question was returned unpaid vide return memo dated 16.10.2009 Ex.
CW1/7 (colly) due to the reason, "Exceeds Arrangement".
(c) The complainant has proved on record legal notice dated 27.10.2009 Ex. CW1/9 and
postal receipt Ex. CW1/10 (colly). The accused persons have duly replied to the said
legal notice vide reply dated 23.11.2009 (Ex. CW1/11).
(d) The fact that the payment was not made within 15 days of the receipt of the legal
notice is also not disputed. As such, on the basis of the above, the first, third, fourth
and fifth ingredient of the offence under Section 138 NI Act stands proved against
the accused company.
Digitally
signed by
DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:14:38
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 9 of 25
13. The controversy in the present complaint case pertains to second ingredient.
CONTENTIONS IN RELATION TO NON-FULFILMENT OF SECOND
INGREDIENT
14. As far as the proof of second ingredient is concerned, the complainant is required to
prove that the cheque in question was drawn by the drawer for discharging a legally
enforceable debt. In the present case, the issuance of the cheque in question is not
denied by the accused company. As per the scheme of the NI Act, once the accused
admits signature on the cheque in question, certain presumptions are drawn, which
result in shifting of onus on the accused.
15. The combined effect of section 118(a) NI Act and section 139 of the NI Act is that a
presumption exists that the cheque was drawn for consideration and given by the
accused for the discharge of debt or other liability. Both the sections use the
expression "shall", which makes it imperative for the court to raise the aforesaid
presumptions once the foundational facts required for the same are proved (Hiten P.
Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16). Further, it has been held by the
Hon'ble Apex Court in Rangappa v. Sri Mohan, (2010) 11 SCC 441 that the
presumption contemplated under Section 139 of NI Act includes the presumption of
existence of a legally enforceable debt. In order to rebut the statutory presumption u/s
139 NI Act, the standard of proof is that of preponderance of probabilities, by which
the accused is required to raise a probable defence. To rebut the presumption, it is
open to the accused to rely on evidence led by him/her or the accused can also rely on
the materials submitted by the complainant or the circumstances upon which the
parties rely in order to raise a probable defence (Basalingappa v. Mudibasappa,
(2019) 5 SCC 418).
Digitally signed
by DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:14:45 +0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 10 of 25
16. In this case, arguments raised by the learned counsel for the accused to rebut the
presumption are discussed below.
I. Contention - Non-compliance of the Dues Agreement dated 11.08.2008
17. The entire case of the accused company is premised on the Dues Agreement Ex.
CW1/2. The Dues Agreement was executed as a supplementary agreement to the
registered sale deed Ex. CW1/1 between the complainant and the accused company
for sale of the Concerned Property. The accused company has submitted that out of
the total consideration amount of Rs. 1,75,00,000 (mentioned in the registered sale
deed Ex. CW1/1), an amount of Rs. 50,00,000 was retained by the accused company
as per the terms of the Dues Agreement and the same was payable only upon
satisfaction of certain conditions. The accused company has further submitted that the
cheque in question of Rs. 50,00,000 was given as a security cheque which was to be
encashed only after the compliance of the following conditions encapsulated in the
Dues Agreement:
(i) The complainant will clear all claims and liabilities in relation to the Concerned
Property from the relative departments within a period of twelve months;
(ii) The complainant will get the Concerned Property mutated in the name of the accused
company;
(iii)The complainant will clear all the MCD taxes, or any kind of government dues or
taxes pending towards the Concerned Property and also get new MCD building plan
sanctioned from MCD.
18. The first question which needs to be decided is whether the Dues Agreement Ex.
CW1/2 is admissible in evidence, keeping in mind that the primary document in
Digitally signed
by DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date: 2021.09.30
15:14:55 +0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 11 of 25
relation to the sale of the Concerned Property is the registered sale deed Ex. CW1/1.
IA. Relevant Clauses of the Registered Sale Deed Ex. CW1/1
19. The relevant clauses of the registered sale deed Ex. CW1/1 are reproduced below for
reference:
(a) Endorsement of the Sub Registrar:
Contents of the document explained to the parties who understand the
conditions and admit them as correct. Vendor(s)/Mortgagor admits prior
receipt an entire consideration Rs. 17,500,000.
(b) Payment of consideration:
And whereas second party paid a sum of Rs. 20,00,000 and balance was
payable at the time of sale deed. (pg.18)
. . . the total sale consideration will be Rs. 1,75,00,000 (Rupees One Crore
Seventy Five Lacs only) (pg. 24)
1. That in pursuance of this SALE DEED and in consideration of total sum of
Rs. 1,75,00,000 in the following manner:
Rs.20,00,000 vide pay order no. 695551 dated 22.08.2006 for an amount of
Rs. 15,00,000 and Rs. 2,50,000 vide cheque number 962514 dated 11.08.2006
drawn on Oriental Bank of Commerce, Hauz Khas, New Delhi and Rs.
2,50,000 in cash.
CH.PO DATED AMOUNT BANK
No.
0066458 09.08.2008 60,00,000 Oriental Bank of
Commerce, Vishal
Enclave, New
Delhi
0066459 09.08.2008 45,00,000 Oriental Bank of
Commerce, Vishal
Enclave, New
Delhi
Digitally
signed by
DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:15:04
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 12 of 25
2462031 50,00,000 Oriental Bank of
Commerce, Vishal
Enclave, New
Delhi
Which amount has been received by the VENDOR from the VENDEE, in
full and final settlement, the receipt of which the VENDOR admit and
acknowledge hereby. Nothing is left to be paid by the VENDEE to the
VENDOR against the said property. (pg 27)
(c) Property free from encumbrances:
2. That the VENDOR assures the VENDEE, that the VENDOR is the sole and
rightful owner of the above share of the property and the same is absolutely
free from all kinds of encumbrances, such as sale, mortgage, gift, litigation,
disputes, attachment in decree of any courts, liens, charges, court injunctions,
agreement, acquisition and requisition etc and if it is ever proved otherwise, or
if the whole or any portion of the said property is taken away or goes out from
the possession of the Vendee on account of any legal defect in the ownership
and the title of the Vendor on account of any claim to be made by any claimant,
then the vendor will be liable and responsible to make good the loss suffered
by the vendee. (Pg 28-30)
(d) Undertaking to get the property mutated:
4. That the Vendor undertake to have the said property mutated in favour of
the Vendee in MCD and other concerned authorities, otherwise the vendee
can also get the said property mutated in his own name in MCD and other
concerned authorities on the basis of this sale deed or its certified copy. (Pg
33-34)
(e) Physical possession handed over to the accused:
8. That the actual physical vacant possession of the said property has been
delivered to the Vendee, on the spot. (pg 39)
1
During final arguments, both sides have mutually submitted that there is a minor clerical
error in the sale deed in relation to this cheque number. As per learned counsels from both sides, the
correct cheque number, which was handed over to the complainant at the time of registration of the
sale deed, is 246206 (and not 246203).
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:15:11
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 13 of 25
20. The following points emerge from the aforesaid clauses of the registered sale deed:
(a) The Sub-Registrar has made an endorsement to the effect that the vendor admits
receipt of the entire sale consideration of Rs. 1,75,00,000 (and the sale deed nowhere
mentions that there is an understanding between the parties that an amount of Rs.
50,00,00, out of the total amount of Rs. 1,75,00,000 is to be paid later).
(b) The registered sale deed mentions the cheque in question in the consideration clause
(and the sale deed nowhere mentions that this cheque must be encashed only upon
satisfaction of certain conditions by the vendor).
(c) The registered sale deed mentions that in case it is proved that there is an
encumbrance on the Concerned Property, the vendor will be liable to indemnify the
vendee. (Therefore, there is no understanding in the registered sale deed that the
consideration amount is payable only after encumbrances are cleared from the
Concerned Property. The vendee is at liberty to sue the vendor and in case it is
proved that the vendor has handed over the Concerned Property with encumbrances,
the vendor would be liable to indemnify the loss suffered by the vendee. However, the
said indemnification has no connection to/ bearing on the sale consideration which
was required to be paid at the time of execution of the sale deed. There is a difference
between a condition precedent and a warranty. The sale deed has no condition
precedent that the consideration amount would be payable only after all
encumbrances, if any, are removed. The sale deed only has a warranty clause which
stipulates that in case of any loss due to any encumbrance, the vendor is liable to
indemnify the vendee).
(d) The vendor had an obligation to get the Concerned Property mutated in the name of
the vendee. However, at the same time, the vendee could also get the Concerned
Property mutated in its name on the basis of the registered sale deed.
(e) Physical vacant possession of the land was handed over to the vendee.
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:15:19
+0530
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IB. Relevant Clauses of the Dues Agreement Ex. CW1/2
21. The Dues Agreement Ex. CW1/2 is in conflict with certain express undertakings
given by the parties in the registered sale deed Ex. CW1/1. While the registered sale
deed expressly records that the entire sale consideration of Rs. 1,75,00,000 is being
paid to the vendor at the time of execution of the sale deed, the Dues Agreement
states that an amount of Rs. 50,00,000, out of the total sale consideration amount of
Rs. 1,75,00,000, is being retained by the vendee and will be paid after a time period
of 12 months. Further, the Dues Agreement mentions certain condition precedents for
payment of the amount of Rs. 50,00,000, whereas the registered sale deed does not
mention any condition precedent for payment of the amount of Rs. 50,00,000 to the
vendor. In fact, the registered sale deed specifically mentions that the entire sale
consideration is being handed over to the vendor in the form of cheques. The relevant
portion of the Dues Agreement, which consists of a condition precedent, in conflict
with the registered sale deed, is reproduced hereinbelow:
the SECOND PARTY has retained a sum of Rs. 50,00,000 out of the total
consideration of the sale amount and issued a post dated cheque no. 246206
dated 11th Aug 2009 with the second party to clear all the claims and
liabilities from the relative departments to the extent of the share of the First
Party and this shall be materialized within a period of 12 months as per the
First Party from today and after adjusting all true expenses and payment made
to any party (if any), the entire balance amount or the present amount shall be
returned to the First Party by the Second Party and this amount shall be
treated as indemnifying to losses amount only and the second party would have
no claim or authority to forfeit this amount in any eventuality.
. . . In the mean time the First Party will clear all the MCD Taxes or any kind
of government dues or taxes pending due toward the said property. The first
party shall get the MCD mutation transferred in the name of Second Party
within the said period and the first party shall also get the new MCD
Building Plan (as proposed and designed by the Second Party) sanctioned
from MCD and only after meeting all these procedures the second party shall
pay the said amount to the first party.
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:15:27
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 15 of 25
22. While the sale deed Ex. CW1/1 is a registered document, the dues agreement is not.
In such a scenario, the question that arises for consideration is whether the dues
agreement can modify/ alter the terms of the registered sale deed Ex. CW1/1.
IC. Position of Law: Modification of a registered sale deed can only be done by
way of a subsequent registered deed
23. Section 54 of the Transfer of Property Act (TPA) read with section 17 of the
Registration Act provides that sale of tangible immovable property of the value of
rupees 100 and upwards can be made only by a registered instrument. Section 3 of
TPA defines "registered" as registered under the law for the time being in force
regulating the registration of documents. This, in the present case, means the
Registration Act of 1908.
24. Therefore, a sale deed, conveying an immovable property of value of more than Rs.
100, is required to be registered.
25. Consequently, it is a settled position of law that a document, required by law to be
registered, can only be modified/ altered by way of a registered written document. In
S. Saktivel v. M. Venugopal Pillai, (2000) 7 SCC 104, the Hon'ble Supreme Court
has reiterated this position:
6 . . . Where under law a contract or disposition is required to be in writing and
the same has been reduced to writing, its terms cannot be modified or altered or
substituted by oral contract or disposition. No parol evidence will be
admissible to substantiate such an oral contract or disposition. A document for
its validity or effectiveness is required by law to be in writing and, therefore,
no modification or alteration or substitution of such written document is
permissible by parol evidence and it is only by another written document the
terms of earlier written document can be altered, rescinded or substituted.
There is another reason why the defendant-appellant cannot be permitted to let
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:15:34
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CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 16 of 25
in parol evidence to substantiate the subsequent oral arrangement. The reason
being that the settlement deed is a registered document. The second part of
proviso (4) to Section 92 does not permit leading of parol evidence for proving
a subsequent oral agreement modifying or rescinding the registered instrument.
The terms of registered document can be altered, rescinded or varied only
by subsequent registered document and not otherwise. If the oral
arrangement as pleaded by the appellant, is allowed to be substantiated by parol
evidence, it would mean rewriting of Ext. A-1 and, therefore, no parol evidence
is permissible.
26. Therefore, the registered sale deed Ex. CW1/1 can be modified by way of a registered
deed only. Since Dues Agreement Ex. CW1/2 is not a registered document, it cannot
be read in evidence as modifying any of the terms of the registered sale deed Ex.
CW1/1.
27. It may be argued that the Dues Agreement, even though not registered, can still be
admitted in evidence in light of section 17 (2) (v) (1A) of the Registration Act. Clause
(v) of sub-section (2) of Section 17 of the Registration Act stipulates that any
document that by itself does not create/declare/assign/limit/extinguish any right in a
property but only creates a right to obtain another document that would then so create
such right, is not required to be registered. It may be argued that the Dues Agreement
does not create any right in the Concerned Property by itself since the property is not
being conveyed through the Dues Agreement. Further, it may be argued that the Dues
Agreement may be admitted in evidence in terms of section 49 of the Registration
Act. The said section provides that even though a written agreement has not been
registered, it can still be admitted in evidence as evidence of any collateral transaction
of a contract. Thus, it may be argued that the central transaction is the conveyance of
the Concerned Property, and the Dues Agreement only covers certain collateral
transactions to the said central transaction.
28. However, the said argument does not hold much water. While the Dues Agreement
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:15:40
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CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 17 of 25
Ex. CW1/2 is not a document by itself creating a right to immovable property, it is
definitely a document which is limiting the right already created earlier in the
Concerned Property in the form of the sale deed Ex. CW1/1. The Dues Agreement,
Ex. CW1/2, has limited the right of the vendor to receive the entire sale consideration
by inserting a condition precedent, obligating the vendor to remove all encumbrances,
which is not present in the registered sale agreement, since the registered sale deed
only contains a warranty in relation to lack of encumbrances (and no such condition
precedent exists in the registered sale deed which makes payment of consideration
amount subject to removal of encumbrances). Such a document is covered within the
purview of Section 17 (1) (b) of the Registration Act:
17. Documents of which registration is compulsory.--(l) The following
documents shall be registered. . .
(a) instruments of gift of immovable property;
(b) other non-testamentary instruments which purport or operate to create,
declare, assign, limit or extinguish, whether in present or in future, any right,
title or interest, whether vested or contingent, of the value of one hundred
rupees and upwards, to or in immovable property; . . .
29. Hence, the Dues Agreement was required to be registered and could not be simply
taken to be, even in terms of Section 49 of the Registration Act, to be an instrument
not requiring registration and one being evidence of a collateral transaction, because
the said instrument actually limits a right already created in immovable property,
thereby specifically coming within the ambit of clause (b) of sub-section (1) of
Section 17 of the Registration Act.
30. In Krishan Kumar v. Mahesh Chander and Ors., 2019(3)RCR(Civil)463, the
Hon'ble Punjab & Haryana High Court was faced with a similar legal issue, i.e., once
a registered sale deed has been executed, would a subsequent unregistered agreement
be acceptable as evidence for modification of certain terms of the registered sale
deed? The Hon'ble High Court refused to read the subsequent unregistered agreement
Digitally signed
by DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:15:47 +0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 18 of 25
in evidence and held as follows:
The question then is as to whether Mr. Gupta is correct in submitting that
once a registered sale deed shows the sale consideration to be a particular
amount, with nothing mentioned therein as to any payment remaining to
be paid by the vendee, and to be received by the vendor, would a
subsequent unregistered agreement, even stated to be executed on the
same date, be acceptable, with the possession of the shop also having been
admittedly handed over to the vendees (as per a further recital in the sale
deed itself).
54. In that context, to repeat, both the courts (in Mahesh Chanders' suit), have
held that since by his suit he was seeking a recovery of Rs. 3 lakhs, the suit was
actually one seeking specific performance of a contract, and therefore the
agreement of sale could be read in evidence, as proof of such contract having
been entered into, even in terms of Section 49 of the Registration Act.
In the opinion of this court, the aforesaid interpretation is also not possible
to be accepted, in the face of clauses (b) & (c) of sub-section (1) of Section
17 of the Registration Act, read with sub-section 1-A thereof.
The aforesaid provisions specifically stipulate that any non-testamentary
instrument, either creating or limiting or extinguishing a right (including a
future right), in immovable property above a value of Rs. 100/, is a
compulsorily registrable document.
This would be so even so considering clause (v) of sub-section (2) of Section
17, as also the explanation following the last clause of the sub-section thereof.
Clause (v) of sub-section (2) does stipulate that any document that by itself
does not create/declare/assign/limit/extinguish any right in such property but
only creates a right to obtain another document that would then so create etc.
such right, does not require to be registered.
However, that clause would not be applicable, because though the
agreement Ex. P1 is not a document by itself creating a right to immovable
property, it is definitely one limiting the right already created earlier in
the property in the form of the sale deed and further, in any case Ex. P1 is
not simply a document creating a right to obtain another document.
The explanation following sub-section (2) of course is only as regards an
agreement of sale, i.e. a document purporting or operating to effect a contract
for the sale of immovable property, which document does not require
compulsory registration as per the said explanation.
However, to again repeat, the agreement, Ex. P1, is not one purporting or
operating to effect a contract for sale of immovable property, but is one
limiting the right already created in the property, by virtue of a registered
sale deed.
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:15:53
+0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 19 of 25
Hence, in the opinion of this court, it would be a document that was
required to be registered and cannot be simply taken to be, even in terms
of Section 49 of the Registration Act, to be an instrument not requiring
registration and one being evidence of a collateral transaction, because the
said instrument (Ex. P1) actually limits a right already created in
immovable property, thereby specifically coming within the ambit of
clause (b) of sub-section (1) of Section 17 of the Act of 1908.
55. That issue having been settled, the 1st & 3rd questions of law, as shown to
be framed in paragraph 45 hereinabove, are answered to the effect that the
agreement, Ex. P1, as relied upon by respondent Mahesh Chander in the suit
instituted by him seeking recovery of Rs. 3 lakhs, could not have been
admitted in evidence by the learned courts below, it being an unregistered
document which was necessarily required to be registered in terms of
clauses (b) and (c) of sub-section (1) of Section 17 of the Registration Act,
it not being a document covered by clause (v) of sub-section (2) of the said
provision, or even by the explanation to sub-section (2) of Section 17 or by
Section 49 of the said Act. (Emphasis added).
ID. Position of law: A document barred by a statute to be admissible in evidence
cannot be admitted in evidence even if admitted by the opposite party
31. The existence of Dues Agreement has not been disputed by the complainant.
However, that by itself would not make the Dues Agreement admissible in evidence.
It is a settled position of law that when a document is barred by a statute to be
admissible in evidence, it cannot be admitted in evidence even if admitted by the
opposite party. In Kotamreddi Seetamma v. Krishnaswamy Row., 1916 SCC OnLine
Mad 479, the Hon'ble Madras High Court has previously held that in the case of an
unregistered lease, the courts should not act on admissions made by parties in their
pleadings when the documents whose execution or contents are thus admitted are not
receivable in evidence due to a statutory bar based on public policy considerations:
5. When documents are made merely inadmissible in evidence by statutory law
for the non-payment of proper stamp, duty thereon, it may be a question whether
public policy requires the admission in pleadings of their contents to be rejected
by the Courts, especially as the Stamp Act itself enacts that when a document is
Digitally signed
by DEVANSHU
SAJLAN
DEVANSHU
Date:
SAJLAN 2021.09.30
15:16:00
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CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 20 of 25
once admitted in evidence, though not properly stamped, the admission cannot
be called in question afterwards in the suit: see last paragraph, S. 35, and that
Criminal Courts might ignore the Section 33, Clause 2(a) of the Stamp Act.
Most unstamped and insufficiently stamped documents could also be made
admissible in evidence on the payment of the proper duty and a penalty. The
Courts, again, are not usually inclined to treat enactments relating to revenue as
involving such large and grave principles, of public policy as govern
enactments, relating to registration and attestation of documents. But where a
document is not merely made inadmissible in evidence wholly or for certain
purposes as in the Section 49, Clause (c) of the Registration Act, but the
legislature further enacts that a document not registered shall not affect
any immovable property comprised therein, or that a transaction of a
particular nature in respect of immovable property (generally or of a
particular description) can be legally effected only by a document
complying with prescribed conditions as to attestation, registration, etc.,
(Sections 54, 59, 107, etc. of the Transfer of Property Act), such provisions
must be deemed to, have been enacted on high grounds of public policy and
Courts should not, in my opinion, be astute in creating loop holes for
evading the plain intention of the legislature. I do not think it would serve any
useful purpose to deal in detail with all the decisions quoted by Mr.
Venkatarama Aiyar. Most of them could be distinguished on the ground that
they make use of admissions in pleadings to get rid of only the disability
relating to inadmissibility in evidence imposed by stamp laws. (Emphasis
added).
32. Similarly, in Shail Kumari v. Saraswati Devi, 2001 SCC OnLine Del 791, it has
been held by the Hon'ble Delhi High Court that:
13. . . But in cases where such document is marked exhibit without due
application of mind in violation of provisions of a Statute requiring a particular
mode of proof etc., the opposite party may still show during the hearing of final
arguments that the document is inadmissible in evidence and should be excluded
from consideration because of statutory bar or noncompliance of statutory
requirement about mode of proof or otherwise. For instance a Will is required to
be proved by examining at least one of the attesting witnesses in accordance
with Section 68 of the Evidence Act. A document which is inadmissible for
want of registration or proper stamp is inadmissible in evidence, unless use
of it is permissible for collateral purposes or extracts of accounts book
without production of books of account and proof that they were kept in
ordinary course of business. Mere putting of exhibits number on these
document in the absence of their proof in accordance with law does not make
them part of the evidence to be read for deciding the suit (Emphasis added).
Digitally
signed by
DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:16:06
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CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 21 of 25
33. Therefore, the aforesaid position of law leads to an irresistible conclusion that the
Dues Agreement, being an unregistered document, cannot be read in evidence.
IE. Conclusion: Accused Company is liable to pay consideration amount in
absence of admissibility of Dues Agreement
34. Therefore, the defense sought to be raised by the accused company, on account of the
Dues Agreement, is not of any relevance.
35. Once the Dues Agreement is removed from the picture, the situation becomes straight
forward. The cheque in question was given by the accused company in discharge of
its legal liability for purchase of the Concerned Property. The registered sale
agreement Ex. CW1/1 specifically notes the same. Ex. CW1/1 is a registered sale
deed, and it has been admitted by both the parties. The Sub-Registrar has duly given
an endorsement on the sale deed that the entire sale consideration has been received
by the complainant (which includes the cheque in question). The accused company
did not point out at that stage before the Sub-Registrar that the cheque in question is
not being given as payment for consideration and is merely a security cheque.
Therefore, the accused company is liable to fulfill its obligations under the said
registered sale agreement.
36. If the complainant has violated any of the terms of the registered sale deed, the
accused company is at liberty to initiate civil action against the complainant for
recovery of any loss suffered by the accused company. However, the accused
company cannot unilaterally refuse to make part payment of the consideration amount
after having expressly agreed in the sale deed to the contrary (i.e., having undertaken
in the sale deed that the entire sale consideration is being paid on the date of
registration of the sale deed).
Digitally
signed by
DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:16:12
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CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 22 of 25
37. In absence of admissibility of the Dues Agreement, the accused company has been
unable to prove that the cheque in question was a security cheque which was to be
encashed upon satisfaction of certain conditions. Hence, in view of the discussion in
the foregoing paragraphs, the inevitable conclusion is that the accused company has
failed to rebut the onus put on it by virtue of the presumptions enshrined in Section
118 and 139 of the NI Act. Therefore, the second ingredient also stands proved
against the accused.
F. CONCLUSION
38. To recapitulate the above discussion, the complainant has been successful in
establishing his case beyond reasonable doubt that the accused company had issued
the cheque in question in discharge of his legally enforceable liability. The
presumptions under Section 118 and Section 139 of NI Act were drawn against the
accused company. The accused company has miserably failed to rebut the said
presumption by raising a probable defence. The defence of the accused company that
the complainant misused the cheque in question and there was no legal liability is not
proved, even on the standard of preponderance of probabilities.
39. Resultantly, the complaint of the complainant is allowed, and the accused
company, Darintech Construction Pvt. Ltd, is hereby convicted of the offence
under Section 138 of the Negotiable Instruments Act, 1881.
40. Moving on to the vicarious liability of accused no. 2, it has been submitted by learned
counsel for the accused that accused no. 2 is neither the Director of the accused
company nor was he a signatory of the cheque in question. Ex. DW1/B specifically
shows that accused no.2 Rahul Puri had ceased to be a Director of the accused
Digitally
signed by
DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:16:19
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CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 23 of 25
company with effect from 26.12.2007. Therefore, he was not a Director of the
accused company at the time of commission of offence u/s 138 NI Act. Further, he is
not a signatory of the cheque in question either. Therefore, accused no. 2 cannot be
made liable vicariously in terms of section 141 of the NI Act.
41. So far as vicarious liability of accused no.3 is concerned, accused no. 3 has not denied
her signatures on the cheque in question as well as the factum of her directorship at
the time of commission of the offense. Ex. DW1/B clearly shows that the accused no.
3 Ms. Tripta Puri has been a director in the accused company since 26.12.2007.
Therefore, the accused no. 3 was a director in the accused company at the time of
commission of offense u/s 138 NI Act. Further, the accused no. 3 is the signatory of
the cheque in question. Hence, accused no. 3 is vicariously liable in terms of 141 of
the NI Act, being the signatory of the cheque in question, in terms of the judgement
of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla, (2005) 8 SCC 89, which held that:
(c) The answer to Question (c) has to be in the affirmative. The question notes
that the managing director or joint managing director would be admittedly in
charge of the company and responsible to the company for the conduct of its
business. When that is so, holders of such positions in a company become
liable under Section 141 of the Act. By virtue of the office they hold as
managing director or joint managing director, these persons are in charge of
and responsible for the conduct of business of the company. Therefore, they get
covered under Section 141. So far as the signatory of a cheque which is
dishonoured is concerned, he is clearly responsible for the incriminating
act and will be covered under sub-section (2) of Section 141.
42. Let the convict be heard separately on quantum of sentence.
43. A copy of this judgment be given free of cost to the convict.
Digitally signed
by DEVANSHU
DEVANSHU SAJLAN
SAJLAN Date:
2021.09.30
15:16:26 +0530
CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 24 of 25
ORDER :-
1. Darintech Construction P. Ltd - Convicted.
2. Sh. Rahul Puri - Acquitted
3. Smt. Tripta Puri - Convicted Digitally signed by DEVANSHU DEVANSHU SAJLAN SAJLAN Date:
2021.09.30 15:13:08 +0530 Announced in the Open (Devanshu Sajlan) Court on 30.09.2021 MM (NI Act-05), West, THC DELHI CC No. 13701-2016 Harjinder Kaur Vs. Darintech Construction Pvt. Ltd & Ors. 25 of 25