The Code of Criminal Procedure, 1973 - Section 482 - The
Negotiable Instruments Act, 1881 - Section 138 - Cheques were issued under and
in pursuance of the agreement to sell. Though it is well settled that an
agreement to sell does not create any interest in immoveable property, it
nonetheless constitutes a legally enforceable contract between the parties to
it. A payment which is made in pursuance of such an agreement is hence a
payment made in pursuance of a duly enforceable debt or liablity for the
purposes of Section 138.
IN THE SUPREME COURT OF
INDIA
CRIMINAL APPELLATE
JURISDICTION
(DR. DHANANJAYA Y.
CHANDRACHUD) AND (HEMANT GUPTA) JJ.
MARCH 13, 2019
CRIMINAL APPEAL
NO. 483 OF 2019
(Arising out of
SLP(Crl.) No. 4608 of 2016)
RIPUDAMAN SINGH
Petitioner(s)
VERSUS
BALKRISHNA
Respondent(s)
CRIMINAL APPEAL
NO. 484 OF 2019
(Arising out of
SLP(Crl.) No. 4610 of 2016)
For Petitioner(s) Mr. Shyam Divan, Sr.
Adv. Mr. Santosh Kumar, Adv. Mr. Visushant Gupta, Adv. Mr. Mushtaq Ahmad, AOR
For Respondent(s) Mr. Akshat
Shrivastava, AOR Ms. Pooja Shrivastava, Adv.
J U D G M E N T
Dr. Dhananjaya Y. Chandrachud, J.
Leave granted.
These appeals arise from a judgment of
a learned Single Judge of the High Court of Madhya Pradesh at its Bench at Indore
dated 31 March 2016. The learned Single Judge has allowed a petition under
Section 482 of the Code of Criminal Procedure, 19731 and quashed the complaints instituted by the appellants under Section 138
of the Negotiable Instruments Act, 1881.
The appellants are spouses. Claiming
to be owners of certain agricultural land they entered into an agreement to sell
dated 28 May 2013 with the Respondent. The sale consideration was Rs. 1.75
crores. The agreement records that an amount of Rs. 1.25 crores was paid in
cash and as for the 1
“CrPC”balance, two post dated cheques were issued, each in the amount of Rs 25
lakhs.
The cheques were issued by the
respondent in favour of the two appellants in the present appeals. The details
of the cheques are as follows:
(i) Cheque No. 297251 dated 03.06.2013
drawn on Indusind Bank, Indore for an amount of Rs. 25,00,000/- (Rupees
twenty-five lacs only) favouring Ripudaman Singh;
(ii) Cheque No. 297252 dated
02.07.2013 drawn on Indusind Bank, Indore for an amount of Rs. 25,00,000/-
(Rupees twenty-five lacs only) favouring Smt. Usha.
Together with the agreement, the
appellants executed a General Power of Attorney in favour of the respondent.
The first of the two cheques was deposited for payment. On 18 June 2013 it was
returned unpaid with the remarks “Insufficient funds”. The second cheque dated
2 July 2013 was returned with the same remark by the banker, upon deposit.
After issuing legal notices dated 21
June 2013 and 13 August 2013, the appellants instituted complaints under
Section 138 of the Negotiable Instruments Act, 1881. Process was issued by the
Judicial Magistrate, First Class.
The respondent filed two separate
applications seeking discharge in the respective complaint cases. Those
applications were dismissed by the Judicial Magistrate, First Class, Indoreon 3
September 2014. On 8 October 2014, charges were framed under Section 138.
The respondent then filed a petition
under Section 482 CrPC before the High Court in which the impugned order has
been passed. While allowing the complaint, the High Court has adverted to
Clause 4 of the agreement between the parties which is in the following terms:
“That on the above property of the
seller there is no family dispute of any type nor is any case pending in the
court. If due to any reason any dispute arises then all its responsibility
would remain of the selling party and the payment of cheques would be after the
resolution of the said disputes.”
The High Court held that a suit in
respect of the land, Civil Suit No. 4-A of 2012 is pending before the XIVth Additional
Sessions Judge, Indore since 2 September 2011 in which the complainants are
arraigned as parties.
On this basis, the High Court held
that under the terms of clause 4 of the agreement, the cheques could not have
been presented for payment. The cheques, according to the High Court, have not
been issued for creating any liablity or debt but for the payment of balance
consideration. Holding that the respondent did not owe any money to the
complainants, the complaint under Section 138 have been quashed.
Assailing the judgment of the High
Court, Mr. Shyam Divan, learned senior counsel submits that as a matter of
fact, acting on the strength of the General Power of Attorney which was issued
by the appellants in both the cases, the respondententered into a sale
transaction in respect of the same property on 3 August 2013 for a total
consideration of Rs. 3.79 crores. Hence, it has been submitted that the order
passed by the High Court is manifestly misconceived.
On the other hand, learned counsel
appearing on behalf of the respondent submitted that clause 4 of the agreement
to sell postulated that there was no dispute in respect of the land which was
the subject of the agreement to sell nor was there any case pending before the
Court. Moreover, it was stated that if a dispute was to arise, it was the duty
of the vendor to get it resolved and the payment of cheques would be after the
resolution of the dispute.
We find ourselves unable to accept the
finding of the learned Single Judge of the High Court that the cheques were not
issued for creating any liability or debt, but ‘only’ for the payment of
balance consideration and that in consequence, there was no legally enforceable
debt or other liability. Admittedly, the cheques were issued under and in
pursuance of the agreement to sell. Though it is well settled that an agreement
to sell does not create any interest in immoveable property, it nonetheless
constitutes a legally encforceable contract between the parties to it. A
payment which is made in pursuance of such an agreement is hence a payment made
in pursuance of a duly enforceable debt or liablity for the purposes of Section
138.
Moreover, acting on the General Power
of Attorney, the respondent entered into a subsequent transaction on 3 August2013.
Evidently that transaction was after the legal notice dated 21 June 2013 and
hence could not have been adverted to in the legal notice. Recourse to the
jurisdiction of the High Court under Section 482 was a clear abuse of process.
The question as to whether there was a
dispute as contemplated in clause 4 of the Agreement to Sell which obviated the
obligation of the purchaser to honor the cheque which was furnished in
pursuance of the agreement to sell to the vendor, cannot be the subject matter
of a proceeding under Section 482 and is a matter to be determined on the basis
of the evidence which may be adduced at the trial.
For these reasons, we are of the view
that the order passed by the High Court in the petition under Section 482 CrPC was
unsustainable. We allow the appeals and set aside the impugned judgment and
order of the High Court.
However, we clarify that we have not
expressed any opinion on the merits of the issues which may arise during the course
of the trial.
The appeals are, accordingly, disposed
of.
Pending application(s), if any, shall
stand disposed of.