Supreme Court of India
RIPUDAMAN SINGH versus BALKRISHNA on 13 March 2019
[2019] 5 S.C.R. 499
RIPUDAMAN SINGH
v.
BALKRISHNA
(Criminal Appeal No.483 of 2019)
MARCH 13, 2019
[DR DHANANJAYA Y CHANDRACHUD ANDHEMANT GUPTA, JJ.]
Code of Criminal Procedure, 1973: s.482 – Quashing ofcomplaint – Appellants claiming to be owner of agricultural landentered into an agreement to sell the land to the respondents andreceived part payment in cash and remaining in cheques – Alongwith the agreement to sell, appellants executed a General Power ofAttorney in favour of respondent – On presentation, cheques weredishonoured for insufficiency of funds – Appellant issued legalnotice and thereafter instituted complaints under s.138 NI Act –Respondent filed petition under s.482 for quashing of complaint –High Court quashed the complaint holding that cheques were notissued for creating any liability or debt but for the payment of balanceconsideration – Held: Admittedly, the cheques were issued underand in pursuance of the agreement to sell – Though it is well settledthat an agreement to sell does not create any interest in immovableproperty, it nonetheless constitutes a legally enforceable contractbetween the parties to it – A payment made pursuant to such anagreement is a payment of a duly enforceable debt or liability forthe purposes of s.138 – Recourse to the jurisdiction of the HighCourt under s.482 was a clear abuse of process – The question asto whether there was a dispute as contemplated in the agreement todell which obviated the obligation of the purchaser to honor thecheque which was furnished in pursuance of the agreement to sellto the vendor, cannot be the subject matter of a proceeding unders.482 and is a matter to be determined on the basis of the evidencewhich may be adduced at the trial – The order passed by HighCourt in petition under s.482 was unsustainable – NegotiableInstruments Act, 1881 – s.138.
499
A
B
C
DE
F
G
ADisposing of the appeals, the Court
HELD: The finding of the Single Judge of the High Courtis not sustainable that the cheques were not issued for creatingany liability or debt, but ‘only’ for the payment of balanceconsideration and that in consequence, there was no legallyBenforceable debt or other liability. Admittedly, the cheques wereissued under and in pursuance of the agreement to sell. Thoughit is well settled that an agreement to sell does not create anyinterest in immoveable property, it nonetheless constitutes alegally enforceable contract between the parties to it. A paymentwhich is made in pursuance of such an agreement is hence aCpayment made in pursuance of a duly enforceable debt or liabilityfor the purposes of Section 138. Moreover, acting on the GeneralPower of Attorney, the respondent entered into a subsequenttransaction on 3 August 2013. Evidently that transaction wasafter the legal notice dated 21 June 2013 and hence could notDhave been adverted to in the legal notice. Recourse to thejurisdiction of the High Court under Section 482 was a clear abuseof process. [Paras 13, 14] [502-G-H; 503-A-C]
CRIMINAL APPELLATE JURISDICTION: Criminal AppealNo. 483 of 2019.EFrom the Judgment and Order dated 31.03.2016 of the High Courtof Madhya Pradesh, Bench at Indore in M.C.R.C No. 356 of 2015
With
Criminal Appeal No. 484 of 2019
Shyam Divan, Sr. Adv., Santosh Kumar, Visushant Gupta,FMushtaq Ahmad, Advs. for the Appellant.Akshat Shrivastava, Ms. Pooja Shrivastava, Advs. for theRespondent.
The Judgment of the Court was delivered by DR. DHANANJAYA Y. CHANDRACHUD, J.G
Citations and Judicial Treatment
Cited by
0
Decisions in the index citing it
Cites
0
Decisions referred to
In this index
0
Of the decisions it cites
Overruled / Questioned
0
No negative treatment found
Loading the citing and cited decisions…
This judgment in the centre: on the left the decisions it cites, on the right the decisions citing it. Colour is the treatment; choose a decision to open it.
1. Leave granted.
2. These appeals arise from a judgment of a learned Single Judgeof the High Court of Madhya Pradesh at its Bench at Indore dated 31March 2016. The learned Single Judge has allowed a petition under H
Section 482 of the Code of Criminal Procedure, 1973[1] and quashed thecomplaints instituted by the appellants under Section 138 of the NegotiableInstruments Act, 1881.
3. The appellants are spouses. Claiming to be owners of certainagricultural land they entered into an agreement to sell dated 28 May2013 with the Respondent. The sale consideration was Rs. 1.75 crores.The agreement records that an amount of Rs. 1.25 crores was paid incash and as for the balance, two post dated cheques were issued, eachin the amount of Rs 25 lakhs.
4. The cheques were issued by the respondent in favour of thetwo appellants in the present appeals. The details of the cheques are asfollows:
(i) Cheque No. 297251 dated 03.06.2013 drawn on Indusind Bank,Indore for an amount of Rs. 25,00,000/- (Rupees twenty-five lacsonly) favouring Ripudaman Singh;
(ii) Cheque No. 297252 dated 02.07.2013 drawn on IndusindBank, Indore for an amount of Rs. 25,00,000/- (Rupees twenty-five lacs only) favouring Smt. Usha.
5. Together with the agreement, the appellants executed a GeneralPower of Attorney in favour of the respondent. The first of the twocheques was deposited for payment. On 18 June 2013 it was returnedunpaid with the remarks “Insufficient funds”. The second cheque dated2 July 2013 was returned with the same remark by the banker, upondeposit.
6. After issuing legal notices dated 21 June 2013 and 13 August2013, the appellants instituted complaints under Section 138 of theNegotiable Instruments Act, 1881. Process was issued by the JudicialMagistrate, First Class.
7. The respondent filed two separate applications seeking dischargein the respective complaint cases. Those applications were dismissed bythe Judicial Magistrate, First Class, Indore on 3 September 2014. On 8October 2014, charges were framed under Section 138.
8. The respondent then filed a petition under Section 482 CrPCbefore the High Court in which the impugned order has been passed.
A
B
C
D
E
F
G
H
AWhile allowing the petition, the High Court has adverted to Clause 4 ofthe agreement between the parties which is in the following terms:
“That on the above property of the seller there is no family disputeof any type nor is any case pending in the court. If due to anyreason any dispute arises then all its responsibility would remainBof the selling party and the payment of cheques would be afterthe resolution of the said disputes.”
9. The High Court held that a suit in respect of the land, Civil SuitNo. 4-A of 2012 is pending before the XIVth Additional Sessions Judge,Indore since 2 September 2011 in which the complainants are arraignedCas parties.
10. On this basis, the High Court held that under the terms ofclause 4 of the agreement, the cheques could not have been presentedfor payment. The cheques, according to the High Court, have not beenissued for creating any liability or debt but for the payment of balanceDconsideration. Holding that the respondent did not owe any money tothe complainants, the complaint under Section 138 have been quashed.
11. Assailing the judgment of the High Court, Mr. Shyam Divan,learned senior counsel submits that as a matter of fact, acting on thestrength of the General Power of Attorney which was issued by theEappellants in both the cases, the respondent entered into a sale transactionin respect of the same property on 3 August 2013 for a total considerationof Rs. 3.79 crores. Hence, it has been submitted that the order passedby the High Court is manifestly misconceived.
12. On the other hand, learned counsel appearing on behalf of therespondent submitted that clause 4 of the agreement to sell postulatedFthat there was no dispute in respect of the land which was the subject ofthe 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 ofthe vendor to get it resolved and the payment of cheques would be afterthe resolution of the dispute.
G
13. We find ourselves unable to accept the finding of the learnedSingle Judge of the High Court that the cheques were not issued forcreating any liability or debt, but ‘only’ for the payment of balanceconsideration and that in consequence, there was no legally enforceabledebt or other liability. Admittedly, the cheques were issued under and in H
pursuance of the agreement to sell. Though it is well settled that anagreement to sell does not create any interest in immoveable property, itnonetheless constitutes a legally enforceable contract between the partiesto it. A payment which is made in pursuance of such an agreement ishence a payment made in pursuance of a duly enforceable debt or liabilityfor the purposes of Section 138.
14. Moreover, acting on the General Power of Attorney, therespondent entered into a subsequent transaction on 3 August 2013.Evidently that transaction was after the legal notice dated 21 June 2013and hence could not have been adverted to in the legal notice. Recourseto the jurisdiction of the High Court under Section 482 was a clear abuseof process.
15. The question as to whether there was a dispute as contemplatedin clause 4 of the Agreement to Sell which obviated the obligation of thepurchaser to honor the cheque which was furnished in pursuance of theagreement to sell to the vendor, cannot be the subject matter of aproceeding under Section 482 and is a matter to be determined on thebasis of the evidence which may be adduced at the trial.
16. For these reasons, we are of the view that the order passedby the High Court in the petition under Section 482 CrPC wasunsustainable. We allow the appeals and set aside the impugned judgmentand order of the High Court.
17. However, we clarify that we have not expressed any opinionon the merits of the issues which may arise during the course of the trial.
18. The appeals are, accordingly, disposed of.
19. Pending application(s), if any, shall stand disposed of.
Devika Gujral
Appeals disposed of..
A
B
C
D
E
F
G
H