Bombay High Court

Shaikh Suleman Shaikh Rustam vs Lata Anil Gangwal Through Her ... on 19 April, 2023

Bench: S. G. Mehare

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             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                        BENCH AT AURANGABAD

           CRIMINAL REVISION APPLICATION NO.334 OF 2022
                               WITH
                CRIMINAL APPLICATION NO.3845 OF 2022
          IN CRIMINAL REVISION APPLICATION NO.334 OF 2022

     Shaikh Suleman Shaikh Rustam,
     Age 45 years, Occu. Agriculture,
     R/o Shajapur, Post. Ghanegaon,
     District Aurangabad.                          ... Applicant.

             Versus

     Lata Anil Gangwal,
     Age 56 years, Occu. Household,
     R/o 32, Jawahar Housing Society,
     Jawahar Colony, Aurangabad.
     Through her Power of Attorney Holder
     Dr. Anil Hansraj Gangwal,
     Age 58 years, Occu. Medical Practitioner,
     R/o 32, Jawahar Housing Society,
     Jawahar Colony, Aurangabad.                   ... Respondent.

                                    ...
      Advocate for Applicant : Mr. V. D. Sapkal (Senior Counsel) i/b
                       Mr. Gore Ravindra Vitthal.
         Advocate for Respondent : Mr. Patni Pramod Fulchand.
                                    ...

                               CORAM :    S. G. MEHARE, J.

RESERVED ON : 28.02.2023 PRONOUNCED ON : 19.04.2023

JUDGMENT :-

1. Rule. Rule made returnable forthwith and heard finally

by consent of the parties.

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2. The applicant takes exception to the judgments and

orders of conviction of the learned Judicial Magistrate First

Class (Court No.16), Aurangabad, in SCC.No.3149 of 2019,

dated 06.05.2022 and confirmed in Appeal No.69 of 2022,

dated 16.11.2022 by the learned Additional Sessions Judge,

Aurangabad.

3. The "applicant" would be referred to as an "accused" and

the "respondent" as the "complainant" for convenience.

FACTS :

The complainant had a case that the accused approached

her through estate broker Shri. Bhimchand Govindrao Desai to

purchase her landed property situated at Dhanegaon, Taluka

Gangapur. After negotiation, the consideration was agreed

upon and settled at Rs.56,50,000/-. An agreement to sale was

also executed, and the mode of payment was by cheque.

Hence, cheque numbers were written in the agreement.

However, the accused did not sign the agreement. She, the

broker and another witness signed it. The original agreement

was handed over to the accused, and its copy was retained.

The sale was to be executed within two months. Before

executing the sale deed, the accused requested the

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complainant to show consideration for Rs.36,50,000/-. He

promised to pay the balance consideration of Rs.20,00,000/- in

cash within a short period after selling some of the plots out of

her land sold to him. He agreed if he would not pay the

balance consideration in cash within fifteen days, the cheque

bearing No.125856 drawn on the Cosmos Bank (disputed

cheque) be presented for encashment. Surprisingly, the accused

issued a notice to the complainant stating that the agreed

consideration was Rs.36,50,000/- and the cheque in dispute

was delivered as a security to the complainant, as it was their

first transaction. His notice was replied. The cheque in dispute

was presented to her bank for encashment on 21.12.2018.

However, the accused had instructed the bank to 'stop

payment'. Hence, on 15.01.2019, a statutory notice was served

upon the accused. The accused did not reply to the said notice.

4. It was a defence that the cheque in dispute was delivered

to the complainant as a security and never intended to be

encashed. Therefore, there was no legally enforceable debt.

5. The learned senior counsel appearing for the accused has

vehemently argued that both courts erred in law in believing

the complainant's case that the cheque in dispute was given

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towards the balance consideration. The agreement of sale

dated 06.03.2018 was unregistered and signed by the

complainant only. Since the accused did not sign, it was an

incomplete agreement that did not bind him. These

circumstances prove that the cheque in dispute was given as a

security. The complainant nowhere mentioned whether the

cheque in dispute was post-dated or otherwise. He raised a

question. How the sale agreement can be executed after the

execution of the sale deed. The cheque in dispute also became

ineffective. The complainant wrote the false contents and date

on the cheque with ill intent. The power of attorney of the

complainant has admitted that on the date of the execution of

the sale deed, there was no separate agreement about the

balance consideration of Rs.20,00,000/- to be paid in cash.

6. He has referred to Illustration(b) of Section 63 of the

Indian Evidence Act and vehemently argued that the Xerox

copy of the agreement to sell was secondary evidence, and

unless the original was produced before the Court, secondary

evidence was inadmissible in evidence. However, both Courts

erroneously received it in the evidence.

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7. The learned senior counsel relied on the case of Joseph

Vilangadan Vs. Phenomenal Health Care Services Ltd. and

another ; 2010 (5) AIR Bom. R 554, and vehemently argued

that the limitation starts from the date of the delivery of the

cheque. Therefore, the claim of the applicant is barred by

limitation. The arguments of the learned senior counsel for the

accused mainly revolve around the agreement to sell, which

was not signed by the accused, and the cheque in dispute was

ineffective. Learned senior counsel for the accused prays to

allow the revision application and set aside the impugned

judgments and orders.

8. Per contra, learned counsel Mr. Patni for the complainant

has vehemently argued that Section 20 of the N.I. Act gives a

right to the holder in due course to complete the transaction.

Even if it is assumed that the cheque was blank, the accused

did not deny his signature. He referred to the said cheque at

Exh.9 and argued that the accused had counter-signed the

alterations in the said cheque. Therefore, it cannot be said that

the accused had a voice to say that its contents were written

falsely. He knew the issuance of the cheque in dispute. The

amount filled in the cheque in dispute was also not disputed.

Once the delivery of the cheque is proven no question to claim

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that the cheque was time-barred. The presumption under

Sections 118 and 139 of the N.I. Act, are in favour of the

complainant. The accused was to prove his defence that the

cheque in dispute was delivered as security at least under the

doctrine of a preponderance of the probability. The accused

had to get the sale deed from the complainant, then what

reason he had to give the cheque as security? The defence was

apparently false and an afterthought. The terms of the

agreement bind the accused for the reason that it was the

document agreeing the terms of the purchase of the land. The

accused admitted in cross-examination the contents of the

cheque in dispute. The accused had no defence of novation of

contract before either of the Courts. It was a new ground

raised for the first time. It is a mixed question of facts and law,

hence, cannot be raised for the first time before a revisional

Court. He supported the impugned judgments and orders.

9. To bolster his argument, he relied on Nav Bharat Press

(Bhopal) Pvt. Ltd. and another Vs. Nootan Agencies Nagpur

and another ; (2019) 6 Mh.L.J. (Cri.) 64. In this case, the ratio

has been laid down that the scope of revision under Section

401 is limited and the revision could be allowed unless the

findings rendered by the Courts below were found perverse or

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any jurisdictional error was found in the orders of the Courts

below.

10. In the case of Ripudaman Singh Vs. Balkrishna ; (2019)

4 SCC 767, it has been held that though the agreement to sell

does not create interest in immovable property, it constitutes

an enforceable contract between the parties. The cheques

issued in pursuance of the agreement to sell qualify as being

towards legally enforceable debt or liability and amenable for

prosecution under Section 138 in case of dishonour.

11. In the case of T. Nagappa Vs. Y. R. Muralidhar ; 2008 (6)

Mh.L.J. 515, it has been held that by reason of Section 20 of

the N.I. Act only a right has been created in the holders of the

cheque subject to the conditions mentioned therein. Thereby,

only a prima facie authority is granted, inter alia, to complete

an incomplete negotiable instrument. The provision as a rider,

namely no person other than a holder in due course shall

recover from the person delivering instrumentation anything in

excess of the amount intended by him to be paid therein.

12. In the case of Purushottam S/o Maniklal Gandhi Vs.

Manohar K. Deshmukh ; 2007(1) Mh.L.J. 210, it has been held

that it is open to a person to sign and deliver a blank and

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incomplete cheque and is equally open for the holder to fill up

blanks and specify the amount therein.

13. In the case of Bhawish Chand Sharma Vs. Bawa Singh

2018 ; DGLS (Delhi) 413, it has been held that the agreement,

namely the sale of the property, is not prohibited by law. The

mutual agreement between the parties to disclose only a part

of the consideration under the sale deed may attract other

consequences for the parties. However, that itself does not

render the underlined transaction unlawful. Pertinently, it is

not claimed that at the relevant time, there was a bar to the

payment of consideration in cash and the said bar and the

effect of invalidating the transaction.

14. In case of M/s Shakti Tubes Ltd. Vs. State of Bihar and

others ; 2010 AIR SCW 2842, it has been held that the

novation and alteration of contact is a mixed question of law

and facts. Therefore, it cannot be allowed to be raised for the

first time at the final hearing of the appeal before the Supreme

Court.

15. In the case of Yogendra Bhagatram Sachdeo Vs. State of

Maharashtra and another, 2003 STPL 3392 Bombay , it has

been held that where the demand notice has not been replied it

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can raise a presumption against the accused that he had no

defence.

16. The sale transaction and issuing of the cheque in dispute

is not disputed. The accused has the defence that he did not

sign the alleged agreement hence did not bind him, and the

cheque in dispute was given as security as it was their first

transaction. Since the sale deed was executed, the agreement

to sale is inexecutable.

17. The following points emerge from the arguments of the

respective counsels.

(i) Whether agreement of sale not signed by the buyer

is inexecutable against him?

(ii) Can the agreement to sale become inexecutable

after the execution of the sale deed, and

consequently, the cheque delivered at the time of

agreement cannot be cashed ?

18. The Hon'ble Supreme Court in Aloka Bose Vs. Parmatma

Devi & others ; AIR 2009 Supreme Court 1527, in Paragraph

No.7 has specifically observed that the agreement to sell can be

oral or it can be signed by the vendor executing the document

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and delivering it to the purchaser who accepts it. A written

agreement signed by one of the parties, if it evidences such an

oral agreement will also be valid. In India, an agreement of

sale signed by the vendor alone and delivered to the purchaser,

and accepted by the purchaser, has always been considered to

be a valid contract.

19. It is admitted that the accused did not sign the said

agreement to sale. But the original was handed over to the

accused, and he had received it. P.W.2 Desai, the broker, proved

the agreement to sale. The accused admitted in his cross-

examination that all four cheques arising out of the sale

transaction were delivered simultaneously. He did not deny the

contents of the cheque in dispute. The original agreement to

sell was in the custody and possession of the accused.

Therefore, before leading the evidence to prove the said

agreement to sell, a notice to produce original agreement was

served upon the accused. He has opposed it and denied that he

did not possess any such agreement. However, the Trial Court

permitted to lead the secondary evidence of the agreement to

sell.

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20. The party claiming to lead the secondary evidence has to

prove, as per Section 65 of the Indian Evidence Act, that the

original is in the possession or power of the person against

whom the document is sought to be proved or any person

legally bound to produce it and when after the notice to

produce documents mentioned in Section 66, such person does

not produce it. The secondary evidence may be permitted to

lead.

21. C.W.2 was cross-examined thoroughly. He deposed that

the original of the said document was given to the accused. His

evidence that he was the commission agent for the transaction

has gone unchallenged. The complainant had proved that the

said agreement was in possession and power of the accused. In

cross-examination, the accused admitted that the negotiation

were done in the hospital of the power of attorney at Waluj.

Therefore, the Court has validly received the said document

Exh.32 in the evidence.

22. In the agreement Exh.32, the cheque numbers were

mentioned. The agreement was to be completed within two

months, but it appears that it was completed after around

seven months. Before fifteen days were over, the accused

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issued a notice alleging that the cheque in dispute was given as

security, and he had an apprehension of its presentation in the

bank. In the notice, he did not mention the agreement to sale.

The complainant replied to the said notice and took a stand

that the agreement to sale was executed. The accused neither

gave a reply to the said reply nor denied that there was no

agreement as such. Considering these facts with the ratio laid

down in the case of Aloka Bose (supra), it cannot be said that

the agreement to sale became infructuous and inexecutable.

23. Let us now test the defence of issuing the undated

cheque in dispute as 'security'. The admission of the accused

that he put his small signature below the alterations in the said

cheque speaks lot. He explained that as it was his first

transaction with the complainant. Hence, he had issued the

cheque in dispute as 'security'. It has been correctly falsified by

the arguments of the learned counsel for the complainant that

when the accused had to get the sale deed, then what reason

he had to give a cheque as security? His explanation does not

inspire confidence or appear probable.

24. Section 20 of the N.I Act deals with an Inchoate stamped

instrument. It has been provided in the said section that where

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a person delivers a signed negotiable instrument, either wholly

blank or having written incomplete, he thereby gives prima

facie authority to the holder thereof to make or complete by

writing the contents, including the amount, provided such

amount shall not exceed the amount agreed by the person

issued such cheque. In other words, issuing a blank signed

cheque give authority to its holder to fill in the blanks but

should not exceed the amount agreed to be paid.

25. To believe the case of issuing cheques as security, the

nature of transactions assumes importance. The cheque may be

given as security where the drawer has to perform his part of

the contract in terms of the agreement in the agreed time

against borrowing something. In such case, the drawee cannot

present the cheque issued in advance till the time of

performing the contract is over. Security is furnished against

the money or other thing borrowed from the lender. It may be

by pledging or mortgaging movable or immovable property,

including a negotiable instrument. In the case of furnishing the

security, the borrower has to return or repay the thing he has

borrowed or taken from the lender as per the agreement. In

agreement to sale of the immovable property, both parties have

to perform their part of the contract. It is an agreement of

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transfer of immovable property for consideration. The

purchaser has to pay the agreed consideration, and the seller

has to transfer his property or thing, whatever it may be. It's an

enforceable agreement. It is governed under the Specific Relief

Act. Considering the nature of the agreement and transaction

between the complainant and the accused it is hard to believe

that the accused had any reason to issue the cheque in dispute

as security. In these facts, the defence appears not probable.

The ratio laid down in the case of Purshottam (supra) and T.

Nagappa (supra) is squarely applicable to the case at hand.

26. The conduct of the accused reveals that he knew that the

cheque was likely to be presented for encashment. Hence, he

tactfully issued a notice through the lawyer demanding the

cheque in dispute back. If the cheque in dispute was issued as a

security, the accused had no reason to keep it with the

complainant after the sale deed. He ought to have taken it back

before or after the execution of the sale deed. But he did not

do so. It is also not the case that the cheque amount was in

excess of the agreed amount of the sale transaction to prove

the defence that the blank signed cheque was issued as security

and the complainant used it falsely. It is believed that the

cheque in dispute was issued towards the balance

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consideration, and the accused failed to pay the said

consideration in cash. Hence, it was correctly presented for

encashment. Non-replying to the statutory notice is also one of

the circumstances against the accused.

27. Both courts have considered the entire circumstances

and the conduct of the accused and rightly concluded that the

offence under Section 138 of the N.I.Act, is made out.

28. Considering the arguments advanced by the respective

counsels thoroughly and going through the impugned

judgments and orders, the Court did not find errors on the face

of the record. Both judgments and orders are legal, proper, and

correct and do not warrant interference. Hence, the following

order:

ORDER

(i) Criminal Revision Application stands dismissed.

(ii) The accused to surrender his bail bonds and

appear before the learned Judicial Magistrate First

Class, Court No.16, Aurangabad, on or before

06.05.2023 till then he shall not be arrested.