Case BriefsHigh Courts

Delhi High Court: Suresh Kumar Kait, J., allowed a petition wherein directions were sought for quashing the complaint case filed against the petitioner under Section 138 (dishonour of cheque) read with Sections 141 (offences by companies) and 142 (cognizance of offence) of the Negotiable Instruments Act, 1881.

The petitioner- Society, Employees Welfare Fund of the employees of Hindustan Aeronautics Ltd., had issued four cheques for a total sum of Rs 4.1 Crores in favour of the respondent-complainant. According to the complainant, the petitioner had drawn to said cheques in the discharge of legally recoverable debt pursuant to the terms of the MoU/ Agreement to Sell concerned, however, on presentation of encashment, the subject cheques got dishonoured. The complainant-builder was represented by Nimesh Chib and Siddharth Chaturvedi, Advocates.

Per contra, Vikas Gupta and Ieshaan Gupta, Advocates, submitted on behalf of the petitioner that the proceeding initiated by the complainant was an abuse of the process of law, and the complaint does not satisfy ingredients of the offence punishable under Section 138 NI Act.

The High Court noted that the subject cheques were issued by the petitioner-Society on behalf of its individual members to facilitate the transaction in getting their houses constructed by the respondent. Since the individual members of the Society immediately doubted whether the respondent would be able to complete the flats, they did not deposit the amount with the Society and, thus, the cheques issued by the Society got dishonoured.

Being of the opinion that the petitioner-Society was not liable under Section 138, the High Court observed: “It is not disputed that the society was constituted for the welfare of its members who were interested in getting their houses constructed by the respondent. Therefore, the society played a role only to facilitate its members in getting their houses constructed and the society had no liability as per Section 138 NI Act on the date of signing of the MoU.”

It was further opined that even if it is presumed that the said was paid to the respondent as advance money, even then there appeared to be no criminal liability or any liability which was recoverable under provisions of Section 18.

In such view of the matter, the court allowed the instant petition and quashed the complaint case filed against the petitioner as also all proceedings emanating therefrom. [Employees Welfare Fund v. KRA Infrastructure Developer (P) Ltd., 2019 SCC OnLine Del 11245, decided on 19-11-2019]

Case BriefsHigh Courts

Patna High Court: Birendra Kumar, J. allowed a petition since the entire factual position of the case, made out a case of a civil dispute only and because of that the criminal proceedings were to be quashed.

An application was filed under Section 482 of the Code of Criminal Procedure for quashing of the order of summoning the petitioner to face trial for the offence under Section 420 of the Penal Code. The petitioner challenged this on the grounds that a bare perusal of the complaint petition would show that the case was purely of civil dispute and the complainant had deliberately attempted to give it a color of a criminal offence.

The complainant had entered into an agreement with the petitioner to purchase plots. The petitioner received the total consideration money and gave the receipt of the same and promised to execute sale deed after the marriage of her daughter. Thereafter, petitioner went to Delhi and when the complainant tried to contact the petitioner she tried to evade execution of the sale deed. Ultimately, a legal notice was sent to the petitioner. The petitioner informed the complainant that the plot was also the subject matter of the suit for partition, wherein half share of the petitioner was admitted.

The petitioner had filed a petition before the trial court in the partition suit aforesaid, praying therein for permission to sell the suit property and permission to execute sale deed but the trial judge restrained both the parties to not to transfer the suit land without permission of the court. The said partition suit was dismissed later for non-prosecution and the request of the opposite party to execute the sale deed was finally turned down by the petitioner. Hence, the counsel for the complainant alleged that even after no judicial order was in existence, restraining the parties to the suit from executing the sale deed, the petitioner did not execute the sale deed, as such committed criminal breach of trust and misappropriation. In furtherance to such fraudulent behavior, the petitioner entered into an agreement dated to transfer the aforesaid plot in favor of Arvind Kumar, her cousin brother which was proof of her fraudulent and dishonest intention while entering into an agreement with the complainant.

The counsel for the petitioner argued that from the narration of the facts, it was evident that the act lacked the culpable intention of the petitioner at the time of making an initial promise and even thereafter. Hence, offence under Section 415 of the Indian Penal Code was apparently not made out.

The Court held that an agreement to sale did not create a title in favor of the intended purchaser, nor it extinguishes the title of the intended vendor, rather it created a right enforceable in law at the instance of the aggrieved party. It was not in dispute that the opposite party had not brought any proceeding to enforce his civil right. The most important ingredient to prove the charge under Section 420 of the Penal Code is the culpable intention at the time of making an initial promise. The culpable intention of the petitioner was evidently not there for the reason that the petitioner has got title over plot No. 3388, which has an area of 84 Kathas. Thus, only for the reason, that petitioner had entered into an agreement to sale with some other prior to the agreement with the complainant would not make the petitioner guilty of having a dishonest and fraudulent intention at the inception. Moreover, the petitioner fairly admitted the agreement to sell with the complainant and the factum of partition suit brought by her sister in the same year as well as judicial order of the court, prohibiting the parties from transferring the suit property. Therefore, judicial order was there in the way of performance of the agreement by the petitioner, till the dismissal of the suit in the year, 2011. Hence, the same cannot be allowed to be given a color of criminal prosecution, which would apparently result in a miscarriage of justice. Hence,

In view of the above-noted facts, the instant petition was allowed and the impugned order and entire criminal proceeding stood quashed.[Meena Sahi v. State of Bihar, 2019 SCC OnLine Pat 1649, decided on 23-09-2019]

Case BriefsHigh Courts

Punjab and Haryana High Court: Amit Rawal, J. dismissed an appeal against the decree of the suit for specific performance of the agreement to sell.

Factual matrix of the case was, respondent-plaintiff alleged that appellant-defendant after mutual decision extended the date for the performance of the agreement, but on the date decided to perform the defendant did not come forward. Subsequently, plaintiff sent a legal notice and filed a suit when the defendant failed to reply to notice. Contention of the appellant was he never entered into an agreement with the plaintiff.

Deepender Ahlawat, learned counsel for the appellant submitted that readiness and willingness on behalf of the respondent-plaintiff was conspicuously wanting. No documents in this regard were placed on record. Even if the agreement to sell was denied, extensions were also the testimony of the same.

Learned counsel for the respondent, submitted various pieces of evidence and witnesses to prove his case that the appellant had entered into alleged agreement to sell and a copy of the impugned notice was also presented before the Court.

The Court observed that such arguments were not sustained for the simple reason that if a person who has denied the agreement to sell cannot be permitted to take the plea of readiness and willingness particularly when extensions and earnest money had been proved on record. The Court held, “As an upshot of my findings, there is no illegality and perversity in the concurrent findings of fact and law to form a different opinion than the one arrived at by the Courts below.” Hence, there were no merits in the appeal found by the Court.[Balwan Singh Raghav v. Dalip Kumar, 2019 SCC OnLine P&H 709, decided on 24-05-2019]

Case BriefsHigh Courts

Punjab & Haryana HC: The Bench of Raj Mohan Singh, J. dismissed a revision petition on the ground of insufficient evidence but granted liberty to file a fresh revision petition with better particulars.

The present matter pertained to the validity of an agreement of sale executed by petitioner and one Sukhchain Singh, being contested before the lower court. The petitioner’s submission before lower court was that one Girdhari Lal had obtained her signatures on some blank papers and the said agreement of sale was the outcome of such fraud. She filed an application for leading examination of handwriting and fingerprint expert as additional evidence in order to prove the said forgery. However, the trial court dismissed the application on the premise that the petitioner had admitted her signature on the agreement. Comparison of the signature was not sought to be made with any other document. The handwriting and fingerprint expert cannot opine whether the signatures appended on blank papers were prior in point of time or subsequent thereof. Aggrieved by the said order, the instant revision petition was filed.

The Court observed that the petitioner could not furnish any explanation as to how Sukhchain Singh’s signatures came to be appended on an agreement to sell. The story advanced by her was in the context of her signing the blank papers and not by Sukhchain Singh in the presence of any witness. In view thereof, it was held that the impugned order did not suffer from any error of jurisdiction or perversity of any type.[Jaspal Kaur v. Girdhari Lal, 2019 SCC OnLine P&H 56, decided on 15-01-2019]