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IN THE HIGH COURT OF PUNJAB AND HARYANA
RAJ SHEKHAR ATTRI, J.
Gopi Ram Jain - Appellant
Vs.
Attar Singh - Respondent
CRM-M-14159-2017 (O and M)
Decided on : 24-01-2019
CRIMINAL - Negotiable Instruments Act, 1881 - Section 138 - Dishonour of Cheque - Cheques issued as part of sale consideration - Stoppage of payment by writing a letter to the bank - Whether amounts to cheating - Whether liability of the Company and its directors qua the offence under section 138 of Negotiable Instruments Act does not arise at all - Held, no.
Fact of the Case:
The petitioners, directors of a company, issued cheques as part of the sale consideration for the purchase of land. However, they later stopped payment of the cheques by writing a letter to the bank. The vendors filed complaints under section 138 of the Negotiable Instruments Act, and the petitioners were summoned to face trial.
Finding of the Court:
The court held that the petitioners were liable for the offence under section 138 of the Negotiable Instruments Act. The court reasoned that the cheques were issued as part of the sale consideration, and the payment thereof could not be stopped as did by the Company in this case. The court also held that the act of stopping payment of the cheques amounted to cheating as provided under Section 415 of the Indian Penal Code.
Issues: 1. Whether the provisions of section 138 of Negotiable Instruments Act have been made out for the purpose of the prosecution of the petitioners? 2. Whether oral agreements have been substituted with contract of sale? 3. Whether Gopi Ram Jain petitioner was a sleeping Director?
Ratio Decidendi: 1. The court held that the petitioners were liable for the offence under section 138 of the Negotiable Instruments Act because the cheques were issued as part of the sale consideration, and the payment thereof could not be stopped as did by the Company in this case. 2. The court held that the oral agreements were not valid because they were entered into after the execution of the sale deed and were in violation of Section 91 of the Evidence Act. 3. The court held that Gopi Ram Jain petitioner was not a sleeping Director because he was an active director of the Company and was absolved of the duties only on 5.7.2017, which was much after the dishonour of the cheques.
Final Decision: The court dismissed the petitions and imposed special costs of Rs. 50,000/- on the petitioners.
RAJ SHEKHAR ATTRI, J.
1. This order shall dispose of the bunch of aforesaid 22 petitions as common questions of law and facts are involved in all of them. The facts are extracted from CRM-M-14159-2017 for presence of convenience and the parties would be referred by their status in this petition.
2. The present petition (CRM-M-14159-2017) has been filed under section 482 of Code of Criminal Procedure, 1973 for quashing criminal complaint No.156 of 2.11.2016 (NI Act Case No.777 of 2016) (Annexure P-1) filed by the complainant-respondent under section 138 of Negotiable Instruments Act as well as subsequent proceedings including summoning order dated 2.11.2016 passed by learned Judicial Magistrate, 1st Class, Rewari whereby the petitioner along with others have been summoned to face trial under section 138 of Negotiable Instruments Act.
3. This case has chequered history. M/s S.K.G. Buildcon Private Limited is a registered Company (hereinafter referred to as “the Company”). It seems that the Company along with its group Company M/s Ambition Colonisers Private Limited developed a residential colony on a piece of land measuring 13.237 acres situated within the revenue estate of village Maheshwari, District Rewari (Haryana). This land was adjacent to the land measuring 27K-10M owned and possessed by the private respondents/complainants along with other co-sharers who are also impleaded as respondents in connected petitions. The Company has obtained Letter of Intent (in short, ‘LOI’) for the purpose of developing said colony in October, 2012 and obtained licence from the competent authority in March, 2013 to develop this colony on the land measuring 13.237 acres.
4. A bare perusal of Annexure R-2 (which is a plaint of the suit filed by the Company against the land owners) shows that necessary sanction was accorded to the Company by the competent authority and immediately thereafter, the Company started development of Group Housing Residential Complex in the name and style of M/s Kaasa Ramana and earlier this complex was given the name of ARAVALI GREEN VILLAGE. The Company asserts that the house building project got good response and more than 150 flats had already been booked by the intending purchasers before the sale of the land of the private respondents and other co-sharers came into existence. However, the adjacent land measuring 27K- 10M was also purchased by the Company vide sale deed dated 10.9.2013 (registered vide No.1311 dated 11.9.2013) from the land owners namely Khazan Singh, Attar Singh, Jai Singh, Smt. Urmila, Smt. Rajbala and Smt. Sunita for a total consideration of Rs. 17,18,75,000/-. However, the consideration was paid through cheques and some of them were post-dated cheques which are also duly mentioned in the sale deed dated 10.9.2013. The details of these cheques are duly mentioned in the sale deed which are as under : -
Cheque Number
Date
Amount (Rs.)
Name of Bank
Particulars
005948
10.09.2013
5,00,000
Bank of Maharashtra
Khazan Singh
005949
10.03.2014
25,00,000
Bank of Maharashtra
Khazan Singh
005950
10.09.2016
2,11,87,500
Bank of Maharashtra
Khazan Singh
005966
10.09.2016
5,00,000
Bank of Maharashtra
Khazan Singh
005951
10.09.2013
10,00,000
Bank of Maharashtra
Attar Singh
005952
10.09.2014
50,00,000
Bank of Maharashtra
Attar Singh
005953
10.09.2016
4,30,62,500
Bank of Maharashtra
Attar Singh
005954
10.09.2013
5,00,000
Bank of Maharashtra
Jai Singh
005967
10.09.2014
5,00,000
Bank of Maharashtra
Urmila
005955
10.09.2014
25,00,000
Bank of Maharashtra
Jai Singh
005968
10.09.2016
5,00,000
Bank of Maharashtra
Jai Singh
005956
10.09.2016
2,08,75,000
Bank of Maharashtra
Jai Singh
005957
10.09.2013
5,00,000
Bank of Maharashtra
Urmila
0059
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