2015 (3) TMI 1321 - HC - Indian Laws

Grant of Leave to Appeal - Return of cheque on the ground of stop payment - denial of legally recoverable debt - it was claimed that the cheque was issued to book the deal in respect of the land which being cancelled the order of stop payment was given - Held that - It was only in the legal notice that it was claimed for the first time that a friendly loan of 12 lacs had been advanced to the accused by the respondent. No details with regard to the same had been furnished; no receipt had been produced; it was not disclosed as to how the said loan was disbursed; when it was disbursed; to whom it was disbursed and; where it was disbursed. He submits that the accused was a stranger to the petitioner and its director. Admittedly the director of the petitioner had met the accused only on 26.10.2009 at the time of execution of the sale deed - Even though it was claimed that the said liability is reflected in the audited balance sheet of the petitioner company the same was not produced. It appears rather strange that someone who is purchasing a property worth 1, 72, 26, 000/- would obtain a friendly loan from the seller of the property - who is a stranger. The entire sale consideration was paid at the time of execution of the sale deed. When such a large amount of 1, 72, 26, 000/- flowed from the account of the accused and his wife it does not make sense for the accused to obtain a loan of 12 lacs from the complainant. Even if one were to imagine that the accused was short of 12 lacs and the complainant was willing to accommodate the accused the sale deed would have recorded that the balance amount of 12 lacs would be payable after sometime. The averment of the petitioner in the complaint is bald and devoid of any particulars as to how the legally recoverable debt had arisen. The respondent having raised a probable defence the presumption against the respondent stood dislodged. It is well settled that the Court would not grant leave to appeal where neither material evidence and circumstances have been ignored nor inconsequential circumstance have been given prominence more than what is required. The Court would not grant leave to appeal where the conclusion drawn is not found to be so illogical that no person would draw the same - Leave to appeal can be granted where it is shown that the conclusion arrived at by the Trial Court is perverse or there is mis application of law or any legal principle. Petition dismissed.

Summary

Issues Involved:
1. Leave to appeal under Section 378 (3) of the Code of Criminal Procedure (Cr PC).
2. Acquittal under Section 138 of the Negotiable Instruments Act.
3. Legally enforceable debt or liability.
4. Security cheque versus cheque issued for discharge of liability.
5. Condonation of delay under Section 5 of the Limitation Act.

Issue-wise Detailed Analysis:

1. Leave to Appeal under Section 378 (3) Cr PC:
The petitioner sought leave to appeal against the judgment dated 04.07.2013 by the learned Metropolitan Magistrate, which acquitted the respondent under Section 138 of the Negotiable Instruments Act. The High Court examined whether the trial court's decision was perverse or if there was a misapplication of law. The court concluded that the reasoning adopted by the learned MM was neither perverse nor lacking in appreciation of evidence, thereby dismissing the petition.

2. Acquittal under Section 138 of the Negotiable Instruments Act:
The petitioner claimed that the respondent issued a cheque for Rs. 12 lacs towards a legally payable debt, which was dishonored due to stop payment instructions. The trial court acquitted the respondent, reasoning that the complainant failed to establish the liability against which the cheque was issued. The court observed that the complainant did not provide any document to show the accused's liability and that the cheque was given as a security for a property transaction, not for discharging a debt.

3. Legally Enforceable Debt or Liability:
The trial court noted that the complainant did not specify the liability in the complaint or the affidavit. The legal notice mentioned a friendly loan, but no details or documentation were provided to substantiate this claim. The court found it improbable that the accused, who paid Rs. 1,72,26,000/- for a property, would take a loan of Rs. 12 lacs from the complainant. The court held that the complainant failed to establish a legally enforceable debt.

4. Security Cheque versus Cheque Issued for Discharge of Liability:
The respondent argued that the cheque was given as a security for a property transaction, not for discharging a debt. The trial court accepted this defense, noting that the accused had paid the full sale consideration and had issued stop payment instructions before the cheque was dated. The court referenced legal precedents stating that a security cheque does not attract penal provisions under Section 138 of the Negotiable Instruments Act.

5. Condonation of Delay under Section 5 of the Limitation Act:
The petitioner sought condonation of a 205-day delay in filing the leave petition. The court examined whether Section 5 of the Limitation Act could be invoked to condone the delay. The court referred to the Supreme Court's judgment in Mangu Ram v. Municipal Corporation of Delhi, which allowed condonation of delay under Section 5. However, the court found the petitioner's explanation for the delay insufficient and unsatisfactory, leading to the dismissal of the application for condonation of delay.

Conclusion:
The High Court dismissed the petition for leave to appeal, finding no merit in the petitioner's arguments. The trial court's judgment acquitting the respondent was upheld, as the complainant failed to establish a legally enforceable debt, and the cheque in question was deemed a security cheque. The application for condonation of delay was also dismissed due to an inadequate explanation for the delay.