2022 (6) TMI 699 - HC - Indian Laws

Dishonor of Cheque - legally enforceable debt or not - framing of charges - acquittal of the accused - Section 138 of NI Act, 1881 - HELD THAT - It is evident that the complainant asserted that after the registration of the Sale Deeds she and her co-sharers handed over physical possession of the land to the accused person herein. In her examination in chief on affidavit, the complainant herein stated that on the date of registration of those deeds itself they handed over such possession to the accused person herein, by shifting their stand as made in the complaint petition. In the cross-examination, the complainant admitted that the accused person never took any loan from her. She again volunteered during such cross-examination that she deposited the cheque only after handing over possession of the land to the accused so far. Even as on date if possession is delivered, would immediately pay the cheque amount. From the affidavits, more particularly, as per the affidavit under Exbt.A, it appears that the parties to the agreement for sale, ultimately, shifted from their original agreement due to changed circumstances of non-registration of those deeds. They altered the terms of their contract in respect of payment of money that it would be paid by the accused only after possession of the purchased land was handed over to him by the complainant. Such novation is permissible under Section 62 of the Indian Contract Act, 1872. But the complainant has suppressed the said facts and brought a new story through her complaint petition as indicated above. Unless the complainant could show that possession was duly handed over after registration of those sale deeds and thereafter the cheque was deposited by her, she cannot claim any legally enforceable debt in her favour to be discharged by the accused. This Court is not inclined to interfere with the findings of the Courts below and the order stands confirmed and the prayer in revision stands rejected.

Issues Involved:
1. Legally enforceable debt under Section 138 of the NI Act.
2. Registration and possession of the land.
3. Dishonoring of the cheque.
4. Concurrent findings of the lower courts.
5. Directions for resolving the dispute.

Issue-Wise Detailed Analysis:

1. Legally Enforceable Debt under Section 138 of the NI Act:
The petitioner lodged a complaint under Section 138 of the NI Act, 1881, alleging that the respondent issued a cheque for Rs. 4,00,000/- which was dishonored due to insufficient funds. The trial court acquitted the respondent, concluding that the legally enforceable debt was not proven. The complainant failed to show that possession was duly handed over after the registration of the sale deeds and that the cheque was deposited thereafter. The appellate court upheld this decision, and the High Court confirmed the findings, emphasizing the absence of a legally enforceable debt.

2. Registration and Possession of the Land:
The petitioner and her co-sharers executed sale deeds for 2.09 acres of land in favor of the respondent. Due to an objection by a third party, the registration was delayed. The respondent requested the return of Rs. 5,00,000/- paid for the land, which the petitioner returned. Subsequently, the District Registrar directed the registration of the sale deeds. The respondent issued a cheque for Rs. 4,00,000/- and paid Rs. 1,00,000/- in cash. The petitioner claimed that possession was handed over on the date of registration, but the respondent contested this, stating possession was never given.

3. Dishonoring of the Cheque:
The cheque issued by the respondent was dishonored due to insufficient funds. The petitioner sent a demand notice, but the respondent did not make the payment. Instead, the respondent issued a legal notice demanding the handover of vacant possession of the land. The court noted discrepancies in the petitioner's statements regarding the possession and the cheque's deposit timing, leading to the conclusion that the debt was not legally enforceable.

4. Concurrent Findings of the Lower Courts:
Both the trial court and the appellate court found that the petitioner did not establish a legally enforceable debt. The High Court reviewed the evidence and upheld the concurrent findings, noting that the petitioner suppressed facts and altered the terms of the contract, which affected the claim's validity.

5. Directions for Resolving the Dispute:
To resolve the dispute, the High Court directed the petitioner to return Rs. 1,00,000/- with 6% interest per annum from February 2012 to the respondent within two months. The respondent, upon receiving the amount, must forbear from claiming any rights over the property. The petitioner is at liberty to take possession of the property and initiate legal proceedings for the cancellation of the sale deeds if necessary. The court emphasized maintaining a harmonious relationship between the parties and putting an end to the litigation.

Conclusion:
The High Court dismissed the criminal revision petition, confirming the lower courts' findings that the petitioner did not prove a legally enforceable debt. The court provided directions to resolve the dispute amicably, ensuring both parties' interests were considered. The judgment emphasizes the importance of clear evidence and adherence to legal procedures in establishing claims under Section 138 of the NI Act.

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