2020 (10) TMI 903 - HC - Indian Laws

Dishonor of Cheque - section 138 of NI Act - sale of land under Coercion - complainant contended that the accused though agreed under Ex.P1 to sell his lands and received ₹ 24,00,000/- as advance sale consideration, cheated him alienating the properties to others - Void agreement or not - illegal consideration or not - HELD THAT - The primary document to be proved was Ex.P2 the Cheque. Ex.P1 was produced to substantiate that the Cheque was issued towards the discharge of liability under a land deal. According to the complainant in all, ₹ 24,00,000/- was received and Cheque was issued towards liability of ₹ 24,00,000/- plus ₹ 10,00,000/- as damages for breach of agreement - the accused in his affidavit admits that Ex.P1 was issued by him but under coercion. The theory of coercion is also rejected. Further, before the First Appellate Court another agreement as per Ex.R1 was produced where the receipt of ₹ 24,00,000/- was admitted. Therefore, the fact that amount mentioned in Ex.P1 was ₹ 23,00,000/- does advance the case of the accused. Void Agreement or not - accused contends that in the grant order there was bar for transfer of lands for 15 years from the date of the grant, therefore, the agreement under Ex.P1 and Ex.R1 were void - HELD THAT - No such defence was taken before the trial Court and the Appellate Court. The said contention is being raised for the first time before this Court. On that count only the said contention is liable to the rejected - Even otherwise the accused did not produce the grant order or the copy of the grant order to show that there was a bar for alienation. It is a settled position of law that mere agreement to sell does not amount to transfer of property. What would be barred is the transfer of property and not agreement to transfer the property. Therefore, there is no merit in the contention that the agreement was void. Illegal Consideration or not - accused contended that the agreements Ex.P1 and Ex.R1 were void, therefore, as per Section 23 of the Indian Contract Act, 1972 the consideration becomes illegal and the recovery of the same cannot be enforced - HELD THAT - The contention that agreements was void is already rejected. Apart from that, Section 65 of the Indian Contract Act binds him to refund the money received. The said section bars the accused from making unjust enrichment - Looked from any angle, there is no error, illegality, incorrectness in the judgments of conviction and sentence passed by the Courts below. The revision petition is dismissed.

Summary

Issues Involved:
1. Validity of the sale agreement under the Karnataka Land Reforms Act.
2. Presumption under Section 139 of the Negotiable Instruments Act.
3. Service of notice to the accused.
4. Allegations of coercion and duress in obtaining the cheque.
5. Legality of the consideration under the Indian Contract Act.

Issue-wise Detailed Analysis:

1. Validity of the Sale Agreement:
The accused argued that the sale agreement (Ex.P1) violated the Karnataka Land Reforms Act, which barred alienation of the property for 15 years, rendering the agreement void. However, this defense was not raised in the trial and appellate courts. Additionally, the accused did not produce the grant order to substantiate the claim. The court held that an agreement to sell does not amount to a transfer of property and thus, the contention of the agreement being void was rejected.

2. Presumption under Section 139 of the Negotiable Instruments Act:
The accused admitted that the cheque belonged to his account and bore his signature. Under Section 139 of the NI Act, this admission raised a presumption that the cheque was issued towards the discharge of a liability. The burden then shifted to the accused to rebut this presumption. The court found that the accused failed to provide acceptable evidence to rebut the presumption, as his claims of coercion were unsupported by corroborative evidence.

3. Service of Notice to the Accused:
The complainant issued a statutory notice (Ex.P5) to the accused, which was confirmed to be delivered by the postal authority (Ex.P8). The accused contended that the notice was not served on him, but the court invoked Section 114(f) of the Evidence Act, presuming the notice was served. The court noted that the accused did not challenge the postal authority's confirmation or the postal receipt, thus justifying the presumption of service.

4. Allegations of Coercion and Duress:
The accused claimed that the cheque and the sale agreement were obtained under coercion by the complainant with the aid of rowdy elements. However, the court found this defense unsubstantiated, as the accused did not provide any evidence beyond his testimony. The court also noted that the accused did not contest the statutory notice's allegations at the earliest opportunity, which undermined his claim of coercion.

5. Legality of the Consideration under the Indian Contract Act:
The accused argued that since the sale agreements (Ex.P1 and Ex.R1) were void, the consideration was illegal under Section 23 of the Indian Contract Act, 1972. The court rejected this argument, stating that even if the agreements were void, Section 65 of the Indian Contract Act would require the accused to refund the money received, preventing unjust enrichment.

Conclusion:
The court upheld the judgments of conviction and sentence passed by the trial court and the first appellate court, finding no error, illegality, or incorrectness. The revision petition was dismissed, confirming the accused's liability under Section 138 of the Negotiable Instruments Act.