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TMI Blog2020 (9) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany nor he has acted as managing director or that he has not availed loan either from KSFC or from SBI or his contention that his signatures were obtained by the complainant on the blank papers and documents - there are no bonafides in the contentions raised by the accused in his defence. The opinion formed by the trial Court that the agreement in question is dated 09.02.2005, whereas the cheque in question dated 10.05.2007 and therefore there was no legally enforceable debt at the time of issuance of cheque, cannot be accepted. The terms and conditions in Ex. P6 itself makes it clear that the accused had agreed to make payment in installments and the manner in which the said payments are to be made, are clearly explained and agreed between the parties in the agreement - the finding of the trial Court that there was no legally recoverable debt and acquitting the accused on the said ground is illegal and perverse. The impugned judgment of acquittal passed by the trial Court is set aside. The accused who is the respondent herein is convicted for the offence punishable under Section 138 of the Act - Appeal allowed. - Crl. Appeal No. 2945/2012 - - - Dated:- 28-8-2020 - M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all these materials on record came to the conclusion that there was no legally enforceable debt and therefore no offence under Section 138 of the Act was made out against the accused. Accordingly, accused was acquitted for the above said offence. 5. Aggrieved by the said judgment of acquittal passed by the trial Court, the complainant has preferred this appeal on various grounds. 6. The learned counsel for the appellant contended that the impugned judgment of acquittal is illegal, perverse and the same is liable to be set aside. The trial Court has not properly appreciated the contentions of the parties and it has ignored the agreement entered into between the parties. The trial Court has also ignored the fact that the accused had raised huge loan from KSFC in pursuance of the said agreement. But inspite of that, it has formed an opinion that there was no enforceable debt and proceeded to acquit the accused. The trial Court has also not taken into consideration the fact that the agreement entered into between the parties and issuance of the cheque in question in terms of the agreement, is not at all disputed by the accused. He has also not disputed the fact that the cheque i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roff and the shares were transferred to the accused. Again he stated that he does not know how many shares were transferred or sold in favour of the accused and on what date. He admitted that he has not produced any resolution passed in the company to the effect that the share are to be transferred in favour of the accused. 10. Witness stated that he had not submitted transfer certificate to the Registrar of Companies, but he volunteered that, since the accused has not paid the entire consideration amount, the transfer of shares has not yet been effected. Out of the total consideration amount of ₹ 13,00,000/-, accused has paid only ₹ 1,80,000/-. Witness denied the suggestion that since he had not transferred the share in favour of the accused as agreed between the parties, there is no legally recoverable debt to prosecute the accused. 11. Ex. P1 is the cheque dated 10.05.2007 drawn by the accused in favour of the complainant for ₹ 3,50,000/- and the cheque was drawn in favour of Syndicate Bank, Yellapur Branch. Ex. P2 is the memo and Ex. P3 is the endorsement issued by Syndicate Bank Yellapur in favour of IDBI Bank, Hubli returning the cheque with a memo tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cover the same either by prosecuting the purchaser or by filing Civil suits. The agreement also contains a recital that original copy of the agreement was deposited with Mr. Krishna H. Hegde, who is an intermediary and the agreement is to be given to the purchaser on payment of the entire amount agreed under the agreement. If any misunderstanding or dispute arises between the parties, decision of said Krishna H. Hegde will be final and binding on both the parties. 13. Ex. P7 is the letter dated 30.03.2005 addressed by Meharwade Associates, Chartered Accountants, issued to the Assistant Manager, KSFC, Dharwad informing that the formalities for change of Object Clause and change of Registered Office Clause is completed. Induction of Arun M. Revankar i.e. accused herein as director and retirement of Parash Shreroff is also completed and informed that a formal understanding was reached between the existing directors of the company i.e. Channabassappa Ganji, Chandrashekhar Ganji (i.e. the appellant herein) who shall also retire from the directorship and the that the entrustment of the right, title and interest in the company in favour of the incoming director Arun M. Revankar-accused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. His signatures were taken on the blank documents and also on the cheques. The cheques were taken as security. No shares were transferred as agreed and the shares were still in the name of the complainant. The complainant misused the blank cheques and filed false complaint. There is no legally recoverable debt, since the shares are not transferred. During cross examination, witness admitted that an agreement was entered into for purchase of shares of the Company for ₹ 13,00,000/- He admitted the agreement-Ex. P6. Even though witness stated that his signatures were taken on some blank documents, he categorically stated that Ex. P6 was not blank, when he signed the same. Witness admitted that he agreed to pay ₹ 12,50,000/- as per the terms of Ex. P6 and that as per the terms of Ex. P6, he had handed over the cheque Ex. P1 on the date of the agreement but stated that the said cheque was issued as security. He denied the suggestion that he has already taken over the possession of the factory and running the business. 19. Witness stated that Meharwade Associates is the chartered accountant for M/s. Sanners Engineering Company Private Limited and he had availed the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further agreeing to pay the balance amount of ₹ 10,50,000/- in three equal installments of ₹ 3,50,000/- each to be given at the end of every year, from the date of agreement. Agreement also refers that the purchaser has issued three cheques for the said amount promising to pay the same at the prescribed period. 24. Ex. P1 is the cheque dated 10.05.2007 bearing No. 057129. Accused examined as DW1 specifically admitted the agreement Ex. P6 and the contents therein. The signature found on Ex. P1 is also not disputed. Receipt of the legal notice which is as per Ex. P4 is also not denied in clear terms. During cross examination the accused also admits the documents which are as per Ex. P7 to 11. These documents clearly disclose that the accused had infact entered into the agreement-Ex.P6 for purchase of shares of the company owned by the complainant and others, paid part consideration amount and towards payment of the balance consideration amount, issued the cheque Ex. P1 and other cheques. 25. The documents also disclose that the accused had raised loan from KSFC and also from Syndicate Bank for running his business. But however the KSFC has taken over the premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no legally enforceable debt. 28. Thus it is clear that, if a cheque is issued in terms of an agreement and the same is dishonored, the amount of the cheque, constitute legally enforceable debt, as the agreement is legally enforceable between the parties. 29. When the complainant is successful in proving the existence of legally recoverable debt and issuance of Ex. P1-cheque and also dishonor of the same, presumption under Sections 118 and 139 of the Act comes into operation and it is for the accused to rebut these legal presumptions. 30. In the present case, accused has not made any attempt to rebut the presumption. When he admitted the agreement-Ex.P6 and also issuance of the cheque Ex. P1, it cannot be said that there is no legally recoverable debt. Even though accused cross examined PW1 through his counsel and got examined himself as DW1, nothing has been placed before the Court to rebut the presumption or to substantiate the contention that he has not taken over the business of the company nor he has acted as managing director or that he has not availed loan either from KSFC or from SBI or his contention that his signatures were obtained by the complainant on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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