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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 ..... agreed to pay Rs. 3,50,000/- as consideration. Towards payment of the said amount, the cheque bearing No. 057129 dated 10.05.2007 drawn on Syndicate Bank, Yellapur for Rs. 3,50,000/- was issued and assured the complainant that he will arrange for necessary funds in his account and asked to present the cheque in the second week of May 2007. Accordingly, the complainant presented the cheque in question for encashment on 14.05.2007 through his banker IDBI, Hubli. But the said cheque was dishonored as there was insufficient funds in the account of the accused and the same was informed to the complainant vide letter dated 16.05.2007. The complainant issued legal notice on 13.06.2007 asking the accused to pay the cheque amount within 15 days. Inspite of service of notice on the accused, he had not repaid the cheque amount nor replied to the notice. Thereby he had committed the offence punishable under Section 138 of the Act and requested the trial Court to take cognizance of the offence and to initiate legal action. 4. The trial Court took cognizance of the offence and the presence of the accused was secured. The accused pleaded not guilty and claimed to be tried. The complainant exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferring of the shares in favour of the accused, the complainant cannot prosecute the accused for dishonor of the cheque. The complainant should have proceeded against the accused by instituting necessary suit by recourse to civil remedy. When the complainant has not chosen to do so, he cannot seek interference in the impugned judgment of acquittal passed by the trial Court. Hence, he prays for dismissal of the appeal as devoid of merits. 8. I have perused the materials on record including the trial Court records. 9. The complainant has examined himself as PW1 in support of his contentions raised in the complaint. He has reiterated his contention as stated in the complaint and in all 11 documents were came to be marked. During cross examination by the learned advocate for the accused, it is elicited from this witness that M/s. Sanners Engineering Company Private Limited is a registered Company, having three directors i.e. the complainant, Channabasappa Ganji and Parash Shreroff. He stated that a resolution was passed in the company to sell its shares. He stated that he was having 28.6%, Parash Shreroff was having 25% and Channabassappa Ganji was having 46.4% of the shares in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.05.2005. It was further agreed that the accused promised to make payment of the balance agreed amount of Rs. 10,50,000/- in three equal installments of Rs. 3,50,000/- at the end of every month, from the date of agreement. The agreement also refers to issuance of three cheques for Rs. 3,50,000/- promising to pay the said amount at the prescribed period. It is agreed between the parties that seller has to take all responsibility of transferring the shares of Parash Shreroff to the purchaser and to bear the expenses etc., It is also agreed that the purchaser can raise loan from the financial institutions for his intended production in the factory, by pledging the property of the company and seller agreed to assist and cooperate in raising the said funds. It was also agreed that the seller will be having right of re-entry and check up the activities of production etc., till the entire amount of Rs. 13,00,000/- is paid. However it was agreed that the seller should not unnecessarily interfere or cause obstruction in the purchaser running the business smoothly. It is further agreed between the parties that the purchaser has to make payment of installment within the stipulated period and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accused that the KEB had disconnected the power to the factory and reducing the total workers in the factory from 10 to 4 and informing the KSFC about the steps taken to promote the marketing of the productions, produced in the Company. 16. Ex. P10 is the copy of the letter dated 22.08.2007 issued by KSFC and addressed to the accused informing taking over of the entire unit of M/s. Sanners Engineering Company Private Limited for non-payment of the installment of the loan as agreed and calling upon to pay the outstanding balance of Rs. 4,74,050/- immediately. Copy of this letter is also addressed to the complainant in the present case and also to Channabassappa Ganji and to the Manager, SBI, Hubli. 17. Ex. P11 is the copy of the endorsement issued by the Special Officer on duty, Office of the Chief Ministers Secretariat, addressed to the accused informing that his representation submitted to the Chief Minister during Janata Darshan and the same has been referred to the Public Education Department, Bengaluru for necessary action. 18. Accused examined himself as DW1 and stated that there were negotiations between himself and the complainant with regard to purchase of shares of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross examination, he virtually admitted Ex. P1 to P11, even though he has taken the stand that his signatures were taken on blank papers by the complainant and that he has not received any legal notice. Even though he stated that he had not acted as managing director of M/s. Sanners Engineering Company Private Limited, he has not disputed the postal acknowledgment-Ex.P5. 22. In the light of these oral and documentary evidence adduced by the parties to the litigation, I have considered the submissions made by both the learned counsels representing the parties. 23. Ex. P6 is the agreement, admittedly entered into between the parties wherein the accused had agreed to purchase 28.6% of the shares belonging to the complainant herein, along with the remaining shares held by other two directors, for a total consideration amount of Rs. 13,00,000/-. The agreement also refers to payment of Rs. 50,000/- in cash on the date of the agreement and issuance of cheque bearing No. 057126 dated 10.03.2005 drawn on Syndicate bank, Yellapur for Rs. 50,000/- after agreeing to pay the said amount within one month from the date of agreement, also agreeing to pay Rs. 1,50,000/- within 3 months and issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not issued for creating any liability or debt, but the cheques were issued for payment of balance consideration and that in consequence, there was no legally enforceable debt or other liability, held in paragraph 9 as under: "9. We find ourselves unable to accept the finding of the learned Single Judge of the High Court that the cheques were not issued for creating any liability or debt, but "only" for the payment of balance consideration and that in consequence, there was no legally enforceable debt or other liability. Admittedly, the cheques were issued under and in pursuance of the agreement of sell. Though it is well settled that an agreement to sell does not create any interest in immovable property, it nonetheless constitutes a legally enforceable contract between the parties to it. A payment which is made in pursuance of such an agreement is hence a payment made in pursuance of a duly enforceable debt or liability for the purposes of Section 138." (Emphasis supplied) 27. The Hon'ble Apex Court in the above case also taken into consideration that there was a General Power of Attorney executed in favour of the respondent entered into subsequent to the transaction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment 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. Under such circumstances, 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. Hence, the impugned judgment of acquittal is liable to be set aside. 33. In view of the above, 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. 34. In view of the above, I proceed to pass the following: ORDER Appeal is allowed. Impugned judgment of acquittal dated 08.10.2012 passed in C.C. No. 2457/2007 on the file of learned I Addl. Senior Civil Judge and JMFC, Hubli, is set aside. Heard both the learned counsels regarding the quantum of sentence. Appellant/accused who is convicted for the offence punishable under Section 138 of the Act is sentenced to undergo simple imprisonment for a period of six months and to pay fine of Rs. 6,00,000/- to be deposited within 60 days from the date of receipt of the judgment and in defaul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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