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TMI Blog2020 (1) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... noured cheque will save the limitation of time barred debt, in the absence of promise'. This issue is a significant question of law, though may not have serious bearing on the case in hand, even if held either way. Cheque is defined under section 4 of the Negotiable Instruments Act as a 'bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand'. Cheque is therefore a negotiable instrument carrying the promise implicitly, unlike a pro-note where the promise is explicit and mandatory. Therefore, limitation has to be reckoned from the date the cheque and not on the fact 'whether the cheque was honoured or dishonoured'. Under the Negotiable Instruments Act, the issuance of cheque is to be presumed to be issued for discharge of debt. The consequence event 'whether the said cheque on presentation honoured or not is immaterial - In the opinion of this Court, even if the said cheque is not presented in time and become stale, but it is proved that the cheque was issued with intention to discharge the debt or part of the debt then, the limitation has to be reckoned from the date of the cheque considering the cheque as ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... got three sale deeds dated 19.03.2005 and one sale deed dated 11.04.2005 registered in the name of the first defendant directly. Based on the resolution passed by the second defendant firm cheque of the partnership firm was issued by the first defendant to purchase the above said land in his personal name. In the said transaction, the first defendant is liable to pay ₹ 2,56,00,000/- whereas, he paid only a sum of ₹ 1,77,00,000/- and the balance sum of ₹ 79,00,000/- was due and payable by the plaintiff. 3. The entire transaction on behalf of the first defendant was done through his Power Agent Krishnamurthy. When the plaintiff demanded the balance of ₹ 79,00,000/-, Krishnamurthy the Power Agent of the first defendant executed a letter of acknowledgment dated 15.04.2006 in favour of the plaintiff. Subsequently, the first defendant issued a cheque from the Bank account maintained by the second defendant for a sum of ₹ 79,00,000/- dated 30.10.2007 drawn on ABN AMRO Bank, Haddows Road Branch, Chennai. On 15.04.2008, the plaintiff presented the cheque for collection. The same was dishonoured with endorsement Insufficient' fund . Notice was issued to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no document to show that the plaintiff had interest in 5 acres' 22 guntas of agriculture land in Bidaraguppe Village at Sarjapur Main Road, Anekal Taluk, Bangalore Rural District and he spent heavily towards conversion of the said agricultural land into non agricultural land. Further, the allegation of fixing the price of the land @ 46 lakhs per acre is not true. The claim of the plaintiff is false and is not entitled for any interest as claimed. 7. Based on the above averments, the following issues were framed by this Court on 18.09.2014:- 1. Whether the plaintiff is entitled to recover a sum of ₹ 1,21,66,000/- from the defendants along with interest at 18% p a on the principal sum of ₹ 79,00,000/- from the date of plaint? 2. Whether the suit claim is sustainable on speculation as the plaintiff is a speculator and middle man in real estate business? 3. Whether the suit is barred by limitation? 4. Whether the suit is bad for mis-joinder of parties? 5. Whether the dishonoured cheque will give raise to a cause of action without any specific promise to pay a time barred debt under Section 25 (3) of Indian Contract Act? 6. Whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and for a sale consideration of ₹ 41 lakhs per acre. The plaintiff has advanced a sum of ₹ 1,00,000/- to B. Chennakesava. The plaintiff contends that he invested his money for conversion of the said land into non agricultural land and to settle the dispute between the land owners. He arranged for execution of the sale deeds by the respective land owners directly in the name of the first defendant showing the guide line value of the properties which was far Below the agreed value. The land owners accordingly, executed four sale deeds which were marked as Exs. P.5 to P.8 respectively. The sale consideration agreed by the first defendant for the said land was ₹ 2,56,00,000/- whereas, he paid only ₹ 1,77,00,000/-. For the balance sum of ₹ 79,00,000/- one Krishnamurthy the Power Agent of the first defendant gave an acknowledgment letter dated 15.04.2006 (Ex. P.10). Later, the first defendant gave the cheque, dated 17.03.2007 drawn in the name of the account of the second defendant, for a sum of ₹ 79,00,000/- (Ex. P.11) When the said' cheque was presented for collection, it was returned for want of sufficient fund. Criminal case was initiated for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner in KVL Associates, Chennai which is the sister concern of the second defendant firm. Further Krishnamurthy Was authorised by the first defendant to negotiate with the parties for purchase of property and he has executed a power of attorney deed in his favour for that purpose. 15. The stop payment letter given by the first defendant is marked as Ex. P:-23 In this letter the first defendant informed ABN AMRO Bank, Nugambakkam Branch that 8 of his signed cheques are missing from his office. To avoid misuse of the cheques he instruct the bank to stop payment. The Cheque bearing No. 401681 (Ex P-11) is not one among the 8 cheques referred in this letter dated 14/07/2008. 16. The counsel for the plaintiff pointing out that Ex. P-11 cheque bearing No. 401681 dated 30/10/2007 was presented for collection by the plaintiff on 15/4/2008. The said cheque was returned by the banker with the memo Ex. P-12 intimating that the cheque is returned unpaid for funds insufficiency. Therefore the plaintiff caused legal notice (Ex P-13) to the first defendant on 14/05/2008. The defendant in his reply Ex. P-14 has stated that the plaintiff and Krishnamurthy were his agents for purchase of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnalatha w/o Balaji and Krishnamurthy before the Additional District Judge/Tirupathi in O.S 107/2007 is relied by the plaintiff and they are marked as exhibits P-29/Ex P-34 to 40. The pith and substance of the said suit is that Balaji (the plaintiff in this suit), his wife Ravoori Swarnalatha and krishnamurthy misappropriated the money of the first defendant and purchase property at Tirupathi, hence prayer to declare the properties purchased in the name of the Balaji and his wife were from out of the amounts received from the Perim Janarthan Rao (the first defendant herein). 19. The orders passed by the Government of Karnataka permitting the conversion of the agricultural land which are the subject matter of the transactions under consideration in the present suit is marked as Ex. P-41. The plaintiff relies this document to show he had a role in getting the conversion orders arid for which he has spent money. 20. The Andhra Bank, Vidyapeetha Circle Branch, Bangalore in which the plaintiff maintains account had given the letter dated 08/09/2012 certifying that the plaintiff had purchased 5 pay orders from his account as on 13/03/2005 out of which 4 were purchased in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -8 were got registered. The recitals in these Exhibits also indicates that Krishnamurthy is the authorised representative of the first defendant. While so, the acknowledgment letter dated 15/04/2006 Ex. P-10 given by Krishnamurthy binds the principal and the first defendant cannot turn around and plead that the act of his agent does not binds him. 27. Pointing the portion of the DW-1 testimony where the first defendant has admitted that he started the firm KVL Associates and he appointed Krishnamurthy as the working partner of the said firm, the learned counsel for the plaintiff would submit that, this admission positively disproves the claim of the defendants that the acknowledgment letter Ex. P-10 admitting liability of ₹ 79,00,000/- and the cheque Ex. P-11 for ₹ 79,00,000/- were documents created in collusion between the plaintiff and the said Krishnamurthy. Therefore the learned counsel submits that there is no reasonable ground to suspect Ex. P-10 acknowledgment of debt and issuance of cheque (Ex P-11) to discharge the debt. 28. Regarding the criminal prosecution initiated under section 138 of NI Act, the learned counsel for the plaintiff submitted that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendant fails to prove that the cheque was not issued to discharge of a debt. 31. The learned counsel for the plaintiff would state that, the defendants have not rebutted the said statutory presumption, contrarily, the plaintiff through the above mentioned documents have established there was financial transaction between the plaintiff and the defendants and the plaintiff has contributed his service and money for completion of the transactions pertaining to the land purchased under Ex. P-5 to P-8. 32. Relying upon Bir Singh vs. Mukesh Kumar [2019(4) SCC 197] the counsel for the plaintiff submitted that there is strong presumption against the defendants which has not been rebutted. Except a bald denial of debt and fake allegation of misuse of cheque by his agent in collusion with the plaintiff, there is no cogent evidence that there was no debt or liability. Hence suit to be allowed. 33. In defence, the first defendant has mounted the witness box. 21 documents are marked as defence side exhibits. Ex. D-1 to D-5 are civil proceedings for recovery money initiated against the plaintiff and others by one Gottipatti Damodara Naidu. Ex. 'D-6 and D-7 are the copy of the cri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower Agent, Krishnamurthy the blank cheque Ex. P-11 was filed up and presented for collection. 35. The plaintiff initiated private complaint under the Negotiable Instruments Act in respect of the cheque issued in favour of the plaintiff for a sum of ₹ 79,00,000/-. The Judicial Magistrate convicted the defendant. Later, the Principal City Civil Court and Sessions Judge Bangalore City vide order dated 21.07.2012 in Criminal Appeal No. 878 of 2010 (Ex. D.19) has set aside the judgment and order of the trial Court dated 18.11.2010 convicting the first defendant. The Learned Counsel for the Defendant further states across the bar that the further appeal preferred by the plaintiff before the High Court against the order of acquittal also dismissed by the High Court, Bangalore. 36. The prime contention of the learned counsel for the defendant is that, there is no agreement between the plaintiff and the defendants to pay ₹ 46 lakhs per acre in respect of the property covered under the sale deeds Ex. P-5 to P-8. The plaintiff was duly paid for his services and nothing payable to him. Contrarily the plaintiff and Krishnamurthy (since deceased) has fraudulently encashed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at Sarjapur Main Road, Anekal Taluk, Bangalore Rural District to the plaintiff. In this document, Chennakesava claims himself as the representative of the owners of 5 acres 22 guntas of land. The plaintiff has not explained how this document could be relied upon for his contention that he had interest in the entire 5 acres 22 guntas of land situated at S. Nos. 269, 270 and 279 at Bidaraguppe Village at Sarjapur Main Road, Anekal Taluk, Bangalore Rural District when there is no document to link B. Chennakesava and other owners of 5 acres 22 guntas of land at S. Nos. 269, 270 and 279 at Bidaraguppe Village at Sarjapur Main Road, Anekal Taluk, Bangalore Rural District. The lack of privity of contract with other owners, renders a plaintiff case weak. Even assuming that the plaintiff have some claim over the property which is covered under Exs. P.5 to P.8 by virtue of Ex. P.3 agreement of sale, it is an agreement between the plaintiff and one of the several owners who hold only 7 guntas of land. How this agreement of sale will bind the remaining owners holding more than 5 acres of land is unexplained by the plaintiff. Further, the evidence available reveals that the first defendan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly. The shop is managed by B, and he is in the habit of ordering goods from C in the name of A for the purposes of the shop, and of paying for them out of A's funds with A's knowledge. B has an implied authority from A to order goods from C in the name of A for the purposes of the shop. 188. Extent of agent's authority.-An agent having an authority to do an act has authority to do every lawful thing which is necessary in order to do such act. -An agent having an authority to do an act has authority to do every lawful thing which is necessary in order to do such act. An agent having an authority to carry on a business, has authority to do every lawful thing necessary for the purpose, or usually done in the course, of conducting such business. Illustrations (a) A is employed by B, residing in London, to recover at Bombay a debt due to B. A may adopt any legal process necessary for the purpose of recovering the debt, and may give a valid discharge for the same, (a) A is employed by B, residing in London, to recover at Bombay a debt due to B. A may adopt any legal process necessary for the purpose of recovering the debt, and may give a valid discharge for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his authority will bind the principal. 226. Enforcement and consequences of agent's contracts.-Contracts entered into through an agent, and obligations arising from acts done by an agent, may be enforced in the same manner, and will have the same legal consequences as if the contracts had been entered into the acts done by the principal in person. -Contracts entered into through an agent, and obligations arising from acts done by an agent, may be enforced in the same manner, and will have the same legal consequences as if the contracts had been entered into the acts done by the principal in person. Illustrations (a) A buys goods from B, knowing that he is an agent for their sale, but not knowing who is the principal. B's principal is the person entitled to claim from A the price of the goods, and A cannot, in a suit by the principal, set-off against that claim a debt due to himself from B. (a) A buys goods from B, knowing that he is an agent for their sale, but not knowing who is the principal. B's principal is the person entitled to claim from A the price of the goods, and A cannot, in a suit by the principal, set-off against that claim a debt due to himsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate the whole transaction. 46. It is seen that Ex. P-10 letter given by Krishnamurthy the agent of the first defendant is not within the authority and it is separable from the acts authorised. Therefore, execution of the letter Ex. P-10 as agent of first defendant is an act in excess of the authorisation. This execution of this letter does not fall within the acts authorised to do under Exhibit P-69. Therefore, it is held that for want of authorisation, the first defendant who is the principal is not bound by Ex. P-10 executed by his agent. 47. Dehors of Ex. P-10, independently if other documents are analysed for ascertaining the existence of liability, in the absence of the documents to show that the plaintiff has incurred expenses in dealing with the property and the first defendant agreed for a sale consideration of the properties at the rate of ₹ 46 lakhs per acre the plaintiff averments stand in air without any corroboration. Neither in the sale agreement (Ex P-3) nor in sale deeds marked as Ex. P.5 to P.8 the property is valued at ₹ 46 lakhs per acre. 48. It is the contention of the plaintiff that, though the market value of the property was ₹ 46 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an act only to an extent which he is authorised explicitly or impliedly and not beyond that. 52. Ex. P.10, acknowledgment alleged to have been executed by Krishnamurthy is dated 15.04.2006. This letter indicates that the first defendant is liable, to pay ₹ 79,00,000/- towards purchase of land bought through the plaintiff. If the statement found in the document is true, then there must be some evidence that the plaintiff had entered into an agreement with the other land owners holding the entire 5 acre 22 guntas of land whereas, the only document produced by the plaintiff is Ex. P.3, which is in respect of 7 guntas of land held by B. Chennakesava. When the entire transfer of property got completed, and sale deeds Exs. P-5 to P-8 got registered between 19.03.2005 and 11.04.2005, the necessity to give the letter Ex. P-10 on 15/04/2006 is also left unexplained by the plaintiff. 53. The learned counsel for the plaintiff relying upon the entries made in the statement of bank accounts and the letter of the Andhra Bank which are marked as Exs. P-17; P-42; P-43 and P-44 would submit that the plaintiff had paid money to the other land owners on the dates relevant to the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble presumption, it is the duty of the Court to look whether the cheque would have been given on 30/10/2007. In this context, Ex. P-22 the criminal complaint before the Crime Branch, Chennai on 30.08.2007, against the plaintiff and Krishnamurthy given by the first defendant is relevant and requires consideration. This complaint was taken on file for investigation in Crime No. 470/2007. In this complaint it is specifically alleged that the plaintiff and Krishnamurthy has cheated the first defendant to a tune of ₹ 1.50 crores in connection with the land dealing. While so, after lodging criminal complaint on 20/08/2007, the first defendant could not have issued the cheque Ex. P-11 in favour of the plaintiff on 30.10.2007. 58. In alternate, the probable date or month of issuance of this cheque can be ascertained by verifying the dates on which the previous and subsequent cheques were encashed. From Ex. P-47 the ABN/AMRO bank statement of account of the second respondent firm indicate that most of the cheques bearing Numbers between 401673 and 401683 were encashed between October 2004 and January 2005. Out of these cheques, the plaintiff himself has encashed the following 4 che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t promise to pay wholly or in part such debt and 3. The promise must be in writing signed by the person or by his duly appointed agent. 62. Therefore, a promise to pay a time-barred debt is a condition precedent for application of Section 25(3) of the Indian Contract Act. The said promise must be express and unequivocal. Now, when we read the content of the letter - Ex. P-10 given by Krishnamurthy as general power of Attorney holder of the first defendant, leave alone the authority to give such letter, we find that the promise to pay is conspicuously absent in this letter. Assuming the letter acknowledging the debt is valid and given prior to the expiry of limitation, it is highly improbable to say the cheque - Ex. P-11 was issued on 30/10/2007. Undoubtedly, it should have been left the possession of the defendants and come to the possession of the plaintiff prior to 20/08/2007, the date on which the first defendant gave complaint to the Commissioner of Police, Chennai alleging fraud and cheating. 63. However, the cheque being dishonoured, one of the issue framed in this case is 'whether a dishonoured cheque will save the limitation of time barred debt, in the absen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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