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TMI Blog2023 (9) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner shall undergo a further period of simple imprisonment for one month. The strenuous argument made on behalf of the revision petitioner is that an agreement, the consideration or object of which is forbidden by law and if permitted, it would defeat the provisions of any law, cannot be a debt as contemplated under the Explanation to Section 138 of the Negotiable Instruments Act. The debt is based on Ext.P8 Letter of Acknowledgment executed between the parties and since the sale agreement and Ext.P8 Letter of Acknowledgment are executed to undervalue a property, any debt arising therefrom cannot be subject matter of proceedings under Section 138 of the Negotiable Instruments Act. After failing to honour the cheque issued in con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;s Court. 2. The petitioner states that he is the accused and is the sole Proprietor of M/s. Seven Ocean Maritime Agencies and Excel Trans, Ernakulam. Towards balance sale consideration consequent to a property assignment, two cheques, one for Rs. 1,48,30,000/- dated 20.09.2004 drawn on Overseas Bank and another cheque dated 29.09.2011 for Rs. 15 lakhs drawn on Axis Bank, were issued. On presentation, the cheques were returned unpaid for want of funds. The 1st respondent thereupon issued notice demanding payment and thereafter filed CC Nos. 45/2013 and 46/2013. 3. The petitioner states that on an erroneous appreciation of evidence, the trial court found the petitioner guilty and the petitioner was convicted and sentenced to undergo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cknowledgment is legally not enforceable, contended the counsel for the petitioner. 7. The counsel for the petitioner argued that as per Explanation under Section 138 of the NI Act, debt means legally enforceable debt. The counsel pointed out that in Krishna Janardhan Bhat v. Dattatraya Hegde [2018 (1) KLT 425 (SC)], the Hon'ble Apex Court has held that for constituting an offence, existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. 8. The counsel for the petitioner further argued that an enforceable debt has to be pleaded and proved. As per Section 23 of the Indian Contract Act, 1872, the consideration or object of an agreement is lawful unless it is forbidden by law or is of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heque can be unenforceable. 10. The counsel for the petitioner, relying on the judgment of the Apex Court in Amrit Banaspati Company Limited and others v. State of Punjab and others [AIR 1992 SC 1075], argued that any agreement against public policy would be unenforceable. The counsel also relied on the judgment of the High Court of Allahabad in Nutan Kumar and others v. Second Additional District Judge, Banda and others [AIR 1994 All 298], to urge the point. As the debt, if any, under Ext.P8 is not legally enforceable, no proceedings under Section 138 can be initiated against the petitioner. Both the trial court and appellate court ignored these crucial aspects while convicting the petitioner, contended the counsel for the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory formalities and within the stipulated time. The cheque was dishonoured for insufficiency of funds. The petitioner has not disputed the documents executed. In such circumstances, the Magistrate's Court convicted the petitioner under Section 255(2) of the Code of Criminal Procedure for the offence under Section 138 of the Negotiable Instruments Act and sentenced the petitioner to undergo simple imprisonment for three months and to pay a fine of Rs. 15 lakhs. It was also ordered that in case of default, the petitioner shall undergo a further period of simple imprisonment for one month. 15. The petitioner filed Criminal Appeal No. 105/2016 aggrieved by the said judgment. The Additional Sessions Judge dismissed the Criminal Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity to pay stamp duty. In other words, the revision petitioner is the beneficiary of Ext.P8 acknowledgment letter and of the undervaluation. 18. After failing to honour the cheque issued in consideration of the purchase of property, now the petitioner cannot be heard to contend that the debt is not a legally enforceable debt and a proceeding under Section 138 is not maintainable. 19. Transaction is admitted. Issuance of cheque is not disputed. The 1st respondent has not violated any procedure prescribed in Sections 138 and 139 of the Negotiable Instruments Act. In the facts of the case, the 1st respondent cannot be heard to contend that the debt is not enforceable through Section 138 proceedings. The criminal revision petition the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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