Andhra High Court High Court

Jagadish Rai Agarwal And Ors. vs State Of Andhra Pradesh And Ors. on 16 August, 2004

Andhra High Court
Jagadish Rai Agarwal And Ors. vs State Of Andhra Pradesh And Ors. on 16 August, 2004
Equivalent citations: II (2005) BC 497, 2005 123 CompCas 121 AP, 2005 CriLJ 314
Author: C Somayajulu
Bench: C Somayajulu


JUDGMENT

C.Y. Somayajulu, J.

1. Alleging that the petitioners having agreed to purchase Ac. 17-25 gts of land in S. Nos. 246 and 247 of Kethireddipalli village, at Rs. 2.31 lakhs per acre from them and paid an advance of Rs. 5.02 lakhs through two cheques, and that on April 12, 2003, the first petitioner gave a cheque dated April 25, 2003, for Rs. 35,69,375 drawn on Tamil Nadu Mercantile Bank Ltd. towards the balance amount due and payable as per the agreement, and agreed to take the sale deed within one week from April 25, 2003, at the expense of the petitioners, and when the said cheque was presented for payment in Andhra Bank, Khairatabad, on April 25, 2003, by the second respondent, it was returned with an endorsement dated April 28, 2003, that payment was countermanded by the drawer and that in spite of a notice dated May 5, 2003, demanding payment of the amount covered by the dishonoured cheque being issued, the petitioners failed to make payment of the amount covered by the dishonoured cheque nor sent a reply, respondents Nos. 2 to 4 filed a private complaint against the petitioners for an offence under section 138 of the Negotiable Instruments Act, 1881 (the Act), which was taken cognizance of by the learned magistrate as C. C. No. 845 of 2003. This petition is filed to quash the said C. C.

2. The contention of learned counsel for the petitioners is that since the dishonoured cheque was drawn by the first petitioner only and since there is nothing in the complaint to show as to how petitioners Nos. 2 to 4 are connected with the first petitioner and the bouncing of the cheque, and since the cheque was not given towards discharge of a legally enforceable “debt” and since the statutory notice under section 138 of the Act sent to them were received by the petitioners on May 8, 2003, and since the complaint was presented on June 26, 2003, the complaint is clearly barred by time and since respondents Nos. 3 and 4 are not either payees or holders in due course of the cheque, the complaint against the petitioners is liable to be quashed.

3. The contention of learned counsel for respondents Nos. 2 to 4 is that since respondents Nos. 2 to 4, admittedly, are the joint owners of the property agreed to be sold to the petitioners, as admitted by them in their notice dated April 30, 2003, and since admittedly the petitioners took possession of the land agreed to be sold by respondents Nos. 2 to 4, it is clear that the transaction of sale is almost complete except obtaining of a registered sale deed, and since the amount covered by the dishonoured cheque was given towards the balance of sale consideration due and payable to respondents Nos. 2 to 4 from the petitioners under the agreements, since the word “debt” is not defined in the Act, by giving a wider meaning to the word “debt”, it is to be taken that the dishonoured cheque was given towards a legally enforceable “debt”, i.e., the sale consideration due and payable to respondents Nos. 2 to 4 under the agreement of sale entered into by the petitioners. In support of his contention that the word “debt” has to be given a wider meaning he relied on the following paragraphs in, Union of India v. Raman Iron Foundry, .

“It would be profitable in this connection to refer to the concept of a debt’, for a sum due is the same thing as a debt due. The classical definition of ‘debt’ is to be found in Webb v. Stenton [1883] 11 QBD 518 (CA) where Lindley L.J., said : ‘. . . a debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation.’ There must be debitum in praesenti; solvendum may be in praesenti or in futuro-that is immaterial. There must be an existing obligation to pay a sum of money now or in future. The following passage from the judgment of the Supreme Court of California in People v. Arguello [1869] 37 Calif 524, which was approved by this court in Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth-tax , clearly brings out the essential characteristics of a debt (page 779 of 59 ITR) :

‘Standing alone, the word “debt” is as applicable to a sum of money which has been promised at a future day as to a sum now due and payable. If we wish to distinguish between the two, we say of the former that it is a debt owing, and of the latter that it is a debt due.’ This passage indicates that when there is an obligation to pay a sum of money at a future date, it is a debt owing but when the obligation is to pay a sum of money in praesenti it is a debt due. A sum due would, therefore, mean a sum for which there is an existing obligation to pay in praesenti, or in other words, which is presently payable.”

4. His next contention is that in any event since the burden of proof to establish that the dishonoured cheque was not issued for any legally enforceable “debt” is on the petitioners, in view of the presumption under section 139 of the Act, till disproved by the petitioners it has to be taken that the dishonoured cheque was issued towards a legally enforceable debt. It is his contention that since the dishonoured cheque was drawn for and on behalf of Jagdish Rai Agarwal, HUF, of which the first petitioner is the karta, and since petitioners Nos. 2 to 4 admittedly are the sons of the first petitioner, and since the HUF also would be a company within the meaning of section 141 of the Act, in view of the Explanation to that section, petitioners Nos. 2 to 4, as members of the HUF are also liable for punishment under the Act. It is his contention that since the averments in the complaint clearly disclose that the petitioners received the statutory notice on May 12, 2003, complaint filed on June 26, 2003, is very much within time. It is his contention that the question as to whether the notices were received on May 12, 2003, or not is a matter to be decided by the trial court but not by this court, because this court while considering a petition under section 482 of the Criminal Procedure Code has to presume that all the allegations in the complaint are true.

5. In reply the contention of learned counsel for the petitioners is that that the postal acknowledgement produced by respondents Nos. 2 to 4 into the court along with the complaint show that notices were received on May 8, 2003, and in fact in the complaint the date of receipt of notices was originally typed as May 8, 2003, and that respondents Nos. 2 to 4 having realised that the complaint would be out of time if the date of receipt of notice is shown as May 8, 2003, the date of receipt of notice was altered as May 12, 2003, and contends that from the dates mentioned on the postal acknowledgements under the signatures of the petitioners it is clear that the complaint is barred by time.

6. I find force in the contention of learned counsel for respondents Nos. 2 to 4 that since the word “debt” used in section 138 of the Act is not defined in the Act, it should be given a wider meaning and interpretation, and as held in Webb v. Stenton [1883] 11 QBD 518 (CA) referred to in Raman Iron Foundry case, it should be taken to refer to a sum of money which is now payable or will become payable in the future by reason of a present obligation. In view thereof the amount payable by the purchaser to the vendor of a property under an agreement of sale can also be treated as a “debt” especially when possession of the property agreed to be sold was delivered. Therefore, I am not able to agree with the contention of learned counsel for the petitioners that the proceedings have to be quashed because there is no “legally enforceable debt” in this case, more so because as per section 139 of the Act, the court “shall presume” that the dishonoured cheque was issued in discharge of a “debt” or “other liability”, in whole or in part. So, if not towards “debt”, since the petitioners gave the cheque towards the balance due under the agreement of sale, it is covered under “other liability” mentioned in section 139 of the Act. The meaning of “shall presume” as per section 4 of the Indian Evidence Act, 1872, is that the court has to presume a fact as proved till it is disproved. So, the burden would be on the petitioners to establish that the dishonoured cheque was not issued in discharge of “debt” or “other liability”. It is well known that when the burden of proof is on the accused, question of quashing the complaint does not arise. So, the complaint cannot be quashed on the ground that there is no legally enforceable debt.

7. The contention that since respondents Nos. 3 and 4 are not the payees or holders in due course of the dishonoured cheque the complaint is liable to be quashed, in my considered opinion, is devoid of any merit, because the fact that persons who are not payees or holders in due course of the cheque also joined the payee of a dishonoured cheque, per se, is not a ground for quashing of the complaint. That apart, as rightly contended by learned counsel for respondents Nos. 2 to 4, the registered notice got issued by the petitioners through their advocate shows that respondents Nos. 2 to 4 are the owners of the property agreed to be sold and that all of them are entitled to the amount covered by the dishonoured cheque. Therefore, the complaint cannot be quashed on the ground that respondents Nos. 3 and 4 also joined the second respondent in filing the complaint.

8. The next contention of learned counsel for the petitioners relates to nonliability of petitioners Nos. 2 to 4 for an offence under section 138 of the Act in respect of a cheque drawn by the first petitioner. Though ex facie there appears to be force in the contention of learned counsel for the petitioners, on deeper examination, I find force in the contention of learned counsel for respondents Nos. 2 to 4 that since the dishonoured cheque was issued by the first petitioner as karta of the HUF, petitioners Nos. 2 to 4, being the sons of the first petitioner and members of HUF, in view of the Explanation to section 141 of the Act, like directors of a company, can be made liable for the offence under section 138 of the Act. In the notice got issued by the petitioners through their counsel they clearly admitted that all of them have entered into an agreement to purchase the property of respondents Nos. 2 to 4. So, it is clear that they also have a role to play in the sale transaction and so prima facie they also would be liable for the offence under section 138 of the Act, if the cheque issued by the karta of the HUF is dishonoured. So, I find no grounds to quash the complaint against petitioners Nos. 2 to 4.

9. The other contention relates to limitation, Xerox copies of the postal acknowledgements in respect of notice sent by respondents Nos. 2 to 4 under section 138 of the Act, filed by the petitioners, are not very clear, i.e., the dates on which the addressees received the notices are not clear. No doubt xerox copies of the envelopes in which the petitioners received the notices, produced by the petitioners with this petition, show that the petitioners made a note thereon that they were received by them on May 8, 2003. But, that cannot be taken into consideration for deciding this petition. Date of receipt of notice contained on the postal acknowledgements of the statutory notice sent by respondents Nos. 2 to 4 can be verified by the trial court. Irrespective of the date of receipt of statutory notice mentioned in the complaint, the court also has a duty to verify the date of receipt of notice, if any, contained on the postal acknowledgement, because the court has to be satisfied that the complaint is filed within the period of limitation. Therefore, the petitioners are at liberty to request the trial court to decide the question of limitation before it.

10. For the above reasons, I find no grounds to quash the complaint. As stated above the petitioners arc at liberty to approach the trial court for deciding the question of limitation. The petition is disposed of accordingly.