TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 1291
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....ich, the plaintiff had already acquired interest. The sale price for the said land was finalised @ Rs. 46 lakhs per acre with condition that the plaintiff should get permission for converting the usage of the said land, from agricultural to non agricultural purpose. The plaintiff spent huge money for the said conversion and also spent heavily on settling the Court dispute among the land owners. 2. Thereafter, the plaintiff arranged for the sale deeds being executed directly in the name of the first defendant. The plaintiff believing the first defendant paid the sale consideration to the land owners from out of his personal fund. The plaintiff by issuing post dated cheques 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 Rs. 2,56,00,000/- whereas, he paid only a sum of Rs. 1,77,00,000/- and the balance sum of Rs. 79,00,000/- was due and payable by the plaintiff. 3. ....
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....t dated 15.04.2006 executed by Krishnamurthy cannot be the basis for any claim against the defendants in the absence of any proof of money payable by the defendants. 6. The criminal case initiated under the Negotiable Instruments Act against the first defendant though initially ended in conviction before the trial court, the judgment of the trial Court was later reversed in the appeal by the Appellate Court and therefore, there is no enforceable debt against the defendants. The plaintiff along with Krishnamurthy who is the estranged employee of the first defendant had illegally withdrawn lakhs of rupees from the first defendant. There is no document to show that the plaintiff had interest in 5 acres' 22½ 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.....
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....is the absolute owner of 7½ guntas of land situated at Bidaraguppe Village at Sarjapur Main Road, Anekal Taluk, Bangalore Rural District. In the said agreement, B. Chennakesava for himself and on behalf of the adjoining' land owners falling under S. Nos. 269, 270 and 279 at Bidaraguppe Village at Sarjapur Main Road, Anekal Taluk, 'Bangalore Rural District agreed to sell the land @ Rs. 41 lakhs per acre and executed the sale agreement marked as Ex. P-3. In the said agreement for sale between the plaintiff and B. Chennakesava, the parties have agreed for transfer of 5 acres 22½ guntas land for a sale consideration of Rs. 41 lakhs per acre. The plaintiff has advanced a sum of Rs. 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 respect....
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....galore for Rs. 65 lakhs in the name of the first defendant, but actually they did not purchased any land at Kanakapura. The first defendant has also alleged that the plaintiff and Krishnamurthy had taken away Rs. 2,56,00,000/- from him for the purchase of the properties at Sharjapur Road registered in his him, whereas on verification from the vendors he came to know that the they were paid only Rs. 1,50,00,000/-. 14. The plaintiff relies on this document to show that the first defendant has admitted in his complaint that the said Krishnamurthy is the working 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 ....
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....n conviction in C.C.19342/2008 on 18/11/2010 (judgment copy is marked as Ex. P-33). On Appeal before the Session Judge, Bangalore in C.A. 878/2010 the conviction was set aside on 21/07/2012. (judgment copy is marked as Ex. P-67). The plaintiff aggrieved by the order of the appellate court has preferred appeal before the High Court, Bangalore, in Cri. Appeal No. 1110/2012. (Appeal copy is marked as Ex. P-61). 18. The documents connected to the civil proceedings initiated by the first defendant against Balaji (the plaintiff herein), Ravoori Swarnalatha 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 ....
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....ne of the partners of the second defendant firm, the second respondent firm has resolved to utilise the funds of the firm to purchase lands in the name of the first defendant, the cheques of the second defendant firm were used for the purchase of the lands at Bangalore. 26. The first defendant though initially denied the status of Krishnamurthy, admits in his complaint to police commissioner and in the cross examination that Krishnamurthy was his authorised agent and only through him the sale deeds Ex. P-5 to P-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 ackn....
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....sentation of deeds that would be executed by the owners of the aforesaid lands. The bank account statements and the letter of the Andhra Bank which are marked as Ex. P-42, Ex. P-43 and Ex. P-44 clearly proves that the part sale consideration to the vendors and registration charges were paid by the plaintiff from his bank account. Even assuming only blank cheque was given by the first defendant it would attract the presumption under section 139 of the Negotiable Instruments Act, in case if the 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....
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....owever he in connivance with the power agent Krishnamurthy has overdrawn money' from the 2nd defendant's bank account more and above what is payable to the vendors. For the said act of cheating criminal complaint lodged with Commissioner of Police, Chennai against the plaintiff and Krishnamurthy. On his complaint/Balaji and Krishnamurthy were arrested and released on bail by order of the High Court Madras vide Ex. D-15 and D-16. Therefore in connivance with his estranged Power 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 Rs. 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 agains....
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..... 41 lakhs. Knowing this the first defendant expressed his desire to buy those land for a sale consideration @ Rs. 46 lakhs per acre. To substantiate this contention the plaintiff relies the recital in Ex. P.10 and Ex. P.3. 40. However, the recital in Ex. P.3 would show that one B. Chennakesava holding 7½ guntas of land has agreed to sell 5 acres of land @ Rs. 41 lakhs per acre in S. Nos. 269, 270 and 279 at Bidaraguppe Village 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 22½ 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 22½ 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 22½ 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 ....
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.... in Serampor, living himself in Calcutta, and visiting the shop occasionally. 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 As 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. A owns a shop in Serampor, living himself in Calcutta, and visiting the shop occasionally. 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 conduc....
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....o do acts and deeds relating to registration of the sale deeds and nothing more. While so, the alleged acknowledgment of debt executed by Krishnamurthy on behalf of the first-defendant will not bind the defendants. 45. In this context, it is also relevant to refer Sections 226, 227 and 228 of the Indian Contracts Act which deals enforcement and consequences of agent's contracts, and how far the act of agent exceeding 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 entit....
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....he does beyond the scope of his authority cannot be separated from what is within it, the principal is not bound to recognize the transaction." Illustration A, authorizes B to buy 500 sheep for him. B buys 500 sheep and 200 lambs for one sum of 6,000 rupees. A may repudiate the whole transaction. A, authorizes B to buy 500 sheep for him. B buys 500 sheep and 200 lambs for one sum of 6,000 rupees. A may repudiate 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....
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....except one. 51. Ex. P.10 is a letter given by Krishnamurthy, the Power Agent of the first defendant. It is claimed to be letter acknowledging the debt. However, when tested with the recital of power of attorney deed (Ex P 69) 'whether Krishnamurthy had authority to give such letter', it is found to be beyond his authority. Under section 188 of the Indian Contract Act, an Agent can do 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 Rs. 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 22½ guntas of land whereas, the only document produced by the plaintiff is Ex. P.3, which is in respect of 7½ 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 11.04.200....
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....uld be established through impeccable documents or through independent reliable oral evidence. In this case, the plaintiff has failed to state the exact date the cheque was issued and from whom he received the cheque. 57. Under section 118 of the Negotiable Instruments Act, unless contrary is proved, it has to be presumed that it was issued on the date on which it bear. Being a rebuttable 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 Rs. 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 ....
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....ract Act and Specific Relief Act - 14th Edition, Lexis Nexis - Butterworths Wadhwa), in order to invoke the provisions of Section 25(3) of the Indian Contracts Act, the following conditions must be satisfied:- 1. It must be referred to a debt which the creditor but for the period of limitation, might have enforced; 2. There must be a distinct 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 possess....