TaxTMI 
TaxTMI 
2020 (1) TMI 1291
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....oad, Anekal Taluk, Bangalore Rural District, in which, 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....
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....in the name of the plaintiff. The alleged letter of acknowledgment 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 The plaintiff along with Krishnamurthy who is the estranged employee of the first defendant had illegally withdrawn lakhs of rupees from the first defendant.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 abov....
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....defendant directly. 10. According to the plaintiff, he entered into a sale agreement with one B. Chennakesava on 05.11.2004 who 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....
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....with Balaji (Plaintiff) had cheated him to the tune of Rs. 1.70 crores by misleading him that they have purchased land at Kanakapura, Bangalore 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....
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....ion 138 of the Negotiable Instruments Act in respect of the cheque marked as Ex. P-11. The said criminal complaint filed by the plaintiff ended in 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 th....
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....ove documents and explaining the purpose for which those documents are relied, submitted that there can be no doubt about the facts that the first defendant is one 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 wor....
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....9 the power of attorney deed dated 14/03/2005 executed by the first defendant in favour of the said Krishnamurthy empowers the agent to appear before the Sub-Registrar, Anekal for the presentation 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. ....
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....e entrusted to negotiate with the land owners for purchase of the land covered under Exs. P.5 to P.8. The plaintiff who was the middleman for the said transaction has received his remuneration. However 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....
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....,000/- K. Krishnamurthy (s/d) G.R A Holder of P. Janardhan Rao Bangalore 15-04-2006" 39. The specific case of the plaintiff is that, he had an understanding with the land owners to sell 5 acres 22½ guntas at the rate of Rs. 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 ther....
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.... be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case." Illustration 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 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....
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....ose of transfer of Khatha in respect of the aforesaid lands in my name and for the said purpose to sign applications, statutory forms, to swear to affidavits. My lawful attorney shall have powers to pay cess, tax and such other outgoings in respect of the aforesaid lands on my behalf." 44. The recital thus authorise Krishnamurthy only to 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 f....
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....icy on the cargo." 228. Principal not bound when excess of agent's authority is not separable.-Where an agent does more than he is authorized to do, and what 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. -Where an agent does more than he is authorized to do, and what 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. Th....
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....Exs. P-3, P-10 and P-11. 50. As pointed out earlier, Ex. P-3 is an agreement for a miniscule minuscule extent of land (7½ guntas) with one owner and the property under consideration is of vast extent of 5 acres and 22½ guntas. (About 40 guntas is equal to one acre) owned by several persons. The plaintiff has no evidence to show he has any agreement with all the owners 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....
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....e agreement for 7½ guntas of land and the acknowledgment letter of Krishnamurthy. The content of documents does not correlates the parties, value of the property and liability mentioned in the cheque Ex. P-11. The claim of Rs. 79,00,000/- for the transactions covered under the sale deeds viz., Exs. P.5 to P.8 executed by the land owners directly in the name of the first defendant either should 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....
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....awn on such date, this point has been discussed above at length and held that the presumption under section 118 of the Negotiable Instruments Act regarding the date has been rebutted through the entries found in the 2nd defendant's bank statement of account marked as Ex. P-47. 61. Sub-section (3) of section 25 Indian Contracts Act deals with acknowledgment time barred debt. According to Pollock and Mulla (The Indian Contract 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 Krishnamu....