TaxTMI 
TaxTMI 
2025 (7) TMI 275
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....011. 3. The Complainant asserted that in November, 2008 the Accused no. 1 who is a Hindu Undivided Family (HUF) of which the Respondents no.2 to 4 are the members, agreed to sell their House bearing no. 8-1/23, New Friends Colony, New Delhi and property at 4th Floor, Gopal Das Tower, Connaught Place, New Delhi, vide a written Agreement for which the Complainant made a payment of 1,50,00,000/-. 4. In July, 2009, the Agreement was cancelled vide Cancellation Agreement dated 04.07.2009, since the Respondents suddenly and arbitrarily refused to honour the Agreement to Sell on the pretext that the value of the properties had increased. The parties entered into Cancellation Agreement dated 04.07.2009 wherein it was stipulated that the accused persons had returned the amount of Rs.3 crores vide two Cheques dated 30.07.2019 and 11.08.2019 for Rs. 1.5 crores each. 5. These cheques were subsequently replaced on 22.12.2010 by the Respondents in respect of which Letter dated 22.12.2010 was executed and fresh Cheque No.200337 for Rs. 1.5 crore was issued as a consolidated instrument for return of the money to the Complainant. However, on presentation the cheque was dishonored for "i....
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.... held that the impugned cheque was issued in respect of existing legal liability. Accordingly, Complaint under Section 138 was dismissed vide Order dated 23.02.2019. 13. Aggrieved by the dismissal of the Complaint, the present Appeal has been filed. 14. The grounds of challenge are that under Section 139 read with 118 NI Act where the cheque has been issued under the signatures of the drawer, there is a presumption that the holder of the cheque has received it in discharge of whole or part of the debt or liability. 15. Reliance has been placed on Bir Singh v. Mukesh Kumar, Criminal Appeal Nos. 230-231 of 2019, decided on February 6, 2019 wherein the Apex Court had observed that the existence of a fiduciary relationship between the payee of a cheque and the drawer, would not disentitle the payee to the benefit of presumption under Section 139 NI Act. The burden of proof with respect to the nature of the Instrument lies on the accused and in the absence of any reasonable cause, it should be believed that the Instrument was given in discharge of a debt and liability. 16. It is asserted that the Learned MM has failed to appreciate the admissions of the Respondents. There wa....
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....e Complaint. It is submitted that the impugned judgment be set aside and the Respondents be convicted under 138 NI Act. 23. The Respondents in their detailed Reply have submitted that the Complainant alleged that he had advanced a sum of Rs. 1.50 crores out of which Rs. 75 lac was given by cheque and Rs. 75 lacs in cash, but no evidence has been brought on record in regard to the alleged payment of Rs. 75 lakhs in cash. Furthermore, the Complainant admitted in his cross-examination that he did not remember if this alleged loan of Rs. 75 lakhs was reflected in the ITR Returns. Moreover, the Complainant had alleged that there was an Agreement to Sell in respect of two properties of the Respondent, entered in November, 2008 but the not produced the Agreement to Sell on the pretext that the original Agreement was torn after the execution of subsequent documents. 24. The Complainant has relied on the Cancellation Deed Ex.CW1/DX5 claiming it to be executed in July, 2009, but is an undated document. This alleged Cancellation Agreement of July, 2009 was filed only on 7th February, 2013 and not with the Complaint filed in February, 2011. This document does not contain any reference to....
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....ly discharged by the Respondents and that it was for the Appellants to have prove their case of there being legally enforceable debt or liability. 31. Reliance has been placed on M.S. Narayana Menon @ Mani vs. State of Kerala & Anr, (2006) 6 SCC 39, M/s. Kumar Exports v. M/s. Sharma Carpets 2009 (2) SCC 513, Basalingappa vs. Mudibasappa, Criminal Appeal No.636 of 2019 decided on 09.04.2019. 32. It is therefore, submitted that the present Appeal is without merit and may be dismissed. Submissions heard and Record Perused. 33. The present Complaint under Section 138 NI Act pertains to Cheque No. 200337 for Rs. 1.5 crore dated 22.12.2010 which on presentation by the Appellant, was dishonoured on account of 'insufficiency of funds'. 34. The Respondents have admitted their signatures on the impugned cheques, but a defence was setup which was reiterated by Respondent No. 2, Sh. R. L. Verma; Respondent No. 3 Dhruv Verma and Respondent No. 4 Ms. Aruna Verma, in their respective testimony that there was no existing debt or liability underlying the said cheques, which were only given as a security. 35. Under Sections 139 and 118 NI Act, once the signatures on the cheques hav....
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.... rested on two documents, viz. Agreement to Sell of November, 2008 and Cancellation Agreement dated 04.07.2009 CW1/DX5. However, these aspects have emerged only in his cross-examination, by the Respondents. 41. The CW-1 Kushal K. Rana in his cross-examination had explained that the Complainant-Company is in the business of property transactions with the Respondents since 2008. The Respondents had agreed to sell the property bearing No. A-1/23, New Friends Colony and the property at 4th Floor, Gopal Dass Tower, Connaught Place, New Delhi, for which an Agreement to Sell was signed between them in November, 2008 and Rs. 1.5 crores was accordingly, paid to the Respondents. 42. Respondent No. 3-Dhruv Varma in his testimony has refuted this Agreement to Sell of November, 2008. He explained in his examination-in-chief, that there was a separate Agreement executed in 2009 with respect to the property on the 9th Floor of Gopal Das Building, which was an entirely different transaction, which had no concern whatsoever with the alleged Agreement in respect of property bearing No. A-1/23, New Friends Colony and 4th Floor, Gopal Dass Tower, Connaught Place, as has been asserted by the Comp....
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....5 crores which had been given as advance with respect of the aforesaid two properties. 46. Pertinently, in this Agreement of Cancellation Ex CW1/X-5, there is no mention whatsoever of the two properties or the Agreement to Sell of November, 2008. It states that the Second Party i.e. the Complainant had agreed to purchase certain properties belonging to the Respondents and had made a payment of Rs. 1.5 crores to the first party, out of which Rs. 75 lacs were paid vide Pay Order dated 28.11.2008 and a sum of Rs. 75 lacs was paid in cash to the first party i.e. the Respondents who expressed their inability to sell the properties and offered to return the total sum of Rs.3 crores towards repayment, interest and compensation for loss on account of increase in value of properties. Two cheques dated 30.07.2009 and 11.08.2009 for a sum of Rs. 1.5 crores each, were accordingly issued to discharge the Respondents of their liability. 47. The Respondents have asserted that the claim of the Complainant that he paid a sum of Rs. 1.5 crores towards the cancellation of Agreement to Sell, in addition to return of Rs. 1.5 crores which had been given as advance with respect of the aforesaid two....
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....s. 75 lacs on 17.12.2012. He explained that the balance Rs. 75 lacs was paid in cash. 53. The Complainant has however, not produced any document to show that he had paid Rs. 75 lacs in cash. He has also failed to disclose the source of procuring this money including withdrawal of the money from the bank. The ITR of the year 2008-09 does not reflect any entry of Rs. 1.5 crores, to the respondent. This assumes importance as neither the assertion of Rs. 75 lacs nor of cash payment is corroborated by the ITR; and also in view of the assertion that the transaction pertained not to the two properties but was in relation to third property. 54. The Complainant has failed to prove an outstanding liability of Rs. 1.5 Crores and that too, under the Cancellation Agreement. 55. The defence of the Respondents as deposed by Respondent No. 3-Dhruv Varma in his testimony as CW-1(sic) DW1 as well as other two defence witnesses, was that there were two transactions with the Complainant by which a Loan of Rs.1 Crore was taken. The first transaction was of Rs.25 lacs, which was repaid by way of Pay Order. The second transaction was of Rs. 75 lacs that were also given by Pay Order, sometime in ....
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....in normal course no cheque is signed by the Karta as well as members of HUF, especially when the cheque pertained to the HUF account. 61. There is some merit in this contention of the Respondents. It may be noted that the impugned cheque has been issued from the account of R.L. Varma and Sons (HUF) of which R.L. Varma/Respondent No. 2 was the Karta. It is a settled law which needs no reiteration that when the account is of an HUF, then it is the Karta who alone is authorised to sign the cheque and it need not be signed by all the members of HUF. Pertinently, the cheque in question bears the signatures of R.L. Varma as Karta, but is also signed by Dhruv Varma and Aruna Varma, the other two members of HUF. It has been rightly pointed out that no cheque of HUF need be signed by all the members of HUF but all the Respondents were compelled to sign the cheques under coercion by the Complainant. It is a significant aspect which again serves as support to the defence as setup by the Respondents. 62. The defence of the Respondent may not be convincing as the Cheque in question, was admittedly issued by the Respondents. It is not comprehendible that Cheques of Rs.3.5 Crores would be i....