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REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

    CRIMINAL APPEAL NO. 483 OF 2019        (Arising out of SLP(Crl.) No. 4608 of 2016)

RIPUDAMAN SINGH                              Petitioner(s)

                               VERSUS

BALKRISHNA                                   Respondent(s)

  CRIMINAL APPEAL NO. 484 OF 2019        (Arising out of SLP(Crl.) No. 4610 of 2016)

JUDGMENT

Dr. Dhananjaya Y. Chandrachud, J.

Leave granted.

These appeals arise from a judgment of a learned Single

Judge of the High Court of Madhya Pradesh at its Bench at

Indore  dated  31  March  2016.  The  learned  Single  Judge  has

allowed a petition under Section 482 of the Code of Criminal

Procedure, 19731 and quashed the complaints instituted by the

appellants under Section 138 of the Negotiable Instruments Act,

1881.

The appellants are spouses.  Claiming to be owners of

certain agricultural land they entered into an agreement to

sell  dated  28  May  2013  with  the  Respondent.  The  sale

consideration was Rs. 1.75 crores. The agreement records that

an amount of Rs. 1.25 crores was paid in cash and as for the

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balance, two post dated cheques were issued, each in the amount

of Rs 25 lakhs.

The cheques were issued by the respondent in favour of

the two appellants in the present appeals.  The details of the

cheques are as follows:

(i)  Cheque No. 297251 dated 03.06.2013 drawn on

Indusind  Bank,  Indore  for  an  amount  of  Rs.

25,00,000/-  (Rupees  twenty-five  lacs  only)

favouring Ripudaman Singh;

(ii)  Cheque No. 297252 dated 02.07.2013 drawn on

Indusind  Bank,  Indore  for  an  amount  of  Rs.

25,00,000/-  (Rupees  twenty-five  lacs  only)

favouring Smt. Usha.

Together with the agreement, the appellants executed a

General  Power  of  Attorney  in  favour  of  the  respondent.  The

first of the two cheques was deposited for payment.  On 18 June

2013  it  was  returned  unpaid  with  the  remarks  “Insufficient

funds”.  The second cheque dated 2 July 2013 was  returned with

the same remark by the banker, upon deposit.

After issuing legal notices dated 21 June 2013 and 13

August 2013, the appellants instituted complaints under Section

138 of the Negotiable Instruments Act, 1881. Process was issued

by the Judicial Magistrate, First Class.

The  respondent  filed  two  separate  applications  seeking

discharge in the respective complaint cases. Those applications

were dismissed by the Judicial Magistrate, First Class, Indore

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on 3 September 2014.  On 8 October 2014, charges were framed

under Section 138.

The respondent then filed a petition under Section 482

CrPC before the High Court in which the impugned order has been

passed.  While  allowing  the  complaint,  the  High  Court  has

adverted to Clause 4 of the agreement between the parties which

is in the following terms:

“That on the above property of the seller there is no family dispute of any type nor is any case pending in the court. If due to any reason any dispute arises then all its responsibility would remain of the selling party and the payment of cheques would be after the resolution of the said disputes.”

The High Court held that a suit in respect of the land,

Civil  Suit  No.  4-A  of  2012  is  pending  before  the  XIVth

Additional Sessions Judge, Indore since 2 September 2011 in

which the complainants are arraigned as parties.

On this basis, the High Court held that under the terms

of clause 4 of the agreement, the cheques could not have been

presented  for  payment.  The  cheques,  according  to  the  High

Court, have not been issued for creating any liablity or debt

but for the payment of balance consideration.  Holding that the

respondent  did  not  owe  any  money  to  the  complainants,  the

complaint under Section 138 have been quashed.

Assailing  the  judgment  of  the  High  Court,  Mr.  Shyam

Divan, learned senior counsel submits that as a matter of fact,

acting on the strength of the General Power of Attorney which

was issued by the appellants in both the cases, the respondent

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entered into a sale transaction in respect of the same property

on 3 August 2013 for a total consideration of Rs. 3.79 crores.

Hence, it has been submitted that the order passed by the High

Court is manifestly misconceived.

On the other hand, learned counsel appearing on behalf of

the respondent submitted that clause 4 of the agreement to sell

postulated that there was no dispute in respect of the land

which was the subject of the agreement to sell nor was there

any case pending before the Court.   Moreover, it was stated

that if a dispute was to arise, it was the duty of the vendor

to get it resolved and the payment of cheques would be after

the resolution of the dispute.

We find ourselves unable to accept the finding of the

learned Single Judge of the High Court that the cheques were

not issued for creating any liability or debt, but ‘only’ for

the payment of balance consideration and that in consequence,

there  was  no  legally  enforceable  debt  or  other  liability.

Admittedly, the cheques were issued under and in pursuance of

the agreement to sell.  Though it is well settled that an

agreement to sell does not create any interest in immoveable

property,  it  nonetheless  constitutes  a  legally  encforceable

contract between the parties to it. A payment which is made in

pursuance  of  such  an  agreement  is  hence  a  payment  made  in

pursuance  of  a  duly  enforceable  debt  or  liablity  for  the

purposes of Section 138.

Moreover, acting on the General Power of Attorney, the

respondent entered into a subsequent transaction on 3 August

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2013.  Evidently that transaction was after the legal notice

dated 21 June 2013 and hence could not have been adverted to in

the  legal  notice.  Recourse  to  the  jurisdiction  of  the  High

Court under Section 482 was a clear abuse of process.

The  question  as  to  whether  there  was  a  dispute  as

contemplated  in  clause  4  of  the  Agreement  to  Sell  which

obviated the obligation of the purchaser to honor the cheque

which was furnished in pursuance of the agreement to sell to

the vendor, cannot be the subject matter of a proceeding under

Section 482 and is a matter to be determined on the basis of

the evidence which may be adduced at the trial.

For these reasons, we are of the view that the order

passed by the High Court in the petition under Section 482 CrPC

was  unsustainable.  We  allow  the  appeals  and  set  aside  the

impugned judgment and order of the High Court.

However,  we  clarify  that  we  have  not  expressed  any

opinion on the merits of the issues which may arise during the

course of the trial.

The appeals are, accordingly, disposed of.   

Pending application(s), if any, shall stand disposed of.

.............................J.       (DR. DHANANJAYA Y. CHANDRACHUD)

.............................J.       (HEMANT GUPTA)

NEW DELHI  MARCH 13, 2019

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ITEM NO.1               COURT NO.11               SECTION II-A

              S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (Crl.)  No(s).  4608/2016

(Arising out of impugned final judgment and order dated  31-03-2016 in MCRC No. 356/2015 passed by the High Court Of M.p At Indore)

RIPUDAMAN SINGH                                    Petitioner(s)

                               VERSUS

BALKRISHNA                                         Respondent(s)

 WITH SLP(Crl) No. 4610/2016 (II-A)

 Date : 13-03-2019 These matters were called on for hearing today.

CORAM :           HON'BLE DR. JUSTICE D.Y. CHANDRACHUD          HON'BLE MR. JUSTICE HEMANT GUPTA

For Petitioner(s) Mr. Shyam Divan, Sr. Adv. Mr. Santosh Kumar, Adv. Mr. Visushant Gupta, Adv.

                   Mr. Mushtaq Ahmad, AOR                    For Respondent(s)                     Mr. Akshat Shrivastava, AOR                     Ms. Pooja Shrivastava, Adv.

         UPON hearing the counsel the Court made the following                              O R D E R

Leave granted.

The appeals are disposed of in terms of the signed reportable

judgment.

Pending application(s), if any, shall stand disposed of.

(MANISH SETHI)                                  (SAROJ KUMARI GAUR) COURT MASTER (SH)                                  BRANCH OFFICER

(Signed reportable judgment is placed on the file)