Code of Criminal Procedure, 1973: s.482 – Quashing of complaint – Appellants claiming to be owner of agricultural land entered into an agreement to sell the land to the respondents and received part payment in cash and remaining in cheques – Along with the agreement to sell, appellants executed a General Power of Attorney in favour of respondent – On presentation, cheques were dishonoured for insufficiency of funds – Appellant issued legal notice and thereafter instituted complaints under s.138 NI Act – Respondent filed petition under s.482 for quashing of complaint – High Court quashed the complaint holding that cheques were not issued for creating any liability or debt but for the payment of balance consideration – Held: 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 immovable property, it nonetheless constitutes a legally enforceable contract between the parties to it – A payment made pursuant to such an agreement is a payment of a duly enforceable debt or liability for the purposes of s.138 – Recourse to the jurisdiction of the High Court under s.482 was a clear abuse of process – The question as to whether there was a dispute as contemplated in the agreement to dell 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 s.482 and is a matter to be determined on the basis of the evidence which may be adduced at the trial – The order passed by High Court in petition under s.482 was unsustainable – Negotiable Instruments Act, 1881 – s.138.
Disposing of the appeals, the Court
HELD: The finding of the Single Judge of the High Court is not sustainable 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 enforceable 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 liability for the purposes of Section 138. Moreover, acting on the General Power of Attorney, the respondent entered into a subsequent transaction on 3 August 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. [Paras 13, 14] [502-G-H; 503-A-C]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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