... 1 ... IN THE HIGH COURT OF BOMBAY AT GOA. CRIMINAL APPEAL NO.57 OF 2006 Shri Shyamsundar Babu Naik Dessai, major ina ge, business, r/o House No.1236, Ponsulim, Canacona, Goa. ... Appellant v e r s u s 1. Shri Baban Anant Naik, s/o Anant Naik, major in age, businessman, r/o 'Anant Niwas' Dr. Dada Vaidya Road, Panaji, Goa. 2. S T A T E Through P.P. ... Respondents Mr. A. D. Bhobe, Advocate for the Appellant. Mr. A. Naik, Advocate for the Respondent no.1. ... 2 ... CORAM: R. C. CHAVAN, J. DATED: 21st July, 2008. ORAL JUDGMENT: This appeal is directed against the appellate judgment of the learned Sessions Judge, South Goa, Margao whereby the learned Sessions Judged allowed the appeal filed by the respondent and set aside the conviction and sentence imposed upon the respondent herein by the learned Judicial Magistrate, First Class, Canacona. 2. The appellant entered into an agreement of sale to sell 30625 sq.mtrs. property at the rate of Rs.90/- per sq.mtr. for total consideration of Rs.27,56,250/- to the respondent/original accused. There is no dispute that on 10.11.1995 an agreement to this effect was executed by the parties. Apart from appellant, there are other owners of the ... 3 ... property who have signed the agreement simultaneously. The appellant had executed a power of attorney in favour of the respondent on the same day. Under the agreement, the respondent had paid a sum of Rs.2,00,000/- at the time of the execution of the agreement and was to pay a further sum of Rs.10,00,000/- within a period of 3 months from the date of agreement. However, it is not in dispute that the respondent had paid Rs.7,90,000/- against Rs.10,00,000/- which was required to be paid leaving a balance of Rs.17,66,250/- towards the price settled in the agreement. It is likewise not in dispute that the respondent had issued a cheque in this sum. The cheque was not presented as desired by the respondent. On 20.12.1999, the respondent issued another cheque for Rs.17,66,250/- in the name of the appellant, drawn on Centurion Bank, Panaji branch. The appellant presented the cheque for realization with his bank i.e. Mapusa Urban Co-operative Bank, Canacona branch. However the same was returned by the bank dishonoured on 24.5.2000. On 25.5.2000, the appellant issued ... 4 ... a notice to the respondent indicating that the cheque had been dishonoured and called upon the respondent to pay the said amount of Rs.17,66,250/- alongwith notice charges within 15 days of receipt of the notice. It is not in dispute that this notice was duly received by the respondent and that he failed to pay the amount demanded by the notice. The appellant then filed a complaint before the Judicial Magistrate, First Class, Canacona on 12.06.2000. 3. Upon respondent's appearance and his pleading not guilty, the trial commenced at which the appellant examined himself and tendered necessary documents to prove his case. The respondent was examined under section 313 of the Code of Criminal and also chose to enter the witness box in his own defence. After considering the evidence tendered, the learned Magistrate held the respondent guilty of the offence punishable under section 138 of the Negotiable Instrument Act and proceeded to sentence him to undergo simple imprisonment for one year and pay compensation of Rs.22,00,000/- and to suffer ... 5 ... further imprisonment for 3 months in case of default of payment of compensation. 4. Aggrieved thereby, the respondent took an appeal before the learned Sessions Judge, Margao who held in favour of the respondent and quashed and set aside the entire sentence inflicted upon the respondent, which has propelled the appellant to this Court. 5. I have heard the learned counsel of the appellant/original complainant as also the learned counsel for the respondent/original accused and with the help of of both the learned counsel, I have gone through the entire record of the learned Trial Court as well as the appellate Court. 6. The learned counsel for the appellant submitted that the cheque for Rs.17,66,250/- issued on 20.12.1999 was for an existing enforceable liability. In any case, he submitted that in ... 6 ... view of the provisions of section 139 of the Negotiable Instrument Act, it has to be presumed that the cheque was issued for discharge of debt or liability. The learned counsel for the respondent submitted that in the notice dated 25.5.2000, the complainant himself stated that the cheque of Rs.17,66,250/- was issued as a security with instructions not to submit the same. He therefore, submitted that the learned Sessions Judge rightly concluded that the cheque was issued only for security and not for discharge of debt or any legally enforceable liability. 7. A bare reading of the notice would show that earlier a cheque in the sum of Rs.17,66,250/- was indeed issued as a security as stated in paragraph 5 of the notice, which had been taken back by the accused. Paragraph 8 of the notice refers to the cheque (which was dishonoured) which was issued by the respondent with request to present the same “a little bit late”. The learned counsel for the appellant therefore, rightly ... 7 ... submitted that this cheque was not meant to be a security but was meant to be presented a bit later, obviously for payment. 8. Apart from this, the statement of the respondent under section 313 of the Code of Criminal Procedure itself shows that he had admitted the various payments made as also the fact that after adjusting the payment made, a balance of Rs.17,66,250/- was due. He admitted having issued a cheque on 20.12.1999 which has been dishonoured. In response to question 25 i.e. whether the respondent wanted to say anything about the present matter, the respondent categorically stated that as the complainant pressed him for payment of the amount in the agreement, he has “paid Rs.17,66,250/- in cheque to the complainant.” Thus the respondent has himself admitted having paid by cheque which was subsequently dishonoured. This payment by cheque cannot be called issuance of a cheque merely by way of security. ... 8 ... 9. In his elaborate defence evidence, the respondent has come out with a story that the complainant was in need of money which the respondent provided by borrowing the same at a rate of 10% per month from some money shark known as Babush. The respondent further stated that since the money borrowed was not repaid, Babush stated charging double interest and was pressing the respondent. Thereafter the respondent was persuaded to purchase a plot of property. At one place, the respondent goes on to state that the respondent was persuaded to purchase the property as security. Now if he purchased the property as security, it is not clear as to what made him to act upon the power of attorney executed and mortgage the property which led to proceedings by the bank. These facts have been suggested to the respondent in the course of his cross examination and he was also shown the items of news pertaining to this property appearing in the newspapers. Even if for a while these news items are excluded from ... 9 ... consideration, since the learned counsel for the respondent himself pointed out that the agreement was for development and strenuously attempted to canvass a case that the transaction was, in fact, not complete at all, the story of purchasing the property as security for loan taken from Babush appears to be an eye wash. The transaction apparently soured up leading to default in payment by the accused. Cat came out of the bag in the first few lines of the cross examination of the accused on 10.10.2002 (at page 106 of the paper book), where the accused stated “Thereafter after execution of agreement of sale, I cam to know that the said prop(erty) was agreed to sell (be sold) to me was watchard (orchard ?) zone. Thereafter I informed complaint (complainant) that said plot of land is in watchard (orchard ?) zone and I am unable to do anything in the said prop(erty).....” 10. The respondent admitted in his cross examination that he had paid Rs.7,90,000/- to the complainant and his ... 10 ... family, apart from Rs.2,00,000/- paid at the time of agreement, and that Rs.17,66,250/- remained to be paid to the complainant towards the said agreement. He also agreed that he had issued cheque for Rs.17,66,250/- to the complainant and that he was liable to pay the said amount to him. It is not that the respondent had come out with such admissions at an unguarded moment in his evidence. The learned counsel for the appellant pointed out that respondent was aware that he had to pay the amount to the appellant and had filed an application before the Trial Court seeking time to make the payment in part. This application at Exh.13 is signed by respondent. In the face of this, the respondent chose to claim that the cheque was issued as security. He should not have indulged in such a jugglery and the learned Sessions Judge should not have been swayed by such statements. 11. The learned counsel for the respondent submitted that since the cheque was issued on 20.12.1999 i.e. after the ... 11 ... period of limitation, it was to secure a time barred debt. The learned counsel for the appellant drew my attention to the judgment of the High Court of Bombay decided at Nagpur bearing Criminal Application No.2032 of 2007 delivered on 4.10.2007 on to the question whether a cheque could have been issued in discharge of a time barred liability. The facts in the case are slightly different. In that case loan was taken on 1.3.1995 and a cheque dated 1.3.1999 was issued towards repayment. In the interregnum, deposit receipt issued by accused was renewed by him twice, in 1996 and 1997. All the same the learned counsel submitted that the judgment would be an authority for holding that a cheque could be issued to pay a time barred debt. Section 25 of the Contract Act makes an agreement without consideration void unless it falls in one of the three clauses. Clause (3) which is relevant for our purpose reads as under: 25. An agreement made without consideration is void unless –(1).............. (2) ................ ... 12 ... (3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation or suits. The question therefore, is whether a cheque would amount to a promise made in writing to pay a debt which is barred by limitation. 12. In Mr. Narendra V. Kanekar v. The Bardez Taluka Co-op. Housing Mortgage Society Ltd. and anr. reported in 2006 (3) ALL MR 673, the debtor had taken loan on 5.11.1996. On about 30.10.2003, the debtor executed an affidavit/undertaking admitting the said loan amount and confirming the outstanding balance. The debtor then issued 3 cheques dated 30th October, 30th November and 30th December, 2003 for various amounts. In the context of this fact situation, ... 13 ... this Court considering the effect of section 25 (3) of the Contract Act, held that such cheques could be termed as given in discharge of a legally enforceable debt. While so observing the learned Single Judge of this Court had also said “Mere giving a cheque, without anything more, will not revive a barred debt, because cheque has to be given, as contemplated by the explanatory in discharge of a legally enforceable debt.” It is not necessary to consider this sentence as laying down the law that a cheque in itself would not revive a time barred debt, since the learned Single Judge was not required to consider whether mere giving of a cheque would be enough. In the case which was being decided, there was an affidavit as well. Therefore, since the learned Single Judge did not have an occasion to decide whether giving of a cheque alone will revive the barred debts or not, this observations need not be held as conclusive of the issue. 13. A cheque may give rise to enforceable liability in two ... 14 ... ways. If a cheque is issued as acknowledgment before the period of limitation for recovery of the earlier debt comes to an end, it would mark to the commencement of a fresh period of limitation. A cheque could also be issued for a liability which a drawer of the cheque acknowledges as existing, and desires to be bound by it. By issuing instruction to his banker in the form of a cheque, he would make a promise to pay a time barred debt to be discharged on behalf of the drawer by his bankers. Had the law snapped the link between “drawer” and “payee” and made only the “drawee” liable on a negotiable instrument like cheque it would have been open to say that a cheque does not represent a promise to pay to “payee” since the law makes the “drawer” and not the “drawee” liable. On the other hand Section 30 of the Negotiable Instrument Act spells out liability of drawer towards holder upon dishonour of a bill of exchange and a cheque is by definition under section 6, a bill of exchange. Section 5 of the Negotiable Instrument Act defining and describing a bill of exchange also refers to a “promise” or an ... 15 ... “order” to pay. A cheque is a promise to pay an amount and hence gives rise to a fresh contract and fresh set of obligation to pay the amount. In view of this, the arguments that payment under a cheque in respect of time barred obligation can not be enforced has to be rejected. 14. The learned counsel for the respondent next submitted that the complainant is still the owner of the property and the transaction is yet to be completed. The learned Sessions Judge has also referred to this line of argument. The learned counsel for the appellant points out that the complainant is owner only on paper. After having executed the agreement dated 10.11.1995, which, among other things recites that the respondent would have authority to undertake development of the property and also enter into agreements of sale of plots in the said property, the complainant becomes owner only on paper. If the respondent indeed believes that he is not the owner of the property and that the appellant happens to be the ... 16 ... owner, the respondent should not have dabbled with the property. 15. If according to the respondent, the transaction evidenced by agreement dated 10.11.1995 is not yet complete and the mutual obligations of the parties are still enforceable, it is not clear as to how the respondent can raise a bogey. of dishonoured cheque having being issued in respect of a time barred debt. It amounts to blowing hot and cold in the same breath. While there can be no doubt that the agreement settled time table for payment of the amounts due under the agreement, namely 3 months and 9 months from the date of agreement, which would take probable date of last payment to 10.11.1996, it cannot be over looked that in transaction pertaining to immovable property, time cannot be of essence. It would not be open to a purchaser to say that time for making payment has lapsed and he is discharged from the obligation to pay the same. The limitation in such cases would start from ... 17 ... refusal to perform the obligation under the contract. The facts disclosed would show that there has been no refusal by the respondent to perform his obligation of paying the amount due. On the other hand, as the forgoing discussion would show that he has time and again acknowledged that he was liable to pay Rs.17,66,250/- to the appellant. 16. In any case, it is clear that the respondent has raised all sorts of contentions claiming that he borrowed the amount for the appellant from money sharks, that the liability grew because the money was not repaid, that since this is a development agreement, the transaction is incomplete, that the appellant could enforce the agreement in appropriate civil forum etc. It is not necessary to go into these aspects in this proceeding. The question is limited whether the respondent is required to discharge liability undertaken by cheque dated 20.12.1999, and it is clear from the respondent's own admission that he acknowledged that he has to pay Rs.17,66,250/- to the ... 18 ... complainant. 17. The learned counsel next submitted that the property was owned by several owners and therefore, the complainant alone was not entitled to receive the entire price. For raising such contention, the respondent should have tendered some document that he has paid the money to other owners independently, or that other owners do not support the complainant. No such defence is taken. In any case a payee of a cheque can initiate such a proceeding without joining others. 18. It is unfortunate that the learned Sessions Judge got influenced by several factors which were strictly not relevant for deciding the questions before him. For instance, in paragraph 5 of the judgment, he observed that copy of the agreement filed was incomplete, not containing pages 5 and 6. Though these pages did not contain any clause which would have a bearing on the matter, the learned Sessions Judge went on to ... 19 ... castigate the learned Magistrate by observing that “this shows clear non application of mind by the learned Trial Court” in exhibiting incomplete document. He did not stop at that, he went on to observe that the said agreement of sale had been notarized by the Public Notary, Shri Gopal Tamba, “even without verifying as to whether the document was complete in itself. This shows that the Notary Public had attested the said document in a very casual and mechanical manner.” It is unfortunate that the learned Sessions Judge made these observations when the Notary Public was not before him and without carefully examining what was notarized. Attestation of the Notary Public is not as a true copy of the original, but the Notary has attested the execution of the agreement itself. There is nothing to show that when notarized, the original was incomplete. Copy filed was not attested by the Notary. In any case, in face of the fact that parties had no dispute about clauses in the agreement, missing pages was an irregularity which did not go to the root of the matter. This agreement only provided ... 20 ... the background in which liability was created. 19. To sum up, on respondent's own admission in his statement under section 313 of the Code of Criminal Procedure, as also his evidence on oath, he owed Rs.17,66,250/- under the agreement dated 10.11.1995. He admitted having paid this amount by the cheque which was dishonoured. In view of this , the learned Sessions Judge could not have held that the cheque was not for legally enforceable liability, or it was only issued by way of security and was therefore, thoroughly unjustified in up-setting the judgment of the learned Trial Court. 20. In view of this, I allow the appeal and set aside the judgment of the learned Sessions Judge and restore that of the learned Magistrate. The respondent shall surrender to his bail to serve his sentence. The Registry to issue appropriate warrant. 21. The respondent stated that he is 67 years old ... 21 ... suffering from multiple deficiencies, as also that he has undergone open heart surgery and therefore seeks 10 days' time to surrender. Learned counsel for the appellant has no objection. Since dictation of the judgment itself was concluded at 4.25 p.m. and copy of the judgment could be available to the respondent in a day or two, a week's time is granted to surrender. R.C. CHAVAN, J. lh/.