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2006 (11) TMI 636 - HC - Indian LawsSection 138 of the Negotiable Instruments Act, 1881(Act) - Dishonour of cheque - insufficiency of funds - discharge of legally enforceable debt or a security cheque - Section 23 and 65 of the Indian Contract Act, 1872 - illegal gratification - void agreement - HELD THAT:- A review of the legal position with regard to the scope and ambit of the said Section 65 indicates that it would not apply to cases falling u/s 23. In other words, agreements which are void ab initio and their illegality is known to the parties at the time of execution would not fall within the purview of Section 65. An agreement of the kind mentioned in illustration (f) to Section 23 and the one at hand being void ab initio and to the knowledge of the parties would also not benefit from the equitable principle of restitution embedded in Section 65. So, neither the sum of 1,000 rupees mentioned in the said illustration (f) nor the sum of ₹ 80,000/- paid in the present case is recoverable in law. If the facts of the present case are examined, it would be immediately clear that it does not fall in any of these three classes of cases. The first class of cases deals with situations or agreements where the object is unlawful. In the present case - securing a job in the Haryana Police for the nephew - is not an unlawful object. What is unlawful is the consideration paid for it. The consideration having already been paid, the illegality stood completed on the part of the respondent No.1. And, since the respondent No.1 would have to rely upon this illegality to make out his claim or enforce the same, this case does not also fall within the third class of cases mentioned above. This leaves us with the second class of cases where the parties are not in pari delicto. In the present case neither party is a victim of exploitation. Both had voluntarily and by their free will joined hands to flout the law. Therefore, in terms of the Supreme Court decisions in Sita Ram v. Radha Bai [1967 (10) TMI 70 - SUPREME COURT], themselves, the parties being in pari delicto, the doctrine would apply and the sum of ₹ 80,000/- could not be recovered in a court of law. Meaning thereby that there did not exist any legally enforceable debt or liability for the discharge of which it could be said that the cheque in question was issued. Consequently, Section 138 of the said Act would not be attracted. This legal position was not appreciated by the courts below and it is for this reason that they fell into error. That being the case, the conviction of the petitioner is set aside. It is, however, made clear by the learned Counsel for the petitioner that the sum of ₹ 1 lac, which had been deposited pursuant to the orders by the court below, has already been withdrawn by the respondent No.1 and that he would not be pressing for its return. The learned Counsel for the petitioner also submits that to maintain his bona fides, he would be paying a further sum of ₹ 20,000/- within two months to the complainant/respondent No.1. He submits that the said sum will be deposited in the trial court, which the complainant/respondent No.1 may withdraw immediately thereafter. With these observations, the revision petition is allowed. The petitioner is acquitted. However, the petitioner has already paid a sum of ₹ 1 lac to the complainant/respondent No.1 and has undertaken to pay a further sum of ₹ 20,000/- to the complainant/respondent No.1 within two months by depositing the same in the trial court, which the complainant/respondent No.1 may withdraw thereafter.
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