TMI Blog2015 (9) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... t financial position. Advance cheques had been issued towards payment of rent by the respondent/lessees. The respondents continued to remain tenants and incurred the liability to pay rent month to month. The advance cheques issued towards payment of rent when deposited for realization of the rent for the said period were dishonoured upon presentation. The respondent/lessees incurred the liability to pay the rent as they continued to retain possession even though the same had been sealed by the municipal authorities. Thus, reliance placed on Indus Airways (2014 (4) TMI 464 - SUPREME COURT) by the learned MM is completely misplaced and this is yet another serious error of law found in the impugned judgment. - Impugned order is set aside - Decided in favour of appellant. - Crl. A. No.679/2015 - - - Dated:- 1-7-2015 - MR. VIPIN SANGHI, J. For The Appellant : Mr. K. N. Popli Mr. Mohit Popli, Advocates. For The Respondent : Mr. Mr. Juggal Wadhwa, Mr. Rishabh Wadhwa and Mr. Parth Kaushik, Advocates for R-1 2. Mr. Rajeev Kumar and Mr. Saurabh Kumar, Advocates. JUDGMENT : 1. The present appeal is directed against the common judgment dated 10.07.2014 passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n addition to that, the accused/ lessee also issued 12 post dated cheques qua each lease agreement to each complainant/ lessors as advance rent, totaling 60 cheques for the period of 01.10.2008 to 30.09.2009. The said cheques were handed over to each of the complainants at the time of execution of each of the lease agreements i. E. on 18.07.2008 in pursuance of Clause (4) of the lease agreements-which are all having identical terms and conditions. Clause 4 of each of the lease agreements, insofar as it is relevant reads: the lessee has also submit 12 post dated cheques at the time of execution of this lease deed as advance for monthly rent . Each of the cheques were drawn for the amount of ₹ 91,300/- (After TDS deduction on rent of ₹ 1,10,000/-). Of these 60 cheques, 47 got dishonoured upon presentation, leading to filing of 47 separate complaints qua each dishonoured cheque. The details of the complaint, wherefrom the present appeal arises, are as follows: CC No. Complainant Cheque dated Cheque No. 76/01 Sangeeta Batra 06.04.2009 017198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party conduct, and that the parties were under an obligation to perform their part of the contract. Finally, the learned MM considered the issue whether the cheques in question had been issued, not in discharge of a subsisting liability, but as advance/security cheques. 8. On this aspect, the learned MM held that the rent becomes due or accrues on the utilization of the premises for the purpose for which it was taken. Since the premises was sealed, it could not be utilized by the respondent for the purpose of running a restaurant. The cheques in question were advance cheques and were issued prior to the crystallized liability having arisen. Reliance was placed on the judgment of the Supreme Court in M/s Indus Airways Pvt. Ltd. vs M/s Magnum Aviation Pvt. Ltd., IV (2014) SLT 321, and in particular on the following extract from the said judgment: 13. The explanation appended to Section 138 explains the meaning of the expression debt or other liability‟ for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not surrendered, merely on account of the sealing of the leased premises, the obligation to pay rent did not get suspended or ceased. Whether, or not, the respondents were able to use the premises for the intended purpose, namely, to set up a restaurant, was not relevant or material. Learned counsel submits that when the premises was let out by the appellant along with the other four sisters, there was no notice by the Municipal Corporation pending. 12. Learned counsel submits that the building was booked vide letter dated 17.10.2008, whereas the premises had been leased to the respondent on 18.07.2008. Learned counsel submits that the building was not sealed for want of completion certificate and that the said sealing had taken place on account of unauthorized construction. It was booked on 17.10.2008 for excess coverage of basement, ground floor, first floor and additional second floor. It was again booked on 20.06.2009 for unauthorized construction of basement, ground floor, first floor, second floor and third floor. Learned counsel has referred to the testimony of DW-1, Sh. S. K. Gupta, A. E. (Building), SDMC, West Zone, New Delhi and in particular to his cross examination r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, if necessary, from the concerned authority/ department at his own costs and that the Lessee shall get the same renewed from time to time. 14. Learned counsel submits that the respondent/accused undertook unauthorized construction of the third floor between the first booking-which took place on 17.10.2008, and the second booking-which took place on 20.06.2009, when the premises was already leased out to the respondents. Learned counsel submits that DW-1 S. K. Gupta admitted that as per Master Plan 2021, the property in question, which is on Najafgarh Road is permitted for commercial use and can be used commercially for running a restaurant. He also admitted that the complainant had paid the conversion charges vide receipts dated 19.06.2008 and 30.06.2008. 15. Learned counsel submits that, in any event, the respondents by opting to hold on to the lease premises even after its sealing, and not surrendering the lease, incurred the liability to pay the rent. 16. On the other hand, learned counsel for the respondent submits that the appellant and the other co-owners were responsible for the sealing of the premises. In this regard, clause 7(b) of the lease deed Ex. CW-1/DA i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance is placed on the judgment of the Supreme Court in Sanwat Singh Ors. v. State of Rajasthan, AIR 1961 SC 715, wherein the Supreme Court held that if the trial court has acquitted the accused, the appellate court shall not take a different view unless the finding is such that no reasonable person will come to that conclusion. The Supreme Court also referred to the decision of the Privy Council in Sheo Swarup v. King Emperor, LR 61 IA 398, wherein the Privy Council had observed: the High Court should and will always give proper weight and consideration to such matters as (1) the views of the trial Judge as to the credibility of the witnesses, (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial, (3) the right of the accused to the benefit of any doubt, and (4) the slowness of an appellate court in disturbing a finding of fact arrived at by a Judge who had the advantage of seeing the witnesses . 21. Mr. Wadhwa has also placed reliance on the judgment of this Court in Virender Singh v. Laxmi Narain Anr., 135 (2006) DLT 273, wherein this Court invoked the maxim Pari deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... livered by us to the complainant vide letter dated 27.03.09 vide Ex DW-2/C-2, wherein we called back our old cheques. 25. Since the respondents have urged that this Court should not interfere with the judgment of acquittal in the present appeal, I may refer to the judgment of the Supreme Court in Ghurey Lal v. State of U. P., (2008) 10 SCC 450. In this decision, the Supreme Court after considering several earlier decisions, laid down the guidelines to be followed by the High Courts and other appellate courts if the court is inclined to overrule or otherwise disturb the trail courts finding of acquittal. The relevant extract from this decision reads as follows: 70. In light of the above, the High Court and other appellate courts should follow the well settled principles crystallized by number of judgments if it is going to overrule or otherwise disturb the trial court's acquittal: 1. The appellate court may only overrule or otherwise disturb the trial court's acquittal if it has very substantial and compelling reasons for doing so. A number of instances arise in which the appellate court would have very substantial and compelling reasons to discard the tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiated under the Delhi Rent Control Act, 1958, inter alia, on the ground of non payment of rent by the tenant. The Rent Controller passed an order under Section 15(1) of the said Act, directing deposit of arrears of rent and directing payment of interim rent from month to month. During pendency of the eviction proceedings, a part of the tenanted premises was destroyed by fire. The tenant did not deposit the interim rent fixed by the Controller. Consequently, the landlord moved an application under section 15(7) of the said Act praying that the defence of the tenant be struck out. The tenant/appellant then contended that the landlord was not entitled to claim rent as part of the premises had been destroyed by fire, and the landlord had refused-either to reconstruct the destroyed premises, or permit the appellant/tenant to do so. The application of the landlord under section 15(7) was rejected by the Rent Controller. However, in first appeal, the Rent Control Tribunal allowed the appeal of the respondent/landlord. Consequently, the tenant preferred a second appeal before the High Court. 29. This Court rejected the appellants/tenants submission that it had the right to suspend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to his Lesser the possession which he obtained from the latter at the time of the lease. he cannot rid himself of his obligations under the lease. His holding to the possession into which he was inducted by his Lesser will estop him from disputing the right of his Lesser to evict him and to recover possession from him. 9. To the same effect are the cases reported in AIR1966All225 and in re- Alanduraippar s case, AIR1963Mad94 , There cannot be any unilateral suspension of rent. The tenant continues to be liable for the whole of the rent until he obtains an order from the Court or agreement from the landlord for reduction of the proportionate part of the rent. (See. Kishan Chand v. Rainesh Chander and others 1969 AIRCJ 839 a decision of Deshpande J. of this Court). Therefore, where an order for deposit of rent has been made under sub-section (1) of section 15 of the Act, the tenant cannot unilaterally suspend the payment or deposit of rent as ordered by the Controller and if he does so he undoubtedly commits a breach of the order of the Controller which will entitle the tenant to ask for an order under sub-section (7) of section 15 of the Act . [emphasis supplied ] Fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrelevant for the present purpose, as to who was responsible for the sealing of the premises on both the occasions. Even if one were to proceed on the assumption that the appellant and the other co-owners had made excess coverage on the basement and upper floors of the leased premises even prior to the grant of the lease, and it was that excess coverage which led to the sealing of the leased premises, that would not provide justification to the respondent/tenants to deny their liability to pay the rent, if they choose to continue to hold the leased premises as tenants. 32. The lease agreement in clause 15 provides that: 15. That the Lessee has verified and has fully satisfied itself regarding the soundness, nature, extent and quality of the construction, structure, fixtures and fittings of the building, purpose for which the Demised Premises can be used etc. and has also verified and fully satisfied himself about the soundness of the title of the Lessor. Hereafter, no claim and/ or demand of any nature whatsoever on any ground shall lie upon the Lessor. 33. The respondent/lessees took the premises on lease with open eyes. Even if it were to be accepted for the sake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmitted to be sustained. 38. The decision in Shreyas Agro (supra) has no application in the facts of the present case. This is for the reason that the accused in this case had admitted the principal amount due but, however, disputed the interest claimed and stated that the amount reflected in the cheques was not the legally enforceable liability. The amount had been filled up by the drawee on a blank signed cheque. The Court held: 5. . . In the case of a signed blank cheque, the drawer gives authority to the drawee to fill up the agreed liability. If the drawee were to dishonestly fill up any excess liability and the extent of liability if it becomes bona fide matter of civil dispute in such case, the drawer has no obligation to facilitate the encashment of cheque. In the instant case the reply Ex. P. 40 discloses that long before presentation of cheque, the extent of liability was disputed but ignoring the objection, the company filled up the cheque for an amount not admitted by the drawer. If the accused were to prove that there is a bona fide dispute with regard to extent of liability, the dishonour of cheque under such circumstance does not attract prosecution Under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crepancies in his books of accounts. The complainant did not bring on record any material to show that the parties had transactions, other than those which had been entered into through the Cochin Stock Exchange. The Supreme Court held that the so called acknowledgement, as correct, of some of the statements of account was not enough since, admittedly, there was no acknowledgement in respect of five statements of accounts. After examining the evidence, the Supreme Court observed as follows: 26. In view of the said error of record, the findings of the High Court to the effect that the appellant had not been able to substantiate his contention as regards the correctness of the accounts of Ex. P10 series must be rejected. 33. The Supreme Court then proceeded to delve into Sections 118(1) and 139 of the NI Act which raise a presumption against the drawer of a cheque. In para 52 of the judgment, the Supreme Court, inter alia, observed; .. The appellant clearly said that nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable as probable the cheque therefore cannot be held to have been issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., (2003) 2 SCC 111. 140. Although, decisions are galore on this point, we may refer to a recent one in State of Gujarat and Ors. v. Akhil Gujarat Pravasi V. S. Mahamandal and Ors., AIR2004SC3894 wherein this Court held: ... It is trite that any observation made during the course of reasoning in a judgment should not be read divorced from the context in which they were used. 36. The Supreme Court in Narayana Menon (supra) was not particularly dealing with the issue as to whether, or not, a cheque issued for security or for any other purpose would come within the purview of Section 138 of the NI Act. The observation of the Supreme Court as extracted above cannot, therefore, be understood as laying down a general proposition that a cheque issued as security would not come within the purview of Section 138 of the NI Act in all cases. Such reading of the judgment would go contrary to the express language used in Section 138 of the NI Act, which uses the expression, where any cheque for payment of any amount of money of any debt or other liability ‟. 37. The Karnataka High Court in M/s Shree Ganesh Steel Rolling Mills Ltd. v. M/s STCL Limited, Crimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case. 43. The learned MM has placed heavy reliance on the judgment of the Supreme Court in Indus Airways (supra). This Court had the occasion to consider Indus Airways (supra) in another recent decision in Credential Leasing Credits Ltd v. Shruti Investments Anr, Crl. Appeal No. 729/2015 decided on 28.06.2015 I may set out herein below the relevant extract from the said decision: 20. It is the observation made by the Supreme Court in Indus Airways (supra) that the dishonoured cheque should be in relation to a debt or other liability subsisting on the date of drawal of the cheque, to be able to maintain a complaint under Section 138 of the NI Act, which is the cornerstone of the legal submission of the respondents/ accused. 21. On a closer scrutiny of the decision in Indus Airways (supra), it appears to me that Indus Airways (supra) has no application to the facts of the present case as the above extracted observations were made in a materially different factual background. I have consciously extracted paragraph 35 from the decision in Suresh Chandra Goyal (supra), wherein this Court has taken note of the settled legal position on the aspect as to how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntain a complaint under Section 138 of the NI Act, the same would not align with the ratio laid down in the earlier decision in Beena Shabeer (supra). 24. As noticed above, in Indus Airways (supra) the Supreme Court was considering the fact situation wherein the purchase order was not executed with supply of the contracted goods and, thus, the cheque issued by the purchaser towards advance payment was held as not covered by Section 138 of NI Act. But what happens, where the purchaser while placing the purchase order issues in advance a post-dated cheque; goods/ services are supplied in terms of the contract, and; the post-dated cheque upon presentation on the due date gets dishonoured. The Supreme Court was not dealing with such a fact situation. Could it be said that, because there was no pre-existing or pre-determined debt or other liability on the date of issue of the cheque by the purchaser (as the goods/ services were supplied only after the issuance of the post-dated cheque), a complaint under Section 138 NI Act would not lie? 25. In my view, it would defeat the object of Section 138 NI Act to hold that the seller/ service provider cannot enforce his right conferre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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