TMI Blog2021 (11) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of anything reflecting on the transaction as a loan, which is only an investment made therefor, for which it was agreed to pay ₹ 48,87,200/- [principle amount ₹ 46,00,000/- along with interest for 90 days viz., ₹ 2,87,200/-] and hence, the amount deposited by the private complainant in escrow account is only an investment for the company, for which by way of security a cheque in issue has been issued by the accused and the said cheque does not represented any legal consideration or does not support by any legally enforceable debt and hence, presentation of cheque for encashment itself is under cloud and hence, similar findings rendered by the Lower Appellate Court is justified and the same is hereby confirmed. Appeal dismissed. - Crl. A. No. 461 of 2015 - - - Dated:- 22-10-2021 - R.M.T. Teekaa Raman, J. For the Appellant : M. Mohammed Rafi for R. Joe Anand For the Respondents : M. Anbalagan JUDGMENT (The case has been heard through Video Conference) The defeated private complainant is the appellant herein. 2. For the sake of convenience, the parties are referred as per the ranking before the Trial Court. 3. The complainant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zation given to PW1 is not with reference to cheque case and accordingly allowed the appeal and set aside the conviction and sentence passed by the Trial Court. Hence, the present Criminal Appeal has been preferred by the complainant. 6. Heard both the learned counsels and perused the materials placed on record. 7. The learned counsel for the complainant would contend that as per the terms of Ex. P2/Memorandum of Understanding is clear that the amount has been taken for the purpose of running the business by the accused. The terms and conditions envisages for the payment of ₹ 48,87,000/- which is inclusive of both principal and interest as contained in the terms of Ex. P2/memorandum of understanding and furthermore in the authorization, there is a specific word of authorizing PW1/complainant to initiate the Criminal Proceedings and the word criminal proceedings in the authorization encloses the proceedings under Section 138 of the Negotiable Instruments Act. 8. Mr. M. Anbalagan, learned counsel for the accused would contend that as per Ex. P2/Memorandum of Understanding entered between the complainant and the accused-Company on 22.07.2009, it is only an investment an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and promised that the processing, manufacturing, billing and collection of the sale proceeds shall be completed in maximum period of 90 days from the date of commencement of production and a gross profit of 28.06% was assured. The accused company further promised that they would pay 25% annualized interest at the end of 90 days period to the complainant. 10(c). On these promises made, the complainant company had lend an amount of ₹ 46,00,000/-. They had the funds transferred from their account to the accused company. A sum of ₹ 25,00,000/- was transferred on 30.07.2009 and another sum of ₹ 21,00,000/- was transferred on 20.08.2009 from the account of the complainant to the account of the accused. The accused company represented by its Managing Director and the appellant company entered into a Memorandum of Understanding dated 22.07.2009, which was marked as Ex. P2, wherein all the above details have been mentioned. In the said MOU it has been clearly mentioned that the accused company would pay a sum of ₹ 2,87,000/- as annualized interest calculated for a period of 90 days for the sum of ₹ 46,00,000/- lent. Therefore, the accused company had issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (including interest) and hence, a post dated cheque was issued by the accused. In other words Ex. P3/cheque was not supported by any consideration, it is only for the investment made by the private complainant since he is entitle for return the money along with interest, as a matter of clarity, the cheque was given and it is not for encashment. Since the investment was not properly done as per the schedule and there is a violation much less. 15. According to the accused the cheque was given only as a security for the said sum of ₹ 48,87,000/- and the said amount ₹ 46,00,000/- was not a loan as projected by the private complainant, it is for investment and that is the reason why instead of having a separate account, the accused along with private complaint has open escrow account so that while releasing the fund the private complainant will have control over the expenses since it is an investment. In short, ₹ 46,00,000/- is an investment along with interest and not a loan. 16. The Trial Court has rejected the case of the defence while the Appellant Court has accepted it and reversed the conviction and thus, the present Criminal Appeal. 17. To consider a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er . There is no denial by the complainant in the reply dated 27.04.2010. 18. The accused who was examined as DW2 had categorically stated that the current bank account shall be treated as the Escrow Bank account and the same shall be operated upon exclusively for the specific purposes of the investment made by the party of the First part. The said bank account shall be operated jointly by the Authorize Signatory of the Party of the Second part and Authorized representative of the party of the First part as mentioned in this agreement. 19. Thus, on a combined reading of the recitals in Exs. P2, P3, P10, P11 coupled with the evidence of DW2(accused), the accused was having existing account that should be considered as escrow account. Ex. P2/Memorandum of Understanding entered on 22.07.2009 assumes significance. On a perusal of the clause (3) of Ex. P2/MOU between parties, the complainant has invested a sum of ₹ 46,00,000/- for the development of the accused business for which, 90 days interest is calculated and fixed at ₹ 2,87,000/-. 20. It is the specific version of PW1 in his complaint as well as evidence that the first installment of ₹ 25,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es only after 90 days. 25. As per the Ex. P1/MOU escrow account was open in Kotak Mahindra bank, wherein, the complainant will be the first signatory while the accused is second signatory such arrangement has been made so that the withdrawal from the escrow account will be monitored by the private complainant who has made the investment. 26. The first amount ought to have been made on 22.07.2010 but the first installment payment was made only on 30.07.2010, whereby, the complainant has withdrawn ₹ 11,00,000/- from the escrow account as could be seen from Ex. D15. Thereafter, second installment payment was made on 20.08.2009. Hence, as stated supra as per the terms of Ex. P2/memorandum of understanding, the cheque in issue can be utilized and deposited only after 90 days from the date of the investment and hence, the cheque is prematured and not came into force dated 22.10.2009. 27. On a perusal of E-mails sent by the learned counsel for the private complainant, it is seen that the amount is only as an investment not as a loan as projected by PW1 in the witness box assumes significance. 28. Ex. D1 is exchange of email between the respective counsels. In Ex. D2/E-ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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