JAYESH BABULAL AJMERA Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) BY these applications, the applicant has challenged the issue of process and the rejection of his revisions against the issue of process under section 138 of the Negotiable Instruments Act, 1881.

(2.) THE only contention raised on behalf of the applicant is that no offence under section 138 is made out since the applicant stopped payment of the cheque of the value of Rs.2,90,000/- and Rs.50,000/- because he learnt that the respondent's statement in the agreement that the property is free from encumbrances is not true and that the property was encumbered. According to the applicant, he purchased plot bearing survey no.41, hissa no.5(pt) at village Behrampur, Off Vasai Station Road, Vasai Taluka, Thane dist., owned by the respondent no.2. He made payment on agreement dated 5.10.2004. He made certain payments through cheques amounting to Rs.2,90,000/- and issued five cheques dated 24.2.2005 for Rs.3,40,000/- in favour of the complainant towards payment of the remaining consideration. According to the applicant, he learnt that the said property was encumbered and, therefore, he stopped payment of the two cheques involved in this complaint. The respondent no.2 made a complaint under section 138 of the Negotiable Instruments Act before the Magistrate who, after verification, issued process. Aggrieved by the issuance of process, the applicant filed a revision before the Sessions Court which was dismissed. The learned counsel for the applicant submitted that the applicant was justified in stopping payment of the cheques, though he had sufficient funds, since he discovered that the property agreed to be sold was not free from encumbrance as represented by the respondent, but was in fact, encumbered. He learnt of the encumbrance from a letter issued by Bank of India on 18.2.2005 to the Asstt. Town Planner, CIDCO, where the said property was mentioned. In that letter, the Bank has stated that it has decided to take possession of the plot and sell it for realisation of the Bank's dues. It is significant to note that there is no dispute about the signature on the cheques and the fact that the cheques were issued to the respondent no.2. The only contention is that when the applicant discovered of the encumbrance, it could not be said that the cheques were issued to discharge a legal debt. This contention cannot be accepted and, in any case, at this stage. It cannot be said that the transaction between the parties stood annulled merely on the applicant discovering the letter by the Bank written to a third party i.e. CIDCO that it intends to take possession of the property for recovery of dues. It is equally possible that the respondent no.2 who has agreed to sell the property may have intended to liquidate the Bank's dues and convey an unencumbered title to the applicant. That is a possibility which cannot be ruled out. In fact, the learned counsel for the respondent no.2 submitted that the property is not at all encumbered as claimed by the applicant. These are all issues which would have to be decided at the trial. Prima facie, at this stage, it cannot be said that there was no debt or liability for the discharge of which the cheques were issued. The learned Sessions Court has rightly applied its mind and come to the conclusion that there was sufficient material before the Magistrate for issuance of process and that the material which the petitioner has brought before the Court is in the form of defects. The learned Sessions Court has correctly observed that the applicant would have to establish these defects at the time of trial.