Dilip vs Arun Bheemarao Shivane

P.D. Waingankar, J.—This criminal revision petition under Section 397 read with Section 401 of Cr.P.C. is against the order dated 30.04.2010 in Crl.A. No. 16/2009 on the file of III-Additional District and Sessions Judge, Belagavi.

The brief facts, which gave rise to this criminal revision petition are as under:

The revision petitioner (who shall herein after be called as ''accused'') was constructing his residential house in CTS No. 4767/7 at Chavat Galli, Belagavi. He had entrusted the work of construction to the respondent (who shall herein after be called as ''complainant''). A contract was entered between the parties. Substantial work was completed by the complainant, a sum of Rs. 6,90,000/- was paid to the complainant by the accused, which according to the accused was excess payment. Since the complainant was not satisfied with the payment made by the accused, the complainant stopped the progress of work. Therefore, the accused was making an attempt to entrust the work to different contractor for completion of the work. After coming to know of the same, the complainant filed a suit for injunction against the accused in O.S. No. 656/2005 on the file of the first Additional Civil Judge (Jr. Dn.), Belagavi for a decree of permanent injunction. On account of filing of the suit and the status-quo order granted, the accused could not entrust the work to third person for its completion. He approached the complainant and discussed the matter. An understanding was reached, whereunder, it appears that the complainant agreed to receive a sum of Rs. 50,000/- from the accused and withdraw the suit, so as to pave the way for the accused to complete construction work. The accused handed over the cheque in question for Rs. 50,000/- dated 06.01.2005 in pursuance of an agreement dated 19.12.2005 entered between the parties. But the complainant did not withdraw the suit as agreed upon. The cheque on presentation came to be dishonored for the reason "insufficient funds". Upon issuance of demand notice, the complaint came to be filed against the accused for the offence under Section 138 of N.I. Act.

The accused having denied the accusations, the complainant led his evidence and produced necessary documents. The defence of the accused was no existence of liability by the accused in favour of the complainant for the discharge of which the cheque was issued. The learned Magistrate upon hearing the arguments and upon consideration of the materials on record, by judgment dated 04.02.2009 convicted the accused in Criminal Case No. 558/2007 for the offence punishable under Section 138 of N.I. Act and sentenced him to pay fine of Rs. 2,000/- in default to undergo imprisonment for a period of one month. The learned Magistrate also directed the accused to pay a sum of Rs. 55,000/- to the complainant by way of compensation.

Aggrieved by the judgment of conviction and the order of sentence, the accused preferred Criminal Appeal No. 16/2009 on the file of III-Additional District and Sessions Judge, Belagavi. The learned Sessions Judge on re-appreciation of the evidence, dismissed the appeal by order dated 30.04.2010, while confirming the judgment of conviction and order of sentence passed by the learned Magistrate. Challenging the legality and correctness of the orders passed by both the learned Magistrate and the learned Sessions Judge, this revision petition is preferred by the accused.

I have heard both the learned counsels appearing for the petitioner/accused and the respondent/complainant. Perused the records.

Upon going through the records, the issuance of the cheque dated 06.01.2006 drawn on State Bank of India, Belagavi for Rs. 50,000/- by the accused in favour of the complainant is not in dispute. It is also not in dispute that the accused had given the work of construction of his house to the complainant. Part payment was also made by the accused in favour of the complainant towards the work done. According to the accused, he made excess payment, having regard to the work done by the complainant. It is the case of the complainant that though he completed substantial work, the accused failed to make entire payment in respect of the work completed by him.

It is borne out from the records, when the accused was trying to entrust the contract work to a third person, the complainant filed a suit in O.S. No. 656/2005 for decree of permanent injunction against the accused from entrusting the remaining work to third party till the bills of the complainant were stalled. In view of filing of the suit and an order of status-quo passed by the Court, the accused approached the complainant for amicable settlement. After negotiation, a settlement was arrived at, in pursuance of which agreement came to be entered as per Ex. D1 dated 19.12.2005 between the accused and the complainant, which reads as under:-

From the reading of the agreement, it is evident that the accused issued cheque for Rs. 50,000/- in favour of the complainant towards full and final settlement of the claim put forth by the complainant and thereby the complainant unequivocally declared that he has no objection for the accused and that he is going to withdraw the suit in order to maintain cordial relationship.

It is evident that the accused issued cheque for Rs. 50,000/- on the undertaking given by the complainant that he would withdraw the suit. Having received cheque for Rs. 50,000/-, it was obligatory on the part of the complainant to withdraw the suit immediately so as to pave the way for the accused to proceed with the work and get it completed. But as agreed, the complainant did not withdraw the suit. The suit was continued and it was decreed after recording the evidence of the parties on 24.09.2007 i.e., after about two years from the date of agreement. Since the suit was not withdrawn as agreed upon by the complainant, there was no liability upon the accused to pay the amount as shown in Ex. P1 - cheque. Both the learned Magistrate and the learned Sessions Judge without looking into the contents of the agreement entered between the parties, and the obligation therein have mechanically held that since, cheque is dishonored and even after the issuance of demand notice the accused failed to pay the cheque amount, he committed an offence punishable under Section 138 of N.I. Act. The accused by producing Ex. D1, the agreement entered into between the parties has established that the complainant failed to perform his obligation under the agreement and therefore, there was no obligation on the part of the accused to pay a sum of Rs. 50,000/- to the complainant under Ex. P1 - cheque. As such, the judgment of conviction passed by the learned Magistrate and confirmed by the learned Sessions Judge is liable to be set aside. Accordingly, I pass the following:

(i) The criminal revision petition is allowed.

(ii) The judgment of conviction and the order of sentence dated 06.02.2009 in C.C. No. 558/2007 on the file of the JMFC-III, Belgavi and the order passed by the III-Additional District and Sessions Judge Belagavi in Crl.A. No. 16/2009 dated 30.04.2010 confirming the judgment of conviction and sentence passed by the learned Magistrate are hereby set aside.

(iii) The petitioner/accused is acquitted of the charge under Section 138 of N.I. Act. The bail bonds and surety bonds, if any, executed shall stand cancelled.