one and same compensation should be given for the lands acquired under the same notification = Having regard to the submissions urged on behalf of the appellants in so far as not considering the application for substitution of the L.Rs. of deceased appellants, we would have remitted the matter back to the High Court to give an opportunity to the appellants herein, who are the legal representatives of some of the deceased appellants to afford an opportunity of hearing and decide the appeals on merits. That, however, would only be a formality because having regard to the law laid down by this Court in Gafar’s case, the High 31 Court is bound to follow that decision, since the notification for acquiring the lands in respect of the villages are one and the same. 28) The learned senior counsel may be, as a last salvo, submits that in the event, we are not inclined to grant any of the reliefs that he has asked for, then we may direct that the amounts paid by way of compensation pursuant to the judgment of the Reference Court need not be recovered and the securities furnished by some of the appellants need not be enforced. This prayer is contested by the learned counsel for the respondents. This request of Shri. Varma appears to be reasonable. The land acquisition in question is of two decades old, and it is plausible that the landowners have utilized the compensation amount paid for one purpose or the other. In such circumstances, we are not inclined to put an extra burden of repayment on them. Therefore, while dismissing the appeals, we clarify that in the peculiar facts and circumstances of the case and in the interest of justice, we restrain the respondents from recovering the amounts paid as compensation or enforcing security offered while withdrawing the compensation amount pursuant to order passed by the Reference Court.

                                                   REPORTABLE





               IN THE SUPREME COURT OF INDIA


                CIVIL APPELLATE JURISDICTION



                  CIVIL APPEAL NO. 5448 OF 2006





Fida Hussain & Ors.                         .............. Appellants




                                versus




Moradabad Development Authority & Anr.      ..............Respondents





                                 With




                  CIVIL APPEAL NO. 5382 OF 2006




Dhyan Singh & Ors.                          .............. Appellants




                                versus




Moradabad Development Authority & Anr.      ..............Respondents





                                                           1


                                  With



                  CIVIL APPEAL NO. 5387 OF 2006



Het Ram (Dead) through LRs.                          ................Appellants




                                 versus




Moradabad Development Authority & Anr.             ..............Respondents




                                  With




                  CIVIL APPEAL NO. 5388 OF 2006




Sompal & Ors.                                      .............. Appellants




                                 versus




Moradabad Development Authority & Anr.             ..............Respondents




                                  With




                  CIVIL APPEAL NO. 5389 OF 2006




Vipin Chandra & Ors.                               .............. Appellants




                                 versus




Moradabad Development Authority & Anr.             ..............Respondents



                                                                                 2


                                      With




                  CIVIL APPEAL NO. 5391 OF 2006




Mohan Singh & Ors.                             .............. Appellants




                                     versus




Moradabad Development Authority & Anr.         ..............Respondents




                                      With




                  CIVIL APPEAL NO. 5394 OF 2006




Hari Singh (Dead) through LRs.                 .............. Appellants




                                     versus




Moradabad Development Authority & Anr.         ..............Respondents




                                      With




                  CIVIL APPEAL NO. 5395 OF 2006




Roshan & Ors.                                  .............. Appellants




                                     versus




Moradabad Development Authority & Anr.         ..............Respondents





                                                                 3


                                  With




                 CIVIL APPEAL NO. 5397 OF 2006




Ram Ratan & Ors.                                   .............. Appellants




                                 versus




Moradabad Development Authority & Anr.            ..............Respondents




                                  With




                 CIVIL APPEAL NO. 5412 OF 2006




Lalman (Dead) through L.R.                        ................... Appellant




                                 versus




Moradabad Development Authority & Anr.            ..............Respondents




                                  With




                 CIVIL APPEAL NO. 5421 OF 2006




Gaj Ram (Dead) through LRs.                       ...................Appellants




                                 versus




Moradabad Development Authority & Anr.            ..............Respondents





                                                                          4


                                   With




                   CIVIL APPEAL NO. 5428 OF 2006




Chandan & Ors.                               .............. Appellants




                                   versus




Moradabad Development Authority & Anr.       ..............Respondents




                                   With




                   CIVIL APPEAL NO. 5429 OF 2006




Hussain Bux (Dead) through LRs.              .............. Appellants




                                   versus




Moradabad Development Authority & Anr.       ..............Respondents




                                   With




                   CIVIL APPEAL NO. 5432 OF 2006




Waheed (Dead) through LRs.                   .............. Appellants




                                   versus




Moradabad Development Authority & Anr.       ..............Respondents





                                                               5


                                With




                  CIVIL APPEAL NO. 5436 OF 2006




Sunil Kumar Sharma alias Sonu & Ors.       .............. Appellants




                               versus




Moradabad Development Authority & Anr.    ..............Respondents




                                With




                  CIVIL APPEAL NO. 5444 OF 2006




Karan Singh & Ors.                         .............. Appellants




                               versus




Moradabad Development Authority & Anr.    ..............Respondents




                                With




                  CIVIL APPEAL NO. 5445 OF 2006




Mahesh & Ors.                              .............. Appellants




                               versus




Moradabad Development Authority & Anr.    ..............Respondents





                                                          6


                                  With




                 CIVIL APPEAL NO. 5446 OF 2006




Ram Chandra & Ors.                         .............. Appellants




                                versus




Moradabad Development Authority & Anr.     ..............Respondents




                                  With




                 CIVIL APPEAL NO. 5455 OF 2006




Komal Singh                                .............. Appellant




                                versus




Moradabad Development Authority & Anr.     ..............Respondents




                                  With




                 CIVIL APPEAL NO. 5457 OF 2006




Laloo Singh alias Baloo Singh & Ors.       .............. Appellants




                                versus




Moradabad Development Authority & Anr.     ..............Respondents





                                                          7


                                 With




                    CIVIL APPEAL NO. 5499 OF 2006




Khoob Chand & Ors.                           .............. Appellants




                                versus




Moradabad Development Authority & Anr.      ..............Respondents




                                 With




                    CIVIL APPEAL NO. 5501 OF 2006




Babu Ram & Ors.                              .............. Appellants




                                versus




Moradabad Development Authority & Anr.      ..............Respondents




                                 With




                    CIVIL APPEAL NO. 5502 OF 2006




Harbansh & Ors.                              .............. Appellants




                                versus




Moradabad Development Authority & Anr.      ..............Respondents





                                                            8


                                  With




                    CIVIL APPEAL NO. 5504 OF 2006




Dori Lal & Ors.                              .............. Appellants




                                versus




Moradabad Development Authority & Ors.      ..............Respondents




                                  With




                    CIVIL APPEAL NO. 5506 OF 2006




 Jafsar                                      .............. Appellant




                                versus




Moradabad Development Authority & Anr.      ..............Respondents




                                  With




                    CIVIL APPEAL NO. 5507 OF 2006




Bal Kisan & Ors.                             .............. Appellants




                                versus




Moradabad Development Authority & Anr.      ..............Respondents





                                                            9


                                 With




                  CIVIL APPEAL NO. 5508 OF 2006




Bankey Lal & Ors.                          .............. Appellants




                                versus




Moradabad Development Authority & Anr.    ..............Respondents




                                 With




                  CIVIL APPEAL NO. 5511 OF 2006




Jai Pal & Ors.                             .............. Appellants




                                versus




Moradabad Development Authority & Anr.    ..............Respondents




                                 With




                  CIVIL APPEAL NO. 5533 OF 2006




Abhay Kumar Bhatnagar & Anr.               .............. Appellants




                                versus




Moradabad Development Authority & Anr.    ..............Respondents





                                                          10


                                           With




                      CIVIL APPEAL NO. 5452 OF 2006




Ram Lal & Anr.                                                   .............. Appellants




                                          versus




Moradabad Development Authority & Anr.                          ..............Respondents





                                  J U D G M E N T




H.L. Dattu, J.




1)    This batch of appeals is directed against the separate orders passed


      by   the   High   Court   of   Allahabad   in   Regular   First   Appeals   filed   by


      land   owners   for   enhancement   of   compensation   awarded   by   the


      Reference   Court for the lands acquired under the Land Acquisition


      Act,   1894,   [hereinafter   referred   to   as   `the   Act']   in   the   villages   of


      Harthala   and Mukkarrabpur.   There are  in all  30 appeals   before  us,


      out of which, 23 are in relation to the village of Harthala  and 7 in


      relation to the village of Mukkarrabpur.





                                                                                            11


2)    In   view   of   the   orders   we   propose   to   pass   in   all   these   appeals,   we


      deem   it   unnecessary   to   state   the   facts   giving   rise   to   the   present


      appeals in greater details and a brief reference thereto would suffice


      to appreciate the controversy.  




3)    Lands   in   Village   of   Harthala:-   There   are   twenty   three   appeals


      relating to this village.  Under Section 4 read with Section 17 of the


      Act, Notification dated 20.09.1990 was issued and published by the


      State Government for the acquisition of the lands of the appellants.


      Subsequently,   a   declaration   dated   10.06.1991   was  published   in  the


      Gazette, under Section 6 of the Act. The lands acquired were taken


      physical   possession   by   the   State   Government.   In   accordance   with


      Section   11   of   the   Act,   the   Land   Acquisition   Officer   [hereinafter


      referred to as `the LAO'] assessed  the market value of the acquired


      lands   at  `80   per   sq.   meter   vide   order   dated   18.09.1993   as


      compensation.   Dissatisfied   with   the   award   of   the   LAO,   the   land


      owners filed objections, inter-alia claiming that the market value of


      the acquired lands is `1000 per sq. meter, due to the proximity of the


      lands   to   the  city   of  Moradabad.   After   scrutinizing   the   evidence   on


      record,   the   Reference   Court   had   come   to   the   conclusion   that   the


      market   value  of  the   nearby   land   was  `550   per  sq.   meter,   however,





                                                                                             12


      taking   into   consideration   the   location   and   potentiality   of   the   lands


      and also proximity of the lands from the city of Moradabad and other


      relevant factors, enhanced the compensation awarded to `270 per sq.


      meter. The State preferred appeals against the enhancement so made


      by the Reference Court and the High Court has allowed the same in


      the   light   of   the   judgment   of   the   Court   in   First   Appeal   No.   247   of


      1997 dated 05.03.2004.





4)    Lands in village of Mukkarabbpur:- Seven of the present appeals


      relate to the village of Mukkarabbpur. A Notification for acquisition


      of the lands under the Act was issued and published on 20.08.1992.


      In pursuance of the Notification, the State took possession of the said


      lands on 06.05.1997 by paying 80% of the estimated compensation


      at   the   rate   of  `150   per   sq.   meter.   However,   vide   order   dated


      29.08.1997, the LAO fixed the compensation at the rate of `92.59 per


      sq.   meter.   Aggrieved   by   the   same,   the   appellants   moved   the


      Reference Court and produced evidence in support of their claim that


      the prevailing rates of land in that village and its roundabouts were


      much higher.  After giving due consideration to the claim made and


      the   evidence   on   record,   the   Reference   Court   enhanced   the




                                                                                             13


      compensation   to  `350   per   sq.   meter.   The   respondents   preferred


      appeals   to   the   High   Court,   and   the   same   came   to   be   allowed,


      reviving the award passed by the LAO.




5)    Shri. M.L. Varma, learned senior counsel, appears for the appellants,


      and   Shri.   M.P.   Shorawala,   learned   counsel,   holds   the   brief   for   the


      respondents.




6)    At the outset, it is relevant to note that the question of adequacy of


      compensation for the lands acquired in these two villages under the


      same   notification   has   been   gone   into   by   this   Court   in   the   case   of


      Gafar and Ors. v. Moradabad Development Authority, (2007) 7 SCC


      614.  In that case, this Court made a detailed enquiry into the method


      of   valuation   adopted   by   the   LAO   and   the   enhancement   of


      compensation by the Reference Court. This Court took the view that


      the evidence relied upon by the Reference Court while enhancing the


      compensation were not reliable, and, therefore, the High Court was


      justified in setting aside the order passed by the Reference Court and


      restoring the award passed by the LAO.





                                                                                           14


7)    In Gafar's case for the lands acquired in the village of Harthala under


      Notification   dated   13.09.1991,   after   a   detailed   consideration   of   the


      compensation awarded by the LAO, this Court held:




         "15. We find that the Awarding Officer had taken note of a

         sale   deed,   which   was   at   a   time   proximate   to   the   date   of

         notifications in these cases and it related to a piece of land,

         though   a   small   extent,   which   was   not   distant   from   the

         acquired   lands,   to   borrow   the   language   of   the   Awarding

         Officer.   We   are   inclined   to   see   some   force   in   the   stand

         adopted   by   the   High   Court   that   the   Awarding   Officer

         himself   had   been   generous   in   his   award.   Since   he   has

         adopted   such   a   rate,   the   question   is   whether   this   Court

         should   interfere   with   the   decision   of   the   High   Court

         restoring that Award or award any further compensation.


         16. The scope of interference by this Court was delineated

         by   the   decision   in     Kanta   Prasad   Singh   v.   State   of   Bihar

         wherein this Court held that there was an element of guess

         work inherent in most cases involving determination of the

         market   value   of   the   acquired   land.   If   the   judgment   of   the

         High   Court   revealed   that   it   had   taken   into   consideration

         the relevant factors prescribed by the Act, in appeal under

         Article   133   of   the   Constitution   of   India,   assessment   of

         market   value   thus   made   should   not   be   disturbed   by   the

         Supreme   Court.   For   the   purpose   of   deciding   whether   we

         should interfere, we have taken note of the position adopted

         by   the   Awarding   Officer,   the   stand   adopted   by   the

         Reference Court and the relevant aspects discussed by the

         High   Court.   On   such   appreciation   of   the   facts   and

         circumstances  of  the  case  as   a  whole,  we   are  of  the  view

         that   the   sum   of   Rs.   80   per   square   meter   awarded   as

         compensation   in   these   cases   is   just   compensation   paid   to

         the   land   owners.   Once   we   have   thus   found   the

         compensation  to  be  just,  there  arises   no  occasion   for   this

         Court   to   interfere   with   the   decision   of   the   High   Court

         restoring the award of the Land Acquisition Officer.





                                                                                            15


         17.   In   view   of   our   conclusion   as   above,   all   the   appeals

         relating to Harthala have only to be dismissed."





8)    In   respect   to   the   lands   acquired   in   village   of   Mukkarabbpur,   this


      Court, in Gafar's case, held:




         "18. In respect of the lands at Mukkarrabpur, the claim for

         enhancement was allowed by the Reference Court in spite

         of the finding that the evidence of P.Ws. 1 and 2 adduced

         on behalf of the claimants was unreliable. It also found that

         the two sale deeds relied on by the claimant in support of

         the   claim   for   enhancement   were   also   not   comparable   or

         reliable in the light of the evidence of the claimant himself

         and   that   it   has   not   been   shown   that   the   lands   involved

         therein were comparable to the lands acquired. In spite of

         it, the Reference Court granted an enhancement only based

         on its award in L.A.R.  No. 134 of 1988 and on that basis

         the   award   was   made   at   Rs.   192/-   per   square   meter.

         Obviously,   the   award   in   L.A.R.   No.   134   of   1988   was   set

         aside by the High Court. Hence, the award of the Reference

         Court   in   the   case   on   hand   became   untenable.   Once   no

         reliance   could   be   placed   on   that   award   to   enhance   the

         compensation,   it   is   clear   that   even   on   the   finding   of   the

         Reference Court, no claim for enhancement has been made

         out by the claimants. In that situation, the High Court was

         fully   justified   in   setting   aside   the   award   of   the   Reference

         Court  and in restoring  the  award of the  Land Acquisition

         Officer.


         19.   We   may   incidentally   notice   that   the   lands   were

         agricultural  lands being used for cultivation  and even the

         method of valuing it on the basis of price per square meter

         does not appear to be justified. All the same, the award has

         adopted that method and the State cannot go back on it. In

         the absence of any acceptable legal evidence to support the

         claim   for   enhancement,   no   grounds   are   made   out   for

         interference   with   the   decision   of   the   High   Court   in   the

         appeals relating to village Mukkarrabpur."



                                                                                            16


9)     This Court also held that it could not be said that the High Court had


       adopted an erroneous approach or employed the wrong principles in


       regard to the claim for enhancement of compensation, or that, it has


       so   erred   as   to   warrant   interference   under   Article   136   of   the


       Constitution of India.




10)            A   review   petition   filed   by   the   appellants   therein   was   also


       dismissed by this Court.




11)    Shri. M.L. Varma, learned senior counsel, submits that the findings


       and   the   conclusions   in   the   judgment   of   this   Court   in   the   case   of


       Gafar  are   flawed   for   the   reason   that   the   exemplars   relied   on   for


       deciding   the   compensation   was   for   inundated   land,   and   hence,   the


       same could not reflect the true value of the land. He further submits


       that   relevant   sale   deeds   were   not   taken   into   consideration   by   the


       Court   while   concluding   that   the   Reference   Court   had   erred   in


       enhancing the compensation and that the High Court was correct in


       setting aside the same.  The learned senior counsel also submits that


       this Court should have remanded the matters to the High Court in the


       case of Gafar, as the High Court, being the first appellate Court, was


       required to give a reasoned judgment while allowing appeals against




                                                                                           17


the order of the Reference Court enhancing the compensation.  In the


alternative,   Shri.   Varma  contends  that  the decision  in  Gafar's case


does not operate as a binding precedent on the present set of appeals,


since this Court has not decided any legal issue.  It is also stated that


the decision  does not operate  as a  res judicata, as the parties were


different.  It   is  further  argued  that  out  of the  thirty   appeals   that  are


listed   before   us,   in   the   seven   appeals   relating   to   the   acquisition   of


lands in the village of Mukkarrbpur, the matters were not shown on


the cause list on the day they were disposed of. He further states that


in some other cases (six appeals), the learned counsel appearing for


the   respondents   before   the   High   Court   (appellants   before   us)   had


submitted   an   "illness   slip"   and   had   not   appeared   on   the   day,   the


matters   were   disposed   of.   Shri.   Varma   further   contends   that   in   as


many   as   seventeen   appeals   before   us,   the   Development   Authority


had   filed   applications   for   substitution   to   bring   on   record   the   legal


representatives of the deceased land owners and without considering


and deciding the applications, the High Court could not have passed


the   impugned   orders.     Despite   all   these   procedural   infirmities,   the


High Court could not have allowed the Regular First Appeals filed


by the State, is the contention of learned senior counsel Shri Varma.





                                                                                       18


12)    Pursuant to the direction issued by this Court, an affidavit has been


       filed by Shri. V.P. Rai, learned counsel, who had appeared before the


       High   Court,   in   support   of   factual   assertion   made   by     Sri   Varma.


       Learned counsel in his affidavit has stated that seven appeals before


       the High Court (listed as C.A. No. 5502/2006, C.A. No. 5499/2006,


       C.A.   No.   5501/2006,   C.A.   No.   5404/2006,   C.A.   No.   5507/2006,


       C.A.   No.   5508/2006   and   5511/2006   before   us,   all   relating   to   the


       village   of   Mukkarrabpur)   were   not   shown   on   the   cause   list   of   the


       High Court on the day they were disposed of, and hence, he had no


       knowledge   about   the   hearing   of   the   appeals.   Shri.   Rai,   has   further


       stated, that as many six appeals (listed as C.A. No. 5448/2006, C.A.


       No. 5391/2006, C.A. No. 5397/2006, C.A. No. 5445/2006, C.A. No.


       5452/2006   and   C.A.   No.   5455/2006   before   us)   in   which   he   was


       appearing, were disposed of on the day, he had submitted an "illness


       slip" due to his ill health.




13)    Per   contra,   Shri.   M.P.   Shorawala,   learned   counsel,   has   argued   that


       there is no legal or factual infirmity in the judgment of this Court in


       the case of  Gafar. He submits that this Court has already dealt with


       the merits of the matter at length in the case of  Gafar  and the same


       need not be gone into, once over, again by this Court. With regard to





                                                                                         19


       the  point  of  non-listing   of cases,   the  learned   counsel  contends  that


       the cause lists are prepared under the authority of Hon'ble the Chief


       Justice of the High Court, and it was not the practice of the Court to


       send the files of matters that were not listed, to the Court Hall, let


       alone hear them and dispose them of.




14)    Having   carefully   considered   the   submissions   of   the   learned   senior


       counsel Shri Varma, we are of the view that the judgment in Gafar's


       case does not require reconsideration by this Court. In Gafar's case,


       this   Court   had   meticulously   examined   all   the   legal   contentions


       canvassed by the parties to the lis and had come to the conclusion


       that   the   High   Court   has   not   committed   any   error   which   warrants


       interference.     In   the   present   appeals,   the   challenge   is   for   the


       compensation assessed for the lands notified and acquired under the


       same   notification   pertaining   to   the   same   villages.     Therefore,   it


       would not be proper for us to take a different view, on the ground


       that   what   was   considered   by   this   Court   was   on   a   different   fact


       situation. This view of ours is fortified by the Judgment of this Court


       in the case of  B.M. Lakhani v. Municipal Committee, (1970) 2 SCC


       267, wherein it is held that a decision of this Court is binding when


       the   same   question   is   raised   again   before   this   Court,   and





                                                                                       20


       reconsideration   cannot   be   pleaded   on   the   ground   that   relevant


       provisions, etc., were not considered by the Court in the former case.




15)    With  regard  to the  contention  that  the decision   of  the Court  in the


       case of Gafar did not operate as res judicata for the present batch of


       cases,   we   are   of   the   view   that   the   principles   of  Resjudicata   would


       apply only when the lis was inter-parties and had attained finality of


       the   issues   involved.     The   said   Principles   will,   however,   have   no


       application interalia in a case where the Judgment and/or order had


       been   passed   by   a   Court   having   no   jurisdiction   thereof   and/or


       involving a pure question of law.  The principle of Resjudicata will,


       therefore, have no application in the facts of the present case.  




16)    To   examine   the   other   limb   of   the   contention   of   the   learned   senior


       counsel that the judgment in the case of  Gafar  did not operate as a


       precedent   for   the   present   batch   of   cases,   as   no   point   of   law   was


       decided,   this   issue   requires   to   be   considered   in   the   light   of   the


       judicial pronouncement of this Court.  




17)    In the case of Shenoy & Co. v. CTO, (1985) 2 SCC 512, a number of


       writ petitions were allowed by the High Court. However, the State


       chose to file appeal only in one case, which came to be allowed by





                                                                                           21


this Court in the said case.  In this fact situation, this Court took the


view   that   the   decision   of   this   Court   was   binding   on   all   the   writ


petitioners   before   the   High   Court,   even   though   they   were   not


respondents in the appeal before this Court. It was held:




   "22.  Though   a   large   number   of   writ   petitions   were   filed

   challenging  the Act,  all those writ  petitions  were grouped

   together, heard together and were disposed of by the High

   Court by a common judgment. No petitioner advanced any

   contention   peculiar   or   individual   to   his   petition,   not

   common to others. To be precise, the dispute in the cause

   or   controversy   between   the   State   and   each   petitioner   had

   no personal or individual element in it or anything personal

   or   peculiar   to   each   petitioner.   The   challenge   to   the

   constitutional   validity   of   1979   Act   proceeded   on   identical

   grounds   common   to   all   petitioners.   This   challenge   was

   accepted by the High Court by a common judgment and it

   was  this  common judgment  that was  the subject-matter   of

   appeal before this Court in Hansa Corporation case. When

   the Supreme Court repelled the challenge and held the Act

   constitutionally valid, it in terms disposed of not the appeal

   in Hansa Corporation case alone, but petitions in which the

   High   Court   issued   mandamus   on   the   non-existent   ground

   that   the   1979   Act   was   constitutionally   invalid.   It   is,

   therefore,   idle   to   contend   that   the   law   laid   down   by   this

   Court   in   that   judgment   would   bind   only   the   Hansa

   Corporation and not the other petitioners against whom the

   State of Karnataka had not filed any appeal. To do so is to

   ignore the binding nature of a judgment of this Court under

   Article   141   of   the   Constitution.   Article   141   reads   as

   follows:


        "The  law  declared  by   the   Supreme  Court  shall   be

        binding on all courts within the territory of India. A

        mere reading of this article brings into sharp focus

        its   expanse   and   its   all   pervasive   nature.   In   cases

        like this, where numerous petitions are disposed of




                                                                                      22


    by a common judgment and only one appeal is filed,

    the parties to the common judgment could very well

    have   and   should   have   intervened   and   could   have

    requested the Court to hear them also. They cannot

    be heard to say that the decision was taken by this

    Court behind their back or profess ignorance of the

    fact   that   an   appeal   had   been   filed   by   the   State

    against   the   common   judgment.   We   would   like   to

    observe   that,   in   the   fitness   of   things,   it   would   be

    desirable   that   the   State   Government   also   took   out

    publication in such cases to alert parties bound by

    the   judgment,   of   the   fact   that   an   appeal   had   been

    preferred before this Court by them. We do not find

    fault with the State for having filed only one appeal.

    It is, of course, an economising procedure."


23.  The judgment in  Hansa Corporation case  rendered by

one of us (Desai, J.) concludes as follows:


    "As   we   are   not   able   to   uphold   the   contentions

    which found favour with the High Court in striking

    down the impugned Act and the notification issued

    thereunder   and   as   we   find   no   merit   in   other

    contentions   canvassed  on  behalf  of  the  respondent

    for sustaining the judgment of the High Court, this

    appeal   must   succeed.   Accordingly,   this   appeal   is

    allowed   and   the   judgment   of   the   High   Court   is

    quashed and set aside and the petition filed by the

    respondent   in   the   High   Court   is   dismissed   with

    costs throughout."


To   contend   that   this   conclusion   applies   only   to   the   party

before this Court is to destroy the efficacy and integrity of

the   judgment   and   to   make   the   mandate   of   Article   141

illusory. But setting aside the common judgment of the High

Court, the mandamus issued by the High Court is rendered

ineffective not only in one case but in all cases.


24.  A   writ   or   an   order   in   the   nature   of   mandamus   has

always been understood to mean a command issuing from

the   Court,   competent   to   do   the   same,   to   a   public   servant

amongst  others,  to perform  a duty  attaching  to  the office,



                                                                                  23


failure to perform which leads to the initiation of action. In

this   case,   the   petitioners-appellants   assert   that   the

mandamus   in   their   case   was   issued   by   the   High   Court

commanding   the   authority   to   desist   or   forbear   from

enforcing   the   provisions   of   an   Act   which   was   not   validly

enacted.   In   other   words,   a   writ   of   mandamus   was

predicated upon the view that the High Court took that the

1979   Act   was   constitutionally   invalid.   Consequently   the

Court directed the authorities under the said Act to forbear

from enforcing the provisions of the Act qua the petitioners.

The Act was subsequently declared constitutionally valid by

this Court. The Act, therefore, was under an eclipse, for a

short duration; but with the declaration of the law by this

Court,  the temporary shadow cast  on it by the mandamus

disappeared   and   the   Act   revived   with   its   full   vigour,   the

constitutional   invalidity   held   by   the   High   Court   having

been removed by the judgment of this Court. If the law so

declared invalid is held constitutionally valid, effective and

binding   by   the   Supreme   Court,   the   mandamus   forbearing

the authorities from enforcing its provisions would become

ineffective   and   the   authorities   cannot   be   compelled   to

perform   a   negative   duty.   The   declaration   of   the   law   is

binding   on   everyone   and   it   is   therefore,   futile   to   contend

that the mandamus would survive in favour of those parties

against whom appeals were not filed.


25. The fallacy of the argument can be better illustrated by

looking   at   the   submissions   made   from   a   slightly   different

angle.   Assume   for   argument's   sake   that   the   mandamus   in

favour   of   the   appellants   survived   notwithstanding   the

judgment   of   this   Court.   How   do   they   enforce   the

mandamus? The normal procedure is to move the Court in

contempt   when   the   parties   against   whom   mandamus   is

issued disrespect it. Supposing contempt petitions are filed

and   notices   are   issued   to  the   State.  The   State's   answer   to

the Court will be: "Can I be punished for disrespecting the

mandamus, when the law of the land has been laid down by

the   Supreme   Court   against   the   mandamus   issued,   which

law   is   equally   binding  on   me  and   on  you?"   Which   Court

can   punish   a   party   for   contempt   under   these

circumstances?   The   answer   can   be   only   in   the   negative



                                                                                  24


         because the mandamus issued by the High Court becomes

         ineffective   and   unenforceable   when   the   basis   on   which   it

         was issued falls, by the declaration by the Supreme Court,

         of the validity of 1979 Act.


         26.  In   view   of   this   conclusion   of   ours,   we   do   not   think   it

         necessary to refer to the other arguments raised before the

         High   Court   and   which   the   learned   counsel   for   the

         appellants   attempted   to   raise   before   us   also.   The   appeals

         can   be   disposed   of   on   this   short   point   stated   above.   The

         judgment   of   this   Court   in  Hansa   Corporation   case  is

         binding on all concerned whether they were parties to the

         judgment or not. We would like to make it clear that there

         is no inconsistency in the finding of this Court in  Joginder

         Singh case and Makhanlal Waza case. The ratio is the same

         and   the   appellants   cannot   take   advantage   of   certain

         observations made by this Court in Joginder Singh case for

         the reasons indicated above."





18)    In the case of Director of Settlements, A.P. v. M.R. Apparao, (2002)


       4 SCC 638, this Court held:




         "7. So far as the first question is concerned, Article 141 of

         the   Constitution   unequivocally   indicates   that   the   law

         declared   by   the   Supreme   Court   shall   be   binding   on   all

         courts   within   the   territory   of   India.   The   aforesaid   Article

         empowers   the   Supreme   Court   to   declare   the   law.   It   is,

         therefore, an essential function of the Court to interpret a

         legislation.   The   statements   of   the   Court   on   matters   other

         than law like facts may have no binding force as the facts of

         two   cases   may   not   be   similar.   But   what   is   binding   is   the

         ratio of the decision and not any finding of facts. It is the

         principle   found   out   upon   a   reading   of   a   judgment   as   a

         whole,   in   the   light   of   the   questions   before   the   Court   that

         forms the ratio and not any particular word or sentence...

         A   judgment   of   the   Court   has   to   be   read   in   the   context   of

         questions   which   arose   for   consideration   in   the   case   in

         which the judgment was delivered. ... The law which will be



                                                                                                25


          binding   under   Article   141   would,   therefore,   extend   to   all

          observations of points raised and decided by the Court in a

          given case..."





19)    The position was made clear by the decision of this Court in the case


       of  Union of India v. Krishan Lal Arneja, (2004) 8 SCC 453. In this


       case, 14 properties were notified for acquisition under the provisions


       of   the   Land   Acquisition   Act,   1898.   Only   two   persons,   namely


       Banwari   Lal   &   Sons   and   Shakuntala   Gupta,   had   previously


       challenged   the   validity   of   the   acquisition   by   filing   writ   petitions


       before the High Court and having the cases decided in their favour


       finally by this Court. This Court held that the decisions in the earlier


       cases were a binding precedent for this subsequent appeal that was


       preferred by the Union of India.  This Court held:




          "12....The decision in  Banwari Lal  and  Shakuntala Gupta

          of this Court in relation to the same notification may not be

          binding   on   the   principle   of  res   judicata.   The   argument,

          however,   cannot   be   accepted   that   those   decisions   are   not

          binding   being   "property-specific"   in   those   cases.   In   our

          considered opinion, the decisions are binding as precedents

          on the question of validity of the notification, which invokes

          urgency   clause   under   Section   17   of   the   Act.   We   find

          ourselves in full agreement with the ratio of the decisions in

          those   cases   that   urgency   clause,   on   the   facts   and

          circumstances,   which   are   similar   to   the   present   cases,

          could   not   have   been   invoked.   The   two   decisions   are,

          therefore, binding as precedents of this Court. We are not

          able to find any distinction or difference as to the ground of




                                                                                         26


          urgency   in   regard   to   the   properties   covered   by   these

          appeals."





20)    It is now well settled that a decision of this Court based on specific


       facts   does   not   operate   as   a   precedent   for   future   cases.   Only   the


       principles of law that emanate from a judgment of this Court, which


       have   aided   in   reaching   a   conclusion   of   the   problem,   are   binding


       precedents   within   the   meaning   of   Article   141.   However,   if   the


       question of law before the Court is same as in the previous case, the


       judgment of the Court in the former is binding in the latter, for the


       reason that the question of law before the Court is already settled. In


       other words, if the Court determines a certain issue for a certain set


       of facts, then, that issue stands determined for any other matter  on


       the same set of facts.




21)    The   other   reasons   given   by   Shri.   M.L.   Varma,   learned   senior


       counsel,  for contending that the case  of  Gafar  does not apply as  a


       precedent in other cases are threefold: (a) that seven of the present


       appeals relating to Mukkarrabpur were not heard due to non-listing;


       (b) in six matters relating to Harthala, the matters were disposed of


       in the absence of the counsel, who was absent due to his ill health


       and   submission   of  "illness   slip";   and   (c)   in   some   of  the   cases,   the




                                                                                            27


       applications for substitution was pending before the High Court, and


       these matters could not be disposed of by allowing the appeal against


       the dead persons. We are not impressed by these contentions.




22)    In   the   factual   matrix   of   the   present   case,   the   adequacy   of


       compensation   for   the   acquisition   of   land,   in   the   aforesaid   villages,


       was   the   issue   before   this   Court   in   the   case   of  Gafar  and   in   these


       appeals   also.   The   issue   is  now   settled   by   this   Court   in  the   case   of


       Gafar and Ors. (supra).   The decision of co-equal Bench is binding


       on this Court.  We may usefully note the decision of this Court in the


       case of Union of India vs. Raghubir Singh (1989) 178 ITR 548.  The


       Court observed that the pronouncement of law by a Division Bench


       of this Court is binding on a subsequent Division Bench of the same


       or   a   smaller   number   of   Judges   and   in   order   that   such   decision   be


       binding, it is not necessary that it should be a decision rendered by


       the   Full   Court   or   a   Constitution   Bench   of   this   Court.     Judicial


       decorum and certainty of law require a Division Bench to follow the


       decision of another Division Bench and of a larger Bench and, even


       if,   the   reasons   to   be   stated,   a   different   view   was   necessitated,   the


       matter   should   be   only   referred   to   Hon'ble   The   Chief   Justice   for


       referring the question to a larger Bench.





                                                                                              28


23)    The   learned   senior   counsel   emphasizes   the   fact   that   the   present


       appellants   were   not   heard   when   the   appeals   were   decided   by   the


       High Court, due to non-listing or disposal of the matters when their


       counsel had submitted "illness slip" and was not present in Court. He


       further states that in several cases, the appellants had died, and the


       applications   for   substitution   of   legal   heirs   were   filed   by   the


       Development Authority, which were pending in all but in one case.


       In the one case [presently numbered as C.A. No. 5421/2006], Shri.


       Varma   states   that   the   application   was   dismissed   by   the   Court.   He


       contends that the rules of natural justice of providing a fair hearing


       have not been followed. He states that it would be in the interest of


       justice to remand the matters back to the High Court to decide the


       appeals on merits, keeping in view the parameters while disposing of


       the first appeals by the High Court. Shri. Shorawala, learned counsel


       for the respondent, does not seriously dispute the issue of non-listing


       raised   by   the   appellants,   except   stating   that   the   cause   list   was


       published   under   the   authority   of   Hon'ble   the   Chief   Justice   of   the


       High Court, and it was not the practice of any Court to dispose of a


       matter without it being listed.





                                                                                        29


24)    We   have   considered   the   contention   canvassed   by   Shri.   Varma,


       learned    senior  counsel  and  the affidavit  filed  by  Shri.   V.P. Rai  in


       this regard. It is possible that due to the same nature of the matters,


       the learned Division Bench sitting in appeal may have considered it


       proper to dispose of the matters though they were not listed on the


       said   day   or   the   advocate   for   the   appellants   was   not   present.   This


       issue is raised only in thirteen appeals filed before us. With regard to


       seventeen   appeals,   the   appellants   have   contended   that   the


       substitution of legal heirs had not happened, and that the matter had


       abated.




25)    It   is   in   C.A.   No.   5421   of   2006,   in   which   the   appellants   have


       contended that the application for substitution was rejected, and by


       that order, the appeal had abated. We have perused the appeal paper


       books,   and   do   not   find   any   ground   taken   in   this   regard.   Even   the


       order dated 7/1/2004, by which the application for substitution was


       supposedly rejected by the High Court, has not been annexed. In the


       light   of   this,   we   are   not   inclined   to   accept   the   argument   that   the


       appeal had abated.




26)    On perusal of the appeal paper books of the thirty appeals before us,


       we   find  that  in  some   of the  appeals  [namely   C.A.  Nos.   5429/2006




                                                                                             30


       and   5457/2006],   the   presence   of   the   learned   counsel   is   recorded


       Though some of the appellants before us may not have been heard


       by the High Court due to non-listing of the matter or disposal in the


       absence   of   the   advocate,   it   is   clear   from   the   impugned   orders


       enclosed in some of the appeal paper books that the learned counsel


       for some of the appellants have been heard. It is settled position that


       the Court speaks through its order and whatever stated therein has to


       be read as correct and, therefore, we will go by what is recorded in


       the impugned judgment, rather than what the counsel have stated at


       the time of hearing of these appeals.   In this view of the matter, we


       are not inclined to accept that the learned counsel were not heard in


       all the matters against which appeals are filed.




27)    Having regard to the submissions urged on behalf of the appellants


       in   so   far   as   not   considering   the   application   for   substitution   of   the


       L.Rs.   of   deceased   appellants,   we   would   have   remitted   the   matter


       back   to   the   High   Court   to   give   an   opportunity   to   the   appellants


       herein,   who   are   the   legal   representatives   of   some   of   the   deceased


       appellants to afford an opportunity of hearing and decide the appeals


       on merits.  That, however, would only be a formality because having


       regard to the law laid down by this Court in Gafar's case, the High





                                                                                             31


       Court   is   bound   to   follow   that   decision,   since   the   notification   for


       acquiring the lands in respect of the villages are one and the same.




28)    The learned senior counsel may be, as a last salvo, submits that in


       the event, we are not inclined to grant any of the reliefs that he has


       asked   for,   then   we   may   direct   that   the   amounts   paid   by   way   of


       compensation pursuant to the judgment of the Reference Court need


       not   be   recovered   and   the   securities   furnished   by   some   of   the


       appellants   need   not   be   enforced.   This   prayer   is   contested   by   the


       learned   counsel   for   the   respondents.   This   request   of   Shri.   Varma


       appears to be reasonable. The land acquisition in question is of two


       decades old, and it is plausible that the landowners have utilized the


       compensation   amount   paid   for   one   purpose   or   the   other.   In   such


       circumstances,   we   are   not   inclined   to   put   an   extra   burden   of


       repayment   on   them.     Therefore,   while   dismissing   the   appeals,   we


       clarify that in the peculiar facts and circumstances of the case and in


       the   interest   of  justice,   we  restrain   the  respondents   from  recovering


       the   amounts   paid   as   compensation   or   enforcing   security   offered


       while   withdrawing   the   compensation   amount   pursuant   to   order


       passed by the Reference Court.    





                                                                                         32


29)    In   light   of   the   above,   the   appeals   are   dismissed   with   the   rider   as


       indicated   by   us   at   paragraph   28   of   the   judgment.     Costs   are   made


       easy.





                                                                                     ..............................J.

                                                                                                     [ D.K. JAIN ]





                                                                                                ........................

                                                                                                          ......J.

                                                                                                    [ H. L. DATTU ]

       New Delhi,

       July 19, 2011.





                                                                                                               33

We may also refer to the judgment delivered by this Court in the case of ICDS Ltd. (supra). In the said judgment this Court has referred to the nature of liability which is incurred by the one who is a drawer of the cheque. If the cheque is given towards any liability or debt which might have been incurred even by someone else, the person who is a drawer of the cheque can be made liable under Section 138 of the Act. The relevant observation made in the aforestated judgment is as under: ” The words “any cheque” and “other liability” occurring in Section 138 are the two key expressions which stand as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the statute. These expressions leave no manner of doubt that for whatever reason it may be, the liability under Section 138 cannot be avoided in the event the cheque stands returned by the banker unpaid. Any contra-interpretation would defeat the intent of the legislature. The High Court got carried away by the issue of guarantee and guarantor’s liability and thus has overlooked the true intent and purport of Section 138 of the Act. …… 1 The language, however, has been rather specific as regard the intent of the legislature. The commencement of the section stands with the words “where any cheque”. The above noted three words are of extreme significance, in particular, by reason of the user of the word “any” – the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment.” the cheque issued for the debts of others is also valid. if bounced, he is liable to be prosecuted.

                                                 1



                                                             REPORTABLE


                         IN THE SUPREME COURT OF INDIA


                      CRIMINAL APPELLATE JURISDICTION


                   CRIMINAL APPEAL NOS.  1413-1414 OF 2011

                (Arising out of S.L.P.(Crl.) Nos.1830-1831 of 2009)




Anil Sachar &Anr.                                       .....Appellants




                                     Versus


M/s. Shree Nath Spinners P.Ltd.

& Ors. etc.                                             .....Respondents




                     J U D G M E N T



ANIL R. DAVE, J.



1.     Leave granted.


2.     Being   aggrieved   by   the   common   Judgment   delivered   in   Criminal   Appeal


Nos.379-MA   of   2007   and   381-MA   of   2007   dated   16th  December,   2008   by   the   High


Court of Punjab  and Haryana at Chandigarh, the original  complainants have filed


these appeals.  By virtue of the aforestated judgment and  order,  the High Court has


confirmed the Orders dated 4th May, 2007 passed in Criminal Complaint Nos. 46 and


                                                     2



99 of 1999 by the Judicial Magistrate, First Class, Ludhiana whereby the accused in


the aforestated complaints had been acquitted of the charges levelled against them.





3.     The facts leading to the present litigation in a nut shell are as under:





4.     On   23rd  February,   1999,   Respondent   no.4   -   Munish   Jain,   a   Director   of   M/s.


A.T.   Overseas   Ltd.     had   given   in   all   four   cheques     for   different   amounts   to   Anil


Sachar,     partner   of   M/s.   Rati   Woolen   Mills   who   are   appellant   Nos.   1   and   2


respectively.  According to the case of the complainants, the said cheques were given


to M/s. Rati Woolen Mills,  of which appellant no.1 is a partner,   in consideration of


supply of  goods to M/s. Shree Nath Spinners Pvt. Ltd.





5.     The aforestated cheques, which had been given by Munish Jain as Director of


M/s. A.T. Overseas Ltd.,   had not been honoured and due to dishonour of the said


cheques,   the  complainant,  namely,   Anil  Sachar,    as   a  partner   of  M/s.   Rati  Woolen


Mills   had   issued   notice   as   required   under   the   provisions   of   Section   138   of   the


Negotiable Instruments Act  (hereinafter referred to as `the Act').  In spite of the said


notice,   the   complainant   was   not   paid   the   amount   covered   under   the   aforestated


cheques and, therefore,  complaints had been filed against the present respondents.


                                                     3





6.     The case of the present respondents before the trial court as well as before the


High Court was that the dispute was of a civil nature and with an oblique motive it


was given a colour of criminal litigation.  The said reply had been given especially in


view of the fact that the complaint  had also been filed making out a case against the


accused under the provisions of Sections 406 & 420 of the Indian Penal Code.





7.     The   case   of   the   complainants     was   that   M/s.   A.T.   Overseas   Ltd.   is   a   sister


concern   of   M/s.   Shree   Nath   Spinners   Pvt.   Ltd.   and   the   aforestated   cheques   were


given   by   Munish   Jain   towards   dues   of   M/s.   Shree   Nath   Spinners   Pvt.   Ltd.   as   a


Director of M/s. A.T. Overseas Ltd. After considering the evidence adduced and the


arguments made before the trial court, the trial court acquitted the accused for the


reason   that   the   goods   had   been   supplied   by   the   complainants   to   M/s.   Shree   Nath


Spinners Pvt. Ltd. and the cheques had not been given by M/s. Shree Nath Spinners


Pvt. Ltd. but they had been   given by M/s. A.T. Overseas Ltd.     As M/s. Shree Nath


Spinners Pvt. Ltd. and M/s. A.T. Overseas Ltd. are two different legal entities and as


there   was   nothing   on   record   to   show   that   the   cheques   were   given   by   M/s.   A.T.


Overseas Ltd. in consideration of goods supplied by the complainants to M/s. Shree


Nath Spinners Pvt. Ltd., the conclusion was that there was no liability of M/s. A.T.


                                                   4



Overseas Ltd. and, therefore, dishonour of the aforestated cheques would not make


signatory of the cheques from the account of M/s. A.T. Overseas Ltd.   liable under


the provisions of the Act.





8.     Being aggrieved by the orders passed by the learned Judicial Magistrate, First


Class, Ludhiana, dated 4th  May, 2007,   criminal  appeals were filed before the High


Court   of   Punjab   and   Haryana   at   Chandigarh,   but   the   said   appeals   have   been


dismissed  and, therefore, the original complainants  have approached this Court by


way of these appeals.





9.     It may be noted here that during the pendency of the proceedings,   Mohinder


Jain,     accused/respondent   no.3   expired   and,   therefore,     deleted   from   the   array   of


parties.


10.    Mr.   Nidhesh   Gupta,   learned   Senior   Counsel   appearing   for   the   complainants


mainly   submitted   that   the   learned   Judicial   Magistrate   as   well   as   the   High   Court


committed   an  error  by  acquitting   the  accused     simply   because  the   goods  had  been


supplied to M/s. Shree Nath Spinners Pvt. Ltd. whereas the cheques were given by


M/s.   A.T.   Overseas   Ltd.     He   submitted   that   both   the   concerns,   referred   to


hereinabove, are sister concerns having common Directors and, therefore,  the courts


                                                     5



below ought to have lifted the corporate veil so as to find out the realities.   He also


submitted that Munish Jain, who had signed the aforesaid cheques was Director in


both   the   sister   concerns   viz.   M/s.   Shree   Nath   Spinners   Pvt.   Ltd.   and   M/s.   A.T.


Overseas Ltd.  Moreover, he submitted that once the cheques had been issued by the


accused, as per provisions of Section 139 of the Act, burden  was on the  accused to


show   that   there   was   no   consideration.   So   as   to   substantiate   his   aforestated


submission,   the learned counsel relied upon the Judgments delivered by this Court


in  ICDS Ltd.  v.    Beena
                               Shabeer and Anr.    [2002(6) SCC 426],  K.K. Ahuja  v.    V.K.
                                                                                                           


Vora   and   Anr.,  [2009(10)   SCC   48]     and  K.N.   Beena    v.     Muniy
                                                                                      appan   and   Anr.


[2001(8) SCC 458].





11.    For the aforestated reasons, the learned counsel strenuously submitted that the


High Court had erred in confirming the orders of acquittal because upon lifting the


corporate veil,  the correct position could have been revealed and the correct position


according   to   the   learned   counsel   was   that   the   cheques   had   been   given   by   a   sister


concern, namely,  M/s. A.T. Overseas Ltd.  in consideration of the goods supplied to


M/s Shree Nath Spinners Pvt. Ltd.   The learned counsel also drew our attention to


the fact that there were several inter se transactions between the above-named two


sister   concerns   and,   therefore,     the   courts   below   ought   to   have   believed   that   the


                                                    6



payment had been made by one company for another company and the courts below


ought   to   have   believed   that   there   was   a   consideration   behind   issuance   of   the


aforestated two cheques.   He also draw our attention to the relevant evidence which


was adduced by the complainants to establish the aforestated facts.





12.    On   the   other   hand,   the   learned   counsel   appearing   for   the   respondents


supported the reasons recorded by the courts below while acquitting the accused.  He


mainly   submitted   that   the   cheques   had   been   issued   by   M/s.   A.T.   Overseas   Ltd.   to


whom no goods had been supplied by the complainants and, therefore, there was no


consideration.  In absence of any consideration, according to the learned counsel, the


accused   could   not   have   been   held   guilty   and,   therefore,   the   courts   below   rightly


acquitted the respondents.  The learned counsel relied upon the judgments delivered


in Indowind Energy Ltd. v. Wescare (India) Ltd. and Anr. [2010(5) SCC 306]  and in


Rahul   Builders    v.  Arihant   Fertilizers   &   Chemicals   and   Anr.  [2008(2)   SCC   321].


According   to   him,   even   if   two   companies   are   having   common   Directors,   both


companies would remain different legal entities and, therefore, the submission made


on   behalf   of   the   appellants   that   both   the   companies   are   sister   concerns   and,


therefore,   one   company   should   be   made   liable   for   the   dues   of   another   company


cannot be sustained.  He further submitted that there was nothing to substantiate the


                                                   7



submission that M/s. A.T. Overseas Ltd. had made payment in consideration of goods


supplied   to  M/s.  Shree  Nath  Spinners  Pvt.  Ltd.      He,  therefore,  submitted  that  the


appeals be dismissed.





13.    Upon hearing the learned counsel  appearing for the parties and upon perusal


of  the   record   pertaining   to  the   cases   and  the   impugned  judgment  delivered   by   the


High Court confirming the order passed by the trial court and upon considering the


judgments cited by the learned counsel, we are of the view that the decision rendered


by the courts below cannot be sustained.





14.    Upon   perusal   of   the   record,   we   find   that   the   complainants   had   established


before the trial court that there was an understanding among the complainants and


the accused that in consideration of supply of goods to M/s. Shree Nath Spinners Pvt.


Ltd.,       M/s.   A.T.   Overseas   Ltd.   was   to   make   the   payment.       The   aforestated


understanding   was   on   account   of   the   fact   that   directors   in   both   the   aforestated


companies were common and the aforestated companies were sister concerns.   In the


circumstances, it can be very well said and  it has been proved that in consideration


of supply  of  goods  to  M/s.  Shree  Nath   Spinners  Pvt.  Ltd., M/s.  A.T.  Overseas  Ltd.


had made the payment.  In view of the above fact,  in our opinion,  the trial court was


                                                      8



not   right   when   it     came   to   the   conclusion   that   there   was   no   reason   for   M/s.   A.T.


Overseas Ltd. to give the cheques to the complainants.  The aforestated facts are very


well   reflected   in   the   statement   made   in   the   complaint   and   in   the   evidence   by   the


complainant which have not been controverted.   Paras 2 and 3 of the complaint are


reproduced herein below:


       "2.     That the accused had business dealings with the complainant and

       supply  of the goods which duly supplied by my client vide separate bills

       from   time   to   time   which   was   duly   acknowledged   by   the   accused   no.   5

       Varun Jain director of the accused no. 1.


       3.      That in order to discharge the liability of making the payment, the

       accused   issued   following   two   cheques   in   favour   of   the     complainant

       through their sister  concern M/S A.T. Overseas Ltd. i.e. Accused No. 1

       and   the   cheques   were   duly   signed   by   Mr.   Munish   Jain   one   of   its

       directors"




15.    The trial court materially erred while coming to a conclusion  that in criminal


law   no   presumption can be   raised with regard to consideration   as no   goods had


been supplied by the  complainants to M/s. A.T. Overseas Ltd..  The trial court ought


to have considered provisions of  Section 139 of the Act, which reads as under:-


       "139.  Presumption in favour of holder - It shall be presumed, unless the

       contrary  is proved,   that the holder  of a cheque received the cheque of

       the nature referred to in Section 138   for the discharge,   in whole or in

       part, of any debt or other liability."

               


                                                     9



16.    According to the provisions of the aforestated section,   there is a presumption


with   regard   to   consideration     when   a   cheque   has   been   paid   by   the   drawer   of   the


cheque.    In   the  instant  case,    M/s.   A.T.  Overseas   Ltd.    paid  the   cheque  which   had


been duly signed by one of its Directors, namely,  Munish Jain.   Munish Jain is also a


Director in M/s. Shree Nath Spinners Pvt. Ltd.. As stated hereinabove, both are sister


concerns   having   common   Directors.         Extracts   of   books   of   accounts   had   been


produced before the trial court so as to show that both the companies were having


several transactions and the companies used to pay on behalf of each other to other


parties or their creditors.    The above fact strengthens the  presumption  to the effect


that   M/s. A.T. Overseas Ltd. had paid the cheques to the complainants, which had


been  signed   by  Munish  Jain,  in  consideration   of  goods   supplies  to  M/s  Shree   Nath


Spinners   Pvt.   Ltd.       Of   course,   the   presumption   referred   to   in   Section   139   is


rebuttable.    In the instant case,  no  effort was made by Munish Jain or any of the


Directors of M/s. A.T. Overseas Ltd. for rebuttal of the aforestated presumption and,


therefore,   the   presumption   must   go   in   favour   of     the   holder   of   the   cheques.


Unfortunately,   the   trial   court   did   not   consider   the   above   facts   and     came   to   the


conclusion that  there was no consideration for the cheques which had been given by


M/s. A.T. Overseas Ltd. to the complainants.


                                                        1



17.     It is true that a limited company is a separate legal entity  and its directors are


different   legal   persons.     In   spite   of     the   aforestated   legal   position,     in   view   of   the


provisions of Section 139   of the Act and the understanding which had been arrived


at among  the    complainants  and the accused,    one can safely  come to a conclusion


that the cheques signed by Munish Jain had been given by M/s. A.T. Overseas Ltd. to


the complainants in discharge of  a debt or  a liability,  which had been incurred by


M/s Shree Nath Spinners Pvt. Ltd.


18.     We   may   also   refer   to   the   judgment   delivered   by   this   Court   in   the   case   of


ICDS Ltd.  (supra).     In the said judgment  this Court has referred to the nature of


liability which is incurred by the one who is a drawer of the cheque.   If the cheque is


given towards any liability or debt which might have been incurred even by someone


else,  the person who is a drawer of the cheque can be made liable under Section 138


of the Act.   The relevant observation made in the aforestated judgment is as under:


        " The words "any cheque" and "other liability" occurring in Section 138

        are   the   two   key   expressions   which   stand     as   clarifying   the   legislative

        intent so as to bring the factual context within the ambit of the provisions

        of   the   statute.     These   expressions   leave   no   manner   of   doubt   that   for

        whatever   reason   it   may   be,   the   liability   under   Section   138   cannot   be

        avoided in the event the cheque stands returned by the banker unpaid.

        Any contra-interpretation would defeat  the intent of the legislature.  The

        High Court got carried away by the issue of guarantee and guarantor's

        liability and thus has overlooked the true intent and purport of   Section

        138 of the Act.

         ......


                                                       1



       The language, however, has been rather specific as regard the intent of

       the legislature.  The commencement of the section stands with the words

       "where   any   cheque".       The   above   noted   three   words   are   of   extreme

       significance,     in   particular,     by   reason   of   the   user   of   the   word   "any"   -

       the first three words suggest that in fact for whatever reason if a cheque

       is  drawn  on  an account  maintained   by  him  with  a banker in  favour  of

       another   person   for   the   discharge   of   any   debt   or   other   liability,     the

       highlighted   words   if   read   with   the   first   three   words   at   the

       commencement   of   Section   138,     leave   no     manner   of   doubt   that   for

       whatever   reason   it   may  be,   the   liability   under  this   provision  cannot   be

       avoided in the event the same stands returned by the banker unpaid. The

       legislature has been careful enough to record not only discharge in whole

       or in part of any debt but the same includes other liability as well.   This

       aspect of the matter has not been appreciated by the High Court, neither

       been dealt with or even referred to in the impugned judgment."

       

19.    Looking to the facts of the case and law on the subject,  we are  of the view that


all the four cheques referred to in both the complaints are presumed to have   been


given   for consideration.        The  presumption under Section  139  of  the  Act has  not


been rebutted by the accused and, therefore,   we are of the view that the trial court


wrongly acquitted the accused by taking a view  that there was no consideration for


which  the  cheques  were  given by  Munish  Jain to the   complainants.     The  aforesaid


incorrect view was wrongly confirmed by the High Court.     We, therefore, set aside


the acquittal order and convict accused Munish Jain under Section 138 of the Act.





20.    In view of  the aforestated facts  and legal position, in our opinion, the accused


ought to have been held guilty,  especially accused no. 4, Munish Jain who had signed


                                                                           1



all   the   cheques   for   M/s   A.T.   Overseas   Ltd.       We,     therefore,   hold   Munish   Jain,


accused   no.   4  and  respondent   no.  4   herein,   in   both   the   cases     guilty   of   the   offence


under Section 138 of the Act.


21.         Accused Munish Jain was acquitted by the trial court and the High Court has


confirmed   the   acquittal,   which   is   being   set   aside   by   this   Court   by   allowing   these


appeals.  In the circumstances, as per the provisions of Section 235(2) of the Criminal


Procedure Code, this Court will have to give an opportunity of being heard to him on


the question of sentence.  We, therefore, adjourn the case to 2.8.2011 for hearing the


accused Manish Jain on the question of sentence.   If on that day he fails to appear


before this Court, we shall hear his counsel on the question of sentence.




                                                                           ..................................................J.

                                                                           (Dr. MUKUNDAKAM SHARMA)





                                                                            .................................................J.

                                                                           (ANIL R. DAVE)

New Delhi

19th July,  2011.