Telangana High Court
M/S. Koundinyasa Condtructions ... vs The State Of A.P., Rep By Pp., on 9 July, 2024
THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL REVISION CASE No.1296 OF 2008
ORDER:
1. The revision petitioners/A1 and A3 were convicted by the XI Additional Chief Metropolitan Magistrate at Secunderabad, in C.C.No.876 of 2006, vide Judgment dated 19.11.2007, for the offence under Section 138 of the Negotiable Instruments Act and sentenced to undergo Simple Imprisonment for a period of one year, each, and to pay a fine of Rs.5000/- each. Out of the fine amount, complainant was awarded Rs.5,000/- towards defraying expenses in filing the complaint and continuing the same. Accused No.2 was not found guilty. Aggrieved by the same, the accused Nos.1 and 3 preferred appeal in Crl.A.No.478 of 2007 on the file of Special Judge for Trial of Offences under SCs & STs (POA) Act-cum-VI Additional Metropolitan Sessions Judge, Secunderabad, and the learned Sessions Judge vide Judgment dated 7.08.2008, while dismissing the appeal reduced the sentence of imprisonment of from one year to six months simple imprisonment, each. Aggrieved by the same, present revision is filed. 2
2. Heard learned counsel for the revision petitioners/A1 and A3 and learned Assistant Public Prosecutor for the respondent State.
3. Briefly, the case of the complainant is that the complainant was carrying on construction activity. In the process of construction, A1 company was entrusted with civil works at Orissa as a Sub-contractor to construct Cyclone Relief Houses during 2001-2002. Accused No.1 received substantial amounts from the complainant on various dates as advance for completing the works. However, they failed to carryout works as promised. When asked to return the said advance amounts, the cheque in question was issued to return the advance amounts since the work was not done. The said cheque when presented for clearance was returned unpaid for the reason of 'insufficient funds'. Legal Notice was issued which was served on Accused. Since the amount covered by cheque was not paid, having received notice, the complainant filed the case before the trial Court for the offence under Section 138 of the Negotiable Instruments Act.
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4. In support of the complainant's case, PWs.1 and 2 were examined and Exs.P1 to P13 were marked. The accused examined one witness DW1 who is representative of the company and marked Exs.D1 to D6.
5. The defence of the accused was that there was no outstanding and complainant failed to prove the outstanding.
6. Learned Counsel appearing for the revision petitioners would submit that;
i) firstly the notice is defective since the amount over and above the cheque amount was demanded. Having asked to arrange the cheque amount, notice was sent to pay interest at 18% and also Rs.2500/- towards costs of the notice.
ii) The Managing Director was not made a party to the proceedings, as such, not making the Managing Director as party is fatal to the prosecution.
iii) The 2nd accused was an authorised signatory, but, does not fall within the meaning of persons-in-charge of the company as required under Section 141 of the Negotiable Instruments Act. Only for the reason of signing the cheques, he cannot be made as accused.
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7. In support of his argument, counsel relied on the Judgment of the Honourable Supreme Court in Dilip Hariramani vs. Bank of Baroda1 wherein the Honourable Supreme Court was dealing with the persons who can be prosecuted as responsible on behalf of the company.
8. He also relied on the Judgment of Kerala High Court in A.C.Raj, Inchivila, Thottathu Veedu v. M.Rajan, Ezhakudivila Veedu 2 wherein the learned Single Judge of Kerala High Court while dealing with the case under Section 138 of the Negotiable Instruments Act, found that the cheque was for Rs.5,79,000/- and the notice for Rs.6,50,000/-was sent. In the said circumstances, Court found that it was not in compliance with proviso under Section 138(c) of the Negotiable Instruments Act.
9. The 2nd petitioner/A3 was authorised by the Company to sign on the cheques meant for payment to others by the Company. In the said circumstances, A3 is the person responsible for running of the company on a day to day basis 1 2022 AIR (Supreme Court) 2258 2 1997 CriLJ 1939 5 and the argument that A3 cannot be a 'person' as mentioned under Section 141 of the Negotiable Instruments Act, is incorrect.
10. In the notice that was issued, the cheque amount was specifically mentioned and then asked for additional interest and also costs towards the notice being sent. Once it is specifically mentioned regarding the cheque amount to be paid, though, there is a demand for payment of additional interest or towards costs of the notice, that cannot be in violation of proviso to Section 138 of the Negotiable Instruments Act since the cheque amount was specifically asked for.
11. Having gone through the record, both the Courts below have dealt with all the grounds raised by the defence regarding the outstanding. Having gone through the defence exhibits which are IT returns filed by the accused, I do not find that the case of the complainant is dented in any manner.
12. The jurisdiction of the Court under Section 397 can be exercised so as to examine the correctness, legality or proprietary of an order passed by the trial court or the inferior court, as the case may be. Though the section does not 6 specifically use the expression 'prevent abuse of process of any court or otherwise to secure the ends of justice', the jurisdiction under Section 397 is a very limited one. The legality, proprietary or correctness of an order passed by a court is the very foundation of exercise of jurisdiction under Section 397 but ultimately it also requires justice to be done. The jurisdiction could be exercised where there is palpable error, non-compliance with the provisions of law, the decision is completely erroneous or where the judicial discretion is exercised arbitrarily. Further the facts may not be re-assessed until there is total non-application of mind to the facts.
13. I do not find any infirmity with the finding of the Courts below regarding outstanding. However, the Court below has convicted and sentenced the A1-company also to suffer Simple Imprisonment for a period of six months. The Company cannot be sentenced to imprisonment. Accordingly, the sentence of imprisonment as against A1-Company is set aside.
14. This Court deems it appropriate to direct payment of the cheque amount of Rs.15 lakhs as fine payable by Accused No.1 7 and Accused No.3 shall pay an amount of Rs.1 lakh towards fine before the Court below within six weeks from the date of receipt of a copy of this order. On such deposit, the entire amount shall be paid as compensation to the complainant. In the event of failing to deposit the fine amount within six weeks as directed, there shall be default sentence of one year which shall be undergone by A3. The default sentence in all the other cases shall run concurrently. In the event of the Company not paying fine amount, the complainant is at liberty to recover the fine amount, in accordance with law.
15. Accordingly, Criminal Revision Case is dismissed.
As a sequel, miscellaneous applications, if any, pending shall stand closed.
___________________ K.SURENDER, J Date: 09.07.2024 tk