Gujarat High Court
Shamjibhai Manilal Bavisha Authorized ... vs State Of Gujarat on 15 December, 2023
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR LEAVE TO APPEAL) NO. 12224
of 2019
==========================================================
SHAMJIBHAI MANILAL BAVISHA AUTHORIZED PERSON OR
PROPRIETOR OF VRUNDAVAN TEXTILE
Versus
STATE OF GUJARAT
==========================================================
Appearance:
MR HARSHAD K PATEL(2844) for the Applicant(s) No. 1
MR BOMI H SETHNA(5864) for the Respondent(s) No. 2
MS CHETNA SHAH ADDL. PUBLIC PROSECUTOR for the Respondent(s)
No. 1
==========================================================
CORAM:HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 15/12/2023
ORAL ORDER
1. This is an application under Section 378(4) of the Code of
Criminal Procedure at the instance of the original complainant
seeking special leave to appeal against the judgment and order of
acquittal dated 17.05.2019 passed by the learned 3 rd Additional
Chief Judicial Magistrate, Surat, in Criminal Case No.14948 of
2017.
2. In the complaint, the case put forward by the present
applicant is that the applicant is engaged in the business of textile
market and since the respondent - accused was also engaged in
the same business, the respondent - accused had purchased the
textile material from the complainant. The complainant had raised
various bills during the period from 01.01.2017 to 28.02.2017 for
the total amount of Rs.9,70,004/-. Since the aforesaid amount was
not realized, the complainant had approached the accused,
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
whereby he was handed over cheque dated 04.04.2017 drawn by
the accused in the name of the complainant of an amount of
Rs.9,70,000/-. It is contended by the complainant that the said
cheque was signed by the accused in his presence in the name of
firm of the complainant and had assured that as and when the
cheuqe is presented, the amount will be realized.
2.1 The complainant had presented the aforesaid cheque on
05.04.2017, which was dishonoured with an endorsement of
"funds insufficient". The complainant had raised demand notice
sent by RPAD, which was duly served upon the respondent -
accused on 12.04.2017. It is further contended that the aforesaid
legal notice was received by the respondent - accused on
13.04.2017. However, for the reasons known to the accused,
neither any reply was given to such legal notice nor the amount
claimed was repaid by the respondent - accused. In such
circumstances, the complainant was constrained to approach the
Court of learned 4th Additional Senior Civil Judge and Additional
Judicial Magistrate First Class, Surat. The said complaint was filed
under Section 138 of the Negotiable Instruments Act, which was
registered as Criminal Case No.14948 of 2017.
3. After recording verification of the complainant, learned
Magistrate has issued summons upon the respondent - accused.
The summons were duly served upon the respondent - accused,
who had appeared before the Court and his plea was recorded at
Exhibit 7 under Section 251 of the Cr.P.C. Before the trial Court,
the complainant has let his oral evidence, which is recorded at
Exhibit 4 and various documentary evidence has also been placed
on record by the original complainant. These mainly include the
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
disputed cheque (Exhibit 21), written memo (Exhibit 13), demand
notice (Exhibit 14), RPAD (Exhibit 15), tracking reports (Exhibit 16
and 17), various bills (Exhibit 18 - 23), the statement of Indusind
bank (Exhibit 30), Income Tax Return for the year 2018-19 (Exhibit
30). Further statement was recorded under Section 313 of Cr.P.C.,
wherein specific defence of false bills being raised by the
complainant, was raised by the accused. It was alleged that the
complainant had misused the cheque, which was otherwise
obtained from his brother and false case has been raised against
the accused. The accused had not led any evidence or examined
any witness.
3.1 The learned Magistrate has though not accepted the
defence raised by the respondent - accused in his statement
recorded under Section 313 about misuse of the cheque, in
absence of any any evidence being brought on record by the
respondent - accused has turned down the complaint on the
ground of locus standi. Learned Magistrate has closely examined
the evidence of the complainant as well as documentary evidence
brought on record by the original complainant. Learned Magistrate,
while examining the case put forward by the complainant, noticed
that no documentary evidence has been led by the complainant to
clarify about his status of association with Vrundavan Textiles firm.
Learned Magistrate was persuaded to examine the aforesaid issue
in light of challenge put forward by the accused in cross-
examination of the complainant. Indisputably, the disputed cheque
was issued in the name of Vrundavan Textiles. In such
circumstances, learned Magistrate, in absence of any
documentary evidence being produced on record about the status
of the original complainant with Vrundavan Textiles, arrived at
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
conclusion that the complainant had no locus standi to file such
complaint.
3.2 Having held so, the learned Magistrate has further examined
the case put forward by the complainant, wherein the
contradictions, discrepancies have been noticed. Upon
comparison of the bills placed on record at Exhibit 18 to 23, which
was otherwise raised in the name of Harikrishna Creation,
whereas the Income Tax Return filed by the complainant reflects
the entry of credit in the name of the accused and not against
Harikrishna Creation. While examining the aforesaid issue, though
the learned Magistrate was not convinced with such defence of the
accused, noticed that the complainant had not produced the
income tax return of previous year to show that the goods were
actually delivered to the respondent - accused and the amounts
were pending in the account of the accused against such delivery
of the goods.
4. Mr. Harshad Patel, learned advocate appearing for the
original complainant has at the outset, invited attention of this
Court to the cause title of the original complaint to contend that
the complaint was filed by Shyamjibhai Manibhai Bavisha in his
capacity as authorized person / proprietor of Vrundavan Textile i.e.
"the payee", in whose favour the cheque was drawn. He further
submitted that the learned Magistrate committed serious error in
recording acquittal of the respondent - accused. By arriving at
such a conclusion. It was submitted that the bank account of
Vrundavan Textile is operated by the complainant as it's proprietor.
Even income tax return is also filed by the complainant as the
proprietor of Vrundavan Textile. The disputed cheque was issued
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
by the respondent - accused in the name of Vrundavan Textiles,
which was actually handed over to the original complainant. Thus,
according to the learned advocate, the complainant had become
holder in due course of such cheque being authorized person /
proprietor of the Vrundavan Textiles and the complaint at the
instance applicant was maintainable.
5. Learned advocate Mr. Patel has relied upon the judgment of
this Court in the case of Hitenbhai Parekh Proprietor - Parekh
Enterprise Vs. State of Gujarat reported in 2010 (5) GLR 4136
and has submitted that once the signature on the disputed cheque
was not denied by the respondent - accused, it was for the
accused to rebut the presumption, which has otherwise arisen in
terms of Sections 118 and 139 of the Act. He further submitted
that the learned Magistrate in absence of any probable defence
being emerged on record, committed error in shifting the burden of
proof upon the complainant by observing that no books of account
or other documentary evidence were proved to establish the fact
that the goods were actually sold and delivered to the respondent
- accused in order to establish the existence of legally enforceable
debt. According to him, the statute mandates raising of
presumption. Mr. Patel, learned advocate had also relied upon the
judgment of the Hon'ble Supreme Court in the case of Moinuddin
Abdul Sattar Shaikh Vs. Vijay D. Salvi reported in 2015(9) SCC
622 to contend that the person who draws a cheque on an account
maintained by him alone attracts the criminal liability. No further
submission has been made by the learned advocate for the
complainant.
6. Learned advocate Mr. Bomi Sethna has appeared on behalf
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
of the respondent - accused and has vehemently objected to grant
leave to appeal. He has invited attention of this Court to the
reasons recorded by the learned Magistrate while recording
acquittal of respondent - accused and has submitted that no
arguable case is raised by the learned advocate for the
complainant in absence of any explanation with regard to his locus
standi to file such complaint. In order to assist this Court, learned
advocate has placed on record the paper book consisting of the
relevant evidence brought on record. Learned advocate has
referred to the cross-examination of the complainant, wherein the
complainant had admitted that few bills produced on record does
not bear his signature. He submitted that the complainant in his
cross-examination, had though denied the fact that no entry of
credit was reflected in the name of Harikrishna Creation in the
income tax return for the year 2018-19, which is produced at
Exhibit 30. The aforesaid fact was contradicted from the
documents itself. Reliance was placed upon the entry entered in
the said income tax return of the year 2018-19 in the name of
Vrundavan Enterprise. He, therefore, submitted no entry in the
name of Harikrishna Creation was reflected. He further referred to
the details incorporated in the same under the head of income
derived was of partnership firm, wherein the reference was in the
name of Vrundavan Enterprise. As against that, the learned
advocate had referred to the balance-sheet attached with the such
returns filed by the original complainant under the signature of
Shyamjibhai Manilal Bavisha as proprietor of Vrundavan Textiles.
Contradicting the aforesaid fact, he further referred to the affidavit
of deposition filed by the original complainant at Exhibit 4 in his
capacity as partner / authorized person of Vrundavan Textiles.
Noticing the aforesaid discrepancy, the learned advocate
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
submitted that specific challenge was made by the accused with
regard to the status of original complainant to lodge such
complaint, wherein he has admitted that the complaint was
lodged as proprietor of the firm and not as a partner of the firm,
whereas the deposition is given as partner of the firm. He,
therefore, submitted that in absence of any documentary evidence
being brought on record by the complainant with regard to his
status associated with Vrundavan Textile, the learned Magistrate
has rightly acquitted the respondent - accused. He, therefore,
urged this Court not to entertain present application seeking leave
to appeal and to dismiss the appeal.
7. The only question, which falls for consideration of this Court
is as to whether the present appellant owns the said firm
"Vrundavan Textiles" as a sole proprietor or not. The learned
Magistrate upon appreciation of the admission of the present
applicant in his cross-examination, has arrived at conclusion that
the affidavit is filed by the complainant claiming as partner /
authorized person of "Vrundavan Textiles" whereas in the cause
title of the complaint, he has lodged complaint in his capacity as
authorized person / proprietor of "Vrundavan Textiles". In the legal
notice, which is issued, raising demand against the respondent -
accused, he has described himself as partner / proprietor of
"Vrundavan Textiles". In such circumstances,naturally, the
question would arise for consideration is about locus standi of the
complainant to lodge such complaint when the cheque has been
issued in the name of the firm i.e. "Vrundavan Textiles". In the
cross-examination of the complainant, specific question was raised
by the respondent - accused with regard to production of any
documentary evidence clarifying his status of being associated
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
with "Vrundavan Textiles" to which the complainant has admitted
by submitting that there is no documentary evidence to establish
the fact that he is proprietor of the firm. Learned Magistrate has
followed the principle laid by the Hon'ble Supreme Court in the
case of Milind Shripad Chandurkar Vs. Kalim M. Khan reported
in 2011(2) GLR 1670. The relevant observations of the Hon'ble
Supreme Court are reproduced as under:
14. Relevant part of the affidavit filed by the
appellant/complainant before the trial Court reads as
under:
"I, Shri Milind Shripad Chandurkar, Aged about 37
years, Indian Inhabitant, Occ. Business, Proprietor of
M/s. Vijay Automobiles, having address at Sector-29,
Dronagiri Node, Uran, Dist. Raigad, take oath and
state on solemn affirmation as under.....
I state that in due discharge of legal liability of the
accused as mentioned in foregoing paras, the accused
issued one cheque dtd. 28.4.2005 in my name i.e. in
the Name M/s. Vijaya Automobilies which was drawn
on Development Credit Bank, Kurla Branch, Mumbai-
70 bearing Cheque No.490592, for Rs.7,00,000/-
(Rupees Seven Lakhs only)."
The Relevant part of his cross-examination reads as
under:-
"It is true that till today I had not produced any
documenta reported inry evidence to show that I am
owner of Vijaya Automobiles......Till today I had not
produced any documentary evidence to support."
15. The complainant had also examined Shri S.K. Sharma,
owner of M/s. Vikas Travels under whom the respondent
no.1 had been working as a sub-contractor. In his cross-
examination, reported in Shri S.K. Sharma also stated as
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
under:-
"I have reported in no documentary evidence to show
that complainant Milind Shripad Chandurkar owns the
petrol pump."
16. Thus, from the above, it is evident that the
appellant/complainant could not produce any document to
show that he was the proprietor of Vijaya Automobiles in
spite of the fact that the issue had been agitated by the
respondent no.1/accused at every stage. It is also evident
from the documents on record that in the list of witnesses
the complainant had mentioned the name of his banker as
a witness, however, the said banker was not examined.
17. It may also be pertinent to mention here that
appellant did not make any attempt to adduce additional
evidence at the appellate stage also. No document has
ever been filed to substantiate his averment in this regard.
18. Section 7 of the Act 1881 defines "Payee" as the
person named in the instrument, to whom or to whose
order the money is by the instrument directed to be paid.
Section 8 defines "the holder of the cheque" as any person
entitled in his own name to the possession thereof and to
receive or recover the amount due thereon from the parties
thereto. Section 9 defines "holder in due course" as any
person who for consideration became the possessor of a
cheque if payable to a bearer or the payee or endorsee
thereof.
19. Section 138 provides for penalties in case of
dishonour of certain cheques for insufficiency of funds in
the accounts. However, exception contained in clause (c)
thereof reads as under:
138 (c) "The drawer of such cheque fails to make the
payment of the said amount of money to the payee
or, as the case may be, to the holder in due course of
the cheque, within fifteen days of the receipt of the
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
said notice." (Emphasis added)
20. Section 142 provides for taking cognizance of the
offence notwithstanding anything contained in Cr.P.C.
which reads as under:
142 "(a) no court shall take cognizance of any
offence punishable under Section 138 except upon a
complaint, in writing, made by the payee or, as the
case may be, the holder in due course of the
cheque." ( reported inEmphasis added)
21. This Court in Shankar Finance and Investments v.
State of Andhra Pradesh & Ors., (2008) 8 SCC 536, dealt
with the issue in reported involved herein elaborately and
held that where the "payee" is a proprietary concern the
complaint can be filed
"(i) by the proprietor of the proprietary concern
describing himself as the sole proprietor of the
"payee";
(ii) the proprietary concern describing itself as the
sole proprietary concern represented by its
proprietor; and
(iii) the proprietor or the proprietary concern
represented by the Attorney Holder under the power
of attorney executed by the sole proprietor.
However, it shall not be permissible for an Attorney Holder
to file the complaint in his own name as if he was the
complainant. He can initiate criminal proceedings on behalf
of the principal.
22. In a case of this nature, where the "payee" is a
company or a sole proprietary concern, such issue cannot
be adjudicated upon taking any guidance from Section 142
of the Act 1881 but the case shall be governed by the
general law i.e. the Companies Act 1956 or by civil law
where an individual carries on business in the name or
style other than his own name. In such a situation, he can
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
sue in his own name and not in trading name, though
others can sue him in the trading name. So far as Section
142 is concerned, a complaint shall be maintainable in the
name of the "payee", proprietary concern itself or in the
name of the proprietor of the said concern.
23. The Court placing reliance on earlier judgments,
particularly, in Janki Vashdeo Bhojwani v. Indusind Bank
Ltd., (2005) 2 SCC 217, held that the general principles of
company law or civil law would apply for maintaining the
complaint under Section 138 of the Act 1881.
24. In National small Industries Corporation Ltd. v. State
(NCT of Delhi) & Ors., (2009) 1 SCC 407, this Court held
as under:
14. "The term "complainant" is not defined under the
Code. Section 142 of the NI Act requires a complaint under
Section 138 of that Act to be made by the payee (or by the
holder in due course)..."
25. Thus, in view of the above, the law stands crystallised
to the effect that a person can maintain a complaint
provided he is either a "payee" or "holder in due course" of
the cheque."
8. In view of above principle laid down by the Hon'ble Supreme
Court, it is crystal clear that a person can maintain a complaint
provided he is either a "payee" or "holder in due course" of the
cheque. Indisputably, in the facts of the case, the cheque has been
issued in the name of "Vrundavan Textiles". Thus, it was for the
complainant to prove nexus by leading cogent material of having
authority to lodge the complaint under Section 138 of the Act. As
held by Hon'ble Supreme Court in the case of Shankar Finance
and Investments v. State of Andhra Pradesh & Ors. reported in
(2008) 8 SCC 536 to maintain the compliant under Section 138 of
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
the Negotiable Instruments Act, as provided under Section 142 of
the Act, it has to be filed in the name of "payee". In the present
case, in the name of proprietorship concern itself or in the name of
proprietor of the said concern. However, in absence of any cogent
material being brought on record by the complainant reflecting his
status as sole proprietor of the said proprietorship concern, no fault
can be found with the approach of the learned Magistrate in
dismissing the complaint.
9. So far as reliance placed by the learned advocate on the
income tax return form placed on record of A.Y. 2018-19 is
concerned, it is evident that the alleged transaction with the
respondent - accused has taken place during the period from
03.01.2017 to 28.02.2017, which relates to F.Y. 2016-17. Hence,
the relevant assessment period of the aforesaid transaction would
be A.Y. 2017-18. In such circumstances, the reliance upon
aforesaid document, which is income tax return form of A.Y. 2018-
19 does not come to the aid of the complainant to establish the
fact that the complainant was a sole proprietor as on date of
issuance of the cheque which is 04.04.2017. The document in the
name of balance-sheet as on 31.03.2018 annexed with the
aforesaid income tax return form of A.Y. 2018-19 reflects the
outstanding amount of Rs.9,70,000/- in the name of Pradipbhai
Bhimjibhai Mangroliya, who is otherwise a proprietor / authorized
signatory of "Harikrishna Creation", respondent - accused.
However, the said document is submitted as on date of filing of
income tax return which relates to 30.11.2018. Though the
aforesaid document bears signature of the present complainant, in
his capacity as proprietor of "Vrundavan Textile", the same has
rightly not been taken into consideration by the learned Magistrate
NEUTRAL CITATION
R/CR.MA/12224/2019 ORDER DATED: 15/12/2023
undefined
as the aforesaid document has been entered subsequent to
issuance of cheque. Thus, in absence of any document prior to
issuance of cheque being brought on record, learned Magistrate
has rightly arrived at conclusion that the complainant has failed to
adduce the documentary evidence to satisfy his nexus with
"Vrundavan Textiles" as alleged in the complaint.
For the foregoing reasons, in the opinion of this Court, no
arguable case is made out to present application seeking leave to
appeal and hence, is hereby rejected. Rule is discharged.
Consequently, Criminal Appeal is disposed of.
(NISHA M. THAKORE,J)
Y.N. VYAS
