M/S Cafe Coffee Day vs H R Lalithamma
2021 Latest Caselaw 1849 Kant

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     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 31ST DAY OF MARCH, 2021

                         BEFORE

           THE HON'BLE MR. JUSTICE H.P. SANDESH

             CRIMINAL PETITION No.7495/2020

BETWEEN:

     "M/S CAFÉ COFFEE DAY
     REPRESENTED BY ITS DIRECTORS

1.   JAYARAJ CHANNAPPA HUBLI
     DIRECTOR

2.   MALAVIKA SIDDHARTHA HEGDE
     DIRECTOR

3.   KANARATH PAYATTIYATH BALARAJ
     DIRECTOR

4.   SAKALESPUR VISWESWARAIYA RANGANATH
     DIRECTOR

5.   SADANANDA THIMMA POOJAR
     DIRECTOR

6.   DURAISWAMY SANKARANARAYANAN
     DIRECTOR

7.   VENU AMARA MADHAV
     DIRECTOR

8.   ALBERT JOSEF HIERONIMUS
     DIRECTOR

9.   NITHIN BAGMANE
     DIRECTOR
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10.    H.K.LAXMAN
       AUTHORIZED SIGNATORY
       COFFEE DAY GLOBAL LIMITED
       HAVING THEIR OFFICIAL ADDRESS AT:

       No.23/2, COFFEE DAY ENTERPRISES LIMITED
       COFFEE DAY SQUARE, VITTAL MALLYA ROAD
       BENGALURU 560 001, KARNATAKA
       T+19 80 40012345

       ALSO HAVING THEIR REGISTERED OFFICE AT,

       THE COFFEE DAY GLOBAL LIMITED
       K.M.ROAD, CHIKMAGALUR
       577101, KARNATAKA

                                          ... PETITIONERS
              (BY SRI.S.G.BHAGAVAN,ADVOCATE)
AND:

       H R LALITHAMMA
       WIFE OF KAPIMIPATHAIAH
       AGED ABOUT 92 YEARS, COFFEE PLANTER
       BILIGIRIHALLI ALUR TALUK
       HASSAN DISTRICT.

       PRESENTLY RESIDING AT
       #B-1, KHB COLONY
       PUTTENAHALLI, YEALAHANKA NEW TOWN
       BENGALURU-560064
       REPRESENTED BY POWER OF ATTORNEY HOLDER
       Ms SHRADAMBA K
                                         ... RESPONDENT

           (BY G.V. CHANDRASHEKAR., ADVOCATE )

     THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
OF CR.P.C PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN
C.C.NO.13758/2020 PENDING ON THE FILE OF XVIII
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU
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FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE
NEGOTIABLE INSTRUMENTS ACT.

     THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 12.03.2021, THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:


                            ORDER

This petition is filed under Section 482 of Cr.P.C, praying

this Court to quash the entire proceedings in C.C.No.13758/2020

for the offence punishable under Section 138 of the Negotiable

Instruments Act, (for short 'NI Act') pending on the file of XVIII

Additional Chief Metropolitan Magistrate, Bengaluru.

2. The factual matrix of the case is that respondent

herein has filed the private complaint under Section 200 of

Cr.P.C. invoking the offence punishable under Section 138 of the

NI Act against the petitioners herein. Learned Magistrate, after

considering the sworn statement filed by way of affidavit by the

complainant, issued the process against the present petitioners.

Hence, the present petition is filed before this Court.

3. The main contention of the learned counsel

appearing for the petitioners is that the complaint is filed against

the Directors of the M/s. Café Coffee Day, who are the

petitioners herein but M/s. Café Coffee Day is not a juristic

person. In para No.9 of the petition, it is averred that M/s. Café

Coffee Day is not a juristic person and there is no compliance of

Section 141 of the NI Act. Nothing is averred with regard to the

fact that the petitioners are incharge of the affairs of the

Company. The complaint is filed by the Power of Attorney Holder

and no averment is made in the complaint that the Power of

Attorney Holder is having knowledge about the transaction. The

cheque is signed by Lakshman for M/s. Coffee Day Global

Limited and the complaint does not disclose that the Power of

Attorney Holder is having the knowledge of the same. The

sworn statement constitutes an affidavit but the said affidavit

filed by the complaint is also defective. The documents are also

not exhibited by the Trial Court before issuance of the process

against the petitioners herein.

4. Learned counsel in support of his arguments relied

upon the judgment of the Apex Court in the case of

A.C.NARAYANAN V. STATE OF MAHARASHTRA AND

ANOTHER reported in 2013 AIR SCW 6807 wherein at para

15, the points that came up for consideration before the Apex

Court were:-

(i) Whether a Power of Attorney Holder can sign and file a complaint petition on behalf of the complainant?/ Whether the eligibility criteria prescribed by Section 142(a) of NI Act would stand satisfied if the complaint petition itself is filed in the name of the payee or the holder in due course of the cheque?

(ii) Whether a Power of Attorney Holder can be verified on oath under Section 200 of the Code?

(iii) Whether specific averments as to the knowledge of the Power of Attorney Holder in the impugned transaction must be explicitly asserted in the complaint?

(iv) If the Power of Attorney Holder fails to assert explicitly his knowledge in the complaint then can the Power of Attorney Holder verify the complaint on oath on such presumption of knowledge?

(v) Whether the proceedings contemplated under Section 200 of the Code can be dispensed with in the light of Section 145 of the N.I. Act which was introduced by an amendment in the year 2002?

An elaborate discussion has been made by the Apex Court

with regard to filing of the complaint by the Power of Attorney

Holder and in the said judgment, the Apex Court clarified that

the Power of Attorney Holder can sign and file the complaint on

behalf of the complainant - payee. However, whether the Power

of Attorney Holder will have the power to further delegate the

functions to another person will completely depend on the terms

of the General Power of Attorney. The Apex Court further

observed that the Power of Attorney Holder can depose and

verify on oath before the Court in order to prove the contents of

the complaint. However, the Power of Attorney Holder must

have witnessed the transaction as an agent of the payee/holder

in due course or possess due knowledge regarding the said

transactions. It is further observed that it is required by the

complainant to make specific assertion as to the knowledge of

Power of Attorney Holder in the said transaction explicitly in the

complaint and the Power of Attorney Holder, who has no

knowledge regarding the transactions cannot be examined as a

witness in the case.

5. Learned counsel also relied upon the judgment of the

Apex Court in the case of V.R.KAMATH V. DIVISIONAL

CONTROLLER, K.S.R.T.C., BANGALORE AND ANOTHER

reported in 1998 (1) Kar. L.J. 529 regarding the defective

affidavit and entering the name and prescribed particulars of

deponent and obtained his signature in the register. The entries

must be in serial order and affidavit shall bear the serial number

and the place of attestation must also be written on affidavit.

The affidavit not containing these particulars cannot be accepted

as duly attested.

6. Learned counsel referring to these judgments would

vehemently contend that there is no declaration of the Power of

Attorney Holder for having knowledge of the facts and the

affidavit is also defective and hence, there cannot be any order

of taking cognizance against the petitioners herein.

7. Learned counsel for the respondent, in support of his

arguments, would vehemently contend that out of 17 cheques,

only 6 cheques were presented and M/s. Café Coffee Day is the

division of the juristic person. Learned counsel also would

vehemently content that Section 12 of the Companies Act is

clear that the registered office of the Company is a party to the

proceedings and hence, the same is mentioned in the complaint.

The registered office is capable of receiving and acknowledging

all communications and notices as may be addressed to it.

Learned counsel referring to the same, would vehemently

contend that notice was issued against a juristic person itself and

the petitioners herein, while giving reply, have not disputed the

issuance of cheques. In the reply, the issuance of cheques has

been admitted and also the part payment in terms of Annexure-

B. The petitioners have also sought time, when the notice was

given and now they cannot contend that a juristic person is not

made as a party to the complaint. The mis-description of the

name of the Company is not a ground for seeking quashment of

the proceedings against the Company. The exclusion of the word

"Global" will not take away the case of the respondent herein.

8. Learned counsel also would contend with regard to

the documents are concerned that the originals could not be

secured due to Covid-2019 and the SOP was also issued

regarding the function of the Court. When the SOP was directed,

the petitioners cannot contend that the original documents are

not placed before the Court. The complainant, who had

represented through the Power of Attorney Holder categorically

stated in the affidavit that he is aware of the facts of the case.

When such being the case, it cannot be contended that the

complainant is not having the knowledge.

9. Learned counsel also would contend that in para

Nos.5, 6 and 13 of the affidavit filed before the Court, it is

categorically mentioned with regard to compliance of Section

141 of the NI Act. Hence, the petitioners cannot find fault with

the complaint and its enclosures, when the averments made in

the complaint are specific.

10. Having heard the learned counsel for the petitioners

and also learned counsel appearing for the respondent, the

question that would arise before this Court is whether the

complaint is maintainable as against the petitioners herein and

the very contention of the learned counsel for the petitioners

that complaint is not against a juristic person, is to be accepted

or not. On perusal of the complaint, a specific averment has

been made in the complaint at para No.5 that for the discharge

of the said admitted liability, the Company represented by its

Directors, who are accused Nos.1 to 9 herein collectively took a

decision to clear the liability and convinced the complainant to

accept the post dated cheques. Hence, issued totally 17

cheques signed by the authorized signatory, namely, Accused

No.10 herein. Out of 17 cheques, the complainant initially

presented 6 cheques for encashment for a sum of

Rs.34,59,464/-, the details of the said cheques are also

furnished in the complaint. It is also averred in the complaint

that on presentation of those 6 cheques, the cheques had

bounced for want of sufficient funds. The legal notice also got

issued to all the Directors and Authorized Signatory/ies, who are

in charge of the day-to-day affairs of the Company, namely, all

the accused herein i.e., accused Nos.1 to 10. The copy of the

notice issued against all the Directors are also produced before

the Court.

11. Having taken note of the averment made in para

Nos.5 and 6, it is clear that these accused persons were in the

realm of affairs of the Company and also the specific pleading is

made that they were in charge of day-to-day affairs of the

Company. It is to be noted that in para No.5 of the complaint, a

categorical allegation has been made that the accused persons

collectively took a decision to clear the liability and convinced the

complainant to accept the post dated cheques. Learned counsel

for the petitioners also not disputed the issuance of the cheques

and so also the cheques being dishonoured.

12. Learned counsel appearing for the respondent also

brought to the notice of this Court that in the sworn statement,

the Power of Attorney Holder has categorically stated that he is

the authorized Power of Attorney Holder of the complainant and

he was authorized to file the complaint on behalf of the

complainant. In para No.1, the Power of Attorney Holder has

categorically stated that he knew the facts of the case and has

been authorized to swear the affidavit. In the affidavit also, he

has sworn to that accused Nos.1 to 9 are the Directors, who are

in charge of the day-to-day management of the Company and

accused No.10, who had issued the cheque is an authorized

signatory of the Company.

13. It is also contended that the complainant had

supplied the large quantity of coffee beans, for which, the

payment was not made. Despite several requests, the

complainant was assured that the payment will be made and

accordingly, accused had issued the post dated cheques in

favour of the complainant. In his affidavit, it is sworn to that

notice was issued to all the Directors and Authorized Signatories.

The contention of the petitioners that the Power of Attorney

Holder has not stated that he is having the knowledge of the

facts of the case, cannot be accepted for the reason that in the

affidavit, the person, who has been authorized to sworn the

affidavit had deposed that he is having knowledge and

information about the transaction. When such being the case,

the petitioners cannot contend that the Power of Attorney Holder

is not having the knowledge. No doubt, the Apex Court in the

judgment referred supra categorically held that the complaint

filed by the Power of Attorney Holder should have the knowledge

about the transaction. In the case on hand, the authorized

signatory i.e., the complainant had made an averment in the

affidavit and also in the complaint for having knowledge and

information about the transaction. Whether the complaint had

knowledge or not would come to light only when he is subjected

to the cross-examination. At the stage of taking cognizance, the

Court has to take note of the averment made in the complaint

and also the sworn statement. It is not in dispute that the

affidavit has been filed before the Court. However, it is to be

noted that the affidavit has been filed on 12.12.2020 that is

during the course of the pandemic situation and it is also to be

noted that in the list of documents filed along with the

complaint, all the documents are referred but not marked. In

para No.4 of the affidavit, the averments are made with regard

to the documents and particulars of the cheques. In the

circumstances, the petitioners cannot find fault with the

complaint.

14. The main contention of the learned counsel for the

petitioners is that the complaint is not lodged against a juristic

person. On perusal of the complaint, it discloses that the same

is filed against M/s Café Coffee Day, represented by its

Directors, whereas the word "Global" is missing. In order to

substantiate the contention of the respondent, learned counsel

also brought to the notice of this Court that Annexure-A notice

was issued against a juristic person i.e., M/s. Café Coffee Day

Global Limited and the specific averments are made against the

representative of the Company i.e., its Directors and Authorized

Signatories. It is also important to note that the notice was

acknowledged and reply was given by M/s Café Coffee Day, but

in the reply, the only dispute raised is with regard to the

recipient Nos.5, 7, 8 and 9 stating that they are irrelevant

parties. However, recipient No.5 is not a Director and others are

not directly connected to M/s. Café Coffee Day Global Limited

and they are not aware of recipient No.5. It is further pertinent

to note that in para No.2 of the said reply, they have not

disputed the supply of coffee beans to their Company, but an

averment is made with regard to the payments for supply of

coffee beans in the year 2019, though the complainant is well

aware of the situation that their Company, has been facing due

to the unfortunate incident, on account of untimely demise of the

Chairman and Managing Director. It is further averred that in

view of which their Company had approached the complainant

and had assured that all the commitments shall be honoured and

payments will be cleared during the said financial year and had

sought time to make the payment till May, 2020.

15. Having perused the reply notice, it clearly depicts

that they made part payment of Rs.12 lakhs to the complainant

and now, only on the ground of technicality, the petitioners

cannot contend that a juristic person is not made as a party to

the proceedings. Annexure-C discloses that the rejoinder was

given to the reply notice at Annexure-B and so also Annexure-D

was given to M/s. Coffee Day Global Limited. When such being

the facts and circumstances of the case, now the petitioners

cannot contend that the complaint is not maintainable. It is also

important to note that though "M/s. Coffee Day Global Limited"

has not been arraigned as the accused, it is rightly pointed out

by the learned counsel for the respondent that when the notice

was issued against M/s. Coffee Day Global Limited and reply was

given, they cannot find fault with filing of the complaint by the

complainant since they took defence that some of the recipients

are not having any connections with the Company. The fact that

the Company had purchased the Coffee Beans is not in dispute.

It is also important to note that in the cause title of the

complaint, it clearly discloses that the respondent is also having

its registered office at The Coffee Day Global Limited, K.M.Road,

Chikmagalur, Karnataka. Hence, the very contention of the

learned counsel for the petitioners that the complaint is not

made against a juristic person, cannot be accepted. The

defences which have been taken by the petitioners are to be

considered only during the course of the trial and not at this

stage.

16. Having perused the material on record, the

contentions raised by the petitioners herein cannot be accepted

at this stage since it is a matter of trial. The complainant can

even array the Company at any stage. Herein, it is a case of

issuance of notice against a juristic person and its Directors.

Hence, I am of the opinion that it is not a case for quashment of

the proceedings on the ground of technicality and the Court has

to look into the substantative material available on record and

substantative justice has to be done. Hence, I do not find any

merit in the petition to quash the proceedings initiated against

the petitioners herein.

17. In view of the discussion made above, I pass the

following:-

ORDER

The petition is hereby rejected.

In view of disposal of the main petition, I.A.No.1/2020 for

stay does not survive for consideration and the same stands

disposed of.

Sd/-

JUDGE

PYR