K. Raghavendra Shetty vs Sri.Shivaputrappa
2022 Latest Caselaw 1171 Kant

            THE HIGH COURT OF KARNATAKA
                   DHARWAD BENCH

      DATED THIS THE 27TH DAY OF JANUARY 2022

                         BEFORE

      THE HON'BLE MR. JUSTICE M.NAGAPRASANNA

           CRIMINAL APPEAL NO.100027/2016

BETWEEN

K.RAGHAVENDRA SHETTY,
MANAGER, AGED ABOUT :39 YEARS,
ILC INDUSTRIES LTD. (AGRO DIVISION)
SITE NO.43/4, MARLANAHALLI,
R.G.MAIN ROAD, KARATAGI-583 129,
GANGAVATHI, DIST-KOPPAL.
                                           ... APPELLANT
(BY SRI DAYANAND M.BANDI, ADVOCATE)

AND

SRI SHIVAPUTRAPPA,
PROPRIETOR, AGED ABOUT 50,
AMARADEEP TRADING COMPANY,
CBS GUNJ, II GATE, APMC,
GANGAVATHI, DIST-KOPPAL.
                                         ... RESPONDENT
(BY SRI F.V.PATIL, ADVOCATE)

     THIS APPEAL IS FILED UNDER SECTION 378(4) OF THE
CR.P.C. AND PRAYED TO SET ASIDE THE ORDER DATED
02.12.2015 IN C.C.NO.1192/2013 ON THE FILE OF ADDITIONAL
CIVIL JUDGE AND JMFC, GANGAVATHI AND TO CONVICT THE
RESPONDENT FOR HAVING COMMITTED THE OFFENCE UNDER
SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881
BY ALLOWING THIS APPEAL IN THE INTEREST OF JUSTICE.
                               2




     THIS APPEAL COMING ON FOR ADMISSION THIS DAY,
THE COURT DELIVERED THE FOLLOWING:

                        JUDGMENT

The subject appeal is filed by the complainant seeking

to be aggrieved by the Judgment dated 02.12.2015 passed

in Criminal Case No.1192/2013 by the Additional Civil

Judge and JMFC, Gangavathi, which was filed for the

offence punishable under Section 138 of the Negotiable

Instruments Act, 1881 (for short, 'the NI Act').

2. Heard Sri Dayanand M.Bandi, learned counsel

appearing for the appellant-complainant and Sri F.V.Patil,

learned counsel appearing for the respondent-accused.

3. Brief facts leading for filing of the present

appeal as borne out from the pleadings are as follows :

The complainant-appellant is the Manager of the ILC

Industries Limited and the respondent-accused is in the

business of selling rice and paddy and is the proprietor of

Amardeep Trading Company, Gangavathi. It is the claim of

the complainant that both the complainant and the accused

were known to each other for a long time and on

01.02.2013, the respondent-accused had demanded the

complainant to send rice of 282 bags of 50 Kgs. totally

worth Rs.6,76,800/- and it is also claim of the complainant

that the respondent had agreed to pay the said sum in two

installments.

4. It is further contended that, believing the words of

the respondent, the complainant had supplied rice through

the invoice No.1550 and the respondent had received the

same. The complainant after a month of such supply had

approached the respondent, who in turn had handed over a

cheque for Rs.3,00,000/- drawn on ICICI Bank on

21.03.2013 this was honoured and the balance amount of

Rs.3,76,800/- was to be paid by the respondent, for which,

the respondent had issued a post dated cheque for an

amount of Rs.3,76,800/-, it was dated 20.04.2013 drawn

on ICICI Bank. When the same was presented on

21.06.2013, the said cheque was returned with

endorsement 'want of sufficient funds'.

5. Thereafter, the complainant took up legal

proceedings by issuing a notice on 02.07.2013 upon the

respondent. When the respondent failed to pay the

aforesaid amount, a complaint was registered for offence

punishable under Section 138 of the N.I.Act and

proceedings were taken up in Criminal Case No.1192/2013.

6. The Court after hearing the respective counsel

formulated the following issues.

"1. Whether the complainant proves that towards the payment of balance amount for purchase of rice from the complainant the accused has issued the cheque bearing No.116864, dated 20.04.2013 for a sum of Rs.3,76,800/- drawn on ICICI Bank, Gangavathi and when the said cheque was presented, it was dishonored for the reasons "funds insufficient" and despite of service of notice, the accused has not paid the amount and thus committed the offence punishable under Section 138 of N.I.Act?

2. What order or sentence?"

7. The complainant in order of prove his case

examined himself as P.W.1 and marked about 11

documents. The respondent neither examined any witness

nor marked any documents on his behalf. The learned

Magistrate on consideration of the documents and the

contentions advanced, by an order dated 02.12.2015

acquitted the respondent-accused of the offences

punishable under Section 138 of the N.I.Act. The ground in

which the order of acquittal is based is found at paragraph

No.12. The said paragraph reads as follows :

"12. Now it is relevant t consider as too the complaint is filed by the complainant is in individual capacity or as a authorized person of ILC Industries Ltd. Admittedly the Ex.P.1 cheque is in the name of ILC Industries Pvt. Ltd. The transaction pleaded by the complainant in the complaint is with ILC Industries Pvt. Ltd. The sale invoice produced by the complainant is relating to ILC Industries Pvt. In the reply notice the accused has clearly admitted the transaction and the due amount. The said notice also issued by the complainant as a Manager of the ILC Industries Pvt. Ltd. However no

authorization letter has been produced with the complaint or in evidence. The Ex.P.11 authorization letter has been produced only after denial of authority of the complainant by the accused in the cross examination of P.W.1. Regarding the authority of the complainant the accused has relied upon following decisions -

i. AIR 2009(NOC) 725) (Mad) between M/s. Antifriction Bearing Co.Vs.M/s.Bharath Bearing Ltd.

ii. 2009(1) Crimes 197 (Bombay) between Annasaheb Chougule Urban Co-operative Bank Ltd., vs. Naryana Pandurang Korgaonkar and another.

iii. 1997 Crl.L.J. 1942 between M/s.Swastik Caners Pvt. Ltd. vs. M/s. Deepak Brothers and others.

iv. 2009 Crl.L.J. 2154 between Govind Ram Chanani Vs. Latha and another.

I have gone through the principles laid down in the above decision. The common principle laid down in the above decisions is that if the complaint if filed on behalf of the firm or company, it should be represented by a authorized person having

authority to represent the firm through resolution, GPA or letter of authority. The director or the partner would not become the holder in due course. In the present case on hand the complainant has no doubt has produced the certified copy of the resolution passed by the board of directors in a later stage, it is pertinent to note that whether there is any indication in the complaint that Raghavendra Shetty is the authorized person to file the complaint on behalf of ILC Industries Ltd. On perusal of the averments of the complaint and the cause title to the complaint it appears that Sri Raghavendra Shetty has filed this complaint on individual capacity not as a authorized officer of the ILC Ltd., There is no averment in the complaint that he is the authorized officer of ILC Ltd. It is only stated that he is the Manager of ILC Ltd. Being the Manager, itself not confer any right to file the complaint without any kind of authorization. Without specifically mentioning that he is authorized to file the complaint and the complaint is filed as an authorized person, merely producing the resolution would not quire the defect in the complaint. Therefore it can be safely concluded that the complaint is without proper authorization and the complainant is not the holder in due course."

8. The learned Magistrate has taken into

consideration Ex.P.1-Cheque which is issued in the name of

ILC Industries Pvt. Ltd., the sale invoice produced by the

complainant relating to ILC Industries Pvt. Ltd., and the

notice being issued by the complainant as Manager of ILC

Industries Pvt. Ltd. and on perusal of the averments in the

complaint, it is indicated that Sri Raghavendra Shetty, who

is the complainant, has in his individual capacity filed the

complaint under Section 220 of Cr.P.C. and not as an

authorized Officer of ILC Industries Pvt. Ltd. There is no

evidence that the complainant had been authorized by ILC

Industries Pvt. Ltd., to file the complaint being the

Manager. The Court was of the view that he had no right to

file such complaint without placing any kind of

authorization to file one, before the Court. The Court

concluded that it was registered without proper

authorization; such complainant was not by the holder in

due course.

9. The Court further opined that Ex.P.2-Memo issued

by the Bank did not contain any details of the cheque

alleged to have dishonoured. The order of acquittal on the

aforesaid grounds is passed in favour of the respondent

and against the complainant. On a keen scrutiny of the

order passed by the learned Magistrate, fail to find any

error apparent or illegality committed by the learned

Magistrate as the order is rendered on the basis of

evidence and cogent reasons. The appeal therefore fails

and is dismissed.

SD JUDGE CKK