A Francis vs M/S Future Money
2022 Latest Caselaw 8093 Kant

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 3RD DAY OF JUNE 2022

                           BEFORE

THE HON'BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY

  CRIMINAL REVISION PETITION No.477 OF 2013

BETWEEN:

A.Francis,
Marya Beauty Parlour,
Devasandra,
Nethravathi Extn.,
Opp:Venkateshwara Theatre,
K.R.Puram,
Bangalore-560 036.                            .. Petitioner

 ( By Sri S.S.Haveri, Advocate )

AND:

M/s.Future Money,
A Division of Future
Capital Holdings Ltd.,
No.242, 13th Cross,
CMH Road, Indiranagar,
Bangalore-560 038,
Rep. by its Officer,
Mr.V.Jansi Rao.                               .. Respondent

 ( By Sri Francis Xavier, Advocate )

     This Criminal Revision Petition is filed under Section 397
and Section 401 of Cr.P.C. praying to set aside the judgment
and award of sentence passed by the learned Presiding Officer,
Fast Track Court (Sessions)-XI, Bengaluru, in Crl.Appeal
No.577/2012, dated 25.03.2013, confirming the judgment and
sentence passed by the XV Addl.Chief Metropolitan Magistrate,
                                                 Crl.R.P.No.477/2013
                                 2


Bengaluru in C.C.No.32144/2010, dated 24.8.2012, with costs
throughout, in the interest of justice.

      This Criminal Revision Petition having been heard through
Physical Hearing/Video Conferencing Hearing and reserved for
orders on 30.05.2022, coming on for pronouncement this day,
the Court made the following:

                             ORDER

The present petitioner was accused in

C.C.No.32144/2010, in the Court of the learned XV

Addl.Chief Metropolitan Magistrate, Bengaluru City,

(hereinafter for brevity referred to as the "trial Court").

By its judgment dated 24.08.2012, the trial Court

convicted the accused for the offence punishable under

Section 138 of Negotiable Instruments Act, 1881

(hereinafter for brevity referred to as `N.I.Act') and was

sentenced accordingly.

2. The summary of the case of the complainant in the

trial Court was that the accused had availed a personal

loan facility from the complainant, which is a registered

Company under the Companies Act, 1956, and thereafter,

towards the part repayment of the loan amount, he had

issued two cheques in favour of the complainant, both Crl.R.P.No.477/2013

drawn on ICICI Bank, Indira Nagar Branch, Bengaluru,

both dated 13.02.2010, for a sum of `25,000/- and

`50,000/- respectively. When the said cheques were

presented by the complainant for their realisation through

its Banker, both cheques came to be returned unpaid with

the Banker's shara "insufficient funds". Thereafter, the

complainant got issued a legal notice dated 15.04.2010

upon the accused under Registered Post Acknowledgement

Due, calling upon the payment of the cheque amount.

However, the said notice returned with the postal shara

"intimation delivered" on 17.04.2010. Since the accused

did not repay the loan amount, the complainant was

constrained to institute a case against the accused in the

trial Court for the offence punishable under Section 138 of

N.I.Act.

3. Since the accused pleaded not guilty, charges were

framed against the accused for the alleged offence.

4. The complainant in order to prove its case, got

examined one Sri V.Jansi Rao, Power of Attorney Holder of Crl.R.P.No.477/2013

the complainant-Company as PW-1 and got marked

sixteen documents from Exs.P-1 to P-16. On behalf of the

accused, neither any witness was examined nor any

documents were marked.

5. After hearing both side, the trial Court by its

impugned judgment dated 24.08.2012, convicted the

accused for the offence punishable under Section 138 of

N.I.Act and sentenced him accordingly.

6. Challenging the said order, the accused

preferred an appeal in Criminal Appeal No.577/2012,

before the learned Presiding Officer, Fast Track Court

(Sessions)-XI, Bengaluru, (hereinafter for brevity referred

to as `Sessions Judge's Court), which by its judgment

dated 25.03.2013, dismissed the appeal by confirming the

judgment of conviction passed by the trial Court. It is

against these judgments of conviction, the accused has

preferred this appeal.

7. The respondent is being represented by its learned

counsel.

Crl.R.P.No.477/2013

8. Records from the trial Court and Sessions

Judge's Court pertaining to the matter were called for and

the same are placed before the Court.

9. Heard the arguments from both side. Perused the

materials placed before this Court.

      10. The only point that arises for      my consideration

is,

           "Whether the impugned judgments
      suffer     from     perversity,      illegality,

impropriety warranting any interference at the hands of this Court".

11. The learned counsel for the petitioner in his

argument submitted that he would not deny or dispute the

alleged fact of availment of personal loan by the accused

from the complainant-Company and also issuance of two

cheques and their dishonour by the Banker when

presented for realisation. However, he would dispute that

the person who lodged the complaint had authority to

lodge the complaint since the General Power of Attorney

exhibited by him at Ex.P-1 is subsequent in its date from Crl.R.P.No.477/2013

the date of filing of the complaint. He also submitted that,

admittedly the drawer of the cheques is a proprietorship

concern and since the said establishment is not made as a

party in the complaint, the complaint was not

maintainable.

12. Per contra, learned counsel for the respondent

relying upon a judgment of Delhi High Court in Shankar

Lal Aggarwal -vs- Balram Luthra, reported in 2009 (1)

DCR 257, submitted that notice sent to the Proprietor of

proprietorship firm is a valid notice under Section 138 of

N.I.Act and that the Proprietor can be personally made as

a party to a proceeding under Section 138 of N.I.Act.

Learned counsel further submitted that the complainant

was represented by its General Power of Attorney even at

the time of filing of the complaint which fact is clear by the

finding given by both the Courts below. With this she

submitted that the impugned judgments does not warrant

any interference at the hands of this Court.

Crl.R.P.No.477/2013

13. Learned counsel for the petitioner herein has not

denied or disputed the alleged loan transaction between

the complainant-Company and the accused and also the

accused delivering two cheques in question to the

complainant and their subsequent dishonour by the Banker

when presented for realisation. He has also not denied of

the legal notice issued by the complainant demanding the

cheque amount. Mr.V.Jansi Rao, who was examined as

PW-1 in his capacity as General Power of Attorney Holder

of the complainant-Company has reiterated the contents of

the complaint and to show that there was a loan

transaction between the complainant-Company and the

accused, he has produced loan application at Ex.P-8, on

Demand Promissory Note at Ex.P-9, loan sanction letter at

Ex.P-10, Electronic Clearing Service (ECS) Mandate at

Ex.P-11, Commercial Tax Registration Certificate of the

proprietorship concern of the accused at Ex.P-12, a copy of

telephone bill at Ex.P-13, VAT Certificate of the

proprietorship concern of the accused and the Income-tax

return of the accused for the Assessment Year 2006-2007 Crl.R.P.No.477/2013

at Exs.P-14 and P-15 respectively and Account extract at

Ex.P-16. None of these documents were denied or

disputed in the cross-examination of the complainant from

the accused side. Thus, Exs.P-8, P-9 and P-10 would go to

establish that the accused had availed loan facility, which

as per Ex.P-10, is a sum of `1,00,000/- from the

complainant agreeing to repay the same as per ECS at

Ex.P-11.

14. The accused has also not denied the fact that the

cheques at Exs.P-2 and P-3 were drawn by him and that

when presented for realisation, both the cheques returned

for the reason of insufficiency of funds as per the Banker's

endorsement at Exs.P-4 and P-5. Though the accused has

denied that the legal notice was served upon him, the said

legal notice has been returned to the sender with the

postal shara that the address had remained absent and

that intimation was delivered to him. Thus, even after

delivering of the intimation about the arrival of the postal

article, since the accused has not collected the same, Crl.R.P.No.477/2013

there is deemed service of notice upon the accused.

Admittedly, the accused has not paid the cheque amount

demanded by the complainant in its legal notice, copies of

which are at Exs.P-6 and P-7. Thus, a legal presumption

about the existence of legally enforceable debt forms in

favour of the complainant under Section 139 of N.I.Act.

However, the said presumption is rebuttable.

15. To rebut the legal presumption formed in favour

of the complainant, the accused had taken a defence in the

cross-examination of PW-1 to the effect that the alleged

loan was granted to M/s.Vertical Network Communication,

a proprietorship concern, however, the accused had not

taken the said loan in his personal capacity, as such, the

accused was not liable for the repayment of the loan

amount. PW-1 though admitted that the loan was granted

to M/s.Vertical Network Communication, which is a

proprietorship concern, but, denied that the accused as a

Proprietor of the said concern, had not availed the loan in

his personal capacity.

Crl.R.P.No.477/2013

16. No doubt, the loan documents mentioned above

go to show that the loan was granted in the name of

M/s.Vertical Network Communication, a proprietorship

concern, however, at all places, it is the accused and

accused alone who has been shown as the Proprietor of

the said concern. Several of the documents, including the

Income-tax return and telephone bills stand in the name

of the accused in his individual name and the loan

documents are executed by the accused himself though he

has shown as the Proprietor of M/s.Vertical Network

Communication. Therefore, the only defence taken up by

the accused in the trial Court that the loan was given to a

proprietorship concern, but, not personally to him, is not

acceptable. Needless to say that the said accused himself

being the Proprietor of the said concern and an Executant

of the loan documents, he is liable and his proprietorship

concern cannot be identified as a different legal entity than

him.

17. The first argument of the learned counsel for the

petitioner was that the complaint has been filed by an Crl.R.P.No.477/2013

unauthorised person since the General Power of Attorney

marked at Ex.P-1 was subsequent in its date from the date

of filing of the complaint.

No doubt, the General Power of Attorney executed in

favour of PW-1, which is produced at Ex.P-1, is subsequent

in its date than that of the lodging of the complaint,

however, along with the complaint also, the very same

PW-1, who has filed the said complaint, has produced one

more copy of the General Power of Attorney, however,

shown to have been executed by one Future Capital

Holdings Ltd., in his favour. The said Power of Attorney

authorises PW-1 to lodge the complaint and to proceed in

the criminal prosecution.

It is further observed in the impugned judgment

passed in the Criminal Appeal that as per the documents

produced by the complainant at the time of arguments, the

complainant has produced the order passed by the High

Court of Bombay in Petition No.603/2009, wherein it is

mentioned that Future Capital Credit Ltd., and Future

Capital Services Ltd., were merged with each other and Crl.R.P.No.477/2013

they became a single entity called as "Future Capital

Services Ltd.," The said order of the High Court of

Bombay further reveals that the Future Capital Holdings

Ltd., is a part and parcel of Future Capital Services Ltd.,

The said finding and the availability of documents with the

records placed in this petition have not been denied or

disputed by the learned counsel for the petitioner.

18. Furthermore, the cause title of the complaint also

shows that though the complainant is M/s.Future Money,

but, it is shown as Division of Future Capital Holdings Ltd.,

represented by Mr.V.Jansi Rao, who was later examined as

PW-1 in the case.

Therefore, when under a judicial order, merger of

the Companies has taken place, the earlier Company cease

to be in existence after its merger with another Company

and the Company which emerges after merger would be

entitled to all the rights and liabilities of the merged

Company and subject to the terms of the merger. Thus,

when the previous Company which had granted loan to the Crl.R.P.No.477/2013

accused is shown to have been merged, it cannot be said

that the present complainant-Company does not have

locus standi to file the complaint, so also, its Power of

Attorney Sri V.Jansi Rao. Therefore, the argument of

learned counsel for the petitioner on the said point is not

acceptable.

19. The last point of argument of learned counsel for

the petitioner that the notice issued after dishonour of the

cheques since being addressed to the accused in his

personal name, but, not to the proprietorship concern, is

an invalid notice, is also not acceptable, for the reason

that, admittedly the accused is the Proprietor of his

concern M/s.Vertical Network Communications.

A proprietorship concern since being not an independent

legal entity, it can be sued in the name of the Proprietor.

In this regard, Delhi High Court in Shankar's case (supra),

has observed that the proprietorship firm is not a legal

entity and it can be sued in the name of its Proprietor.

Even if the notice is sent to the Proprietor of a firm in his Crl.R.P.No.477/2013

individual capacity without mentioning him as Proprietor of

the firm, still, it will be a valid notice. It further observed

that prosecution of a Proprietor of a proprietorship firm for

the dishonour of the cheque issued by the proprietorship

firm, is valid prosecution. Thus, the contention of the

learned counsel for the petitioner that the notice sent to

the accused by the complainant-Company was invalid, is

also not acceptable.

20. Barring the above, the petitioner/accused has not

taken any other contention worth considering. Since both

the trial Court and the Session Judge's Court after

appreciating the materials placed before them, including

oral and documentary evidence, have rightly concluded

holding the accused guilty of the offence punishable under

Section 138 of N.I.Act and sentenced him proportionately

to the gravity of the proven guilt, I do not find any

perversity, illegality or error warranting any interference at

the hands of this Court.

Crl.R.P.No.477/2013

21. Accordingly, I proceed to pass the following

order:

ORDER

The Criminal Revision Petition is dismissed as

devoid of merits.

The judgment of conviction and order on sentence

dated 24.08.2012, passed by the learned XV Addl.Chief

Metropolitan Magistrate, Bengaluru, in

C.C.No.32144/2010, which is confirmed by the learned

Presiding Officer, Fast Track Court (Sessions)-XI,

Bengaluru, in Criminal Appeal No.577/2012, dated

25.03.2013, is hereby confirmed.

Registry to transmit a copy of this order to both the

trial Court as also the Sessions Judge's Court along with

their respective records forthwith.

Sd/-

JUDGE

bk/