Sri Narasimha Murthy vs Sri Ajay Kumar Manvi
2023 Latest Caselaw 5736 Kant

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

    DATED THIS THE 18TH DAY OF AUGUST, 2023

                             BEFORE

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

  CRIMINAL REVISION PETITION No.442 OF 2013

BETWEEN:

Sri. Narasimha Murthy,
Aged: Major,
R/at: No.289/1,
Monisha Nilaya,
Begur, Bangalore - 560 068.

Also:
Partner, M/s. Darshan Auto Service,
No.289/4, Begur Main Road,
Near Canara Bank, Begur,
Bangalore - 560 068.
                                                     ..Petitioner
(By Sri. Satyanarayana S. Chalke, Advocate)

AND:

Sri. Ajay Kumar Manvi,
Aged about 40 years,
S/o. Sri. Pattabhi Ramalu,
R/at: No.1200, 6th Main,
'A' Block, 2nd Stage,
Rajajinagar,
Bangalore - 560 010.
                                                  .. Respondent

(By Sri. Krishna R. and Sri. Pravardhan Urs. Advocates)

                              ***
      This Criminal Revision Petition is filed under Sections 397
and 401 of the Code of Criminal Procedure, 1973, with the
following prayer:
                                                    Crl.R.P.No.442/2013
                                   2



         "(i)     Call for the records in C.C.No.33976/2010 on
   the file of the learned XV Additional Chief Metropolitan
   Magistrate, Bangalore City;

         (ii)    reverse and set aside the judgment of
   conviction and sentence dated 26th December 2012 in
   C.C.No.33976/2010;

          (iii) Call for the records in Crl.A.No.21/2013 on the file
   of the learned Fast Track (Sessions) Judge -V, Bangalore City;

          (iv) Reverse and set aside the order dated 27/04/2013
   in Crl.A.No.21/2013,

          (v) Dismiss the complaint and acquit the accused; and
   further,

         (vi) To pass such other order/s that this Court deems
   proper, under the circumstances of the case and in favour of
   the petitioner, in the ends of justice."

      This Criminal Revision Petition having been heard through
physical hearing/video conferencing hearing and reserved on
04-08-2023, coming on for pronouncement of orders, this day,
the Court made the following:

                            ORDER

The present revision petitioner as accused No.1 along

with accused No.2 were arraigned as accused in

C.C.No.33976/2010, in the Court of the learned XV

Additional Chief Metropolitan Magistrate, Bangalore City

(hereinafter for brevity referred to as "the Trial Court"),

for the offence punishable under Section 138 of the

Negotiable Instruments Act, 1881 (hereinafter for brevity Crl.R.P.No.442/2013

referred to as "the N.I. Act"). The Trial Court acquitted

the accused No.2 but convicted accused No.1 (present

petitioner) for the said offence by its judgment of

conviction and order on sentence dated 26-12-2012.

Aggrieved by the same, the present petitioner

(accused No.1) preferred a Criminal Appeal, in the Court

of the Fast Track (Sessions) Judge-V, Bangalore City,

(hereinafter for brevity referred to as "the Sessions

Judge's Court") in Criminal Appeal No.21/2013.

The appeal was contested by the respondent who

was the complainant in the Trial Court. The Sessions

Judge's Court in its order dated 27-04-2013 dismissed the

appeal, confirming the judgment of conviction and order

on sentence passed by the Trial Court dated 26-12-2012

in C.C.No.33976/2010.

Aggrieved by the impugned orders passed by both

the Courts, the accused No.1 has preferred this revision

petition.

Crl.R.P.No.442/2013

2. The summary of the case of the complainant in

the Trial Court was that, he is a Doctor by profession and

knows both accused No.1 and accused No.2 since several

years who are his relatives. During the month of July

2007, the accused No.1 and accused No.2 requested him

for a financial help of a sum of `15,00,000/- to meet their

family necessities and for business purposes. At their

request, he paid a sum of `5,00,000/- in cash on three

occasions during the months of July 2007, November 2007

and September 2008, in all a sum of `15,00,000/- as a

hand loan. The accused persons had agreed to repay the

said loan amount within one and a half years from the

date of borrowing. When he approached them for

repayment of the said land amount, they postponed the

repayment for one or the other reason and finally when

repayment was demanded vehemently, the accused issued

a cheque for a sum of `15,00,000/- bearing No.648882

dated 20-04-2010 drawn on the Syndicate Bank, Tilak

Nagar Branch, Bangalore and asked him to present the

said cheque. Accordingly, when he presented the said Crl.R.P.No.442/2013

cheque for its encashment, the same came to be returned

un-paid with the banker's endorsement as "Exceeds

arrangement". The complainant has further stated that he

intimated the dishonour of the said cheque to the accused,

who asked him to re-present the said cheque.

Accordingly, he re-presented the said cheque on the dates

24-04-2010 and 03-05-2010, however, on both the

occasions, the said cheque came to be returned un-paid

with the same endorsement as "Exceeds arrangement".

Thereafter, he got issued a legal notice to the accused

persons asking them to repay the loan amount. In spite of

service of notice upon them on the date 19-05-2010, the

accused persons failed to pay the cheque amount, which

constrained the complainant to institute a criminal case in

the Trial Court against the accused persons for the offence

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

3. Both the accused persons appeared in the Trial

Court and contested the matter through their counsel.

They pleaded not guilty and claimed to be tried.

Accordingly, to prove his case, the complainant got himself Crl.R.P.No.442/2013

examined as PW-1 and got marked documents from

Exs.P-1 to P-14 and closed his side. However, on behalf of

the accused persons, neither any witness was examined

nor any documents were got marked.

4. The Trial Court after recording the evidence led

before it and hearing both side, by its impugned judgment

of conviction and order on sentence dated 26-12-2012

acquitted the accused No.2 but convicted the accused

No.1 for the offence punishable under Section 138 of the

N.I. Act and sentenced him to pay a fine of a sum of

`15,05,000/- and in default of payment of said fine, to

undergo simple imprisonment for a period of one year.

Challenging the said judgment of conviction and order on

sentence passed by the Trial Court, the accused No.1

(present petitioner) preferred an appeal in Criminal Appeal

No.21/2013, before the learned Sessions Judge's Court,

which after hearing both side, by its impugned order dated

27-04-2013 dismissed the appeal filed by the accused

No.1, while confirming the impugned judgment of

conviction and order on sentence passed by the Trial Crl.R.P.No.442/2013

Court. Being aggrieved by the judgments of conviction

and order on sentence of both the Courts, the accused

No.1 has preferred this revision petition.

L

5. The Trial Court and Sessions Judge's Court's

records were called for and the same are placed before

this Court.

6. Learned counsel for the revision petitioner

(accused No.1) is appearing physically before the Court.

Learned counsel for the respondent (complainant) is

neither present physically nor through video conference.

7. Heard the learned counsel for the revision

petitioner (accused No.1). Perused the materials placed

before this Court including the impugned judgments and

the Trial Court and Sessions Judge's Court's records.

8. For the sake of convenience, the parties would be

henceforth referred to as per their rankings before the

Trial Court.

9. After hearing the learned counsel for the revision

petitioner (accused No.1) and going through the entire Crl.R.P.No.442/2013

materials placed before the Court, the only point that arise

for my consideration in this revision petition is:

Whether the judgments under revision are perverse, illegal and erroneous, warranting interference at the hands of this Court?

10. Learned counsel for the revision petitioner

(accused No.1) in his single point argument submitted

that, the cheque in question is issued by a partnership

firm, however, the said Firm has not been made a party

by the complainant before the Trial Court, as such, the

very complaint itself is not maintainable.

In his support, the learned counsel relied upon a

judgment of the Bombay High Court in the case of PHILIP

J. Vs. ASHAPURA MINECHEM LTD. and another reported

in 2016 (4) Mah.L.J.169.

11. As already observed above, in spite of granting

several and sufficient opportunities, the learned counsel

for the respondent (complainant) has remained absent

and did not address his argument, as such, the

respondent's side argument was taken as 'not addressed'.

Crl.R.P.No.442/2013

12. The complainant - Dr. Ajay Kumar Manvi got

himself examined as PW-1, who, in his examination-in-

chief, in the form of affidavit evidence, has reiterated the

contentions taken up by him in his complaint. He has

stated that accused No.1 and accused No.2 who are the

husband and wife are very well known to him for several

years and that they had a cordial relationship. In the

month of July 2007, the accused persons contacted him

and requested for a loan of a sum of `15,00,000/- for their

family necessities and business purposes. Since the

accused were very well known to him, he helped them

with a hand loan by way of cash of a sum of `5,00,000/-

given three times, i.e. in the months of July 2007,

November 2007 and September 2008, in total amounting

to a sum of `15,00,000/-. Though the accused persons

had promised to repay the said loan amount within one

and a half years time from the date of borrowing,

however, they did not repay the said loan amount within

the agreed time. At the constant demand made by him

(complainant), the accused No.1, with the knowledge and Crl.R.P.No.442/2013

consent of accused No.2, issued a cheque bearing

No.648882 for a sum of `15,00,000/- and dated

20-04-2010, drawn on the Syndicate Bank, Tilak Nagar

Branch, Bangalore and requested him (this witness) to

present the same for realisation. PW-1 has further stated

that when he presented the said cheque for its realisation,

the same came to be returned un-paid with the banker's

endorsement "Exceeds arrangement". He brought the

same to the notice of the accused, who requested him to

re-present the said cheque. Accordingly, he re-presented

the very same cheque on the dates 24-04-2010 and

03-05-2010, however, on those two subsequent occasions

also, the cheque came to be returned with the same

endorsement "Exceeds arrangement".

To support his contention, the witness has produced

the returned cheque and got it marked at Ex.P-1 and the

signature of the drawer therein (accused No.1) at

Ex.P-1(a). He produced three banker's endorsements

evidencing the return of the cheque unpaid with the shara Crl.R.P.No.442/2013

'Exceeds arrangement' and got them marked at Ex.P-2,

Ex.P-3 and Ex.P-4 respectively.

PW-1 has further stated that after the successive

return of the cheque, he got issued a legal notice dated

14-05-2010 to the accused persons under Section 138 of

the N.I. Act, calling upon them to pay the cheque amount

within fifteen days from the date of the said notice. He

sent the notices both under Registered Post

Acknowledgement Due (RPAD) as well as Under Certificate

of Posting (UCP). However, even after receipt of the legal

notice, the accused did not pay the cheque amount but

sent an untenable reply dated 03-06-2010, through their

counsel. The witness has got produced an office copy of

the said legal notice at Ex.P-5, four postal receipts at

Ex.P-6, four Certificate of Posting receipts at Exs.P-7 to

P-10, four postal acknowledgment cards from Exs.P-11 to

P-14. However, the witness has not produced and marked

the reply notice said to have been sent to him by the

accused. With the said evidence, PW-1 contended that Crl.R.P.No.442/2013

the accused persons have committed the offence

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

The witness was subjected to a detailed cross-

examination from the accused's side wherein he adhered

to his original version. However, in his cross examination,

a defence was taken by the accused that, since the

complainant and themselves were known to each other

and were friends, there were financial transactions

between them. In that regard, the complainant had

retained a duly signed cheque of the accused, however,

without returning the said cheque, even after repaying the

amount taken by them on the previous occasion, he has

misused the same by filing the present case. However,

PW-1 did not admit the said suggestion as true.

From the accused's side, neither any witness was

examined including accused themselves nor any

documents were got marked as exhibits.

13. From the above evidence of PW-1, it is

established that the complainant and the accused were Crl.R.P.No.442/2013

known to each other. Apart from PW-1 stating to that

effect in his examination-in-chief, even a suggestion to

that effect was made in the cross-examination of PW-1

from the accused's side. Further, by suggesting to PW-1

in his cross-examination, the accused themselves have

admitted that there were financial transactions between

them and the complainant earlier to the alleged

transaction in question. By suggesting to PW-1 in his

cross-examination that the cheque at Ex.P-1 was given by

them to PW-1 in respect of an earlier financial transaction

and that the complainant has retained the said cheque

without returning the same to the accused though he was

liable and required to return the same, the accused

themselves have admitted that the cheque at Ex.P-1 is

issued by them to the complainant. No where in the

cross-examination of PW-1, the accused have denied that

they were not the drawer of the cheque at Ex.P-1.

Similarly, they have also not denied the evidence of PW-1

that the said cheque at Ex.P-1 was presented for its

realisation by the complainant and that though it was Crl.R.P.No.442/2013

presented thrice for realisation, on all the three occasions,

the same was returned unpaid with the banker's shara

'Exceeds arrangement'. Therefore, the dishonor of the

cheque as per the banker's endorsements at Ex.P-2,

Ex.P-3 and Ex.P-4 also stands proved.

14. The evidence of PW-1 that after repeated return

of the cheque unpaid, he caused a legal notice upon the

accused persons as per Ex.P-5 and the notices were sent

both under Registered Post Acknowledgement Due (RPAD)

as well as Under Certificate of Posting (UCP), as evidenced

in Exs.P-6 to Ex.P-10 and his further evidence that the

notices were served upon the accused as evidenced in

Exs.P-11 to P-14 also have not been denied from the

accused's side. They have only asked PW-1 in his cross-

examination as to whether he is aware about the service

of notice upon the accused, for which the witness

expressed his ignorance. By that itself, it cannot be taken

that the accused persons have denied the service of notice

upon them by the complainant. The evidence of PW-1 Crl.R.P.No.442/2013

that the accused have sent a reply after receipt of the

legal notice has not been denied in his cross-examination.

Thus, the issuance of a legal notice after dishonour of the

cheque and the service of the said notice upon the

accused also stands established.

Thus, in the ordinary course, though a presumption

under Section 139 of the N.I. Act about the existence of a

legally enforceable debt in favour of the complainant

would arise, however, in the instant case, the very

contention of the revision petitioner is that the complaint

itself was not maintainable before the Trial Court since

the drawer of the cheque which was a partnership firm

was not arraigned as a party.

15. The accused have only suggested to PW-1 in his

cross-examination that, with respect to a previous

monetary transaction between them, the cheque in

question was given to him, however, PW-1 (complainant)

even after receiving the repayment of the loan amount,

has retained the duly signed cheque of the accused with Crl.R.P.No.442/2013

him and failed to return the same despite the requests

made by the accused and has misused the said cheque.

They further suggested to PW-1 that alleging that the

complainant has not returned the said cheque, the

accused had lodged a complaint with the Electronic City

Police Station, however, PW-1 expressed his ignorance

about the same. PW-1 also denied a suggestion that the

accused had given him a duly signed blank cheque and in

that, he (complainant) himself has filled the contents and

presented the same. He also denied a suggestion that due

to personal enmity, the complainant has lodged a false

complaint against the accused. Except the above

suggestions made to PW-1 in his cross-examination, the

accused persons have not taken any further step to

substantiate their contention. They have not even

produced a copy or acknowledgement of their alleged

complaint against the complainant before the Electronic

City Police Station and got the same marked as an exhibit.

Crl.R.P.No.442/2013

However, a reading of the impugned judgment of the

Trial Court would go to show that, in the argument from

the accused' side, a contention was taken that the accused

No.2 in the Trial Court since was not a signatory to the

cheque at Ex.P-1, she was not liable and as such, she

cannot be found guilty for the alleged offence. The Trial

Court in its judgment, observing that the accused were

shown as partners of a Petrol Bunk managed by accused

No.1 and that there was no material produced by the

complainant to show that the accused No.2 was also

responsible for the day-to-day affairs and the

management of the said Petrol Bunk run by them, had

proceeded to acquit accused No.2 of the alleged offence.

However, it held the accused No.1 as guilty for the alleged

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

16. Before the Sessions Judge's Court in Criminal

Appeal No.21/2013 which was filed only by accused No.1, Crl.R.P.No.442/2013

a contention was taken by the appellant that, his is a

partnership firm and the cheque at Ex.P-1 was issued on

behalf of the Firm, as such, he could not be vicariously

held liable for the act of the Firm, without the Firm being

made as a party to the complaint. However, the Sessions

Judge's Court observing that, the appellant (accused No.1)

has not produced any material to show that, his is a

partnership firm, whether a registered partnership firm or

not, who are all the partners, etc., proceeded to observe

that the said contention of the learned counsel for the

appellant before it was not acceptable.

However, the very same contention is once again

taken up by the learned counsel for the revision petitioner

in the present revision petition.

17. Learned counsel for the revision petitioner in his

single point argument submitted that, when the cheque is

issued by a partnership firm without making the Firm as

one of the accused, the complaint is not maintainable only Crl.R.P.No.442/2013

against the two individuals, though calling them as

partners of the partnership firm.

In his support, he relied upon a decision of the

Hon'ble Apex Court in Phillip's case (supra), wherein the

learned Single Bench of the Bombay High Court, in a

similar circumstance, for the similar offence, and also

taking support of the judgment of the Delhi High Court in

the case of Vijay Power Generators Ltd. Vs. Sumit Seth

[2014 All M.R. (Cri.) Journal 305] was pleased to observe

that, for maintaining prosecution against a partner,

arraigning a partnership firm as an accused is imperative.

The basic premise of holding either a Director or a partner

liable for prosecution being the same that of the vicarious

liability. It further observed that, once the Company is

held to be an essential party and that arraigning of a

Company as an accused is imperative for prosecution

under Section 141 of the N.I. Act, it necessarily follows

that arraigning of a partnership firm is also imperative for

prosecution against the partners under Section 141 of the Crl.R.P.No.442/2013

N.I. Act. With this, it observed that the prosecution

launched against only one of the partners of a partnership

firm without joining the partnership firm, is not

maintainable.

18. Our Hon'ble Apex Court in the case of Dilip

Hariramani Vs. Bank of Baroda reported in AIR 2022

SUPREME COURT 2258 wherein for an offence punishable

under Section 138 of the N.I. Act, the notice was issued to

accused partner and not to the Firm, though the accused

had not obtained the loan in his individual capacity and

not issued the dishonoured cheque in his personal capacity

and nor even involved in the day-to-day affairs of the

Firm, however, had stood as a guarantor for such loan as

a partner, was pleased to hold that, he cannot be

convicted, as guarantor's liability comes under civil

liability. At the same time, it also observed that, unless

the Firm commits an offence as the principal accused, it's

partners cannot be held vicariously liable and convicted.

Crl.R.P.No.442/2013

The Hon'ble Apex Court in para-14 of the above said

judgment was pleased to observe as follows:

"14. The provisions of Section 141 impose vicarious liability by deeming fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub- section (1) or (2) would not be liable and convicted as vicariously liable. Section 141 of the NI Act extends vicarious criminal liability to officers associated with the company or firm when one of the twin requirements of Section 141 has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. However, such vicarious liability arises only when the company or firm commits the offence as the primary offender...."

19. Admittedly, in the case on hand, the drawer of

the cheque at Ex.P-1 is not an individual but is a

partnership firm. The signatory to the cheque is shown to

have signed the cheque as a partner of M/s. Darshan Auto

Service. Thus, if the cheque is taken as the proof of Crl.R.P.No.442/2013

existence of a legally enforceable debt in favour of the

complainant, then it would be the partnership firm which is

the drawer of the cheque and who is liable to the

complainant. As such, it was very much required for the

complainant to arraign the partnership firm as an accused

along with its partners to fasten the vicarious liability upon

the partner/s who is/are liable for the business,

management and affairs of the Firm. However, neither in

the complaint nor in the evidence of PW-1, there is any

whisper that the accused No.1 (petitioner herein) and

accused No.2 were the partners of M/s. Darshan Auto

Service and that they were the only partners of the said

Firm and were responsible for the business, management

and affairs of the Firm. Merely because in the copy of the

legal notice at Ex.P-5, the accused persons are shown as

partners of M/s. Darshan Auto service, by such description

itself, it cannot be concluded that the accused were the

only partners of the said Firm and that they were

responsible for the affairs of the partnership firm. As

such, the very complaint filed by the complainant in the Crl.R.P.No.442/2013

Trial Court without arraigning the partnership firm as the

accused was not maintainable. However, the Trial Court

did not consider the said lacuna in the case of the

complainant. On the other hand, though the learned

Sessions Judge has considered the said point, however, he

has reasoned that the appellant before it (accused No.1)

had not produced any material much less Partnership

Deed to show that his is a partnership firm and whether it

was registered or un-registered, etc. As such, the learned

Sessions Judge did not accept the contention taken by the

appellant (accused No.1) before it. The said reasoning

given by the learned Sessions Judge is not acceptable for

the reason that, the very legal notice at Ex.P-5 describes

the accused as the partners of M/s. Darshan Auto Service.

Further, as observed above, the drawer of the cheque at

Ex.P-1 is shown to be a partnership firm which is M/s.

Darshan Auto Service. Thus, the very documents produced

by the complainant himself were showing that the drawer

was a partnership firm but not the accused persons

individually. This evidence, the learned Sessions Judge's Crl.R.P.No.442/2013

Court did not appreciate in its proper perspective which

resulted in it dismissing the appeal and confirming the

order of conviction passed by the Trial Court in respect of

accused No.1.

20. Since the reasoning of the Trial Court as well

the Sessions Judge's Court is now proved to be perverse

and erroneous, the same warrants interference at the

hands of this Court and the complaint filed by the

complainant deserves to be held as not maintainable.

Accordingly, I proceed to pass the following:

ORDER

[i] The Criminal Revision Petition stands

allowed in part;

[ii] The impugned judgment of conviction

and order on sentence passed by the learned

Fast Track (Sessions) Judge-V, Bangalore City,

dated 27-04-2013 in Criminal Appeal

No.21/2013, is set aside;

Crl.R.P.No.442/2013

[iii] The impugned judgment of conviction

and order on sentence passed by the learned XV

Additional Chief Metropolitan Magistrate,

Bangalore City, dated 26-12-2012 in Criminal

Case No.33976/2010, only in so far as it relates

to convicting and sentencing the revision

petitioner herein (i.e. accused No.1) for the

offence punishable under Section 138 of the

Negotiable Instruments Act, 1881, stands set

aside;

The criminal case filed against accused

No.1 stands dismissed as not maintainable.

Consequently, the revision petitioner (accused

No.1) - Sri. Narasimha Murthy, Aged: Major,

R/at: No.289/1, Monisha Nilaya, Begur,

Bangalore - 560 068 Also: Partner, M/s. Darshan

Auto Service, No.289/4, Begur Main Road, Near

Canara Bank, Begur, Bangalore - 560 068, is

acquitted of the offence punishable under Crl.R.P.No.442/2013

Section 138 of the Negotiable Instruments Act,

1881.

Registry to transmit a copy of this order to both the

Trial Court and also to the Sessions Judge's Court along

with their respective records, forthwith.

Sd/-

JUDGE

BMV*