M/S. Betala Associates vs Sri. Rajmohan Singh
2023 Latest Caselaw 3383 Kant

                           1


   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 16TH DAY OF JUNE, 2023

                        BEFORE

            THE HON'BLE MS.JUSTICE J.M.KHAZI

            CRIMINAL APPEAL NO.80 OF 2011

BETWEEN:

     M/S. BETALA ASSOCIATES
     NO.85, 2ND STAGE, 2ND PHASE, W C ROAD
     MAHALAKSHMIPURAM,
     BENGALURU - 560 086
     REPRESENTED BY ITS PROPRIETRIX,
     SMT. NIRMALA BETALA
     W/O M G BETALA, AGED 68 YEARS
                                             ...APPELLANT

(BY SRI. C N KESHAVA MURTHY, KLK LAW ASSOCIATES,
    ADVOCATE)

     AND:

  SRI. RAJMOHAN SINGH
  S/O DAROGA SINGH
  AGED 45 YEARS
  PROPRIETOR OF
  M/S MUNNA CHEMICALS
  NO.132, MAGADI ROAD
  KAMAKSHIPALYA,
  BENGALURU - 560 079
                                       .....RESPONDENT
(BY SRI. A GANESH, ADVOCATE &
    SRI. SITARAMA HEGDE, ADVOCATE)

   THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF THE CODE OF CRIMINAL PROCEDURE PRAYING TO a) SET
ASIDE THE JUDGMENT DATED 08.10.2009 IN CRIMINAL
APPEAL NO.1279/2007 PASSED BY THE CITY FAST TRACK
(SESSIONS) JUDGE (FTC-VI), BENGALURU. CONFIRM THE
ORDER OF CONVICTION AND SENTENCE DATED 04.10.2007
                                 2


PASSED IN C.C.NO.31177/2005 ON THE FILE OF THE XV THE
ADDITIONAL     CHIEF    METROPOLITAN     MAGISTRATE,
BENGALURU; b) CONVICT THE RESPONDENT FOR THE
OFFENCE PUNISHABLE UNDER SECTION 138 OF THE
NEGOTIABLE INSTRUMENTS ACT; c) GRANT SUCH OTHER OR
FURTHER RELIEF AS THIS HON'BLE COURT DEEMS FIT TO
GRANT, IN THE INTEREST OF JUSTICE AND EQUITY.

     THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED    ON    05.06.2023, COMING   ON   FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:


                          JUDGMENT

This appeal filed under Section 378(4) of Cr.P.C, is by

the complainant, challenging the impugned judgment and

order dated 08.10.2009, by which Sessions Court reversed

the conviction of respondent/accused rendered by the trial

Court for the offence punishable under Section 138 of

N.I.Act.

2. For the sake of convenience the parties are

referred to by their rank before the trial Court.

3. It is the case of the complainant that she is the

proprietrix of M/s Betala Associates, engaged in

manufacture and supply of chemicals. Accused is the

proprietor of M/s Munna Chemicals. On the request of

accused, complainant supplied Hydrochloric acid and

caustic soda flakes for a total sum of Rs.1,30,714/- on

different dates. Towards repayment of it, initially accused

issued a cheque for a sum of Rs.55,224/-. However, when

it was presented for realization, it was returned with

endorsement "insufficient funds". In fact complainant

issued a legal notice and after receipt of the same, accused

approached the complainant, with a request not to take any

legal action and issued a cheque for Rs.1,30,714/- dated

25.05.2005, with a promise that he would arrange for the

amount.

3.1 However, when the said cheque was presented

on the same day, it was also dishonored on the ground of

insufficiency of funds. Therefore, complainant got issued

legal notice dated 02.06.2005. It is duly served on the

accused on 03.06.2005. Accused has neither paid the

amount due under the cheque nor has sent any reply.

Without any alternative, complainant has filed the

complaint.

4. After due service of notice, respondent/accused

appeared through counsel and contested the matter. He

has pleaded not guilty and claimed trial.

5. In support of her case, complainant got her

husband examined as PW-1 in his capacity as her PA holder

and got marked Ex.P1 to 19. Since accused disputed the

fact that complainant has executed a Power of Attorney in

favour of her husband, complainant has also stepped into

the witness box by examining herself as PW-2 and

reiterated the entire complaint averments.

6. During the course of his statement under

Section 313 Cr.P.C, accused has denied the incriminating

evidence. He has examined himself as DW-1 and one

witness as DW-2 and relied upon Ex.D1 to 5.

7. Vide the judgment and order dated 04.10.2007,

the trial Court convicted the accused and sentenced him to

pay fine of Rs.1,40,000/- and out of the fine amount

recovered, a sum of Rs.1,38,000/- be paid to the

complainant by way of compensation.

8. However, the Sessions Court was pleased to

allow the appeal filed by the accused and acquitted him.

9. Being aggrieved by the same, the complainant

is before this Court, contending that the impugned

judgment and order of the Sessions Court is not tenable

either on law or on facts and liable to be set aside. The

Sessions Court has erroneously allowed the appeal contrary

to the facts proved and with utter disregard to the law. The

findings of the Sessions Court that the power of attorney at

Ex.P2 is invalid and that it is not proved is not correct. The

Sessions Court has failed to appreciate the fact that

complainant has also entered the witness box as PW-2 and

proved the execution of power of attorney in favour of her

husband, who is examined as PW-1.

9.1 The Sessions Court without discussing the

merits of the case has erred in setting aside the well

reasoned judgment of the trial Court, only on the ground

that the power of attorney is not proved. The Sessions

Court has also erred in holding that there was no valid

demand notice and the notice at Ex.P14 is not signed by

the complainant, but it is signed by her husband. It has

also erred in holding that the demand notice is not served

on the accused, though it is duly sent to the address of the

accused and it is received by one of his subordinates and it

bares seal of accused. The findings of the Sessions Court is

contrary to the decision of the Hon'ble Supreme Court

reported in V.Raja Kumari Vs. P.Subbarama Naidu & Anr.

(V.Raja Kumari)1 and K.Bhaskaran Vs. Sankaran Vaidhyan

Balan & Another (K.Bhaskaran)2.

9.2 The Sessions Court has failed to appreciate the

fact that complainant has complied with all the

requirements of Section 138 of N.I.Act. The Sessions Court

has erred in giving a finding that as the power of attorney

is not authenticated, it is invalid. It has failed to interpret

the provisions of Section 85 of the Evidence Act correctly.

There is no justification for Sessions Court reverse a well

reasoned judgment of the trial Court and prays to allow the

appeal, set aside the impugned judgment and order and

confirm the order of the trial Court.

2004 AIR SCW 6344

AIR 1999 SC 3762

10. In support of his arguments, learned counsel for

complainant has relied upon the following decisions:

(i) Devi Tyres, Bangalore Vs. Nawab Jan (Devi Tyres)3

(ii) D.Vinod Shivappa Vs. Nanda Belliappa (D.Vinod Shivappa)4

(iii) T.P.Murugan (Dead) Thr. LRs Vs. Bojan Posa Nandhi Rep. Thr. POA Holder (T.P.Murugan)5

(iv) Rohitbhai Jivanlal Patel Vs. State of Gujarat and Anr. (Rohitbhai Jivanlal Patel)6

11. On the other hand learned counsel for accused

supported the impugned judgment and order and prays to

dismiss the appeal.

12. In support of his arguments, learned counsel for

accused has relied upon the following decisions:

(i) T.L.Nagendra Babu Vs. Manohar Rao Pawar (T.L.Nagendra Babu)7

(ii) Ranjitha Balasubramanian and Anr. Vs. Shanthi Group and Ors.

(Ranjitha Balasubramanian)8

(2000) 7 Kant LJ 185

Crl.A.No.1255-1261/2004 Dt: 25.05.2006

AIR 2018 SC 3601

AIR 2019 SC 1876

ILR 2005 KAR 884

ILR 2007 KAR 765

13. Heard arguments of both sides and perused the

record.

14. It is not in dispute that complainant is the

propreitrix of M/s Betala Associates, engaged in

manufacture and supply of chemicals and respondent is a

proprietor of M/s Munna Chemicals and there were

transactions between the complainant and accused. Though

initially, the accused has disputed that complainant has

supplied chemicals total worth Rs.1,30,714/-, during the

course of evidence, accused has taken up a defence that he

has purchased chemicals worth Rs.63,000/- by paying cash

and the remaining sum of Rs.67,000/- is paid by way of the

same chemicals being supplied back to the complainant in

small packing and thereby the entire amount is repaid. He

has also taken up a defence that while supplying the

chemicals, complainant has forcibly taken a blank signed

cheque by way of security and misusing the same, she has

chosen to file the present complaint.

15. The accused has also taken up a specific

defence that there is no valid service of legal notice by the

complainant and the one issued through her alleged PA

holder i.e., her husband is not valid. Accused has also

taken up a plea that the notice is not duly served on him

and therefore on the ground of non compliance of

mandatory provisions of Section 138 of N.I.Act, the

complaint is not tenable.

16. Before discussing the merits of the case, it is

necessary to examine whether the notice issued through

the PA holder of complainant is a valid notice and whether

it is duly served on the accused. At the outset, it is relevant

to note that the complainant has got issued the legal notice

at Ex.P14 through her husband in his capacity as her power

of attorney holder. The power of attorney in question is

produced and marked at Ex.P2. It is dated 01.06.1996 as

forthcoming from the signature of the complainant.

17. Admittedly, Ex.P2 is not executed or

authenticated before the Notary or other Authorities.

However, the question would be whether a power of

attorney is compulsorily required to be executed or

authenticated before Notary or other Authorities. In this

regard the decision of the Co-ordinate Bench of Kerala High

Court in Crl.A.640/2004 dated 27.01.2020 is relevant. In

this decision, it is clearly observed that under the Power of

Attorney Act, 1882, no specific mode is prescribed for

executing a power of attorney. The execution or

authentication before the Notary or other Authorities is

often resorted to as a matter of commercial expediency and

as a matter of prudence.

18. It also clearly observed that Section 85 of the

Evidence Act provides that if a power of attorney is

executed or authenticated before a Notary or other

Authorities as specified therein, then it is mandatory on the

part of the Court to presume that it is so executed or

authenticated. It means that the if a power of attorney is

executed or authenticated before a Notary or other

Authorities, the said Authorities need not be summoned to

prove that it is executed or authenticated before such

Authority. Of course, since the word 'shall' is used, it is for

the Court to mandatorily raise such presumption unless the

contrary is proved. Therefore, based on Section 85 of the

Evidence Act, it is not open to the Court to say that since

the power of attorney is not executed or authenticated

before such authorities, it cannot be relied upon.

19. In fact after the accused took a specific defence

that complainant has not executed the power of attorney,

the complainant has chosen to enter into the witness box

and speak specifically that she has executed the power of

attorney at Ex.P2 and based on the same, her husband in

his capacity as the power of attorney has sent the legal

notice and also given evidence. As rightly held by the trial

Court, after the complainant has entered into the witness

box and specifically deposed that she has executed the

power of attorney in question, its execution is proved and

the admitted facts need not be further proved. Therefore,

the trial Court rightly held that the power of attorney is

duly executed and therefore the issue of legal notice

through the power of attorney is valid.

20. Moreover, there is no specific form in which the

mandatory notice is to be worded and issued. The object of

issue of notice to the accused is to bring it his notice that

the cheque issued by him is dishonored and to provide him

an opportunity to either pay the amount due under the

cheque or if he dispute his liability to answer the legal

notice by sending the reply. Therefore, no fault could be

find with the fact that the legal notice is issued in the name

of complainant's husband. In fact during the course of his

evidence, he has clearly stated that in his capacity as the

PA holder as well as the husband of the complainant, he

was taking care of the business. Such being the case, the

Sessions Court has grossly erred in holding that the power

of attorney is not executed and there is no valid issue of

legal notice.

21. Now coming to the question whether the legal

notice is duly served on the accused. It is pertinent to note

that the legal notice at Ex.P14 is sent to the address of the

accused. Ex.P15 is the postal receipt and Ex.P16 is the

postal acknowledgement. Even though the postal

acknowledgement does not bare the signature of the

accused, as admitted by him it bares his seal. It appears

this notice is received by one of his employees. Section 27

of General Clauses Act provides that where any Act

authorized or requires any document to be served by post,

whether the expression "serve" or either of the expressions

"give" or "send" or any other expressions is used, then,

unless a different intention appears, the service shall be

deemed to be effected by properly addressing, pre-paying

and posting by registered post, a letter containing the

document, and, unless the contrary is proved, to have been

effected at the time at which the letter would be delivered

in the ordinary course of post. If the post is sent to the

person to his correct address, it shall be presumed that it

has duly served on him, if it is not returned.

22. As admitted by the accused, the address as

stated in the legal notice is correct and if any postal letter

or communication is sent to him to the said address, it

would reach him. For reason best known to him, he is not

ready to disclose the name of the person who has received

it. Having regard to the fact that the acknowledgment bare

the seal of the accused, it goes without saying that it

reached the proper place and a person who is authorized by

the accused has received it by affixing the seal of the

concern. Such being the case, it is not open to the accused

to say that the legal notice is not duly served on him. From

the above discussion, I hold that there is valid service of

notice. In fact the trial Court has discussed in detail these

aspects and come to a correct conclusion that there is a

valid service of notice. However, the Sessions Court has

chosen to disregard these aspects and hold that there is no

due service of notice.

23. Admittedly, the accused has not chosen to send

reply to the legal notice putting forth his defence. Thereby

accused has lost an opportunity to contradict the claim of

the complainant and put forth his defence.

24. Now when once it is held that the legal notice

issued to the accused is valid and also there is due service,

the next question that arise of consideration of the Court is

to appreciate the merits of the complainant's claim. As per

Ex.P3 to 6, the complainant has supplied chemicals to the

accused. In fact he has received the goods sent through

these receipts by affixing his signatures. Ex.P3, 4 and 5

also bares the seal of the accused concern. As per Ex.P17

to 19, the accused has claimed benefit under the CST and

has sent the copies of these forms i.e., form of declaration

as per Rule 12(1) to the complainant. These documents

also supports the case of the complainant regarding supply

of chemicals in question for which the complainant has

chosen to file the present complaint.

25. As already discussed, though at the outset the

accused has disputed the supply of chemicals for a total

sum of Rs.1,30,714/- by the complainant, during the

course of trial, he has taken up a defence that out of the

said amount, he has paid Rs.63,000/- in cash. With regard

to the remaining amount, he has taken up a specific

defence that he is engaged in re-packing the chemicals

which is purchased from complainant and others in small

batches in plastic cans and sell the same to various

persons, including the complainant and with regard to

remaining Rs.67,000/-, he has resold the said chemicals in

small batches to the complainant. Admittedly, he has not

issued any invoices for sale of the said chemicals by the

complainant in small batches. Apart from his interested

testimony, he is not having any documents to evidence the

said fact.

26. To prove that he has paid Rs.63,000/- to

complainant, accused has relied upon Ex.D1 to 5 - small

chits of different dates and claimed that through these

chits, he has paid a total sum of Rs.63,000/- to the drivers

and other employees of complainant concern. DW-2

Shashibhushan Singh is the nephew of accused. He claims

to be working in the accused concern. Though he has also

deposed with regard to the alleged payments made to the

complainant, neither the accused nor he are able to prove

exactly in whose hands these payments were made. Of

course both complainant as well as PW-1 have denied the

said fact. However, the accused has not chosen to lead

further evidence to establish that he has made payments in

the hands of the persons whose names are forthcoming in

the said chits and they are employees of complainant.

Consequently, no reliance could be placed on such chits.

27. The accused has also taken up a defence that

the cheque in question was forcibly taken by complainant at

the time of supply of the chemicals by way of security. As

already noted the accused has not chosen to send any reply

to the legal notice and take up such a defence at the

earliest available opportunity. Except the interested

testimony of the accused, there is no material to show that

the cheque in question was taken by way of security.

Admittedly, after the alleged payment of the amount due

and also the alleged supply of chemicals back to the

complainant in smaller batches, the accused has not chosen

to take back the cheque which he had allegedly given by

way of security. He has also not intimated the Bank not to

make payment with regard to the said cheque.

28. One more aspect which is operating against the

accused is that according to the complainant earlier he had

given a cheque for Rs.55,224/- at Ex.P7 towards part

payment of the amount due and when it was presented for

encashment, it was also returned with an endorsement

"insufficient funds" as per Ex.P9. In respect of the dishonor

of the said cheque also, the complainant has issued a legal

notice dated 10.02.2005 as per Ex.P13. The complainant

has taken up a specific contention that when the fact of

dishonor of the cheque at Ex.P7 was brought to the notice

of accused, he requested the complainant not to take legal

action and choose to issue the subject cheque at Ex.P8.

29. Admittedly, Ex.P7 is also the cheque belonging

to the accused drawn on the same Bank i.e., Federal Bank

Ltd as Ex.P8. The accused is not having any explanation

with regard to issue of this cheque and dishonor of the

same. This also supports the case of the complainant and

falsifies the defence taken by the accused to escape from

the legal liability. Ignoring these aspects, the Sessions

Court only on the basis that the power of attorney executed

by the complainant is not executed or authenticated before

the Notary or other Authorities and also on the ground that

the legal notice is not served on the accused, has come to a

wrong conclusion and upset the well reasoned judgment of

the trial Court. In fact the trial Court has considered each

and every aspect of the contention of the complainant as

well as the defence taken by the accused and held him

guilty of the offence punishable under Section 138 of

N.I.Act.

30. When once the complainant proves that the

cheque in question which is drawn by the accused to his

account maintained with the Bank and when presented it

was dishonored for the reasons of insufficient funds, it is

obligatory on the part of the Court to raise a presumption

under Section 139 and it will operate till the accused

choose to rebut the said presumption by leading legal

evidence. In fact in Devi Tyres, T.P.Murugan and

Rohitbhai Jivanlal Patel, the Hon'ble Supreme Court has

dealt with the presumption under Section 139 of the

N.I.Act. In D.Vinod Shivappa, the Hon'ble Supreme Court

has discussed about the due service of notice to the

accused. In the light of these decisions, the complainant

has proved the allegations against accused beyond

reasonable doubt.

31. In T.L.Nagendra Babu, the Co-ordinate Bench

of this Court dealt with the presumption under Section 85

of the Evidence Act, when the party wants the Court to

draw such presumption. In the present case, power of

attorney is not executed or authenticated before the Notary

or other concerned Authorities and as such the

complainant never sought to draw such a presumption.

32. In Ranjitha Balasubramanian, in view of the

non production of power of attorney, the Co-ordinate Bench

of this Court held that the contention of the complainant

regarding the power of attorney cannot be accepted.

However, in the present case, the power of attorney in

question is produced and in fact by stepping into the

witness box, the complainant has in unequivocal terms

deposed and proved that she has executed power of

attorney in favour of her husband. In view of the same,

these two decisions relied upon by the accused are not

applicable to the case on hand.

33. Thus, the findings of the Sessions Court is

contrary to the evidence placed on record and as such it is

perverse and calls interference by this Court and to restore

the judgment of the trial Court. In the result, the appeal

filed by the complainant deserves to be allowed and the

impugned judgment and order of the Sessions Court is

liable to be set aside and the judgment and order of the

trial Court is to be restored and accordingly, I pass the

following:

ORDER

(i) Appeal filed by the complainant is allowed.

(ii) The impugned judgment and order dated 08.10.2009 on the file of City Fast Track (Sessions) Court, FTC-VI is set aside.

(iii) The judgment and order of the trial Court in C.C.No.31177/2005 on the file of XV Addl.CMM, Bengaluru City is restored.

(iv) The registry is directed to send back the trial Court records along with copy of this Judgment to the trial Court forthwith.

(v) The trial Court is directed to secure the presence of accused to undergo the sentence of imprisonment, if he has failed to pay or deposit the fine amount imposed by it.

Sd/-

JUDGE

RR