M/S Matrix Agency Private Limited vs M/S Nasa Enterprises Pvt Ltd
2023 Latest Caselaw 6566 Kant

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                                    CRL.RP No. 758 of 2019



     IN THE HIGH COURT OF KARNATAKA AT BENGALURU
       DATED THIS THE 19TH DAY OF SEPTEMBER, 2023
                          BEFORE
           THE HON'BLE MR. JUSTICE S RACHAIAH
       CRIMINAL REVISION PETITION NO. 758 OF 2019
BETWEEN:
1. M/S MATRIX AGENCY PRIVATE LIMITED
   OFFICE AT ABOVE LAKSHMI TVS SHOW ROOM
   HOSPET MAIN ROAD, PARVATHINAGAR
   BALLARI - 583 101.
   REPRESENTED BY ITS DIRECTOR
   ALLUM PREETHAM

2.   ALLUM PREETHAM
     DIRECTOR OF M/S MATRIX AGENCY PRIVATE LIMITED
     OFFICE AT ABOVE LAKSHMI TVS SHOWROOM
     HOSPET MAIN ROAD, PARVATHINAGAR
     BALLARI - 583 101.

                                              ...PETITIONERS
(BY SRI. H MALLAN GOUD, ADVOCATE)

AND:
M/S NASA ENTERPRISES PVT. LTD.
A REGISTERED COMPANY
OFFICE AT NO.52/23, TOUCAN PLAZA
LAVELLE ROAD
BANGALORE - 560 001.
REPRESENTED BY ITS POWER OF ATTORNEY HOLDER
ASHOK SADHWANI

                                              ...RESPONDENT
(BY SRI. NAVKESH BATRA, ADVOCATE)


      THIS CRL.RP IS FILED UNDER U/S.397 R/W 401 CR.P.C
PRAYING TO SET ASIDE THE ORDER DATED 15/03/2019 ON THE
FILE OF THE LXV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE,
BANGALORE , AND ETC.,


     THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD
AND RESERVED ON 17.07.2023, COMING ON FOR PRONOUNCEMENT
OF ORDER, THIS DAY, THE COURT MADE THE FOLLOWING:-
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                                               CRL.RP No. 758 of 2019



                               ORDER

1. This Criminal Revision Petition is filed by the

petitioners, being aggrieved by the judgment of conviction and

order of sentence dated 17.05.2017 in C.C.No.13532/2012 on

the file of the Court of the II Additional Small Causes Judge and

XXVIII Additional Chief Metropolitan Magistrate, Bengaluru City

and its confirmation judgment and order dated 15.03.2019 in

Crl.A.No.873/2017 on the file of the Court of LXV Additional

City Civil and Sessions Judge, Bengaluru City, seeking to set

aside the concurrent findings recorded by the Courts below,

wherein the petitioners / accused is convicted for the offences

punishable under Section 138 of the Negotiable Instruments

Act (for short 'NI Act').

2. The petitioners are the accused before the Trial

Court and appellants before the Appellate Court.

Brief facts of the case are as under:

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

complainant being a Company, is the absolute owner of the

commercial building bearing No.52/53 situated at Lavelle Road,

Bengaluru. Accused No.2 Sri.Allum Preetham, in his individual

capacity, agreed to take on lease a portion of ground floor

CRL.RP No. 758 of 2019

premises measuring 1500 sq. ft., along with car parking space

on the basement level for three years from the complainant in

terms of letters of intent dated 17.02.2011 as per Exs.P21 and

22 and also the letter of intent dated 25.04.2011 as per

Ex.P23. The respondent took possession of the property and

started conducting the renovation work. As per the averments

of the said letters of intent, the regular lease deed was to be

executed after the completion of renovation work. In the

meantime, according to letters of intent Rs.57 Lakh had been

paid to the respondent as a part payment. Due to some

unavoidable circumstances, petitioner No.2 did not continue

based on the letters of intent. However, petitioner No. 2

expressed his unwillingness to continue with the said premises

as a tenant. Accordingly, on 10.11.2011, a settlement

agreement was entered into between the parties. In terms of

the said settlement agreements, petitioner No.2 / accused No.2

had to pay Rs.2,50,00,000/- each to the respondent.

Accordingly, 5 cheques were given to the respondent. The

respondent presented the cheques for encashment. However,

those cheques were dishonoured as 'insufficient funds'. After

issuance of the notice, the petitioners surrendered the lease

and delivered the vacant possession of the leased premises to

CRL.RP No. 758 of 2019

the respondent on 16.03.2012. As the petitioners had failed to

pay the amount, as agreed upon as rent, it constrained the

respondent to file a complaint before the Magistrate having

jurisdiction.

4. To prove the case of the complainant, the

complainant examined himself as PW.1 and got marked 28

documents as Exs.P1 to P28. The Trial Court after appreciating

the oral and documentary evidence on record, convicted the

petitioners for the offence stated supra. Being aggrieved by

the same, the petitioners preferred an appeal before the

Appellate Court, and the Appellate Court confirmed the

judgment of conviction rendered by the Trial Court. Being

aggrieved by the same, the petitioners have preferred this

revision petition seeking to set aside the concurrent findings.

5. Heard Shri H Mallan Goud, learned counsel for the

petitioners and Shri Navkesh Batra, learned counsel for the

respondent.

6. It is the submission of learned counsel for the

petitioners that the judgment of conviction and order of

sentence passed by the Trial Court and its confirmation order

CRL.RP No. 758 of 2019

passed by the Appellate Court require to be set aside as the

concurrent findings are perverse, illegal and opposed to facts

and law.

7. It is further submitted that the concurrent findings

of the Courts below in recording the conviction appear to be

erroneous for the reason that, initially burden of proving the

existence of debt or liability is on the complainant and

thereafter, the burden shifts on the accused to prove that there

is no debt or liability. In the absence of proof for the liability of

the petitioners in payment of Rs.2.5 Crores, the Courts below

ought not to have recorded the conviction.

8. It is further submitted that the respondent failed to

execute the lease deed based on the letters of intent and there

was no time stipulated to carry out the renovation work of the

premises which was let out to the petitioners. Due to some

difference of opinion, the petitioners handed over the vacant

possession of the property, the respondent misused the

cheques which were given as collateral security and presented

for encashment which appears to be erroneous and illegal.

Therefore, the conviction is required to be set aside. The

CRL.RP No. 758 of 2019

learned counsel for the petitioners contended that the

concurrent findings of fact need to be looked into by this Court.

9. It is further submitted that the respondent is not

authorized to lodge the complaint and represent the Company.

Since it is a Company, it is mandatory to produce the resolution

of the Board of Directors authorizing a person to represent the

Company. Unless the person who represents the Company fails

to produce the resolution, the complaint is not maintainable.

This aspect should have been considered by the Courts below

while analyzing the evidence. To fortify his contention, learned

counsel for the petitioners relied on the following judgments:-

(i) State Bank of Travancore v. Kingston Computers India Private Limited1

(ii) George Joseph v. HMT (International) Limited2

(iii) Vinay v. Laxman & Another3

(iv) Ramdas Oil Mills v. Union of India (Military Deptt.)4

(v) Bir Singh v. Mukesh Kumar5

(2011) 11 SCC 524

(2015) 2 KCCR1476

(2013) 3 SCC 86

AIR 1977 SC 638

(2019) 4 SCC 197

CRL.RP No. 758 of 2019

(vi) Krishna Janardhan Bhat v. Dattatraya G Hegde6

(vii) Vijay D. Salvi v. State of Maharashtra & Others7

Making such submission, learned counsel for the petitioners

seeks to allow the revision petition and set aside the concurrent

findings recorded by both the Courts below.

10. Per contra, learned counsel for the respondent

justified the concurrent findings and submitted that it is an

admitted fact that, the petitioners being tenants of the

respondent, entered into letters of intent and took possession

of the commercial complex for rent and renovation work was

undertaken in the said premises as per their convenience.

Payment of Rs.57,00,000/- was made as a part payment and

as per the letters of intent, monthly rent was fixed at

Rs.2,25,000/-, Rs.6,75,000/- and Rs.6,00,000/- respectively.

11. It is further submitted that the petitioners having

failed to continue with the premises as tenants, handed over

the vacant possession of the property to the respondent and

agreed to settle the dues as per the settlement agreement.

(2008) 4 SCC 54

(2007) 5 SCC 741

CRL.RP No. 758 of 2019

There were two settlement agreements as per Exs.P24 and

P25. As per the said agreements, the petitioners issued

cheques as part of payment and when those cheques were

presented for encashment, the cheques were dishonoured.

Notice was issued in that respect, the notice was returned as

'unclaimed'. A complaint came to be lodged. The Trial Court

and the Appellate Court concurrently held that the petitioners

were found guilty of the offence under Section 138 of the N.I.

Act. There is no infirmity, or perversity in the findings of the

Trial Court in recording the conviction. Therefore, interference

with the said findings may not be warranted. Having submitted

thus, learned counsel for the respondent prays to dismiss the

petition.

12. Having heard the rival contentions urged by the

learned counsels for the respective parties and also perused the

judgments of the Courts below, the points which arise for my

consideration are:

i) Whether the concurrent findings recorded by

both the Courts below in convicting the petitioners

for the offence under Section 138 of N.I. Act are

sustainable?

CRL.RP No. 758 of 2019

ii) Whether the petitioners have made out

grounds to interfere with the concurrent findings

recorded by both the Courts below for conviction?

13. This Court being a Revisional Court, having regard

to the scope and ambit envisaged to appreciate the facts and

law, it is necessary to have a cursory look upon the evidence

and also the law, to ascertain as to whether any illegality or

perversity or error committed by the Courts below in recording

the conviction. Now it is useful to refer to the dictum of the

Hon'ble Supreme Court in the case of BIR SINGH v. MUKESH

KUMAR stated supra, paragraphs Nos.16 and 17 read thus:

"16. It is well settled that in the exercise of revisional jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re- analyse and re-interpret the evidence on record.

17. As held by this Court in Southern Sales & Services v. Sauermilch Design and Handels GmbH, it is a well-established principle of law that the Revisional Court will not interfere even if a wrong order is passed by a court having jurisdiction, in the absence of a jurisdictional error. The answer to the first question is therefore, in the negative."

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CRL.RP No. 758 of 2019

On careful perusal of the dictum of the Hon'ble Supreme Court,

it makes it clear that the Revisional Court will not interfere

even if the wrong order is passed by a Court having

jurisdiction. In the absence of a jurisdictional error, perversity

etc., the Revisional Court ought not to have interfered with the

findings of the Courts below. It is further guided that the

Revisional Court need not re-analyse and re-interpret the

evidence on record.

14. Having regard to the dictum of the Hon'ble

Supreme Court in respect of the powers vested under the

revisional jurisdiction, it is relevant to refer to the points

canvassed by the learned counsel for the Petitioner. As far as

the contention of learned counsel for the petitioners that, the

respondent has failed to establish that there is legally

enforceable debt or liability is concerned, for better

understanding it is relevant to refer to the judgment of the

Hon'ble Supreme Court in the case of KISHAN RAO v. SHANKAR

GOUDA8, para Nos.18 and 19 read thus:

"18. Section 139 of the 1881 Act provides for drawing the presumption in favour of holder. Section 139 is to the following effect:

(2018) 8 SCC 165

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CRL.RP No. 758 of 2019

"139. Presumption in favour of holder - It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, I whole or in part, of any debt or other liability.

19. This Court in Kumar Exports v. Sharma Carpets, had considered the provisions of the Negotiable Instruments Act as well the Evidence Act. Referring to Section 139, this Court laid down the following in paras 14, 15, 18 and 19: (SCC pp. 519-

20) "14. Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.

15. Presumptions are devices by use of which the courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence. Under the Evidence Act all presumptions must come under one or the other class of the three classes mentioned in the Act, namely, (7) "may presume" (rebuttable), (2) "shall presume" (rebuttable), and (3) "conclusive presumptions" (irrebuttable). The term "presumption" is used to designate an inference, affirmative or disaffirmative of the existence of a fact, conveniently called the "presumed fact" drawn by a judicial tribunal,

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CRL.RP No. 758 of 2019

by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof".

18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists.

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CRL.RP No. 758 of 2019

19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty of going forward with evidence, on the fact presumed and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of the presumption is over."

15. It is also relevant to refer to the dictum of the

Hon'ble Supreme Court in the case of BASALINGAPPA v.

MUDIBASAPPA9, para No.25 reads thus:

"25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:

25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

(2019) 5 SCC 418

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CRL.RP No. 758 of 2019

25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.

25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.

25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.

25.5. It is not necessary for the accused to come in the witness box to support his defence."

16. On applying the above proposition of law to the

present case, petitioner No.2 admitted issuance of the cheques

as per the settlement agreements - Exs.P24 and P25. It is also

established that petitioner No.2 has entered into an agreement

by way of letters of intent executed between petitioner No.2

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CRL.RP No. 758 of 2019

and the respondent. On the contrary, petitioner No.2 has not

produced any documents to show that, he is not liable to

discharge any legally enforceable debt or liability. It is well

settled law that, mere denial in the cross-examination may not

be sufficient to rebut the presumption. Therefore, it could be

inferred by considering the dictum of the Hon'ble Supreme

Court and also Exs.P21 to P23 and Exs.P24 and P25, that the

cheques were issued for discharge of legally enforceable debt.

There is no infirmity in appreciating the evidence by the courts

below.

17. As far as another contention that, the complainant

is not authorized to lodge a complaint is concerned, no doubt it

is true that the complainant/respondent is a Limited Company.

It is necessary to pass a resolution by the Board of Directors to

authorize the respondent to represent the Company in this

case. Learned counsel for the respondent made available the

resolution of the Company before the Trial Court and it was

marked as Ex.P26. On perusal of the said resolution which

indicates that the complainant has been authorized to lodge a

complaint on behalf of the company. Therefore, there is no

infirmity in the said resolution in authorizing the complainant.

However, under misconception of facts, the said resolution was

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CRL.RP No. 758 of 2019

mentioned as Power of Attorney which is not correct.

Therefore, it could be read as 'authorization' instead of 'Power

of Attorney'.

18. On careful reading of the evidence on record, and

findings of the Trial Court and the Appellate Court, it appears

that there are no infirmities or errors committed by the Courts

below in convicting the petitioners. Therefore, interference

with the well-reasoned orders by exercising the revisional

jurisdiction is not warranted.

19. In the light of the observations made above, the

points which arose for my consideration are answered as

under:-

      Point No.(i)           - "Affirmative"

      Point No.(ii)          - "Negative"

20. Hence, I proceed to pass the following:-

ORDER

(i) The Criminal Revision Petition is dismissed.

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CRL.RP No. 758 of 2019

(ii) The judgment of conviction and order of

sentence, dated 17.05.2017 passed in

C.C.No.13532/2012 by the II Additional Small

Causes Judge and XXVIII Additional Chief

Metropolitan Magistrate, Bengaluru, and its

confirmation judgment and order dated

15.03.2019 passed in Criminal Appeal

No.873/2017 by the LXV Additional City Civil and

Sessions Judge, Bengaluru, are confirmed.

(iii) The Trial Court is directed to secure the presence

of petitioner No.2 for the execution of the

sentence in accordance with law.

Sd/-

JUDGE

BSS