Karnataka High Court

Smt. Sangeetha vs Madrasathul Badriya Durs on 13 February, 2024

                            -1-
                                     CRL.RP No. 649 of 2020


  IN THE HIGH COURT OF KARNATAKA AT BENGALURU
     DATED THIS THE 13TH DAY OF FEBRUARY, 2024
                          BEFORE
         THE HON'BLE MR. JUSTICE S RACHAIAH
    CRIMINAL REVISION PETITION NO. 649 OF 2020
BETWEEN:
   SMT. SANGEETHA
   AGED ABOUT 37 YEARS
   W/O R.RAJESH
   RESIDING AT NO.25, 3RD FLOOR
   BADRIYA COMMERCIAL COMPLEX
   ANNIPURA MAIN ROAD
   SUDHAMANAGARA
   BENGALURU - 560 002.

    ALSO AT: NO.60, 7TH CROSS
    NEELASANDRA
    VIVEKNAGAR
    BENGALURU - 560 047.
                                                 ...PETITIONER
(BY SRI. PRAVEEN C, ADVOCATE)

AND:
   MADRASATHUL BADRIYA DURS
   MADARASA COMMITTEE TRUST
   REP. BY ITS PRESIDENT :
   ABDUL SHAKOOR
   AGED ABOUT 74 YEARS
   NO.25, ANNIPURA MAIN ROAD
   SUDHAMANAGARA
   BENGALURU - 560 002.
                                                ...RESPONDENT
(BY SRI. M C RAVI KUMAR, ADVOCATE)

     THIS CRL.RP IS FILED U/S. 397 R/W 401 CR.P.C PRAYING TO
SET ASIDE THE ORDER DATED 25.10.2018 PASSED BY THE XIX
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE AT BANGALORE IN
C.C.NO.2530/2016 AND ALSO THE ORDER DATED 12.03.2020
PASSED IN CRL.A.NO.2369/2018 BY THE LVI ADDITIONAL CITY
CIVIL AND SESSIONS AT BANGALORE, FOR THE OFFENCE
PUNISHABLE U/S.138 N.I. ACT AND ETC.,

     THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD
AND RESERVED ON 17.01.2024, COMING ON FOR PRONOUNCEMENT
OF ORDER, THIS DAY, THE COURT MADE THE FOLLOWING:
                                            -2-
                                                     CRL.RP No. 649 of 2020


                                       ORDER

1. This revision petition is arising out of the judgment of

conviction and order of sentence dated 25.10.2018 in C.C

No.2530/2016 on the file of XIX Additional Chief

Metropolitan Magistrate, Bengaluru, wherein the petitioner

herein has been convicted for the offence punishable

under section 138 of the Negotiable Instruments Act (for

short 'N.I Act'). Being aggrieved by the same, an appeal

was preferred before the Appellate Court. The Appellate

Court vide its order dated 12.03.2020 in Crl.A

No.2369/2018 on the file of the LVI Additional City Civil

and Sessions Judge, Bengaluru (CCH-57), confirmed the

judgment of conviction and order of sentence passed by

the Trial Court. Hence this revision petition.

2. The rank of the parties in the Trial Court will be considered

henceforth for convenience.

Brief facts of the case:

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

Nos.1 and 2 being the tenants of the premises

situated in the third floor of the building of the

complainant situated at No.25, Annipura Main Road,

Sudhama Nagara, Bengaluru, approximately measuring

1750 sq.ft., and the said premises was taken by accused

Nos.1 and 2 for the purpose of running a gymnastic centre

on the basis of monthly rent of Rs.25,000/-. A lease

agreement was executed between the parties on

05.12.2013. The accused Nos.1 and 2 have become

defaulters. On several requests being made by the

complainant, the accused have issued post dated cheque.

When the cheque was presented for encashment, it was

dishonoured with a shara as 'funds insufficient'. A legal

notice was issued on 03.09.2015. A notice was sent to the

accused which was returned with an endorsement as 'not

claimed'. Hence, it is constrained the complainant to

lodge a complaint against the accused before the

Jurisdictional Magistrate.

4. To prove the case of the complainant, the complainant

examined himself as PW.1 and got marked 8 documents

as Exs.P1 to P8. On the other hand, the accused have

been examined as DW.1 and DW.2 and got marked the

document as Ex.D1 which is lease agreement. The Trial

Court after appreciating the oral and documentary

evidence on record, acquitted the accused No.1. However,

the Trial Court held that the accused No.2 guilty of the

offences and convicted and sentenced the accused No.2

for the offence under Section 138 of N.I Act and sentenced

pay a fine of Rs.4,50,000/-, in default, to undergo simple

imprisonment for three months. Being aggrieved by the

same, the accused No.2 / petitioner herein preferred an

appeal before the Appellate Court, the Appellate Court

confirmed the judgment of conviction rendered by the Trial

Court and dismissed the appeal. Hence this revision

petition.

5. Heard Sri.Praveen.C, learned counsel for the petitioner

and Sri.M.C.Ravi Kumar, learned counsel for the

respondent.

6. It is the submission of the learned counsel for the

petitioner that the impugned judgments passed by the

Courts below are perverse, illegal and the same are liable

to be set aside.

7. It is further contended that the Trial Court and the

Appellate Court ought not to have passed the impugned

judgments without considering the legal aspect. As per

the legal proposition, the complainant is not authorized to

lodge a complaint on behalf of the Trust. The said

question is crucial and both the Courts below should have

decided the said aspect and passed an appropriate order

in that regard. The Trial Court and the Appellate Court

without considering the said aspect recorded the

conviction which is not appropriate. Hence, the same is

liable to be set aside.

8. To substantiate his contention, the learned counsel for the

petitioner relied on the following judgments:

1. Milind Shripad Chandurkar V. Kalim M. Khan1

2. Cref Finance Limited (Earlier called Itc Classic Real Estate Finance Ltd.) Rep. By Its Authorized Signatory Pramod Kumar V. Sree Shanthi Homes Private Limited Rep. By its Managing Director And K. C. Chandrashekar Raju, Major, Managing Director2

Making such submission, the learned counsel for the

petitioner prays to allow the petition.

9. Per contra, the learned counsel for the respondent

vehemently justified the concurrent findings and submitted

that substitution of the complainant is a procedure which

is a practice and it is not illegal. Even though the

agreement executed by some other person, the complaint

can be filed by the person who is competent to file the

same. The complainant being the President of the Trust,

he was authorized to lodge a complaint. Therefore, there

LAWS (SC) 2011 3 32

LAWS (KAR) 2013 8 252

is no illegality or infirmity recorded by the Courts below in

recording the conviction. Therefore, the said contention is

required to be set aside and the petition is required to be

dismissed.

10. Having heard the learned counsel for the respective

parties and also perused the finding of the Courts below in

recording the conviction the points which would arise for

my consideration are:

i) Whether the findings of the Trial Court in

recording the conviction for the offence

punishable under Section 138 of N.I Act in

the absence of authorization having been

given to the complainant by the Trust is

sustainable?

ii) Whether the petitioner made out grounds to

interfere with the said findings?

11. This Court being a Revisional Court, scope of interference

with the finding of fact is limited. Unless, it is found that

the appreciation of evidence and law is perverse, it could

not be interfered with the finding of conviction recorded by

both the Courts.

12. The learned counsel for the petitioner raised a ground

regarding the authorization of the complainant to

represent the Trust is a significant point which requires to

be determined. In order to answer such question, it is

relevant to reiterate the facts of the case.

13. It is an admitted fact that, the notice regarding dishonour

of cheque was issued by the Trust, represented by its

General Secretary. The said legal notice is marked as

Ex.P5. Subsequently, a complaint came to be filed by its

President namely Mr.Abdul Shukoor S/o C.M.Khadar. It is

also an admitted fact that the said cheque stands in the

name of the Trust.

14. As per Ex.D1, the lease agreement was executed by the

General Secretary of the Trust in favour of the accused on

05.12.2013. When the complaint was presented, it was

represented by the President of the Trust who is supposed

to obtain the authorisation by the competent authority.

On perusal of the entire records, it appears that no such

authorization is produced by the complainant to represent

the case.

15. It is relevant to refer to the judgment of Co-ordinate

Bench of this Court in the case of GEORGE JOSEPH v. HMT

(INTERNATIONAL) LIMITED, BANGALORE AND

ANOTHER3, paragraph Nos. 25 to 29 and 31 reads thus:

"25. Therefore, the question whether a person is competent and authorised to represent an incorporeal body such as a company or a corporation, in filing or presenting the complaint, would not normally be gone into in the Court taking cognizance of a complaint, if the complaint is on behalf of the payee or the holder in due course of the cheque in question.

26. However, should the question be raised by the Court in the course of the proceedings or is an objection raised by the accused, the complainant is bound to satisfy the Court that the person prosecuting the complaint is competent and duly authorized by the incorporeal complainant to represent it. The contention that the question would be material only if there is a plea raised by the accused to that effect, is apparently taken drawing inspiration from the observation made by this Court in the case of Sarathi Leasing Finance v. B. Narayana Shetty, (2006 (2) KCCR 1155) : 2006 (3) Kar.L.J 397. In that case, it was found as a fact that the complaint had been filed by the Managing Director of the complainant company, and that he was duly authorized under the Articles of Association to do so. Hence, the question whether the accused had raised a 'plea' in that regard did not arise at all and the observation was clearly obiter dicta, which is unwittingly and unnecessarily

(2014 ) SCC Online KAR 12840

emphasized in the head note, to the report, by the concerned editor. Further, in the present case on hand, as can be seen from the judgments of the trial Court and the appellate Court, the question has been raised by the accused and PW-1 has been cross-examined on this aspect.

27. However, the fact that the law requires a company or a corporate body to carry on its affairs in a particular manner and the question whether the proceedings have been instituted and is prosecuted in conformity with such requirements, is a question of law that should be satisfied as a matter of course and ought not to-depend upon whether, ah objection has been raised or a 'plea' taken, ifyou will. The infjrmity if noticed should be cured. It certainly cannot be ignored as being a mere technicality that would not vitiate the proceedings.

28. Section 291 of the Companies Act, 1956, did embody the principle that subject to the specific exceptions mentioned, the directors of the company, as its governing body, are entitled to exercise all the powers of the company. In the instant case on hand, it is noticed by the lower appellate Court that the Articles of Association of the company, did confer the power on the Directors to sue or defend any proceedings on behalf of the company. A delegation of such power can only be by a resolution of the Board of Directors. Hence, a letter of authorization or a Power of Attorney executed by the Chairman or other officer of the company, without a delegation of the power to institute such proceedings having emanated from

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the Board of Directors, would invalidate any proceedings brought without the necessary authority. This lack of authority could have been supplied even before the appellate Court when the issue arose for consideration, as has been observed by the Apex Court in MMTC's case as well in the case of United Bank of India v. Naresh Kumar, (1996) 6 SCC 660. In other words even on a presumption, that in the face of a letter of authorization and a power of attorney having been executed, authorizing the concerned person to file and prosecute the complaint, that there was an implied authorization by the Board, it ought to have been formally ratified, when the same was questioned before the Courts below.

29. This Court has consistently held that for any person to represent and tender evidence in a Court of law on behalf of a company, ought to be authorized under the Articles of Association of the company or by a separate resolution by the Board of Directors.

31. In the result, the proceedings are held to be vitiated for want of authority to prosecute the complaint on behalf of the Company by the Power of Attorney holder."

16. In the present case, admittedly the Trust is the holder in

due course of the cheque. There must be some

authorization to represent the Trust to the complainant.

In the absence of such authorization, obviously, the

complaint cannot be maintainable. The Courts below

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ought to have considered these aspects. Having failed to

consider the same resulted in passing the impugned

judgments which are required to be set aside.

17. In the light of the observation made above, the points

which arose for my consideration are answered as :

Point No. (i) : In the "Negative"

Point No. (ii) : In the "Affirmative"

18. Hence, I proceed to pass the following:

ORDER

i) The petition is allowed.

ii) The judgment of conviction and order of

sentence dated 25.10.2018 in C.C No.2530/2016

on the file of XIX Additional Chief Metropolitan

Magistrate, Bengaluru and the judgment and

order dated 12.03.2020 in Crl.A No.2369/2018

on the file of the LVI Additional City Civil and

Sessions Judge, Bengaluru (CCH-57) are set

aside.