Kerala High Court
M/S.Sree Gokulam Chit & Finance Co.(P) vs P.R.Balakrishnan on 8 November, 2024
CRL.A NO. 1029 OF 2008
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MRS. JUSTICE SOPHY THOMAS
TH
FRIDAY, THE 8
DAY OF NOVEMBER 2024 / 17TH KARTHIKA,
1946
CRL.A NO. 1029 OF 2008
CC NO.238 OF 2002 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE,
ERNAKULAM
APPELLANT/COMPLAINANT:
/S.SREE GOKULAM CHIT & FINANCE CO.(P) LTD., 26,
M
MUTHUGRAMANI STREET, MYLAPORE, MADRAS-4, REPRESENTED BY
AJAYAN.A.T.K., S/O.BALAN.P., ASSISTANT MANAGER, JOSE
JUNCTION, M.G.ROAD, ERNAKULAM, COCHIN-16.
BY ADV SRI.K.S.BABU
RESPONDENTS/ACCUSED:
1
.R.BALAKRISHNAN, S/O.P.N.RAMAKRISHNAN RAO
P
PARTNER, M/S.WOODLANDS JEWELLERS, WOODLAND JUNCTION,
M.G.ROAD, ERNAKULAM,, KOCHI-16.
2
/S.WOODLANDS JEWELLERS,
M
KOCHI-16.
3
TATE OF KERALA, REPRESENTED BY
S
THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,
ERNAKULAM.
1 & R2 BY ADVS.
R
SRI.JOHN BRITTO
SRI.C.A.RAJEEV
R3 BY PUBLIC PROSECUTOR SMT.SEENA C.
THIS
CRIMINAL
APPEALHAVING
BEEN
FINALLY
HEARD
ON
30.10.2024,
THE COURT ON 08.11.2024 DELIVERED THE FOLLOWING:
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"CR"
J U D G M E N T
The complainant in CC No.238 of 2002 on the file of
Additional Chief Judicial Magistrate, Ernakulam, filed this
appeal challenging acquittal of the accused, under Section
138 of the Negotiable Instruments Act (hereinafter referred
as 'the NI Act'), as per judgment dated 31.05.2007.
2. The complainant, M/s.Sree Gokulam Chit & Finance
Company,isaPrivateLimitedcompanyhavingitsregistered
office at Chennai and a branch office at MG Road,
Ernakulam. The complainant is represented by its power of
attorney holder, who is the Assistant Manager of that
company.Heisempoweredtoinstitutethecomplaintandto
give evidence. The 2nd accused is M/s.Woodlands Jewellers
and the1staccusedisitspartner.Rs.2,13,000/-wasdueto
the complainant, from the accused, towards future
instalments of kuri transactions, whichthe2ndaccusedhad
subscribed with the complainant-company. Towards
dischargeofthatdebt,the1staccusedissuedExt.P2cheque
dated 14.12.2001, assuring that, it would be encashed on
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presentation before the Bank. The complainant presented
that cheque for collection but it was dishonoured for the
reason, 'A/c transferred to suit file. No Balance.', as per
Ext.P3 memo. Complainant sent Ext.P5 registered lawyer
notice to the accused, and inspiteofreceiptofnotice,they
did not repay that amount, though a reply was sent with
untenable contentions. Hence the complaint.
3. After taking cognizance and on appearance of the
accused before the trial court, particulars of offence were
read over and explained, to which, they pleaded not guilty
andclaimedtobetried.Thereupon,PW1wasexaminedand
Exts.P1toP10andP10(a)weremarkedfromthesideofthe
complainant. On closure of complainant's evidence, the
accused were questioned under Section 313 of Cr.P.C. They
denied all the incriminating circumstances brought out in
evidence and according to them, they subscribed chitty
conducted by the complainant, which was terminated on
12.11.1998. They paid the entire amount due, and
thereafter their passbook was closed. Ext.P2 cheque was
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given by the accused, as a blank one, only as a security,
when he bid the chitty. After closing the chitty,theaccused
demanded back the blank cheque given as security, but it
was not returned, saying that it was kept intheheadoffice
at Madras. No defence evidence was adduced.
4.Onanalysingthefactsandevidence,andonhearing
the rival contentions from either side, the trial court
acquitted the accused, finding that the complaint was not
properly instituted, as PW1-Assistant Manager was not
properly authorised to filethecomplaintortogiveevidence
on behalf of the company. Moreover, the complainant failed
to prove that, Ext.P2 cheque was issued towards discharge
of a legally enforceable debt. Aggrieved by the acquittal of
the accused, the complainant has preferred this appeal.
5. Heard learned counsel for theappellantandlearned
counsel for the respondents.
6. Learned counsel for the appellant would contend
that, since the complainant is a Private Limited company,
which is an incorporeal body, only an employee or
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representativeofthecompanycanpreferthecomplaint.The
company becomes a de jure complainant and its employee
or other representative representing the company in the
criminalproceedingsbecomesthedefactocomplainant.Ina
complaint, with regard to dishonour of a cheque issued in
favour of a company, for the purpose of Section 142 of the
NI Act, the company will be the complainant, and for the
purpose of Section 200 of the Criminal Procedure Code, its
employee,whorepresentsthecompany,willbethedefacto
complainant. A company can be represented by an
employee, or even by a non-employee authorised and
empowered, to represent the company by a resolution or a
power of attorney.
7. According to the appellant, Ext.P8 extract of the
resolution empowered PW1-Sri.A.T.K.Ajayan, who was the
Assistant Manager ofthecompany,tofilethecomplaintand
to give evidence. Ext.P8 is the extract from the minutes,of
the proceedings of the Board of Directors meeting, held on
14.09.2000, at its corporate office at Chennai, which
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authorisedtheAssistantManagerSri.A.T.K.Ajayan,todothe
following acts:
'( 1) Toinstitute,commence,prosecute,carryonor
defend any suit or legal proceeding,
(2)Tosignandverifyallplaints,writtenstatements
and other pleadings, applications, affidavits,
petitions or documents and produce them
before any Court,
(3) To appoint, engage and instruct any solicitor,
Advocate or Advocates to act and plead and
other wise conduct the case on behalf of the
Company and to sign any Vakalathnama or
other authority in this regard,
(4) To give evidence on behalf of the Company in
any Court of law, and
(5) To do all other lawful acts,deedsandthingsin
connectionwithfilingofanysuitandconducting
anylegalproceedingsinanycourtoflawandto
withdraw the case on behalf of the Company.'
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8. Learned counsel for respondents 1 and 2 would
contendthat,Ext.P8extractoftheminutesisnotadmissible
in evidence and the minutes has to beprovedbyproducing
theoriginal.HewouldrelyonadecisionoftheHighCourtof
Judicature at Bombay in Ashish C. Shah v. M/s. Sheth
DevelopersPvt.Ltd.&Othersreportedin[CDJ2011BHC
339:2011 KHC 6506], to say that, Section 194 of the
Companies Act provides that, the minutes of meetings kept
in accordance with the provisions of Section 193, shall be
evidence of the proceedings recorded therein. No provision
intheCompaniesActwasbroughttothenoticeofthatcourt
which provides that, certifiedcopyorextractoftheminutes
would be admissible in evidence, without proof of the
original. Section 65(f) of the Evidence Act provides that,
secondary evidence may be given, of the existence,
conditionandcontentsofthedocument,whentheoriginalis
the document, of which a certified copy is permitted bythe
Evidence Act or by any other law in force in India, to be
given in evidence. He would rely on another decisionofthe
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Delhi High Court in Escorts Ltd. v.SaiAutosandOthers
[1991 Company Cases Volume 72 Page 483] to say that,
copy of resolution was not enough and the original of the
minutes book, containing the resolution reliedon,hastobe
brought to the court.
9. Section 119 of the Companies Act, 2013 which
correspondstoSection196oftheCompaniesAct,1956says
that,thebookscontainingtheminutesoftheproceedingsof
any generalmeetingofacompanyorofaresolutionpassed
by postal ballot shall be kept at the registered office of the
company,anditshallbeopenforinspectionbyanymember
during business hours and if any member make a request,
for a copy of the minutes,itshallbefurnishedwithinseven
days, onpaymentofprescribedfees.So,Section119ofthe
Companies Act provides for copy of the minutes, and
moreover, learned counsel for the appellant would saythat,
copy of every resolution shall be sent to the Registrar for
recording the same within 30 days of passing the same.
Moreover, as per Section 54 of the Companies Act, 1956, a
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document which requires authentication by a company may
be signed by adirector,themanager,thesecretaryorother
authorisedofficerofthecompany,andneednotbeunderits
common seal. So, accordingtotheappellant,Ext.P8extract
oftheminutes,whichcontainstheresolutionauthorisingthe
Assistant Manager to file criminal or civil cases or to give
evidenceetc.,signedbythedirectorofSreeGokulamChit&
Finance Co.(P)Ltd.,wassufficientauthorityforPW1,tofile
the complaint and to give evidence, on behalf of the
company.
10. Learned counsel for the respondents would point
outthat,Ext.P8wasnotproducedalongwiththecomplaint,
and it was produced subsequently after questioning the
accusedunderSection313ofCr.P.C.Relyingonthedecision
M. M. T. C. Ltd. v. Medchil Chemicals And Pharma (P)
Ltd. [2002 KHC 241], learned counsel for the appellant
contended that, even if there was no authority initially, still
thecompanycanrectifythatdefect,atanystage.Inpara12
of that judgment, we read thus:
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"It has been held that if a complaint is madeinthe
name of an incorporeal person (like a company or
corporation) it is necessary that a natural person
representssuchjuristicpersoninthecourt.Itisheld
that the court looks upon the natural person to be
the complainant for all practical purposes. It is held
that when the complainant is a body corporate it is
the de jure complainant, and it must necessarily
associate a human being as defactocomplainantto
represent the former in court proceedings. It has
further been held thatnoMagistrateshallinsistthat
theparticularperson,whosestatementwastakenon
oath at the first instance, alone can continue to
represent the company till the end of the
proceedings. It has been held that there may be
occasions when different persons can represent the
company. It has been held that it is open to the de
jure complainant companytoseekpermissionofthe
court for sending any other person to represent the
company in the court. Thus, even presuming, that
initially there was no authority, still the company
can, at any stage, rectify that defect. At a
subsequent stage the company can send a person
who is competent to represent the company. The
complaintscouldthusnothavebeenquashedonthis
ground."
11. In the decision, Bhupesh Rathod v.
Dayashankar Prasad Chaurasia and Another[2
021 (6)
CRL.A NO. 1029 OF 2008
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KHC 368], Hon'ble Apex Court held that, even if there was
no authority initially, the company can at any stage rectify
that defect by sending a competent person. In that case,
copy of the board resolution was filed along with the
complaint. An affidavit was brought on record by the
company, affirming the factum of authorisation in favour of
the Managing Director. Hon'ble Apex Court accepted the
copy of board resolution, to find thattheManagingDirector
was authorised to file complaint in the Court and to attend
all such affairs which maybeneededintheprocessoflegal
actions. Paragraphs 23 and 24 of that judgment read thus:
"2
3. It is also relevant to note that a copy of the Board
Resolutionwasfiledalongwiththecomplaint.Anaffidavit
had been brought on record in the Trial Court by the
Company, affirming to the factum of authorisation in
favouroftheManagingDirector.AManageroraManaging
Directorordinarilybytheverynomenclaturecanbetaken
tobethepersonin-chargeoftheaffairsCompanyforits
day - to - daymanagementandwithintheactivitywould
certainlybecallingtheactofapproachingtheCourteither
under civil law or criminal law for setting the trial in
motion (Credential Finance Ltd. v. State of Maharashtra,
1998(3)MahL J805).Itwouldbetootechnicalaviewto
take to defeat the complaint merely because the bodyof
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the complaint does not elaborate upon the authorisation.
The artificial person being the Company had to act
through a person / official, which logically would include
the Chairman or ManagingDirector.Onlytheexistenceof
authorisation could be verified.
24.Whileweturntotheauthorisationinthepresentcase,
itwasacopyand,thus,doesnothavetobesignedbythe
BoardMembers,asthatwouldformapartoftheminutes
of the Board meeting and not a true copy of the
authorisation. We also feel that it has been wrongly
concludedthattheManagingDirectorwasnotauthorised.
If we peruse the authorisation in the form of a certified
copyoftheResolution,itstatesthatlegalactionhastobe
taken against the respondent for dishonour of cheques
issued by him to discharge his liabilitiestotheCompany.
To this effect, Mr. Bhupesh Rathod / Sashikant Ganekar
were authorised to appoint advocates, issue notices
through advocate, file complaint, verifications on oath,
appointConstituentattorneytofilecomplaintintheCourt
and attend all such affairs which may be needed in the
process of legal actions. What more could be said?"
12. Obviously Hon'bleApexCourtacceptedcopyofthe
resolutiontofindthefactumofauthorisationinfavourofthe
Managing Director.
13.Inthecaseonhand,PW1-AssistantManagerofthe
complainant-companyfiledthecomplaintandgaveevidence
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on behalf of the company. Ext.P8 extract of the minutes
shows that, the board of directors authorised him to do so.
Thefactthatonlyextractoftheminutesbookwasproduced,
without producing the original, or that Ext.P8 wasproduced
at a belated stage, etc., will not take away that right from
him. So, he could have filed the complaint and given
evidence also on behalf of the company, on the strength of
the resolution by the boardofdirectors,anextractofwhich
was produced as Ext.P8.
14.Learnedcounselfortherespondentswouldcontend
that, Ext.P9 power of attorney was not executed or
authenticated by theNotaryPublicandso,itcouldnothave
been accepted to draw power for PW1, tofilethecomplaint
or to give evidence. According to him, the two ingredients
contained in Section 85 of the Evidence Act viz. execution
before the Notary Public and the authentication by the
Notary Public are very essential. The words 'executed
before', and 'authenticated by', are the two conditionstobe
satisfied in order to attract the presumption under Section
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85 of the Evidence Act.HewouldrelyonthedecisionBank
of India v. M/s. Allibhoy Mohammed and Others
reported in [AIR 2008 BOMBAY 81], to support his
argument.Inparagraph 18 of that judgment, we read thus:
"18. Let me turn to the Legal Provisions; namely,
Section 85 of the Evidence Act which lays down that
the Court shall presume due execution and
authentication of power of attorney when executed
before, and authenticated by a Notary Public, or any
Court, Judge, Magistrate, Indian Counsel or it's Vice
Counsel or representative of theCentralGovernment,
etc. This presumption is available in favour of the
originalPowerofAttorneyholderprovidedmandateof
Section 85 is duly followed."
15. In the case on hand, though the original power of
attorneyisproducedandmarkedasExt.P9,itdoesnotshow
that it was executed by the complainant in presence of the
Notary Public, and there is no authentication by the Notary
Public, that it was executed before her. So, there is some
forceintheargumentputforwardbylearnedcounselforthe
respondents, that Ext.P9 power of attorney cannot be
accepted,forwantofproperexecutionandauthenticationas
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envisaged under Section 85 of the Evidence Act.
16. Learned counsel for the appellant would submit
that,evenifthepowerofattorneyisignored,thenalso,the
complaint is filed by an officer of the company and he was
authorised as per board resolution dated 14.09.2000, the
extract of which was marked as Ext.P8. So, this Court is of
the view that, though Ext.P9 power of attorney was not
liable to be accepted, being the officer of the company,
authorised by board resolution dated 14.09.2000, PW1 was
empowered to file the complaint and to give evidence.
17.Learnedcounselfortheappellantwouldsaythat,if
the accused was disputing the authority of the complainant
tofilethecomplaintortogiveevidence,itwasopenforhim
to dispute andestablishthesameduringthecourseoftrial.
Hon'ble Apex Court in TRL Krosaki Refractories Ltd.
(M/s.) v. M/s. SMS Asia Pvt. Ltd. and Another [2022
(2) KHC 157:2022 (1) KLT OnLine 1043 (SC)] made that
position clear, by holding that, when thecomplainant/payee
is a company, an authorized employee can represent the
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company. Such averment and prima facie material is
sufficient for the learned Magistrate to take cognizance and
to issue process. If at all there is any serious dispute with
regard to the person prosecuting the complaint not being
authorized, or if it is to bedemonstratedthatapersonwho
filed the complaint has noknowledgeofthetransactionand
assuchthatpersoncouldnothaveinstitutedandprosecuted
the complaint, it would be open for the accused to dispute
thepositionandestablishthesameduringthecourseofthe
trial.
18. Though the respondents were disputing the
authority of PW1, vide Ext.P8 extract of the resolution as
wellasExt.P9powerofattorney,theydidnottakeanysteps
to establish that position, during trial.So,thefindingofthe
trialcourt,thatPW1wasnotauthorizedtofilethecomplaint
and to give evidence on the basis of Ext.P8 extract of the
resolution, is liable to be set aside.
19.Comingtothefactsofthecase,learnedcounselfor
theappellantwouldsubmitthat,therespondentssubscribed
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seven kuries of Rs.5,00,000/- each, with the appellant
company, andtheyauctionedthatkurion14.02.1997.They
defaulted payment of future instalments, and towards
discharge of that liability, the 1st respondent issued Ext.P2
cheque dated 14.12.2001 for an amount of Rs.2,13,000/-.
When that cheque was presented before Bank, it was
returned dishonoured for the reason 'A/c transferred to suit
file. No balance.' The respondents are not disputing the
signatureinExt.P2chequeortheissuanceofthatchequeto
the appellant. All statutory formalities to bring home an
offence punishable under Section 138 of the NI Act was
complied with. Moreover, the presumptions available under
Sections 118 and 139 of the NI Act will come to the aid of
the appellant to show that, Ext.P2 cheque was issued
towards discharge of a legally enforceable debt. So,
according totheappellant,learnedtrialcourtwentwrongin
acquitting the accused.
20. The respondents would contend that, when they
auctioned the kuri with the appellant, as a security for the
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balance instalments, Ext.P2 cheque was given as a blank
signed cheque, and even after they paid the future
instalments fully, and closed the kuri, the blank cheque
entrustedwiththeappellantwasnotreturned. Onlytosee,
whether they could extract some more money from the
respondents, they filed a false complaint, misusing that
blank cheque.
21.RelyingonthedecisionoftheHon'bleApexCourtin
Bir Singh v. Mukesh Kumar[(2019) 4 SCC 197], learned
counsel for the appellant would argue that, even a blank
cheque leaf, voluntary signed and handed over by the
accused, which is towards some payment, would attract
presumptionunderSection139oftheNIAct,intheabsence
of any cogent evidence to show that the cheque was not
issued in discharge of a debt. Paragraphs 33 to 36 of that
judgment read thus:
"33. A meaningful reading of the provisions of the
Negotiable Instruments Act including, in particular,
Sections 20, 87 and 139, makes it amply clear that a
person who signs a cheque and makes it over to the
payeeremainsliableunlessheadducesevidencetorebut
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the presumption that the cheque had been issued for
payment of a debt or in discharge of a liability. It is
immaterial that the cheque may have been filled in by
any person other than the drawer, if the cheque is duly
signed by the drawer. If the cheque is otherwise valid,
the penal provisions of Section 138 would be attracted.
34.Ifasignedblankchequeisvoluntarilypresentedtoa
payee,towardssomepayment,thepayeemayfillupthe
amount and other particulars. This in itself would not
invalidate the cheque. The onus would still be on the
accusedtoprovethatthechequewasnotindischargeof
a debt or liability by adducing evidence.
35.Itisnotthecaseoftherespondent-accusedthathe
either signed the cheque or parted with it under any
threat or coercion. Nor isitthecaseoftherespondent-
accused thattheunfilledsignedchequehadbeenstolen.
The existence of a fiduciary relationship between the
payeeofachequeanditsdrawer,wouldnotdisentitlethe
payee to the benefit of the presumption under Section
139oftheNegotiableInstrumentsAct,intheabsenceof
evidence of exercise of undue influence or coercion.The
second question is also answered in the negative.
36. Even a blank cheque leaf, voluntarily signed and
handed over by the accused, which is towards some
payment, would attract presumption under Section 139
of the NegotiableInstrumentsAct,intheabsenceofany
cogent evidence to showthatthechequewasnotissued
in discharge of a debt."
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22. The respondents are not disputing issuance of
Ext.P2chequetotheappellant,thoughaccordingtothem,it
wasissuedasablanksignedcheque.Theyarenotdisputing
the fact that they auctioned the kuri which they subscribed
with the appellant and future instalments were to be paid,
evenafterauctioningthekuri.Obviously,Ext.P2chequewas
issuednotunderanythreatorcoercion,andevenaccording
totherespondents,itwasissuedasasecurityforthefuture
instalmentstobepaidinthekuri,whichtheyhadauctioned.
In Moideen v. Johny [2006 KHC 1055], this Court held
that, even if a blank cheque was issued as a security, the
person in possession of the blank cheque, can enter the
amount of the liability and present it to the bank. When a
blank cheque is issued by one to another, it gives an
authority on the person, to whom itisissued,tofillitupat
the appropriate stage, with the necessaryentitiesregarding
the liability, and to present it to the bank. In the event of
dishonour of that cheque, the accused cannot be absolved
from his liability.
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23.Anothercontentiontakenupbylearnedcounselfor
the respondents is that, the appellant did not produce the
account books of the chitty to show that Rs.2,13,000/-was
due from them. Learned counsel for the appellant would
submit that, production of account books etc. may be
relevant in a civil court, but as far as a criminalcaseunder
Section138oftheNIActisconcerned,thereispresumption
in favour of the holder of the cheque, and so the burden is
upon the respondentstorebutthatpresumption.Shewould
rely on a decision of the Hon'ble Apex CourtinChandelD.
K.v.M/s.WockhardtLtd.andAnother[2020KHC6204]
which says that production of the account books/cash book
may be relevant in a civil court; but may not be so, in the
criminal case filed under Section 138 of NI Act, because of
the presumption raised in favour of the holder of the cheque.
24. The respondents are not disputing the fact that
they had subscribed kuries with the appellant company.
Ext.D1 passbook shows that the kuri commenced on
12.11.1996, and it was terminated on 12.11.1998. In the
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first page of that passbook, a 'PAID' seal is found with the
date14.02.1997.Accordingtotheappellant,itwasthedate
onwhichthatkuriwasauctionedbytherespondents. Inthe
10th page of that passbook,thereisanendorsementinred
ink, as 'c
losed 14.12.1998'. So according to the
respondents, the endorsement 'c
losed 14.12.1998' andthe
'PAID' seal on the first pageofthepassbook,willshowthat
he had paid the entire amount due under that kuri and so,
no amount was due, so as to issue Ext.P2 cheque.
25. Learned counsel for the appellant would contend
that,ifthekuriwasclosedon14.12.1998,thepassbookwill
show the seal 'c
losed', just like the 'PAID' seal in the first
page. Since the kuri was auctioned by the respondents,
definitely there would have been future instalments, to be
paid monthly, till the termination of that kuri. When the
respondents are alleging discharge of the entire kuri
instalments duetotheappellant,itistheirburden,toprove
itwithcogentevidence.Theycouldhaveverywellcalledfor
the Registers pertaining to the kuri to show that the entire
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amount has been paid by them. Learned counsel for the
appellant would say that, since Ext.D1 passbook was in the
custody of the respondents, they themselves might have
made the red ink entry 'c
losed 14.12.1998'. Since Ext.D1
passbook was with the respondents, the manipulation as
alleged by the appellant cannot be ruled out. Learned trial
court seems to have been carried away by the 'PAID' seal
seen on the first page of Ext.D1 passbook to find that, the
entire dues of the kuri was paid off by the respondents.
Obviously, that 'PAID' seal was regarding payment by the
company, when the kuri was auctioned by the respondents.
26.Learnedcounselfortherespondentswouldcontend
that, on receipt of Ext.P5 lawyer notice, they sent Ext.D2
reply notice disowning theliabilityanddisputingissuanceof
the cheque. But the appellant produced Ext.P10 notice sent
by the respondents on receipt of Ext.P5 notice. In Ext.P10
notice, it was stated that the respondents were facing
financial difficulties and they were making every effort to
raise funds to settle the account. But, learned counsel for
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the respondents would say that, they never sent Ext.P10
replynoticetotheappellant.ButExt.P10(a)postalcoverwill
show that, it was sent by the respondents to
Adv.Sri.K.S.Babu, who sent Ext.P5 notice. Ext.D2 notice as
well as Ext.P10noticeareonthesamedayi.e.10.01.2002.
But Ext.D2 was addressed to the appellant directly. The
postalreceiptoracknowledgementcardofExt.D2noticewas
not produced by the respondents. Since Ext.P5 notice was
sent by an advocate, normally the reply also should have
been given to that advocate. Ext.P10 notice along with
Ext.P10(a) cover seem to be more reliable. On going
through Ext.P10 notice, it could be seen that, the
respondents were admitting their liability to certain extent,
towards the balance amount due on prized chits.
27.Advertingtotheaforesaidfactsandcircumstances,
this Court is of the view that, the trial court went wrong in
acquitting the accused. So,theimpugnedjudgmentisliable
to be set aside. There is evidence to show that Ext.P2
cheque was issued towards discharge of a legally
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enforceable debt, and that cheque was dishonoured for the
reason'A/ctransferredtosuitfile.Nobalance.'Theappellant
had complied with all the statutory formalities in order to
attract an offence punishable under Section 138 of the NI
Act.ThecomplainantwasauthorizedasperExt.P8extractof
the resolution, to file the complaint and to give evidence.
The respondents failed to rebut the presumptions available
in favour of the appellant, under Sections 118 and 139 of
the NI Act. So, respondents 1 and 2 are found guiltyunder
Section 138 of the NI Act.
28. As per Section 141 of the NI Act, if the person
committing an offence under Section 138 is a company,
every person who, at the time the offence was committed,
was in charge of, and was responsible to the company for
the conduct of the business of the company, as well as the
company, shall be deemed to be guilty of the offence and
shall be liable to be proceeded against and punished
accordingly. Section 141(2) of the NI Act reads thus:
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"141. Offences by companies. --
(1) xxx xxx xxx
(2)Notwithstandinganythingcontainedinsub-section(1),
where any offence under thisAct,hasbeencommittedby
a company and it is proved that the offence has been
committed with the consent or connivance of, or is
attributable to, any neglect on the part of, any director,
manager, secretary or other officer of the company, such
director, manager, secretary or other officer shall also be
deemed to be guilty of that offence and shall be liable to
be proceeded against and punished accordingly.
Explanation: For the purposes, of this section,--
(a) "company"meansanybodycorporateandincludesa
firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in
the firm."
29. In the case on hand, the 2nd respondent is a
partnership firm and the 1st respondent is its partner. So
bothofthemareliabletobeconvictedunderSection138of
the NI Act.
30. Regarding the sentence to be imposed, the
transaction relates back to the year 2001 and 23 years
elapsed since then. As held by the Hon'ble Apex Court in
Kaushalya Devi Massand v. Roopkishore Khore [2011
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KHC 281], the gravity of a complaint under the Negotiable
Instruments Act cannot be equated with an offence under
the provisions of the Indian Penal Code or other criminal
offences. An offence under Section 138 of the Negotiable
Instruments Act, 1881, is almost in the nature of a civil
wrong which has been given criminal overtones. So, more
than the punitive aspect under Section 138 of the NI Act,
this Court is inclined to give priority to the compensation
aspect.
31. In the result, respondents 1 and 2 are convicted
and sentenced to undergo simple imprisonment foroneday
till risingofcourtandtopaycompensationofRs.3,00,000/-
(Rupees three lakh only) to the appellant, with a default
sentence of simple imprisonment for six months.
32. Since the 2nd respondent is the firm, the 1st
respondentwhoisthepartnerofthe2ndrespondent,hasto
appear before the trial court on or before 10.12.2024, to
receive the sentence and to pay the compensation to the
appellant/complainant. If the complainant is absent to
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receive the compensation amount, he can deposit the
amount before the trial court. Ifthe1strespondentfailsto
appear as directed above, the trial court has to take steps
for executing the sentence, without further delay.
Registrytoforwardacopyofthisjudgmentalongwith
trial court records to reach the same before the trial court
before 10.12.2024, so as to comply with the directions
aforementioned.
Accordingly the appeal stands allowed.
Sd/-
SOPHY THOMAS
JUDGE
DSV/-
