Telangana High Court
M/S Koundinyasa Construction Company ... vs The State Of Ap Rep By Its Pp Hyd., And ... on 9 July, 2024
THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL REVISION CASE No.1297 OF 2008
ORDER:
The revision petitioners/A1 and A3 were convicted by the
XI Additional Chief Metropolitan Magistrate at Secunderabad,
in C.C.No.877 of 2006, vide Judgment dated 19.11.2007, for
the offence under Section 138 of the Negotiable Instruments
Act and sentenced to undergo Simple Imprisonment for a
period of one year, each, and to pay a fine of Rs.5000/- each.
Out of the fine amount, complainant was awarded Rs.5,000/-
towards defraying expenses in filing the complaint and
continuing the same. Accused No.2 was not found guilty.
Aggrieved by the same, the accused Nos.1 and 3 preferred
appeal in Crl.A.No.479 of 2007 on the file of Special Judge for
Trial of Offences under SCs & STs (POA) Act-cum-VI Additional
Metropolitan Sessions Judge, Secunderabad, and the learned
Sessions Judge vide Judgment dated 7.08.2008, while
dismissing the appeal reduced the sentence of imprisonment of
from one year to six months simple imprisonment, each.
Aggrieved by the same, present revision is filed.
2. Heard learned counsel for the revision petitioners/A1 and
A3 and learned Assistant Public Prosecutor for the respondent
State.
3. Briefly, the case of the complainant is that the
complainant was carrying on construction activity. In the
process of construction, A1 company was entrusted with civil
works at Orissa as a Sub-contractor to construct Cyclone Relief
Houses during 2001-2002. Accused No.1 received substantial
amounts from the complainant on various dates as advance for
completing the works. However, they failed to carryout works
as promised. When asked to return the said advance amounts,
the cheque in question was issued to return the advance
amounts since the work was not done. The said cheque when
presented for clearance was returned unpaid for the reason of
'insufficient funds'. Legal Notice was issued which was served
on Accused. Since the amount covered by cheque was not paid,
having received notice, the complainant filed the case before
the trial Court for the offence under Section 138 of the
Negotiable Instruments Act.
4. In support of the complainant's case, PWs.1 and 2 were
examined and Exs.P1 to P14 were marked. The accused
examined one witness DW1 who is representative of the
company and marked Exs.D1 to D6.
5. The defence of the accused was that there was no
outstanding and complainant failed to prove the outstanding.
6. Learned Counsel appearing for the revision petitioners
would submit that;
i) firstly the notice is defective since the amount over and above
the cheque amount was demanded. Having asked to arrange
the cheque amount, notice was sent to pay interest at 18% and
also Rs.2500/- towards costs of the notice.
ii) The Managing Director was not made a party to the
proceedings, as such, not making the Managing Director as
party is fatal to the prosecution.
iii) The 2nd accused was an authorised signatory, but, does not
fall within the meaning of persons-in-charge of the company as
required under Section 141 of the Negotiable Instruments Act.
Only for the reason of signing the cheques, he cannot be made
as accused.
7. In support of his argument, counsel relied on the
Judgment of the Honourable Supreme Court in Dilip
Hariramani vs. Bank of Baroda1 wherein the Honourable
Supreme Court was dealing with the persons who can be
prosecuted as responsible on behalf of the company.
8. He also relied on the Judgment of Kerala High Court in
A.C.Raj, Inchivila, Thottathu Veedu v. M.Rajan,
Ezhakudivila Veedu 2 wherein the learned Single Judge of
Kerala High Court while dealing with the case under Section
138 of the Negotiable Instruments Act, found that the cheque
was for Rs.5,79,000/- and the notice for Rs.6,50,000/-was
sent. In the said circumstances, Court found that it was not in
compliance with proviso under Section 138(c) of the Negotiable
Instruments Act.
9. The 2nd petitioner/A3 was authorised by the Company to
sign on the cheques meant for payment to others by the
Company. In the said circumstances, A3 is the person
responsible for running of the company on a day to day basis
2022 AIR (Supreme Court) 2258
1997 CriLJ 1939
and the argument that A3 cannot be a 'person' as mentioned
under Section 141 of the Negotiable Instruments Act is
incorrect.
10. In the notice that was issued, the cheque amount was
specifically mentioned and then asked for additional interest
and also costs towards the notice being sent. Once it is
specifically mentioned regarding the cheque amount to be paid,
though, there is a demand for payment of additional interest or
towards costs of the notice, that cannot be in violation of
proviso to Section 138 of the Negotiable Instruments Act since
the cheque amount was specifically asked for.
11. Having gone through the record, both the Courts below
have dealt with all the grounds raised by the defence regarding
the outstanding. Having gone through the defence exhibits
which are IT returns filed by the accused, I do not find that the
case of the complainant is dented in any manner.
12. The jurisdiction of the Court under Section 397 can be
exercised so as to examine the correctness, legality or
proprietary of an order passed by the trial court or the inferior
court, as the case may be. Though the section does not
specifically use the expression 'prevent abuse of process of any
court or otherwise to secure the ends of justice', the
jurisdiction under Section 397 is a very limited one. The
legality, proprietary or correctness of an order passed by a
court is the very foundation of exercise of jurisdiction
under Section 397 but ultimately it also requires justice to be
done. The jurisdiction could be exercised where there is
palpable error, non-compliance with the provisions of law, the
decision is completely erroneous or where the judicial
discretion is exercised arbitrarily. Further the facts may not be
re-assessed until there is total non-application of mind to the
facts.
13. I do not find any infirmity with the finding of the Courts
below regarding outstanding. However, the Court below has
convicted and sentenced the A1-company also to suffer Simple
Imprisonment for a period of six months. The Company cannot
be sentenced to imprisonment. Accordingly, the sentence of
imprisonment as against A1-Company is set aside.
14. This Court deems it appropriate to direct payment of the
cheque amount of Rs.10 lakhs as fine payable by Accused No.1
and Accused No.3 shall pay an amount of Rs.1 lakhs towards
fine before the Court below within six weeks from the date of
receipt of a copy of this order. On such deposit, the entire
amount shall be paid as compensation to the complainant. In
the event of failing to deposit the fine amount within six weeks
as directed, there shall be default sentence of one year which
shall be undergone by A3. The default sentence in all the other
cases shall run concurrently. In the event of the company not
paying the fine amount, the complainant is at liberty to recover
the fine amount in accordance with law.
15. Accordingly, Criminal Revision Case is dismissed.
As a sequel, miscellaneous applications, if any, pending
shall stand closed.
___________________
K.SURENDER, J
Date: 09.07.2024
tk
