E. Mohammed v Tata Finance Limited and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE M.N.KRISHNAN** **WEDNESDAY, THE 3RD DECEMBER 2008 / 12TH AGRAHAYANA 1930** **Crl.Rev.Pet.No. 364 of 2006(A)** **-------------------------------------** **CRA.154/2004 of ADDL. SESSIONS COURT (ADHOC), KOZHIKODE ST.1399/1999 of JUDL. MAGISTRATE OF FIRST CLASS-I, KOZHIKODE** **....................** ## **REVN. PETITIONER(S): APPELLANT/ACCUSED** **--------------------------------------------------** **E.MOHAMMED, S/O.AHAMMED, MANNARAKKAL HOUSE, P.O.VALLURAMBRAM, MALAPPURAM.** **BY ADV. DR.K.B.MUHAMED KUTTY (SR.) SRI.K.M.FIROZ** ## **RESPONDENT(S)/RESPONDENT: COMPLAINANTS** **----------------------------------------------------------** ## **1. M/S.TATA FINANCE LIMITED,** **6/1167 3RD FLOOR, ARAFA COMPLEX, CHEROOTTY ROAD, CALICUT, REPRESENTED BY C.RAMACHANDRAN, BRANCH MANAGER.** **2. THE STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **ADV. SRI. K.SHAJ FOR R1 SRI.SAJJU.S FOR R1** ## **PUBLIC PROSECUTOR SRI. THOMAS JOHN AMBOOKEN** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 03/12/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **M.N. KRISHNAN, J.** **= = = = = = = = = = = = = = CRIMINAL.R.P. NO. 364 OF 2006 = = = = = = = = = = = = = = = Dated this the 3[rd] day of December, 2008.** **==> picture [71 x 9] intentionally omitted <==** This revision is preferred against the judgment of the Additional Sessions Judge, Kozhikode in Crl.A.154/04. The said appeal was preferred against the conviction and sentence passed in S.T.1399/99 by the Judicial First Class Magistrate-I, Kozhikode. The trial court convicted the accused u/s 138 of the N.I. Act and sentenced him to undergo simple imprisonment for a period of three months and to pay a compensation of Rs.1,50,000/- u/s 357(3) Cr.P.C. It is against that decision the present revision is preferred. 2. Learned counsel for the revision petitioner has mainly raised two points before me; (1) is regarding the question of authority for the person who had signed the complaint to file a complaint and (2) regarding the proof of the transaction. It is the case of the complainant that the accused had availed a facility of hire purchase financing and ## Cr.R.P. 364 OF 2006 -:2:- towards the discharge of the liability for the default committed in the hire instalments issued a cheque on 30.6.99 towards the discharge of the said liability which when presented for encashment returned with the endorsement insufficiency of funds. Thereafter notice was sent and on failure to pay the amount a complaint was preferred by the authorised officer of the complainant/Company. But defence of the accused is that the said authorised officer has no locus standi to file the complaint and that it was only by misusing the blank signed cheque given at the time of transaction the case is instituted and further that the revision petitioner had already sold the vehicle earlier and therefore the transaction is not true. 3. Let me consider about the power of attorney question first. Ext.P1 is the power of attorney executed by the Executive Director of the Tata Finance Ltd. in favour of one Ramachandran and it is dated 15[th] January, 2003. Learned counsel would contend that the complaint is filed in the year 1999 and therefore the power of attorney cannot confer any right on the person who had signed the complaint Cr.R.P. 364 OF 2006 ## -:3:- to do so and further it is also argued that the person who has executed the power of attorney has not produced the power of attorney mentioned in Ext.P1 dated 17[th] January, 2002 under Ext.P1. As per the power of attorney the person who had signed the complaint is authorised to commence, carry on or defend or appear in all suits etc. etc. arising out of the company's contract of hire purchase or loan or lease or only finance related business. According to me the word carry on confers the right to continue and when the right to continue is conferred upon the person it is some thing which ratifies the earlier action done by the said person. Now I may also refer to two decisions of the Apex Court in the decision reported in _**M/s M.M.T.C. Ltd. v. M/s Medchl Chemicals & Pharma (P) Ltd. AIR 2002 SC 182.**_ the Apex Court held that, “If any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, then the complaint requesting the Magistrate to take cognizance of the offence must satisfy the ## Cr.R.P. 364 OF 2006 -:4:- eligibility criterion prescribed by the statute. The only eligibility criterion prescribed by S.142 is that the complaint under S.138 must be by the payee or the holder in due course of said cheque. This criterion is satisfied as the complaint is in the name and on behalf of the appellant company who is the payee of the cheque. Merely because complaint is signed and presented by a person, who is neither as authorised agent nor a person empowered under the Articles of Association or by any resolution of the Board to do so is no ground to quash the complaint. It is open to the de jure complainant company to seek permission of the 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.” 4. It is true that it was a situation where the challenge was made u/s 482 Cr.P.C. for quashing the ## Cr.R.P. 364 OF 2006 -:5:- complaint. There the Apex Court held that it is a curable defect which can be cured. In a later decision rendered by the Supreme Court in _**2008 (8) SCC 536 (Shankar Finance & investments v. State of A.P.)**_ the Apex Court had held that requirements of S.142(a) for taking cognizance of offence punishable u/s 138 are (a) the complaint should be made in writing (b) the complaint should be the payee or the holder in due course, where the payee has endorsed the cheque in favour of someone else. 5. The crux of the matter appears to be that when an amount is due and a complaint is filed on behalf of the institution or by the holder in due course of the payee then it is a complaint that is maintainable and even if there is some defect it is a defect which is curable and will not cut at the root of the prosecution. The learned counsel very strongly contends before me that the complaint being filed in 1999 and as Ext.P1 power of attorney does not specifically ratifies the action done by Sri. Ramachandran, in the document Ext.P1 power of attorney it does not empower the so called Ramachandran to institute the complaint. It has to be ## Cr.R.P. 364 OF 2006 -:6:- understood that Ext.P1 is a general power of attorney executed in favour of Ramachandran enabling him to sue or to be sued or to defend or to take action in matters. It has to be remembered the very specific word 'carry on' is used there. So a person who executed the power of attorney was conscious of the fact that some proceedings are pending before some authorities and that is why he has specifically permitted the person to carry on those proceedings. The sum and substance of the same is a ratification of the action and further when it relates to the series of acts to be done the subsequent ratification is not called for. It has also to be stated that it is the company which has to get the amount has filed the complaint represented by its authorised manager and therefore I do not find any mistake committed by the Courts below in arriving at the decision that the manager is competent to sue and the complaint is maintainable. 6. Now let me consider the other question regarding the case. Admittedly the revision petitioner had purchased a vehicle in hire purchase from the complainant/company Cr.R.P. 364 OF 2006 ## -:7:- agreeing to pay the amount in 36 monthly equal instalments. He remitted only six instalments and an amount of Rs.1,33,804/- was due as on 30.6.99. The disputed cheque is for the said amount and therefore it is contended by the complainant that it is towards the discharge of that liability the said cheque is issued. The revision petitioner would contend that on 27.2.98 he had sold the vehicle to DW1 and therefore the question of him paying or issuing a cheque does not arise at all on 30.6.99. As rightly observed by the appellate Court, the complainant is not a party to the agreement of sale between the revision petitioner and DW1 and it is not binding on him. When an amount is due under the hire purchase agreement and that a cheque is issued wherein the signature is admitted in the cheque and the evidence of PW1 indicates that the cheque has been executed by the revision petitioner in discharge of the liability and as both the Courts below had appreciated and found it to be acceptable then necessarily the presumption u/s 139 can be taken unless it is rebutted by other evidence. I am conscious of the fact that the Apex Court has recently ## Cr.R.P. 364 OF 2006 -:8:- held that there is no presumption with respect to the execution of cheque u/s 139 of the N.I. Act. But when the execution of the cheque is proved then necessarily presumption u/s 118 and 139 of the N.I.Act are followed, it can be only dispelled by adducing rebuttal evidence acceptable to the Court. The rebuttal evidence adduced in this case has not been accepted by the Courts below and therefore it has to be held that the revision petitioner has not succeeded in proving otherwise. It is also to be remembered that it has been held in a large number of decisions that when evidence is adduced by the defendants it is also a matter that can be taken into consideration for analyzing the case to find out the truth. Both the Courts have arrived at a decision and I do not find any perversity, illegality or irregularity committed by the Courts below in arriving at that decision and therefore I sustain the conviction u/s 138 of the N.I. Act. 7. Now, turning to the sentence the revision petitioner has been directed to undergo simple imprisonment for three months and to pay a compensation of ## Cr.R.P. 364 OF 2006 -:9:- Rs.1,50,000/-. I feel if he is really interested in making the payment a chance can be given to him by modifying the sentence and converting the compensation into that of fine with default sentence. Therefore the Criminal Revision is disposed of as follows: - (1) The conviction u/s 138 of the N.I. Act is sustained. (2) The sentence is modified and the revision petitioner is directed to undergo simple imprisonment for one day, i.e. till the raising of the Court and to pay a fine of Rs.1,33,804/- which on realisation be paid to the complainant in the case. (3) In case of default of payment of fine the revision petitioner has to undergo imprisonment for a period of six weeks. (4) The revision petitioner shall appear before the trial court to receive the sentence on 16.2.2009 and also for payment of fine. In default the trial court is directed to execute the sentence. Cr.R.P. 364 OF 2006 **==> picture [28 x 9] intentionally omitted <==** (5) If any amount has been paid or deposited by way of compensation in this case it can be treated as a part of fine and only the balance need to be remitted and the said amount shall be disbursed to the complainant on proper application. The Crl.R.P. is disposed of as above. ## **M.N. KRISHNAN, JUDGE.** ul/-