Mulamoottil Consumer Credits Ltd. v. P. Ullas and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE HARUN-UL-RASHID THURSDAY, THE 13TH DAY OF JUNE 2013/23RD JYAISHTA 1935 CRL.A.No. 126 of 2008 ( ) -------------------------- AGAINST THE ORDER IN Crl.L.P. 30/2008 of HIGH COURT OF KERALA DATED 10-01-2008 AGAINST THE JUDGMENT IN ST 1166/2006 of CHIEF JUDICIAL MAGISTRATE,TRIVANDRUM DATED 28-11-2007 APPELLANT/COMPLAINANT:: ---------M/S.MULAMOOTTIL CONSUMER CREDITS LTD. REGD.OFFICE AT TC.9/1419(1), TEMPLE ROAD, SASTHAMANGALAM, TRIVANDRUM & BRANCH INTERALIA AT TRIVABNDRUM IS ` REP.BY ITS ASST.MANAGER., S.RAVEENDRAN NAIR, S/O.SANKARAPILLAI, AGED 65, RESIFDING AT ASWATHY SREEKRISHNA NAGAR, CHAVADIMUKKU, SREEKARIYAM P.O. THIRUVANANTHAPURAM 17 WHO IS A PRINCIPAL OFFICER OF THE COMJPLAINANT COMPANY AUTHORISED TO SIGN PLADINGS, AFFIDAVITS ETC. ON ITS BEHALF. BY ADVS.SRI.NAIR AJAY KRISHNAN SRI.R.T.PRADEEP RESPONDENTS/ACCUSED & STATE:: ----------1. P. ULLAS, AGED ABOUT 25 YEARS, S/O. VIMALAN, RESIDING AT CHARUVILA PUTHEN VEEDU KULAKKADA WEST P.O. KULAKKADA. 2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR HIGH COURT OF KERALA, ERNAKULAM. R2 BY PUBLIC PROSECUTOR SMT.SAREENA GEORGE THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 13-06-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **HARUN-UL-RASHID,J. ------------------------CRL.APPEAL NO.126 OF 2008 ------------------------DATED THIS THE 13TH DAY OF JUNE, 2013** ## **JUDGMENT** Complainant namely M/s.Mulamoottil Consumer Credits Ltd. is the appellant. The appeal is directed against the judgment dated 28/11/2007 in S.T.No.1166/2006 of the Chief Judicial Magistrate Court, Thiruvananthapuram. The court below found that Ext.P1 cheque is one executed by the accused in favour of the complainant company and that the cheque is in discharge of a legally enforceable debt. The Court below also found that the accused is not guilty and he is acquitted under Section 255(1) Cr.P.C. finding that cognizance having taken in the complaint being barred under Section 142 of the Negotiable Instruments Act, accused cannot be adjudged in this proceedings to be guilty of the offence under Section 138 of the Act. 2. The allegation in the complaint is that the accused **-2-** Crl. Appeal No.126/2008 issued Ext.P1 cheque dated 15/5/2006 for an amount of `49,000/in favour of the complainant in discharge of a legally enforceable debt. The cheque was presented for encashment but that was returned on the ground of insufficient funds. Complainant issued legal notice to the accused informing the dishonour of cheque and calling upon him to repay the amount. The defence set up by the accused is that he purchased a vehicle by arranging a loan from the complainant and the cheque in question was issued as security for the due payment of loan. According to him, the entire amount due under the loan has been paid, but the cheque has not been returned. 3. The court below held that all the ingredients constituting the offence under Section 138 of the Negotiable Instruments Act stands proved. The complainant was examined as PW1. Exts.P1 to P7 were produced in support of the prosecution. Accused was examined as DW1. He produced Ext.D1 receipts. Ext.P1 is the cheque, Ext.P2 is the dishonour memo, Ext.P3 is the intimation letter, Ext.P4 is the copy of the lawyer notice and Ext.P5 **-3-** Crl. Appeal No.126/2008 is the postal acknowledgement card. Ext.P6 is the certificate-cumauthorisation letter issued by the complainant company. Ext.P7 is another certificate issued by the company certifying that PW1 is one having authority to file the complaint. 4. The defence set up by the accused is that he has given only a blank signed cheque. He has also stated that he has given the blank cheque but signed form as a security. Apart from the bald testimony of the accused as DW1, there is nothing to hold that the accused had given a cheque in blank but signed form only. The court below found that the exculpating contra evidence of the accused cannot be accepted in the given circumstances. On the basis of the corollary evidence let in by PW1 and Exts.P1 to P5 the court below found that Ext.P1 cheque was one executed by the accused in the favour of the complainant company. 5. The accused raised a contention that he had taken a loan from the complainant company for purchase of a motorcycle, that at the time of taking that loan, the complainant had obtained **-4-** Crl. Appeal No.126/2008 two blank but signed cheques from him as security, that the accused had discharged that liability by paying the entire amount due to the complainant company, that at the time of discharge the accused demanded back his blank cheques and that the complainant at that juncture told the accused that the cheques were lost. The accused failed to adduce evidence in support of the fact that he had paid the entire amount due to the complainant company. Ext.D1 series are 5 receipts purported to have been issued by the complainant company to the accused. The court below observed that even when these five receipts are taken into account, it cover only payment of a total amount of `7,585/-. PW1 deposed that only an amount of `7,000/- and odd was paid by the accused against the entire transaction and that it was for payment of the amount as on the date of Ext.P1 cheque that cheque was given by the accused. The accused failed to adduce evidence in support of his contention. The court below rightly held that the presumption under Section 139 of the N.I. Act is also thereto the **-5-** Crl. Appeal No.126/2008 favour of the complainant company and that the presumption is not displaced by cogent evidence in this case. Therefore, the finding of the court below that Ext.P1 cheque is one issued for the discharge of a legally enforceable debt does not suffer from any legal infirmity. Ext.P2 dishonour memo and Ext.P3 intimation letter produced by PW1 would prove that Ext.P1 cheque was dishonoured for insufficient funds in the account of the drawer. The court below held that the complaint is not maintainable and found that the accused is not guilty of the offence punishable under Section 138 of the N.I. Act. 6. The complainant company is a limited company registered under the Companies Act. The complaint was presented by PW1 in his capacity as the Assistant Manager of the complainant company. In the complaint it is stated that the complaint is filed through PW1. The court below accepted the contention raised by the defence counsel that the complaint is not maintainable as it is not lodged by the Managing Director or the **-6-** Crl. Appeal No.126/2008 Secretary or by an Agent of the company duly appointed for that purpose. Learned defence counsel argued before the court below that PW1 is neither the Managing Director, the Secretary of the company nor the power of attorney holder. The court below found that the complaint is not maintainable for the reason that PW1 being only an Assistant Manager and an employee of the company, he cannot be found as the Principal Officer of the company. 7. Ext.P6 is the certificate-cum-authorisation letter dated 6/6/2002. Ext.P7 is the certificate issued by the company to the effect that PW1 is one having authority to file complaint. 8. In the decision reported in **Om Sakthi SC/ST and** **Minority Credit Co-operative Society Ltd. v. M. Venkateshm (2008 KHC 5500)** the Karnataka High Court held that a complaint instituted alleging offence punishable under the Negotiable Instruments Act should be supported by an authorisation or Power of Attorney. Following the decision reported in **Director, Maruti Feeds and Farms Pvt.Ltd. v . Basanna Pattekar (ILR 2007 Kar.** **-7-** Crl. Appeal No.126/2008 **3155)** it was held that “when a complainant deposing on behalf of the company - non production of resolution - authorising the Director of the Company to establish that the Director has been authorised to depose for and on behalf of the company is fatal to the complaint and the complaint cannot be entertained in the absence of authorisation or a power of attorney.” 9. In the decision reported in **Waterbase Ltd. v. K.Ravindra and another (2003 KHC 2175)** the Andhra Pradesh High Court took the same view. In that case, a contention was raised that PW1 is not competent to lodge the complaint representing the company, inasmuch as there is no proper authorisation. PW1 was the Assistant Manager of the company. After lengthy discussion, the Court held that “it can safely be inferred that PW1 has the implied authority to act on behalf of the company and after all he represented the company only to safeguard its interest, i.e. his acts are not to the prejudice of the company, but on the contrary they are for the benefit of the **-8-** Crl. Appeal No.126/2008 company. Most importantly the Board of the company never expressly or impliedly, disrobed PW1 from the capacity of the Assistant Manager - Credit Control of the company, nor has disowned his acts representing the company. 10. In view of the legal position discussed above, this Court is of the view that the learned Magistrate is not justified in dismissing the complaint finding that PW1 is not the Power of Attorney holder. It is clear from Exts.P6 and P7 that PW1 was authorised to represent the company to lodge the complaint. Therefore, the findings that the complaint is barred under Section 142 of the Act and the complaint filed by PW1 for and on behalf of the company are not sustainable and are liable to be set aside. In the result, the appeal is allowed. The judgment passed in S.T.No.1166/2006 on the file of the Chief Judicial Magistrate, Thiruvananthapuram is set aside. The complaint filed by PW1 for and on behalf of the company is held to be maintainable. The accused is found guilty of the offence **-9-** Crl. Appeal No.126/2008 punishable under Section 138 of the Negotiable Instruments Act and he is convicted and sentenced to undergo simple imprisonment till the raising of the court and to pay a fine of `75,000/- (Rupees seventy five thousand) in default, to undergo simple imprisonment for three months. The fine amount shall be paid to the complainant as compensation. **Sd/HARUN-UL-RASHID, JUDGE** **kcv.**