Mulamoottil Consumer Credits Ltd. v. State of Kerala and Suresh Kumar

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE A.HARIPRASAD** **THURSDAY, THE 27TH DAY OF MARCH 2014/6TH CHAITHRA, 1936** **CRL.A.No. 74 of 2008 (D) -------------------------** **AGAINST THE ORDER/JUDGMENT IN Crl.L.P. 5/2008 of HIGH COURT OF KERALA DATED 02-01-2008.** **AGAINST THE JUDGMENT IN ST 224/2006 of C.J.M.,TRIVANDRUM DATED 31-10-2007.** **APPELLANT(S)/COMPLAINANT::** **-------------------------** **MULAMOOTTIL CONSUMER CREDITS LTD., A COMPANY REGISTERED UNDER COMPANIES ACT WITH THE REGISTERED OFFICE AT TC 9/1419(1) TEMPLE ROAD, SASTHAMANGALAM, THIRUVANANTHAPURAM - 10. THE APPELLANT IS REPRESENTED BY ITS ASSISTANT MANAGER S.RAVEENDRAN NAIR, S/O SANKARA PILLAI, AGED 64, RESIDING AT ASWATHI, SREEKRISHNA NAGAR, CHAVADIMUKKU, SREEKARIYAM, THIRUVANANTHAPURAM 17.** **BY ADV. SRI.NAIR AJAY KRISHNAN.** **RESPONDENT(S)/STATE AND ACCUSED::** **--------------------------------** **1. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **2. T.K.SURESH KUMAR, S/O.THANKAPPAN, AGED 40, RESIDING AT SILPA, DNA 651, A.K.G.NAGAR, PEROORKADA, THIRUVANANTHAPURAM.** **R2 BY ADV. SRI.A.AHZAR** **R1 BY PUBLIC PROSECUTOR SMT.V.H.JASMINE.** **THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 27-032014, ALONG WITH CRA. 176/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **amk** ## **A.HARIPRASAD, J.** **-----------------------------------------------Crl. Appeal Nos.74 & 176 of 2008 -----------------------------------------------Dated this the 27[th] day of March, 2014.** ## **C O M M O N J U D G M E N T** Appeals are filed under Section 378(4) Cr.P.C. in both cases are the same. Appellant Contesting respondent/accused is also the same. The appellant is a Private Limited Company, incorporated under the Companies Act, engaged in the business of consumer credit facility. Common case in both the appeals are as follows : 2. Learned counsel for the appellant/complainant contended that the accused issued cheques for certain amounts drawn on his account in favour of the complainant in order to discharge a legally enforceable debt. When the cheques were presented for collection, they were dishonoured for insufficiency of funds in the account of the accused. Thereafter, statutory notices were issued. In spite of receipt of notices, the amounts were not paid. Hence, two complaints were filed against the ## **Crl. Appeal Nos.74 & 176 of 2008 2** accused. Learned Chief Judicial Magistrate tried these cases separately and pronounced two judgments. Since common questions of fact and law are raised in both cases, they are heard and disposed by this common judgment. 3. Heard the learned counsel for the appellant/complainant and the learned counsel for the accused. The learned Public Prosecutor is also heard. 4. Learned counsel for the appellant submitted that the lower court committed a serious mistake in dismissing the complaint mainly on two points. Firstly, the court below found that the cheques are not supported by consideration. The second reason for dismissal is that the person, who prosecuted the complaint had no authority to institute the complaint. Learned counsel for the appellant submitted that both these findings are legally incorrect. 5. PW1 is the authorized representative of the **Crl. Appeal Nos.74 & 176 of 2008 3** complainant. He was working as the Assistant Manager of the Company. Case in both the complaints put together is that one Vijayachandran and his wife Vasanthakumari availed separate loans for purchase of two vehicles from the complainant company. They executed separate hire purchase agreements. After sometime, they committed breach in repayment of the hire amounts as stipulated in the hire purchase agreements. However, as pointed out by the learned counsel for the accused, it is to be noted that the hire purchase agreements were not produced in this case. Learned counsel for the complainant would contend that the causes of action are not based on the hire purchase agreements, but on the agreements later executed between the company on one hand and the accused and original hirers on the other hand. When there was default in repayment of the hire amounts, the accused came forward to take the vehicles on hire and the company as per the terms agreed to in Exts.P7 and P8 **Crl. Appeal Nos.74 & 176 of 2008 4** allowed the accused to ply the vehicles on the condition that he should remit the hire amounts for both the vehicles to the company. Conditions in Exts.P7 and P8 are not challenged in cross examination of PW1. It is come out in evidence of PW1 that after execution of Exts.P7 and P8, both the vehicles were repossessed by the company for the alleged default, on the part of the hirers and the accused, and the vehicles were sold. It is not brought out as to what was the sale proceeds received by the company by the sale of the vehicles. Learned Magistrate found reasons to dismiss the complaint in the non production of accounts and non revealing the quantum of sale proceeds. 6. Learned counsel for the complainant would contend that the cause of action in this complaint is totally independent of the hire purchase transaction. As pointed out by the learned counsel for the accused, going by the ratio in _**Sudha Beevi v. State of Kerala (2004(2) K.L.T 746)**_ , it can be seen that the hirer **Crl. Appeal Nos.74 & 176 of 2008 5** of a motor vehicle cannot be prosecuted under Section 138 of Negotiable Instruments Act, after the vehicle has been repossessed by the owner and the hire purchase agreement has been terminated. However, the facts and circumstances of this case would show that the said legal possession is not applicable to this case. In these cases, the questions are regarding the acceptability of the terms and conditions in Exts.P7 and P8. Exts.P7 and P8 were not effectively challenged before the trial court. When PW1 was cross examined, the suggestion put to him is only to the effect that signed blank cheques issued by the accused were misused for filing the complaints. In other words, there is no case for the accused at the time of trial that Exts.P7 and P8 were documents not executed by him. Going by the terms and conditions in Exts.P7 and P8, it can be seen that an independent liability had been taken up by the accused to pay amounts towards the rental payable by him for using the vehicle **Crl. Appeal Nos.74 & 176 of 2008 6** on hire. It is pertinent to note that original hirers were also parties to Exts.P7 and P8 and they also agreed to the terms and conditions therein. Exts.P9 to P11 are letters of consent given by the accused and original hirers to the company abiding by the terms and conditions in Exts.P7 and P8. In the absence of any challenge against these documents and the complainant having raised a specific case in the complaints and in the evidence of PW1 that the disputed cheques were issued for the amounts payable under Exts.P7 and P8, I find that the reasoning of the learned Magistrate cannot be legally countenanced. Even if the original hire purchase agreement has become unenforceable, the liability of the accused will not be wiped off and as it does not arise out of the hire purchase agreement. Hence, the finding of the court below on this score is legally incorrect. 7. Learned counsel for the complainant contended that the court below erred in finding that the person, who instituted **Crl. Appeal Nos.74 & 176 of 2008 7** the complaints had no locus to file the complaints. Admittedly, he was functioning as the Assistant Manager of the Company. Exts.P6 and P12 are the authorizations issued by the company authorizing the manager to lodge the complaints. Learned counsel for the appellant placed reliance on _**Waterbase Ltd. v. K.Ravindra and Another (2003 K.H.C 2175)**_ . The law stated therein is thus : _“ 37. It is pertinent to consider S.186 and S.187 of the Indian Contract Act. These provisions indicate that the authorization can be express or implied and the implicity has to be inferred from the circumstances of the case and the things spoken or written, or the ordinary course of dealing._ _38. In the instant case, the complainant who is PW1, as already noticed has been associated with the credit transactions of the company. He was the person who gave the notice referring to various transactions and_ ## **Crl. Appeal Nos.74 & 176 of 2008 8** _he was the person who got the authorization from the Chief Executive of the company. No doubt there is nothing on record to show that the Chief Executive has got authorization to authorize PW1 to represent the company. I am of the view that going into this question amounts to going into the root of the issue. But from the circumstances, it can safely be referred that he has the implied authorization to act on behalf of the company and after all he represented the company only to safeguard it's interest i.e., his acts are not to the prejudice of the company, but on the contrary they are for the benefit of the company. Most importantly the Board of the never or appellant company expressly impliedly, disrobed PW1 from the capacity of the Assistant Manager - Credit Control of the company, nor has disowned his acts the a representing company. Therefore_ **Crl. Appeal Nos.74 & 176 of 2008 9** _comprehensive look at the whole circumstances would only go to show that PW1 had definite authorization to represent the company._ _39. Further S.196 of the Indian Contract Act provides for the ratification of the acts by the agents.”_ This decision was followed by a learned Single Judge of this court in an unreported decision in Crl.Appeal No.129/2008 dated 23-08-2013. Considering the facts and circumstances proved through PW1 and through the documents, I find that the reasonings stated by the learned Chief Judicial Magistrate to hold that the complaints were not properly instituted are unsustainable. In the result, both the appeals are allowed. The impugned judgments of the court below are set aside. Accused is convicted for an offence under Section 138 of Negotiable **Crl. Appeal Nos.74 & 176 of 2008 10** Instruments Act in S.T No.179/2006 on the file of Chief Judicial Magistrate Court, Thiruvananthapuram and he shall undergo imprisonment till the rising of the court and pay a fine of Rs.11,305/- (Rupees Eleven Thousand Three Hundred and Five Only), failing which he shall undergo simple imprisonment for a period of one month. If the fine amount is recovered, it shall be paid to the complainant as compensation under Section 357(3) Cr.P.C. Accused is convicted for an offence under Section 138 of Negotiable Instruments Act in S.T No.224/2006 on the file of Chief Judicial Magistrate Court, Thiruvananthapuram and he shall undergo imprisonment till the rising of the court and pay a fine of Rs.11,305/- (Rupees Eleven Thousand Three Hundred and Five Only), failing which he shall undergo simple imprisonment for a period of one month. If the fine is paid, it shall be given to the complainant as compensation under Section **Crl. Appeal Nos.74 & 176 of 2008 11** 357(3) Cr.P.C. Substantive sentences in both cases shall run concurrently. The accused shall appear before the trial court on 28[th] April, 2014 to undergo the sentence. All pending interlocutory applications will stand dismissed. **Sd/-** **A.HARIPRASAD, JUDGE.** amk //True Copy// P.A to Judge