Pulikkattil Traders v. M/S AVM Marketing & State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE MARY JOSEPH** **THURSDAY, THE 21ST DAY OF NOVEMBER 2019 / 30TH KARTHIKA, 1941** ## **Crl.Rev.Pet.No.150 OF 2019** **AGAINST CRL.A NO.214/2018 of ADDITIONAL SESSIONS COURT - IV, KOZHIKODE DATED 22-10-2018** **AGAINST THE JUDGMENT IN S.T.NO.6/2018 DATED 18.5.2018 OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT XI, KOZHIKODE** ## **REVISION PETITIONERS/APPELLANTS/ACCUSED:** **1 PULIKKATTIL TRADERS, REPRESENTED BY THE MANAGING PARTNER PRASHOB E., AGED 46 YEARS, S/O.LOHIDHAKSHAN, PULIKATTIL HOUSE, PERUMANNA (PO), KOZHIKODE DISTRICT, PIN-673019. 2 SEENA, AGED 38 YEARS W/O.PRASHOB E., PARTNER, PULIKKATTIL TRADERS, PULIKKATTIL HOUSE, PERUMANNA (PO), KOZHIKODE DISTRICT, PIN-673019.** **BY ADVS. SRI.R.BINDU (SASTHAMANGALAM) SRI.PRASANTH M.P** ## **RESPONDENTS/RESPONDENTS/COMPLAINANT & STATE:** **1 M/S.AVM MARKETING, REPRESENTED BY ITS PROPRIETOR, K.N.MOHANAN, AGED 48 YEARS, S/O.K.V.NARAYANAN, 3/557, MUTHANIKKAT COMPLEX, EAST NADAKKAVU, KOZHIKODE, PIN-673011.** **2 STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, PIN-682031.** **R1 BY ADV. SRI.V.N.RAMESAN NAMBISAN R2 BY SRI.THANKACHAN N.K - PUBIC PROSECUTOR** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 21.11.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **Crl.Rev.Pet.No.150 OF 2019** **2** ## **O R D E R** ## **Dated this the 21[st] day of November, 2019** The revision is directed against the judgment of the Additional District and Sessions Judge IV, Kozhikode in Crl.A No.214/2018 affirming the conviction and sentence passed by Judicial First Class Magistrate Court XI, Kozhikode in S.T. No.6/2018 vide judgment dated 18.5.2018. The revision is filed by the appellants/accused against the concurrent findings of guilt against him and orders of conviction and sentence. 2. The facts of the case in brief are to the following effect: The complainant is the proprietor of M/s.A.V.M Marketing having its office in East Nadakkavu, Kozhikode. The accused purchased Panasonic home theatre and Panasonic Mixie from the complainant for Rs.29,060/- as per Bill No.PH794 dated 30.3.2016. A sum of Rs.3,660/- was paid by the accused in cash. The balance amount of Rs.25,400/- remained in credit and towards the discharge of **Crl.Rev.Pet.No.150 OF 2019** **3** that sum, a cheque bearing No.036789 dated 22.12.2016 drawn on Canara Bank, Kuttikkattoor Branch, Kozhikode was issued to the complainant. The cheque was presented by the complainant through its account in Vijaya Bank, East Nadakkavu Branch, but the same was returned stating that funds are insufficient in its account. On 23.12.2016 the memo stating the factum was received by the complainant alongwith the bounced cheque. A notice by registered post dated 7.1.2017 was sent by the complainant to the accused. The first accused as the Managing Partner and the second accused as the partner of M/s.Pulikkattil Traders received lawyer notice sent by the complainant on 13.1.2017. They sent a reply notice on 3.2.2017. The cheque amount was not paid despite the demand made in the notice. Therefore, alleging that the accused have committed the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the N.I Act') the complaint was filed. After recording the sworn statement of the complainant, the complaint was taken on file by the Judicial First Class Magistrate Court XI, Kozhikode as S.T.No.6/2018. The accusations incorporated in the **Crl.Rev.Pet.No.150 OF 2019** **4** complaint were readover to the accused and they pleaded not guilty. In the trial that followed, the complainant was examined as PW1 and Exts.P1 to P12 were marked. Ext.P12 was marked subject to proof, it being only a photocopy of the document. The accused was questioned under Section 313(1)(b) Cr.P.C and he denied all circumstances of incriminating nature put to him. The accused was asked to enter upon defence, but he failed to adduce any evidence. On appreciation of the evidence on record, the trial court found the accused guilty of the offence punishable under Section 138 r/w Section 141 N.I Act. The first accused was sentenced to pay a fine of Rs.25,000/- and the second accused was sentenced to undergo imprisonment till rising of the court and to pay a fine of Rs.25,000/-. In default of payment of fine, the Managing Partner of the first accused as well as the second accused were directed to undergo simple imprisonment for three months. On realisation of the fine amount, a sum of Rs.45,000/- was directed to be paid to the complainant as compensation under Section 357(1) Cr.P.C. In the appeal filed against the aforesaid judgment, the appellate court confirmed the finding of guilt, **Crl.Rev.Pet.No.150 OF 2019** **5** the orders of conviction and sentence passed by the trial court. Aggrieved by that the revision on hand was preferred. 3. It is primarily contended by Sri.Bindu Sasthamangalam, the learned counsel for the appellant that, the second accused being the Managing Partner and the representative of the first accused, in the event of the first accused firm found guilty of the offence under Section 138 N.I Act, the second accused ought not to have been found guilty and imposed with punishment, twice. According to him, there was no allegation in the complaint filed by the 1[st] respondent to launch the prosecution that the offence under Section 138 N.I Act was committed by the first and second accused in furtherance of their common intention to commit the same. It is contended by the learned counsel that even at the time when accusations have been read over to the accused, a whisper was not made indicative of the commission of offence under Section 138 N.I Act by both accused jointly in furtherance of their common intention. According to the learned counsel for want of incorporation of Section 34 IPC, while charging the accused and sending **Crl.Rev.Pet.No.150 OF 2019** **6** them for trial, it is improper to find the first and second accused guilty for the same and convicted and sentenced separately. Accordingly, the learned counsel urged to interfere with the imposition of punishment separately on the Managing Partner as representative of the firm and on him in his capacity as such. Accordingly it was urged by the learned counsel that the courts are justified in finding that the firm as well as the Managing Partner are guilty of the offence under Section 138 N.I Act, but unjustified in imposing sentence separately on the Managing Partner as representative of the firm and in his capacity as such. Secondly, it was contended by the learned counsel that the issuance of the cheque being in the year 2016 and in view of the pendency of the prosecution for two years, this Court has to take a lenient view in the matter of imposition of fine amount by issuing a direction to the revision petitioner to pay interest at the rate of 9% per annum for the fine amount equal to the amount covered by the cheque, following the dictum in **Vijayan v. Baby [(2011(4) KLT 355(SC)]** . The learned counsel has advanced arguments to convince this Court that a direction was issued by the Apex Court in **Crl.Rev.Pet.No.150 OF 2019** **7** **Vijayan** 's case (supra) to grant interest at the rate of 9% per annum for the amount covered by the cheque, with a view to maintain uniformity in the matter of imposition of fine in cheque dishonoured cases. 4. Per contra, the learned counsel for the respondents has contended that the arguments advanced by the learned counsel for the revision petitioner are untenable being devoid of merits. According to the learned counsel, the concurrent finding of the trial court and the appellate court and the orders of conviction and sentence are not liable to be interfered with on the basis of the arguments advanced. According to him, the judgments under challenge being legal and proper are liable to be confirmed. 5. The prosecution in question is undoubtedly filed under Section 138 r/w 141 N.I Act. The allegation of the complainant in the complaint was that the accused is a firm namely Pulikattil Traders and is represented by its Managing Partner Sri.Prashob.E and the second accused is none other than one Smt.Seena, the wife of the first accused and partner of Pulikattil Traders. As per the allegation in the complaint, the accused purchased Panasonic home **Crl.Rev.Pet.No.150 OF 2019** **8** theatre and Panasonic Mixie for Rs.29,060/-, by paying Rs.3,660/- in cash and the rest of the amount in credit. Towards discharge of the balance amount, a cheque was issued by the first accused from its account and given to the complainant, which on presentation was bounced for the reason that funds are insufficient. Since the offence was committed by a firm, the provision relevant for consideration is Section 141 N.I Act. Section 141 is extracted hereunder: “(1) 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: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] (2) Notwithstanding anything contained in subsection (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or **Crl.Rev.Pet.No.150 OF 2019** **9** 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” means any body corporate and includes - a firm or other association of individuals; and - (b) “director”, in relating to a firm, means a partner in the firm.” 6. It is derived from the aforesaid provision that if the person committing an offence under Section 138 is a company, every person who, at the time when 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. It is derived from sub-section (2), where an offence under the Act has been committed by a company and it is proved that it was 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 officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. In view of the **Crl.Rev.Pet.No.150 OF 2019** **10** explanation provided under Section 141 N.I Act, for the purpose of this Section “company” means any body corporate and includes a firm or other association of individuals and “director” in relation to a firm means a partner in the firm. Therefore, a glance at the complaint would reveal that the firm namely Pulikkattil Traders represented by its Managing Partner Sri.Prashob.E and its partner Smt.Seena have committed the offence under Section 138 N.I Act by issuing a cheque towards discharge of the liability due from them to the complainant, which ultimately was bounced for want of funds on presentation before a bank. 7. In the case on hand as revealed from the evidence on record, the factum of purchase of electronic equipments from the complainant and payment of Rs.3,660/- towards initial payment were admitted by the accused. None of the accused have raised a plea that they were not in charge of and responsible for the affairs of the firm at the relevant time when the cheque in dispute was allegedly issued towards the discharge of the balance amount payable. The defence of the accused was that the cheque in dispute was **Crl.Rev.Pet.No.150 OF 2019** **11** issued as security to the complainant at the relevant time of purchase of electronic equipments on credit, for procuring the payment pending. The specific case of the accused was that two weeks after the purchase, the entire balance amount payable was paid and instead of returning the cheque issued as security, the same was retained and misused by the complainant. A suggestion to the effect though was put to the complainant during cross examination, it was denied by him. Apart from putting forth suggestion to the complainant, no evidence was adduced to establish the defence. The issuance of the cheque being admitted by the accused and on failing to prove the purpose for which it was issued, the trial court has taken the view that the execution of the cheque for the purpose pleaded by the complainant was established and accordingly convicted both accused and imposed them with separate punishment as contemplated under sub-sections (1) and (2) of Section 141 N.I Act. The appellate court has confirmed the finding of guilt of both accused, order of conviction and sentence imposed on them. **Crl.Rev.Pet.No.150 OF 2019** **12** 8. Once the firm and the partner were found guilty of the offence under Section 138 N.I Act, in view of subsection (2) of Section 141 N.I Act, each of them shall be liable to be proceeded against and punished accordingly. The trial court has found both accused guilty of the offence under Section 138 r/w Section 141 N.I Act and the first accused was sentenced to pay a fine of Rs.25,000/- and the second accused was sentenced to undergo imprisonment till rising of the court and to pay a fine of Rs.25,000/-. In default of payment of fine, the first and the second accused were directed to undergo simple imprisonment for three months. On realisation of the fine amount Rs.45,000/- out of that was ordered to be paid to the complainant as compensation under Section 357(1) Cr.P.C. 9. This Court has gone into **Vijayan** 's case (supra) wherein a direction as canvassed by the learned counsel for the revision petitioner was not found issued by the Apex Court. What have been stated by the Apex Court in **Vijayan** 's case (supra) is contained in paragraph 18, which is extracted hereunder: **Crl.Rev.Pet.No.150 OF 2019** **13** “18. One other solution is a further amendment to the provision of Chapter XVII so that in all cases where there is a conviction, there should be a consequential levy of fine of an amount sufficient to cover the cheque amount and interest thereon at a fixed rate of 9% per annum interest, followed by award of such sum as compensation from the fine amount. This would lead to uniformity in decisions, avoid multiplicity of proceedings (one for enforcing civil liability and another for enforcing criminal liability) and achieve the object of Chapter XVII of the Act, which is to increase the credibility of the instrument. This is however a matter for the Law Commission of India to consider.” 10. A further amendment of Chapter XVII N.I Act by incorporating in the provision, a direction to levy fine of an amount sufficient to cover the cheque amount and interest thereon at a fixed rate of 9% per annum, followed by award of such sum as compensation from the fine amount, was proposed. It was held that the amendment proposed, if brought into N.I Act effectively, the same would lead to uniformity in decisions, avoid multiplicity of proceedings (one for enforcing civil liability and another for enforcing criminal liability) and achieve the object of Chapter XVII of the Act, which is to increase credibility of the instrument. Accordingly, the Law Commission of India was directed to consider the same. Therefore, the proposition canvassed by the learned counsel that in view of the dictum in **Vijayan** 's **Crl.Rev.Pet.No.150 OF 2019** **14** case supra, the trial court is unjustified in awarding fine of Rs.25,000/- each to accused Nos.1 and 2 and directing payment of Rs.45,000/- as compensation to the complainant is untenable. This Court finds no reason to interfere with the judgment of the appellate court under challenge. The finding of the appellate court and order of conviction and sentence imposed by it, confirming that of the trial court does not call for interference. In the result, the Crl. Revision Petition is dismissed. The learned counsel for the revision petitioners has sought for three months time for depositing the fine amount. This Court is inclined to grant the same. The fine amount shall be deposited by the revision petitioners within three months from this date. On failure to deposit the fine amount within the time granted by this Court, the trial court shall proceed to execute the sentence as per the impugned judgment that stands confirmed. It is noticed from the impugned judgment that the entire fine amount of Rs.45,000/- was directed to be paid to the complainant as compensation. The cheque amount being Rs.25,000/- this Court is inclined to reduce the compensation payable as **15** ## **Crl.Rev.Pet.No.150 OF 2019** Rs.25,000/-. In view of the modification the complainant will only be entitled to get Rs.25,000/- from the fine amount of Rs.45,000/-, when paid or realised. ## **Sd/-** **MARY JOSEPH** **JUDGE** **ab**