Sree Gokulam Chit and Finance Co. (P) Ltd. v. Abul Salam V.S., Shareena and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN FRIDAY, THE 15TH JULY, 2011 / 24TH ASHADHA, 1933 Crl.L.P..No. 575 of 2011 -----------------------------(AGAINST THE JUDGMENT DTD.8.6.2010 IN STC.324/2008 of JUDICIAL FIRST CLASS MAGISTRATE COURT, ADIMALY) .................... PETITIONER/COMPLAINANT: ------------------------------------------ SREE GOKULAM CHIT AND FINANCE CO. (P) LTD., GOKULAM TOWERS, NO.66, ARCOT ROAD, CHENNAI, REPRESENTED BY ITS DIVISIONAL MANAGER (ARREARS) MR. C.K.SURJITH, S/O.KUMARAN, MUVATTUPUZHA DIVISIONAL OFFICE 1ST FLOOR, YAS BAZAR, MUVATTUPUZHA. BY ADV. SMT.C.V.RAJALAKSHMI RESPONDENTS(S): ACCUSED AND STATE: ----------------------------------------------------------- 1. ABUL SALAM.V.S., S/O. SAIDU KUNJU, VELIPPADI VEEDU, MANNAMKALA, ADIMALY.P.O.-685561. 2. SHAREENA, W/O. ABDUL SALAM, VELIPPADI VEEDU, MANAMKALA, ADIMALI.P.O.-685561. 3. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA ERNAKULAM. R3 BY PUBLIC PROSECUTOR SRI.P.A.SALIM. THIS CRIMINAL LEAVE PETITION HAVING BEEN FINALLY HEARD ON 15/07/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ## **V.K.MOHANAN, J.** ## **---------------------------------------Crl.L.P.No. 575 of 2011 ----------------------------------------** Dated this the 15th day of July, 2011 ## **O R D E R** The complainant in a prosecution for the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the N.I.Act') prays for the leave of this Court to file an appeal against the order of acquittal recorded by the trial court under Section 255(1) of the Cr.P.C. 2. I have heard Sri.C.V.Rjalakshmi, learned counsel appearing for the petitioner and I have also gone through the impugned judgment. 3. The case of the complainant, who was examined as PW1, is that he is the business manager of Sree Gokulam Chits and Finance company and he is authorised to conduct prosecution for and on behalf of the company as per Ext.P2 Power of Attorney executed by the Managing Director of the said company in favour of him. Thus, according to the complainant, the accused owed a sum of `.39,229/- towards the company and towards the discharge of the said liability due to the company, the accused issued Ext.P1 cheque in favour of the company, but the same CRL.L.P.NO.575 of 2011 :-2-: dishonored when presented for encashment and no payment was made in spite of the formal demand. On the basis of the above complaint and allegation, cognizance was taken by the court below and the trial was proceeded which culminated in acquitting the accused under Section 255 (1) of the Cr.P.C. During the trial, Sri.Satheesh Kumar.T.A., the complainant himself was examined as PW1. Exts.P1 to P8 were produced and marked on behalf of the prosecution. On the basis of the materials on record and on considering the rival contentions, the learned Magistrate formulated six points for its consideration, among which the first point is whether the complainant has authority to conduct the prosecution case against the accused. 4. The first point was considered along with the second point as to whether Ext.P1 cheque was issued by the accused in discharge of a legally enforceable debt. While considering the above points, the learned Magistrate, after referring to the facts involved in the case and perusal of Section 142 of the N.I.Act, held that cognizance can be taken upon a complaint made in writing only by the payee or, as the case may be, the holder in due course of the cheque. So, according to the learned CRL.L.P.NO.575 of 2011 :-3-: Magistrate, the only eligibility criteria prescribed by Section 142 of the N.I.Act is that the complainant must be the payee or the holder in due course. The learned Magistrate, after considering the entire facts and evidence on record, has found that the complaint is filed by one Satheesh Kumar.T.A., S/o.Achuthan, Business Manager, Sree Gokulam Chits and Finance Company (P) Ltd., Adimaly Branch as contained in the cause title of the complaint. The learned Magistrate has further observed that the averment in the complaint is also to the effect that the complainant, Satheesh Kumar.T.A., is the business manager of the said company. The learned Magistrate has further observed that the complaint is not filed in a representative capacity for and on behalf of the said company. The learned Magistrate has also found from the perusal of the complaint that it is filed by one Satheesh Kumar, the business Manager in his personal capacity. It is also the finding of the learned Magistrate that Ext.P1 is the cheque alleged to be issued by the accused in favour of the company. The above findings are supported by the recitals contained in Ext.P1, which would show that the cheque is issued in favour of Sree Gokulam Chits and Finance company (P) Ltd. Thus, the consequent inference of the learned CRL.L.P.NO.575 of 2011 :-4-: Magistrate is that the complainant Satheesh Kumar.T.A. has no case that he is the holder in due course of the said cheque. 5. The learned counsel for the petitioner submitted that the averments contained in the petition and the deposition of PW1 and the documents produced by the complainant would show that the complaint was filed for and on behalf of the company. But, the above submission is against the facts and evidence which are referred to by the learned Magistrate. 6. Recently, the Honourable Apex Court in the decision reported in v. **Kalim M.Khan Milind Shripad Chandurkar** [2011(2) KLT 271 (SC)] has held that _**when cheque is drawn in the name of some proprietary concern, proprietor cannot claim to be payee of cheque or can he be holder in due course, unless he proves that he is sole proprietor of concern and being so, he could also be payee himself**_ . The above dictum is squarely applicable in the present case. A detailed discussion regarding Sections 138 and 142 of the N.I.Act in the above judgment is narrated in paragraph 20, which I shall quote hereinbelow for convenience. CRL.L.P.NO.575 of 2011 :-5-: “ _20. This Court in Shankar Finance and Investments v. State of Andhra Pradesh and Ors ((2008)8 SCC 536), dealt with the issue involved herein elaborately and held that where the “payee” is a proprietary concern, the complaint can be filed_ - _(i) by the proprietor of the proprietary concern describing himself as the sole proprietor of the “payee”;_ - _(ii) the proprietary concern describing itself as the sole proprietary concern represented by its proprietor; and_ - _(iii) the proprietor or the proprietary concern represented by the Attorney Holder under the power of attorney executed by the sole proprietor._ _However, it shall not be permissible for an Attorney Holder to file the complaint in his own name as if he was the complainant. He can initiate criminal proceedings on behalf of the principal. In a case of this nature, where the “payee” is a company or a sole proprietary concern, such issue cannot be adjudicated upon taking any guidance from S.142 of the Act,1881 but the case shall be governed by the general law i.e., the Companies Act 1956 or by civil law where an individual carries on business in the name or style other than his own name. In such a situation, he can sue in his own name and not in trading name, though others can sue him in the trading name. So far as S.142 is concerned, a complaint shall be maintainable in the name of the “payee”, proprietary concern itself or in the name of the proprietor of the said concern. The Court placing reliance on earlier judgments, particularly, in Janki Vashdeo Bhojwani v. Indusind Bank Ltd. (2005(2) KLT 265 (SC) = (2005) 2 SCC 217), held that the general principles of company law or civil law would apply for maintaining the complaint under S.138 of the Act 1881.”_ The dictum laid down in the above decision is squarely applicable in the present case. There is no properly constituted complaint, since the complainant is not the payee or the holder in due course. Thus, going by CRL.L.P.NO.575 of 2011 :-6-: the reasons given by the learned Magistrate and on examination of the same in the light of the decision cited supra, I am of the view that the learned Magistrate is perfectly justified in acquitting the accused under Section 255(1) of Cr.P.C. and therefore, the petitioner is not entitled to get leave for filing the appeal against the above order of acquittal, especially when the law on the point is now settled as per the above judgment of the Honourable Apex Court. In the result, this Criminal Leave Petition is devoid of any merit and the same is dismissed, accordingly. **V.K.MOHANAN, Judge** MBS/ CRL.L.P.NO.575 of 2011 :-7-: **V.K.MOHANAN, J** . CRL.R.P.No. 69 OF 2001 ## CRL.L.P.NO.575 of 2011 :-8-: ## **ORDER** Dated:23.6.2011