Sree Gokulam Chits & Finance Co. Pvt. Ltd. v. Ciessar and State

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE V.K.MOHANAN** **WEDNESDAY, THE 4TH DAY OF JULY 2012/13TH ASHADHA 1934** **CRL.A.No. 1651 of 2009 ( )** **--------------------------** **(AGAINST THE JUDGMENT IN CC.272/2007 of J.M.F.C.-III, KOTTARAKAKARA, dtd.21.11.2008)** ## **APPELLANT(S)/PETITIONER/COMPLAINANT::** **------------------------------------** **M/S.SREE GOKULAM CHITS & FINANCE CO.PVT. LTD.,ALPHONSA COMMERCIAL COMPLEX, MARKET JUNCTION REP.BY S.PRADEEP, S/O.SREEDHARAN, LEGAL CLERK MOOLATHARA THOPPIL, KANTRAMKANI, MANTRO ISLAND P.O. KOLLAM.** **BY ADVS.SRI.K.S.BABU** **SMT.N.SUDHA** **RESPONDENT(S)/ACCUSED & STATE::** **-------------------------------** **1. CIESSAR, S/O.BHASKARAN,** - **PUNNAYYATHU VEEDU, THATTAMALA P.O., KOLLAM.** **2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA ERNAKULAM.** **BY ADV.SMT.LALIZA T.Y., PUBLIC PROSECUTOR** **THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 04-07-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **ami/** ## **V.K.MOHANAN, J. ------------------------------Crl.A.No.1651 of 2009** ## **------------------------------Dated this the 4[th] day of July , 2012.** ## **J U D G M E N T** The complainant in a prosecution for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the N.I.Act') is the appellant since it is aggrieved by the judgment dated 21.11.2008 in C.C.No.272 of 2007 of the court of Judicial First Class Magistrate-III, Kottarakara, by which the learned Magistrate acquitted the accused under Section 255(1) of the Cr.P.C. 2. The case of the appellant is that the accused issued a cheque dated 16.1.2006 towards the discharge of a liability in favour of M/s.Sree Gokulam Chits and Finance Co.Pvt. Ltd. and when the said cheque presented for encashment, the same was dishonoured for the reason “Exceeds arrangement”. Thereafter, according to the 2 ## **Crl.A.No.1651 of 2009** complainant, a statutory notice was caused to issue to the accused but no amount was paid. Therefore, the accused has committed the offence punishable under section 138 of the NI Act. During the trial of the case PW1 was examined and Exts.P1 to P8 were marked. Though no witness was examined, Exts.D1 to D3 were marked from the side of the defence. The trial court after considering the entire evidence and materials on record and considering the rival contentions, formulated six points for its consideration, among which the first point is whether the complaint is maintainable and the second point is whether the accused issued Ext.P1 cheque to the complainant in discharge of a legally enforceable debt or other liability. The above two points found against the complainant and in favour of the accused and accordingly the accused is acquitted under section 255(1) of Cr.P.C. It is the above findings and order of acquittal challenged in this appeal . 3. I have heard N.Sudha, learned counsel for the 3 ## **Crl.A.No.1651 of 2009** appellant and I have perused the judgment of the trial court in detail. 4. Learned counsel for the appellant on the strength of the decision of the Honourable Apex court reported in **Shankar Finance and Investments Vs. State of Andhra Pradesh and others {2008(8) SCC 536}** has submitted that, the power of attorney holder can represent a company and therefore the findings of the learned Magistrate under point no.1 is incorrect and liable to be set aside. According to the learned counsel, the learned Magistrate is incorrect and illegal in his findings and disbelieving that the accused issued Ext.P1 cheque for an amount of `1,80,782/-. It is also the submission of the learned counsel that the findings of the court below that Ext.P1 cheque was issued by the accused for an amount of `1,80,782/- cannot be believed and is incorrect. 5. In the light of the above submission of the learned counsel for the appellant and in the light of the 4 ## **Crl.A.No.1651 of 2009** facts and circumstances involved in the case and the evidence which are referred to by the learned Magistrate in the impugned judgment, the question to be considered is whether the appellant has succeeded in making out a prima facie case so as to interfere with the findings of the court below and the order of acquittal recorded in favour of the accused. Admittedly, in the cheque in question, the payee appears to be M/s.Sree Gokulam Chits and Finance Co.Pvt.Ltd., but the complaint is filed by 'M/s.Gokulam Chits and Finance Co.Pvt.Ltd., Alphonsa Commercial Complex, Market Jn., Kottarakara, represented by S.Pradeep, legal clerk'. The learned Magistrate after a detail consideration of the complaint as well as the evidence on record has observed that the complaint is not filed by M/s.Gokulam Chits and Finance Co.Pvt.Ltd. Since as per the evidence of PW1 and the contention of PW1, M/s.Gokulam Chits and Finance Co.Pvt.Ltd., the payee, is a private company having its registered office at Chennai. 5 ## **Crl.A.No.1651 of 2009** The learned Magistrate has also found that Ext.P5 statutory notice clearly shows that the notice was issued for and on behalf of M/s.Gokulam Chits and Finance Co.Pvt.Ltd. Thus, the payee is a private limited company. According to the learned Magistrate, as per the evidence of PW1, the Managing Director of the company is the authorised and competent person as per the memorandum of association of the company. So on the basis of the above evidence of PW1, the learned Magistrate has further held that, the Managing Director cannot further delegate his power on the strength of the resolution. The learned Magistrate has also found that, according to PW1, he filed the complaint on the strength of resolution of the company signed by the Executive Director of M/s.Gokulam Chits and Finance Co.Pvt.Ltd. Thus, the learned Magistrate has concluded that if the company is the complainant, definitely the name of the company should be shown as that of the address seen in Ext.P5 notice, but in the present case it is otherwise. It is 6 ## **Crl.A.No.1651 of 2009** further found that, here the complaint is filed by the legal clerk who has got no legal authority to represent the company. The executive director, to whom the power was delegated represent the company cannot further delegate his power executing a power of attorney. In view of section 142 of the NI Act, if the payee is a company, only the person authorised by the company can act and that too only in accordance with the provisions of the Companies Act. I am unable to sustain the contention of the learned counsel for the appellant, that the power attorney holder, eventhough the same was granted by the Managing Director of the company, can represent the company. It is a well settled law that in view of section 142 of the NI Act, a complaint can be filed only by the payee or the holder in due course of the cheque. Here, the complainant is not the payee and thus the complainant is not properly constituted. Therefore, the findings of the court below that the complaint is not maintainable is absolutely correct and no 7 ## **Crl.A.No.1651 of 2009** interference is called for with the same. 6. It is also relevant to note that the case of the accused is that the cheque was issued by him as a security for the chitty amount obtained from M/s.Gokulam Chits and Finance Co.Pvt.Ltd. To substantiate his contention, he had also produced Exts.D1 to D3, which according to the learned Magistrate shows that the outstanding balance is not `1,80,782/- as claimed by PW1. He had paid amounts upto 29.9.2005 and a sum of `2,84,000/- was paid by him as evidenced by Ext.D1 pass book. The learned Magistrate has also referred to Ext.D3 receipt which would shows that even before 16.1.2006, the entire amount was repaid by him. Of course, there is a contention from the side of PW1 to the effect that they have also calculated the dues outstanding and the amount shown in Ext.P1 is including the interest. But the learned Magistrate after considering the claim of PW1 has found that Exts.D1 to D3 clearly sows that the outstanding amount is not `1,80,782/- as claimed 8 ## **Crl.A.No.1651 of 2009** by PW1 and even prior to the presentation of Ext.P1 cheque, the accused had paid substantial amount and the complainant did not produce any document to show the outstanding balance as on 16.1.2006, especially when the complainant failed to show that the payment offered by the accused has been accounted. After considering the above facts and circumstances on the basis of the decision of this Court reported in **Joseph Sartho Vs. Gopinathan G. and another (2008(4) ILR 431)** has held that Ext.P1 cheque was not issued by the accused to the complainant in discharge of a legally enforceable debt, especially when PW1 did not have a case that any endorsement is made in Ext.P1 with respect to all the payments effected as per Exts.D1 to D3 series, subsequent to Ext.P1. Thus, going by the reasoning assigned by the learned Magistrate in support of his findings, especially under point nos.1 and 2, it can be seen that the said findings are fully justified in the light of the evidence and materials available on record 9 ## **Crl.A.No.1651 of 2009** which are referred in the judgment and the reasons assigned by the learned Magistrate are appears to be correct and the same cannot be treated as perverse or illegal. In a recent decision of the Honourable Apex court in **State of Rajasthan v. Darshan Singh @ Darshan Lal** **(2012 (4) Supreme 72)** , the Apex Court has observed that, the jurisdiction of the appellate court to interfere with the order of acquittal is very limited. The apex court has held: “In exceptional cases where there are compelling circumstances and the judgment under appeal is found to be perverse, the appellate court can interfere with the order of acquittal. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial Court's acquittal bolsters the presumption of his innocence.” So on an examination of the facts and circumstances involved in the case, as borne out from the impugned judgment and on an application of the above dictum, it can be seen that the findings of the court below cannot be treated as perverse and the appellant has failed to make out 10 ## **Crl.A.No.1651 of 2009** any compelling reasons so as to interfere with the order of acquittal recorded by the learned Magistrate. If that be so, this appeal is devoid of any merit. In the result, this appeal is dismissed. Sd/- **V.K.MOHANAN, Judge** ami/ //True copy// P.A. to Judge