Sree Gokulam Chits & Finance Co. Pvt. Ltd. v. Hariharan Pillai and State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.K.MOHANAN THURSDAY, THE 16TH DAY OF AUGUST 2012/25TH SRAVANA 1934 CRL.A.No. 1143 of 2009 --------------------AGAINST THE ORDER/JUDGMENT IN CRLP.376/2009 DATED 09-06-2009 CC.36/2008 of J.M.F.C.-III, KOTTARAKAKARA APPELLANT/PETITIONER/COMPLAINANT:: ------------------------------------ M/S.SREE GOKULAM CHIT & FINANCE CO.PVT.LTD., ALPHONSA COMMERCIAL COMPLEX, MARKET JN. KOTTARAKARA, REP.BY S.PRADEEP, LEGAL CLERK MOOLATHARA THOPPIL, KANTRAMKANI, MUNDRO ISLAND P.O. KOLLAM. BY ADVS.SRI.K.S.BABU SMT.N.SUDHA RESPONDENTS/ACCUSED :: ------------------------ 1. HARIHARAN PILLAI, S/O.RAGHAVAN PILLAI, - PAZHAVILAYIL, KULAKKADA KIZHAKKU P.O., KOTTARAKARA. 2. STATE OF KERALA, REPRESENTED BY THE - PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. BY ADV. PUBLIC PROSECUTOR SMT.LALIZA.T.Y. THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 16-08-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **V.K.MOHANAN,J.** ## **--------------------------------------------Crl.Appeal No.1143 of 2009 ---------------------------------------------Dated this the 16[th] day of August, 2012** ## **JUDGMENT** 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 as it is aggrieved by the order dated 08/01/2009 in C.C.No.36 of 2008 of the court of the Judicial Magistrate of the First Class-III, Kottarakara by which the learned Magistrate acquitted the accused under Section 255(1) of the Cr.P.C. 2. The case of the complainant is that the accused issued cheque i.e., Ext.P1 in favour of the complainant towards the discharge of the liability and when the said cheque was presented for encashment the same dishonoured for the reason “funds insufficient” and the accused has not paid the amount in spite of a statutory Crl.A.No.1143/2009 2 notice and therefore the accused has committed the offence punishable under Section 138 of the N.I. Act. To substantiate the case of the complainant PW.1 was examined and Exts.P1 to P8 were marked. The case of the accused is that he subscribed a chitty conducted by M/s.Sree Gokulam Chits & Finance Company Pvt. Ltd. and the chitty was auctioned in the year 2003 and at that time the company obtained a blank signed cheque and signed blank paper and the said cheque is misused by the complainant. According to the accused the entire amount was repaid. Considering the rival contentions advanced before the trial court and on the basis of the evidence and materials recorded in the trial court, the trial court has formulated several points for its consideration among which the first point is with respect to the maintainability of the complaint. The second point was whether the accused issued Ext.P1 cheque in favour of the appellant in discharge of the legally enforceable debt or other liability. After a Crl.A.No.1143/2009 3 detailed discussion, as discernible from paragraph 4 of the judgment sought to be impugned, the trial court has found that “PW.1 filed the complaint as per Ext.P8 power of attorney, the same is executed by one of the directors with whom the power to represent the company was delegated. But he cannot further delegate his power. Similarly the appellant did not file any complaint. The branch office has got no separate legal entity. PW.1 has got no authority to represent the company. So the complaint is not maintainable. Point answered against the complainant”. 3. The learned counsel for the appellant submitted that the finding of the court below under point No.1 is not correct, since there is no delegation of power which already delegated. According to the learned counsel power was given to the Managing Director and he granted power only to the power of attorney holder. It is also the submission of the learned counsel that under Section 290 of the companies Act the resolution is expected to sign by one of Crl.A.No.1143/2009 4 the directors and therefore the accused is bound by the same as the extract of the resolution is signed by one of the directors. Hence according to the learned counsel, the findings of the court below under point No.1 regarding the maintainability of the complaint are not correct and liable to be interfered with. 4. The learned counsel by filing Crl.M.Appln.No.6277 of 2012 producing certain documents under Section 391 of Cr.P.C., submitted that the documents produced along with this petition and marked as AnnexureA1 and A2 may be accepted since due to inadvertent mistake these documents could not be produced before the court during the trial and on the basis of the above documents it can be seen that the findings of the court below, under point No.2 that whether the accused has issued Ext.P1 cheque to the complainant in discharge of the legally enforceable debt or other liability, is incorrect and illegal. Therefore the counsel submitted that the findings of Crl.A.No.1143/2009 5 the court below are liable to be set aside and the respondent/accused is liable to be convicted and sentenced. 5. I have carefully considered the submission of the learned counsel for the appellant and I have gone through the judgment impugned in this appeal. 6. In the light of the arguments advanced by the learned counsel for the appellant and in the light of the findings of the court below on the basis of the materials and evidence referred to in the impugned judgment, the question to be considered is whether the appellant has succeeded in making out a prima facie case in support of its challenge against the impugned judgment and to interfere with the order of acquittal recorded by the trial court based upon its finding, mainly under point Nos.1 and 2. 7. Admittedly the respondents/accused is one of the subscribers of the chitty conducted by M/s.Sree Gokulam Chits and Finance Company Pvt. Ltd. with its headquarters in Chennai. Whereas the complaint was filed by M/s.Sree Crl.A.No.1143/2009 6 Gokulam Chits and Finance Company Pvt. Ltd., Alphonsa Commercial Complex, Market Junction, Kottarakara represented by S.Pradeep, Legal Clerk, Moolathara Thoppil, Kantramkani, Mundro Island.P.O., Kollam. In view of Section 142 of the N.I. Act, 1881, which deals with cognizance of offence, it can be seen that no court shall take cognizance of any offence punishable under Section 138 of the N.I. Act, except upon a complaint in writing made by the payee or, as the case may be, the holder in due course of the cheque. In the present case from the facts stated above it can be seen that the payee is not the complainant. After considering the scope of Sections 138 and 142 of the N.I. Act the learned Magistrate has found that definitely the complaint should be filed by a natural person even though the original complaint is a corporate body. It is further found that here the payee is M/s.Sree Gokulam Chits and Finance Company Pvt. Ltd., Sree Gokulam Towers, No.66, Arcot Road, Chennai. It is the Crl.A.No.1143/2009 7 further finding of the learned Magistrate that, even though Ext.P4 cheque was issued for and in favour of that company, the complaint has not been filed for and on behalf of the said company. It is beyond dispute that it is the Managing Director of the company, who can represent the company, since the Memorandum of Association has authorized only the Managing Director of the company. The learned Magistrate has found that the present complaint was filed by PW.1 as per Ext.P8 power of attorney. In this juncture it is relevant to see that the learned Magistrate has also found that the power of attorney is executed by one of the directors, by which the power to represent the company, was delegated, in favour of the power of attorney holder and therefore the learned Magistrate held that the same illegal since the power cannot be delegated further. Under the provisions of the Companies Act, the Board of Directors of the company it can pass any resolution, which is permissible in law, to enable any person to represent the Crl.A.No.1143/2009 8 company, otherwise as per the articles of association the company shall be represented only by its Managing Director. So as per the Article of Association which approved by the provisions of the Companies Act, the power is given to the Managing Director, which power cannot be delegated further. But in the present case PW.1, on the strength of Ext.P8 posted as representative of the company, which is impermissible, especially when there is no resolution as contemplated by the provisions of the Companies Act enabling PW.1 to represent the company. Therefore according to me the learned Magistrate is fully justified in his finding that PW.1 has got no authority to represent the company. Therefore, I have absolutely no hesitation to approve the findings of the learned Magistrate under point No.I, which is against the complainant/appellant. 8. Section 391 of Cr.P.C., of course empowers the appellate court to take further evidence or directed the trial Crl.A.No.1143/2009 9 court to take further evidence. But as a matter of right the prosecution cannot press Section 391 of Cr.P.C. into service. That is why the above discretionary powers are given to appellate court. Section 391 of Cr.P.C. can be invoked, if the appellate court thinks additional evidence, necessary. In order to decide whether the additional evidence is required or not, the appellate court has to consider the circumstances under which the evidence sought to be adduced could not be produced at the time of the trial. Otherwise in every prosecution, the prosecution can, during the appellate stage adduce evidence and thereby fill up its lacuna based upon the accused got an acquittal. Therefore there would not be any finality for criminal proceedings, unless the appellate court exercise the powers under Section 391 of Cr.P.C. in exceptional circumstances and that too with abundant caution and circumspection of the entire facts and circumstances involved in the case. In the present case the learned Crl.A.No.1143/2009 10 counsel for the appellant submitted that due to inadvertent mistake and omission, the documents sought to be produced in this appeal could not be produced at the time of the trial. According to me this is not a ground to accept additional documents in the appeal stage. The very fact that the appellant wanted to induct documentary evidence during the appellate stage itself shows that the appellant could not succeeded and established its case during the trial, by proving the liability of the accused and the enforceability of the debt alleged by the complainant against the accused. No convincing and legal explanation is forthcoming from the counsel for not producing those documents during the trial of the case. Therefore the present attempt is only to make up the lacuna and inherent defect of the case of the complainant and Section 391 of Cr.P.C. is not designed for the same. Therefore I am not inclined to accept this Crl.M.Appln.6722 of 2012 and to receive the documents produced along with this petition Crl.A.No.1143/2009 11 and accordingly the same is dismissed. If that be so the findings of the court below under point No.2 is absolutely correct and no interference is warranted. 9. In a recent decision of the Apex Court reported in **State of Rajasthan** v. **Darshan Singh @ Darshan Lal** (2012(4) Supreme 72), the Hon'ble Apex Court has held that, “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.” On examination of the facts and circumstances involved in the case and the evidence and materials which are referred to by the learned Magistrate in the impugned judgment, in the light of the above dictum laid down by the Apex Court, it can be seen that the appellant has miserably failed to make out any exceptional ground to interfere with Crl.A.No.1143/2009 12 the findings and has also failed to show that the judgment sought to be impugned is a perverse one. If that be so, even if this appeal is entertained any further there is not even a remote scope to interfere with the findings of the court below and to reverse the order of acquittal recorded in favour of the accused. Therefore the appeal fails. Accordingly dismissed. ## **V.K.MOHANAN, JUDGE** skj