2021 (9) TMI 148 - HC - Indian Laws

Dishonor of cheque - insufficiency of funds - maintainability of complaint against the proprietor without impleading the bar and restaurant as accused No. 1 (i.e. proprietorship concern) - legality of acquittal order passed - Allegation that cheque was stolen and misused - HELD THAT - The respondent is a proprietor of Manjunatha Bar and Restaurant. The complaint can be filed against the individual name of the proprietor Govindaraju or the name of the concern namely, Manjunatha Bar and Restaurant. Merely, because the complainant has not mentioned that it is a proprietorship concern represented by the proprietor Govindaraju, that itself is not a ground to say that the complaint against the respondent is not maintainable in view of Section 141 of N.I. Act. Section 141 of N.I. Act is not applicable in the case of proprietorship. The complaint can be filed against the name of the proprietor or the proprietorship concern. Mere non-mentioning the name of the accused as representative of the proprietary concern or proprietor, it cannot be said that the complaint is not maintainable. On the other hand, the complaint is maintainable against the name of the proprietor/proprietorship concern - the contention of learned counsel for the respondent is not acceptable. Cheque was stolen and misused or not - HELD THAT - The respondent filed a private complaint before the Court and the matter was referred to the Police as per Ex. D.1, FIR has been registered as against the husband of the complainant and Kempegowda, but the Police filed 'B' Final report. The same was not challenged by the accused and the complaint filed by the accused came to be closed. But there is no evidence adduced by examining any other person or by producing any document to show that Kempegowda was working in his Bar and Restaurant. Therefore, the contention that the cheque was stolen by Kempegowda and it was misused by the husband of the complainant is not acceptable. Capacity of the complainant wherein the complainant examined herself - HELD THAT - Though the respondent also produced the passbook showing that the cheque was given to Kempegowda, which was issued by him on 04.11.2019, but the said entries were made on the last page of the notebook. On perusal of the entire notebook, the name of Kempegowda is no where found and no where it was mentioned that the said Kempegowda used to receive the cheque by signing in the notebook, but the accused might have created the document for the purpose of showing that the cheque was given to Kempegowda by making the entry in the last page of the notebook, which cannot be accepted. Even otherwise, the same was not marked. Therefore, the notebook cannot be considered as evidence. Rebuttal of presumption under Section 139 of the N.I. Act - HELD THAT - The contention raised by the respondent-accused that she had no capacity to pay the loan of ₹ 2.00 Lakhs to the accused cannot be acceptable. Another contention raised by the respondent is that the complainant has not examined her husband, who is the friend of the accused - HELD THAT - Merely her husband was not examined before the Court, that itself is not the ground to suspect the capacity of the complainant. Drawing presumption under Sections 118 and 139 of the N.I. Act is available in favour of the complainant where she has to discharge her initial burden that the accused received loan and in respect of repayment of loan, he has issued the cheque, which came to be dishonoured. The complainant is successful in proving the guilt of the accused and the legally liable debt to be recovered from the respondent-accused and the accused issued the cheque which came to be dishonoured and is liable to be punished under Section 138 of N.I. Act - the presumption is rebutted by the accused and came to a wrong conclusion and acquitted the accused, which is erroneous. Appeal allowed.

Summary

Issues Involved:
1. Maintainability of the complaint against the proprietor without impleading the bar and restaurant as accused.
2. Legality and correctness of the judgment of acquittal by the First Appellate Court.

Issue-Wise Detailed Analysis:

1. Maintainability of the Complaint:
The primary issue was whether the complaint was maintainable against the proprietor without naming the bar and restaurant as an accused. The respondent argued that without making the Bar and Restaurant a party, the criminal prosecution could not be launched, citing Section 141 of the N.I. Act and various Supreme Court judgments. However, it was contended by the appellant that the proprietor and the proprietorship concern are one and the same. The court referred to the Supreme Court judgment in *Raghu Lakshminarayanan vs. Fine Tubes* which clarified that a proprietorship concern is not a separate legal entity like a company or partnership firm. The court concluded that the complaint against the individual proprietor was maintainable, as the proprietorship and the proprietor are considered the same entity. Therefore, the contention that the complaint was not maintainable was rejected.

2. Legality and Correctness of the Judgment of Acquittal:
The appellant argued that the First Appellate Court erred in re-appreciating the evidence, particularly by considering unmarked documents. The appellant also contended that she had the financial capacity to lend ?2.00 Lakhs, supported by her salary certificate and bank passbook. The trial court had convicted the accused based on the evidence, including the dishonored cheque and the presumption under Section 139 of the N.I. Act, which the accused failed to rebut effectively.

The respondent contended that the complainant's financial capacity was not proven and that the cheque was misused by an employee, Kempegowda. However, the court noted that there was no substantial evidence to support the claim that the cheque was stolen. The respondent failed to produce any credible evidence or witnesses to substantiate the misuse claim. The court also found that the complainant had provided sufficient evidence of her financial capacity.

The court held that the presumption under Sections 118 and 139 of the N.I. Act was in favor of the complainant, who had successfully discharged her initial burden of proving that the cheque was issued for a legally enforceable debt. The First Appellate Court's judgment of acquittal was deemed erroneous as it failed to properly re-appreciate the evidence and wrongly concluded that the presumption was rebutted by the accused.

Conclusion:
The court allowed the criminal appeal, setting aside the judgment of acquittal by the First Appellate Court and confirming the trial court's judgment convicting the accused for the offence punishable under Section 138 of the N.I. Act.