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TMI Blog2021 (8) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... as accused in the complaint case - HELD THAT:- It is an admitted case on record that the cheques in both the complaint cases were issued under the signature of the accused, in the capacity of the partner of the partnership firm namely Mehta Transport Company i.e. for and on behalf of the said partnership firm; the Legal Notices in connection with the bouncing of cheques were also issued in the name of the accused being the partner of the said firm; the complaint case was also filed against the accused being the partner of the said firm. It is also an admitted fact on record that the specific case of the complainant in both the cases was that the accused being partner of Mehta Transport Company and on behalf of the partnership firm entered into hire purchase agreement for purchase of vehicle and the loan was to the extent of ₹ 12,00,000/- was extended to the partnership firm. In discharge of the said debt, the accused handed over two cheques in favour of the complainant which had bounced on account of insufficient fund . The cheques were issued from the account of the said partnership firm and the petitioner had signed the cheques as a partner - It is also not in dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1st Class, Ranchi. The essential details in connection with the impugned judgements are as under: - Criminal Revision No. 830 of 2012 arises out of Criminal Appeal No.142 of 2011 and Complaint Case No. 87/2006 and T.R. No. 1629/2011. -Conviction of petitioner under section 138 of Negotiable Instruments Act, 1881. -simple imprisonment for one year with fine of ₹ 1,000/- -compensation amounting to ₹ 7,19,739/- -Cheque No. 969458 dated 14.12.2005 drawn on Punjab and Sindh Bank, Ranchi. Criminal Revision No. 833of 2012 arises out of Criminal Appeal No.144 of 2011 and Complaint Case No. 86/2006 and T.R. No. 438/2011. -Conviction of petitioner under section 138 of Negotiable Instruments Act, 1881. -simple imprisonment for one year with fine of ₹ 2,000/- -compensation amounting to ₹ 7,15,164/- -Cheque No. 969457 dated 14.12.2005 drawn on Punjab and Sindh Bank, Ranchi. Arguments of the Petitioner 6. The learned counsel for the petitioner has submitted that both the cases arise out of two different loans extended by the opposite party no. 2 to the partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the complainant shall be restricted to examine the said witness only to the extent of proving the said authorization letter and not beyond that. In spite of this opportunity to prove the authorization letter, the complainant did not avail the opportunity to produce and examine P.W-1 in Complaint Case No. 86/2006 but examined P.W-1 in Complaint Case No. 87/2006 where the authorization letter dated 03.01.2005 was marked as Exhibit 6 (with objection) and the witness was thoroughly cross examined by the defence on the point of authorization letter as the same was issued by the Regional Manager of the complainant company though in favour of the P.W-1 (Field Officer of the complainant company), but there was no authority letter from the Board of Directors of the complainant company or flowing from the Articles of Association of the company. He also referred to the judgement passed by the Hon ble Supreme Court reported in (2015) 1 SCC 527 (Vinita S. Rao versus Essen Corporate services Private Limited and another) to submit that otherwise also the power of attorney must have knowledge about the relevant transaction otherwise he cannot depose as a witness on behalf of the complain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned, the same was duly exhibited in Complaint Case No. 87/2006 as Exhibit -6 and the learned courts below after scrutinizing the materials on record found that P.W-1 was duly authorized and competent to file the complaint case on behalf of the complainant company. He submits that there is no scope for reappreciation of evidences on record to come to a different finding in revisional jurisdiction. 10. So far as Complaint Case No. 86/2006 is concerned, he submits that the learned appellate court has rightly considered the fact that the letter of authorization to file the complaint case was duly exhibited in the connected records of Complaint Case No. 87/2006, between the same parties and accordingly the learned appellate court has rightly taken judicial notice of the authorization letter exhibited as Exhibit - 6 in Complaint Case No. 87/2006 and read it in the Complaint Case No. 86/2006 also. He also submits that P.W-1 while filing the Complaint Case No. 86/2006 had stated on affidavit accompanied with the complaint petition that he was the authorized representative of the complainant company. He submits that there is no illegality of perversity in the aforesaid approach of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor by virtue of Articles of Association of the company and the letter of authorization was issued by the Zonal Manager of the Company in favour of the P.W-1(field officer)? Criminal Revision No. 830/2012 and Criminal Revision No. 833/2012 (b) Whether it was imperative on the part of the complainant company to make the partnership firm of the accused as a co-accused in the complaint cases? If the answer is in affirmative, then what are the consequence? 15. In Cr. Revision No. 830 of 2012, the case of the complainant- Ashok Leyland Finance, in brief, was that the complainant company was dealing with the financing of vehicles to different individuals on hire purchase basis. The accused, a partner of Mehta Transport Company, on behalf of his partnership firm, entered into an agreement of hire purchase dated 06.05.2003 for purchase of Tipper vehicle, in which, it was agreed that a loan of ₹ 12,00,000/- (Rs. Twelve Lakhs Only) for purchase of Tipper vehicle of Tata Motors bearing Registration No. JH-02C-2103 was to be handed over to the accused and it was decided that liability incurred upon the accused shall be discharged by him through paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount, the accused issued a cheque bearing Cheque No. 969457 dated 14.12.2005 for ₹ 7,15,164/- drawn on Punjab and Sindh Bank, Ranchi in favour of the complainant. The accused has also put his signature on the said cheque. The complainant after receipt of the aforesaid cheque deposited the same with its banker M/s IndusInd Bank at Ranchi on 14.12.2005 for its encashment, but the same was returned unpaid by the banker of the accused with return memo dated 15.12.2005 issued by Punjab and Sindh Bank, Ranchi due to insufficient fund . The complainant thereafter issued a demand notice which was dated 13.12.2005 to the complainant, wherein it was requested that the accused was liable to pay the cheque amount within 15 days from the date of receipt of notice, failing which the accused would be liable for the consequences as provided under the law. It was the further the case of the complainant that the accused, even after receipt of the aforesaid notice on 28.12.2005, failed to discharge the liability for a sum of ₹ 7,15,164/- and accordingly, the complainant filed the complaint case. Issue no. (a) - On the point of the authorization letter to file Complaint Cases. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case on behalf of the company, the application was rejected vide order dated 5.04.2008, however Ld. Judicial Commissioner vide order dated 13.08.2008 permitted the complainant to place on record the authorisation letter dated 3.01.2005 on record. P.W.-1 was also permitted to be further examined to establish this fact. The complainant did not got himself examined on fresh oath, however on 6.03.2010, the complaint filed original copy of letter of authorisation dated 3.01.2005 on record. The same was exhibited as exhibit- 6 in complaint case number 87 of 2007, between the same party and on same issue. It is matter of fact that the same has not been exhibited in this case. An exhibited document of same other case between the same parties on the same issue cannot be neglected by this court, this Court is bound to take judicial noting of the document on record. The court has already relied on the said document in other case. 18. In view of these facts and circumstances above discussed above I find that all the basic ingredients necessary to establish offence u/s 138 of N.I. Act has been duly established by the complainant. However, the basic difference is that the case has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 790 (A.C. Narayanan versus State of Maharashtra) and ultimately held in para 17 of the report that a complaint under Section 138 of the Negotiable Instruments Act, 1881 can be filed through the power of attorney holder and the power of attorney must have knowledge about the relevant transactions. 23. Thus, it has been held in the aforesaid judgement by the Hon ble Supreme Court that both the tests are required to be satisfied, there should be a power of attorney or authorization letter to represent the complainant company and that the authorized person should have the knowledge of the relevant transactions involved in the case. 24. This Court finds that in order to ascertain as to whether the P.W-1 in Complaint Case No. 86/2006 had the knowledge about the transactions involved in the said case, he was required to depose before the learned court below, exhibit the authorization letter and offer himself to cross examination so that it could be disclosed as to whether he had the knowledge about the transactions involved in the said Complaint Case No. 86/2006. This opportunity was not availed by the complainant company in Complaint Case No. 86/2006 in spite of the fact that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Complaint Case No. 86/2006. Accordingly, the appellate court s judgement also cannot be sustained in the eyes of law as the same suffers from perversity on this point. 27. As a cumulative effect of the aforesaid findings, the Complaint Case No. 86/2006 filed by P.W-1, the Field Officer of the complainant company, is held to have been filed without proper authorization from the complainant company and accordingly point no. (a) is decided in favour of the accused/petitioner in the Cr. Revision No. 833 of 2012. 28. So far as the Complaint Case No. 87/2006, which is subject matter in Cr. Revision No. 830 of 2012 is concerned, this Court finds that the authorization letter in favour of the P.W- 1 to file the complaint case was duly exhibited on recall of the P.W-1, though marked with objection as Exhibit -6 and the P.W-1 was also cross-examined on the point of authorization. Upon perusal of the judgements passed by the learned courts below, this Court finds that both the courts have given concurrent findings on the point after considering the materials on record and the points raised by the parties and held that the P.W-1 was duly authorized to file the case on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner of the firm. 33. It has been also alleged in the complaint petitions that upon negotiation, the claim of the complainant company was settled and accordingly, in discharge of the liability in connection with each of the vehicles arising out of hire purchase agreements, the two cheques were handed over by the accused which had his signature. During the course of arguments and by referring to the records of the two cases, the learned counsel for the petitioner has pointed out that though the cheques were signed by the accused, but the same was signed as a partner of the partnership firm under its seal and cheques were from the account of the partnership firm as the dues were of the partnership firm and not the individual dues of the accused. 34. During the course of argument, it is not in dispute that on the face of each cheque itself, the cheque was issued by the accused signing it as partner of the firm namely Mehta Transport Company and also the fact that the complaint was filed against the petitioner by describing him as a partner of the firm namely Mehta Transport Company. It is further not in dispute that the loan was taken by the partnership firm in which the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f vehicle on hire purchase - the partnership firm, in which the accused was a partner did not fulfill the terms and conditions of the agreement -after payment of some installment, the partnership firm, in which the accused was a partner, left to pay the balance amount of loan. 37. The aforesaid findings of the learned appellate court reflects that the appellate court has completely lost sight of the status of the accused, who was merely a partner of the firm and that the loan was extended to the partnership firm and not the accused in his individual capacity. The learned appellate court in both the cases virtually substituted the accused in place of the partnership firm and in both the cases has given aforesaid findings which is contrary to the specific case and grievance of the complainant company against the partnership firm in connection with the two loans/hire purchase agreements. 38. In order to consider the aforesaid aspect of the matter and to consider the aforesaid ex-facie perverse findings in both the cases, it is required to be considered that even the cheques involved in the two cases were issued by the partnership firm in discharge of the two debts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n certain circumstances are deemed to be guilty of the offence. 39. The word deemed used in Section 141 of the Act applies to the company and the persons responsible for the acts of the company. It crystallises the corporate criminal liability and vicarious liability of a person who is in charge of the company. What averments should be required to make a person vicariously liable has been dealt with in S.M.S. Pharmaceuticals Ltd. In the said case, it has been opined that the criminal liability on account of dishonour of cheque primarily falls on the drawee (sic drawer) company and is extended to the officers of the company and as there is a specific provision extending the liability to the officers, the conditions incorporated in Section 141 are to be satisfied. 51. We have already opined that the decision in Sheoratan Agarwal runs counter to the ratio laid down in C.V. Parekh which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil Hada has to be treated as not laying down the correct law as far as it states that the Director or any other officer can be prosecuted without impleadment of the company. Needless to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of the offence. 11. In determining as to whether the requirements of the above provision have been fulfilled, it is necessary to bear in mind the principle of law that a partnership is a compendious expression to denote the partners who comprise of the firm. By the deeming fiction in Explanation (a) the expression company is defined to include a firm. 43. In the case of Himanshu v. B. Shivamurthy reported in (2019) 3 SCC 797 the appellant submitted that the cheque was issued by a Director of a public limited company and not issued by the signatory in his personal capacity. Hence, it was urged that the complaint ought to have been instituted against the company and its directors and not against the appellant. However, the records indicated that the cheque was drawn by the appellant for the company as its director and the notice of demand was served only on the appellant. The complaint was lodged only against the appellant without arraigning the company as an accused. In the said background it was held as under: - 12. The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a company, every person, who at the time whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal or otherwise, has been reflected from the records of the two cases in making the partnership firm as an accused in the complaint cases and accordingly the doctrine of lex non cogit ad impossibilia is not attracted. The petitioner had signed the cheque in both the cases as a partner of the partnership firm, for and on its behalf. 48. In the aforesaid view of the matter, the issue no. (b) is decided in favour of the petitioner in both the cases. It is held that it was imperative on the part of the complainant company to make the partnership firm of the accused as a co-accused in the complaint cases and on account of failure to do so, the petitioner could not be convicted for offence under Section 138 of Negotiable Instruments Act, 1881 as complaint only against the petitioner in both the cases was itself not maintainable. 49. Summary Issue no.(a) in Criminal Revision No. 830/2012 (arising out of Complaint Case No. 87/2006) is decided in favour of the opposite party complainant; Issue no.(a) in Criminal Revision No. 833/2012 (arising out of Complaint Case No. 86/2006) is decided in favour of the accused-petitioner; Issue no.(b) in Criminal Revision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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