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TMI Blog2010 (11) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... for collection and same was dishonoured with an intimation on 12.5.2005 as funds insufficient. In pursuance of the intimation the legal notice was issued demanding payment on 6.6.05, after same being received a reply was sent on 20.6.05. Thereafter, after complying the mandatory provisions of law private complaint was filed. After the complainant examining himself and getting marked the relevant documents closed his side. On the basis of the said material on record this impugned order of conviction. 3) The order is illegal, capricious and not in consonance with law. The learned Magistrate has mechanically passed the judgment without application of mind and only on the statutory presumption without appreciating the rebuttal aspect from the side of the appellants. That the trial Court not taken into account admitted fact that there is neither any authorisation nor any power of attorney on behalf of firm to institute the complaint. The trial Court not taking into account non production of invoices. The agreement entering between appellants and respondent for supply of liquor,. The trial Court not taken into account credit sale of liquor . Among other grounds it is prayed this Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any debt or any other liability purpose. Though, accused in his statement U/s 313 has stated the cheque is issued only as security, appellants not led evidence in spite of giving several opportunities. 9) Learned counsel for the appellants argued that cheque is issued only as security not towards debts. In the decision of Dr. B.V. Sampathkumar Vs Dr. K.G.V Lakshmi, ILR 2006 KAR 1730 his lordship held as follows; The dismissal of the complaint on the plea that it was issued only as security and hence no prosecution would lie is an untenable view. A cheque whether issued for repayment of loan or as security makes little difference U/s 138 of the Act. In the event of dishonour, legal consequences are same without distinction. When once issue of cheque is proved, a presumption under section 139 of the Act would arise with regard to consideration. 10) The principle laid down in the decision referred above squarely applies to the facts of this case in hand also. There is no force in the contention of appellants that cheque is issued only for security not for repayment of loan. 11) It is argued on behalf of appellants that the complaint is filed by one Gopal Reddy as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risation letter from other partners to file complaint against appellants, complainant is one of the partner. It is not the case of accused that complaint is filed without authorisation or consent of other partners or other partners are not authorised the complainant to file complaint. Even if there is a defect in the complaint i.e. complaint is filed without power of attorney or authorisation letter from other partners, the same can be curable. In view of the principle laid down in the decision of Hon ble Supreme Court of India complaint cannot be quashed or rejected for want of power of attorney or authorisation. The principle laid down in the Hon ble Supreme Court of India is binding on all courts. Hence, contention of appellants that complaint is filed without power of attorney or authorisation letter from other partners and the same is not maintainable cannot be acceptable. 16) Further cheque is issued in favour of Renuka distributors. Complaint is also filed on behalf of Renuka distributors U/s 138 of N.I.Act. Complaint can be made by the payee or holder in due course of the said cheque. The complaint in question is by the respondent firm who is payee of the cheque. This vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the explanation to section 138 of the N.I.Act provides that the dishonoured cheque shall relate to a debt or liability enforceable in order to constitute an offence. From the evidence on record, it is revealed, that the dishonoured cheque was issued regarding a loan allegedly been taken from the complainant. But, complainant as a money lender cannot enforce such a debt or liability without obtaining a license under section 3 of the said moneylenders Act. So, it is held on the basis of complaint filed by such a moneylender without any license, the offence cannot be taken cognizance of, since the alleged dishonoured cheque pertaining to a debt is not enforceable. 21) In the second decision it is held that the complainant a financing company and provided finances to the accused and accused company issued three post dated cheques for purchase of shares. Complainant company is in contravention of regulation, purchase share of the accused company. Hence, it is held purchase of shares of accused company by the complainant company is in contravention of regulation , as such entire transaction is void and debt is unenforceable. Further it is also held a party to an illegal contract c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... published in the Karnataka Gazette Extraordinary dated 19.10.1967 vide notification No.HD 76 EFL 67 dated 19.10.1967 reads as follows. 25) No liquors shall be sold except for cash. On bear reading of the rules it is clear that liquors shall not be sold on credit. It is not stated that the rule applies only to Government transaction and not private transaction between private parties. So, the contention of complainant counsel that rule 14 applies only to Government transaction and not to private transaction cannot be acceptable and further respondent counsel not produced any authority in support of his arguments to show that rule 14 of the Karnataka Excise Licenses (General Conditions) Rules, 1967 applies only to Government transaction and not to private transactions. The principles laid down in the decision referred above it is clear that only legally enforceable debt is recoverable if debt is not enforceable or contract is prohibited under law cannot be enforceable under law. If, dealing in liquor on credit is prohibited under law, the same cannot be enforceable or recoverable. As I already stated the explanation to section 138 of the N.I.Act, provides that dishonoured cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit and same is prohibited under law. The complainant in my opinion not proved debt is legally recoverable if debt is not legally recoverable it cannot be enforceable U/s 138 of N.I.Act and taking of cognizance is bad and trial Court erred in taking cognizance of the offence in respect of offence U/s 138 of N.I.Act and trial Court erred in convicting accused for the offence U/s 138 of N.I.Act. PW.1 i.e. complainant in his cross-examination clearly admitted there was an agreement between complainant company and accused company regarding supply of liquors i.e. agreement between Laxmi Traders and M/s Renuka Distributors, but for the reasons best known to the complainant. The complainant not produced the said agreement before the Court though, it is available with him. On that ground also Court had inferred that complainant not disclose true fact before the Court and conceal the real transaction between complainant and accused by not producing agreement and entering between complainant and accused. Hence, I answer points NO.1 and 2 in the affirmative. 28) Point NO.3: In view of my findings on the above said points, I proceed to pass the following; ORDER The appeal is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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