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TMI Blog2024 (2) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... e Applicant and the learned Senior Counsel, Mr. Kantak appearing along with Mr. Talaulikar for the Respondent. 4. Mr. Lotlikar would submit that the learned Magistrate as well as the first Appellate Court committed serious error in considering the case put forth by the Applicant and the fact that the complaint was lodged by a Company through its duly constituted Attorney, without producing such Power of Attorney (PoA) along with the complaint or even during evidence. It is submitted that subsequently, the Company placed on record the fabricated resolution, which has been wrongly considered by the Courts below as authorization for filing a complaint. He would further submit that such authorization produced subsequently, ought to have been considered as fabricated and manipulated document since the cross-examination of PW-1 would clearly go to show that there is no proper procedure adopted before granting the power to the authorized Representative/Director. He would submit that such aspect goes to the root of the matter as the complaint has to be filed by the Managing Director or the authorized Representative or by the PoA holder duly authorized by the Company on that behalf. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit that by leading evidence, the Accused has shown his defence on preponderance of probabilities in all aspects, however, it has not been considered by the Courts below. He would further submit that the Representative of the Company, who stepped into the witness box as PW-1 had no personal knowledge of the transactions and therefore, his affidavit ought to have been discarded. 10. The contentions of Mr. Lotlikar could be summarized as under: (A) The complaint filed by describing Mr. Pereira as an Attorney without producing the Power of Attorney is not in accordance with Section 138 of the N.I. Act/incomplete and not a complaint on behalf of the Company. (B) In the alternative, such a complaint could be considered as a complaint filed by Mr. Pereira on his own, without any resolution. (C) There are no averments in the complaint that Mr. Pereira was authorized by any resolution and the subsequent filing of such a resolution is only an attempt to fill up the lacuna. (D) The complaint was stillborn/without authority and could not have been made alive with subsequent resolution. (E) The resolution is a fabricated and manipulated document and there is no mention of it in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to it and thereafter, a complaint was filed within time. 13. Mr. Kantak would submit that the Representative of the Company as found mentioned in the cause title, is the Director himself, who was duly authorized by the resolution passed by the Company, which was produced subsequently. He submits that only because in the cause title, it was mentioned that the Company is represented by its duly constituted Attorney, it does not mean that such person must possess a PoA. He submits that the words "constituted Attorney" could be construed as a person with authority backed by a resolution. Since Mr. Pereira was one of the Directors of the Company and since he was authorized by a resolution of the Board of Directors, the complaint was filed with the Authority. 14. Mr. Kantak would then submit that the evidence on record clearly goes to show that the cheques were issued duly signed by the Accused and they were presented for encashment. It is submitted that there is no dispute that the cheques in question were signed by the Accused, though initially, it was denied. It is submitted that the presumption in favour of the Complainant has not been rebutted. 15. Mr. Kantak would submit that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2022) 2 SCC 355; vi. Credentials Finance Limited Vs. State of Maharashtra & Others, 1998 SCC Online Bom 515; vii. Samrat Shipping Co. Pvt. Ltd. Vs. Dolly George, (2002) 9 SCC 455; viii. TRL Krosaki Refractories Limited Vs. SMS Asia Private Limited & Another, 2022 SCC Online SC 217; ix. C.C. Alavi Haji Vs. Palapetty Muhammed & Another, (2007) 6 SCC 555. 19. The rival contentions fall for determination. 20. The complaint was lodged under Section 138 of the N.I. Act read with Section 142 of the said Act against the Accused/Applicant herein. The complaint was lodged by the Company through Mr. Francisco Lume Pereira claiming that he is one of the Directors of the Company and is aware of the facts of the case. 21. In a nutshell, it is the contention of the Complainant- Company that somewhere in 2007, the Accused approached them, being a sole Proprietor of 'MMC Commodities' claiming that he had exclusive ore purchase rights in respect of certain iron ore mines situated at Sateli, Maharashtra and he is in a position to supply iron ore from the said mines to the Complainant. Even an agreement to that effect was executed by the Accused. The Complainant acting bonafidely upon the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record. Mr. Francisco Lume Pereira (PW-1) stepped into the witness box by filing his affidavit in evidence claiming that he is one of the Directors and was aware of the facts of the matter. At that stage, neither PoA nor resolution was placed on record in favour of Francisco Lume Pereira. However, during cross- examination, when he was asked about his Authority to represent the Company, he disclosed that there was a resolution passed by the Board of Directors in his favour. Such resolution was subsequently produced on record during re-examination. The second witness Mr. Prakash Bhobe (PW-2) claimed that he personally served the notice on the accused on 22.02.2011. Mr. Bhobe claimed that he is one of the Consultants of the Company. Mr. Gaurav Kaushik (PW- 3), the third witness examined by the Complainant is the handwriting expert since the Accused even denied signing of the agreement, issuance of the cheques and receipt of the legal notice. 24. The Accused stepped into the witness box and filed his affidavit in evidence in defence and claimed that he supplied the iron ore to one of the group of the Companies with which the Complainant-Company is associated and in fact, the Accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et or re-appreciate the evidence on record. It is also to be kept in mind that the Revisional Court will not interfere, even if, a wrong order is passed by the Court having jurisdiction, in the absence of jurisdictional error, as held in the case of Southern Sales & Services & Others Vs. Sauermilch Design & Handels GMBH, (2008) 14 SCC 457. 32. Since the signature on both the cheques is admittedly of the Accused, the principles laid down by the Apex Court in the case of Hiten P. Dalal Vs. Bratindranath Banerjee, (2001) 6 SCC 16, shall come into effect, wherein it is held that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn. It is now well settled that Section 139 of the N.I. Act introduces an exception to the general rule as to the burden of proof and shifts the onus on to the Accused. The presumption under Section 139 of the N.I. Act is a presumption of law, as distinguished from the presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the Prosecution to prove the case against the Accused beyond reasonable doubt. The obligation on the Prose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hifts upon the Accused to discharge the presumption imposed upon him. While the onus is on the Accused, he has to raise a probable defence, which must meet the standard of preponderance of probability and not mere probability. 38. The points for determination which were framed by the Trial Court and also by the Appellate Court are required to be re-looked for the simple reason that if the Courts are unable to frame properly the points for determination, the discussion on it would also be affected and the Court is also duty bound to decide unnecessary and unwanted aspects to answer such points. 39. In criminal proceedings, unlike civil matters, issues are not required to be framed on considering the pleadings of both parties. The requirement of framing of points for determination is while pronouncing the judgment under Section 353 of Cr.P.C., which is found in Chapter XXVII. Section 354 of Cr.P.C. deals with language and contents of the judgment wherein sub-section (1) Clause (b) provides that the judgment shall contain a point for determination, the decision thereon and the reasons for the decision. Thus, in a criminal trial, points for determination are required to be framed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oints is a stage only when the judgment is dictated and not prior to it. At that stage, entire material is available with the Magistrate including the arguments of both sides. In the light of above facts, the duty of the Magistrate is to frame the correct point so as to arrive at a proper finding. If incorrect points are framed, a burden is unnecessarily shifting on either complainant or the accused and accordingly reasons are also affected." 42. In the case of Rajesh Jain (supra), the Apex Court while highlighting the importance of points for determination observed in paragraphs 56, 57 and 58 as under: "56. The perversity in the approach of the trial court is noticeable from the way it proceeded to frame a question at trial. According to the trial court, the question to be decided was "whether a legally valid and enforceable debt existed qua the complainant and the cheque in question (Ext. CW I/A) was issued in discharge of said liability/debt". When the initial framing of the question itself being erroneous, one cannot expect the outcome to be right. The onus instead of being fixed on the accused has been fixed on the complainant. Lack of proper understanding of the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainant was signed by one Mr. P.G. Bhobe (PW-2) who was not the employee of the Company. It is claimed that Mr. Bhobe had no authority on behalf of the Company to sign the notice. It is also claimed that such notice was never served on the Accused and his signature was forged on the copy of the notice, which is produced on record. 48. One of the ingredients of Section 138 of the N.I. Act and as held in C.C. Alavi Haji (supra), the Apex Court after considering the earlier decision observed that the provisions of the N.I. Act were incorporated with the object of promoting and inculcating faith in the efficacy of the banking system and its operations and giving credibility to negotiable instruments in business transactions. The introduction of the said Chapter XVII was intended to create an atmosphere of faith and reliance on the banking system by discouraging people from not honouring their commitments by way of payment through cheques. Section 138 of the N.I. Act was enacted to punish those unscrupulous persons who purported to discharge their liability by issuing cheques without really intending to do so. 49. Thus, while construing the provision, the object of the legislatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sultant. He deposed that when he was in his chamber, he received a message from Mr. Francisco Lume Pereira, the Director that he is sending a notice addressed to the Accused, which he should deliver personally to the Accused. Accordingly, on receipt of such notice, he signed on it and hand-delivered it to the Accused in his chamber thereby obtaining the acknowledgment. 53. The thrust of arguments on behalf of the Applicant is that Mr. Bhobe was not an employee of the Company and he was only a Consultant and therefore, the notice is not issued by the payee. First of all, such objection has no much force for the simple reason that the notice is on the letterhead of the Complainant-Company and it is signed by the Consultant. The notice has to be signed by some Officer and accordingly, it was signed by Mr. Bhobe, who worked as a Consultant. The main purpose of the notice is to make the drawer aware of the fact that the cheque is returned unpaid for the reasons disclosed in the memorandum so that he would be able to make necessary arrangements if he is an honest drawer. The very purpose of the notice as contemplated under the Act is considered by the Apex Court in the case of C.C. Alav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defeat the very object of the legislation. As observed in K. Bhaskaran Vs. Sankaran [(1999) 7 SCC 510] if the "giving of notice" in the context of Clause (b) of the proviso was the same as the "receipt of notice" a trickster cheque drawer would get the premium to avoid receiving the notice by adopting different strategies and escape from legal consequences of Section 138 of the Act." (Emphasis supplied) 55. Thus, even if it is contended that the notice is not recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice becomes an original copy with acknowledgment. No doubt the original notice remained with the Accused, however, the office copy with the original signature of the Accused becomes the original document specifically in connection with the acknowledgment/signature of receipt of such notice. 59. The second contention raised by Mr. Lotlikar is that the complaint filed on behalf of the Company through its constituted Attorney Mr. Francisco Lume Pereira is not maintainable, firstly, for want of such PoA, which was not placed on record and secondly, there are no averments in the complaint as well as in the affidavit of Francisco Lume Pereira to that effect. He also claimed that the affidavit in evidence filed by PW-1, Francisco Lume Pereira nowhere discloses that he was authorized by the Company to lodge the complaint and in the absence of such authority, the Courts below committed an error in allowing and accepting the copy of the resolution placed subsequently on record. He submits that it amounts to filling up a lacuna and even such resolution is a fabricated document. 60. Section 142 of the N.I. Act reads thus: "142. Cognizance of offences-[(1)] Notwithstanding anything contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes, the complaint is lodged by the payee. 63. Now the question remains as to whether the person filing or signing the complaint for and on behalf of the Company is either a constituted Attorney or an authorized person in that behalf. The cause title of the complaint shows that the Complainant-Company is represented by its duly constituted Attorney Francisco Lume Pereira whereas paragraph 11 of the complaint reads thus: "11. The Complainant being a Company, this complaint has been signed and shall be verified by Shri Francisco Lume Pereira, the Director of the Complainant, who is also aware of the facts of the case and able to depose to the same." 64. Admittedly, no PoA or even authorization in favour of Francisco Lume Pereira was placed along with the complaint or even at the time of the verification of the complaint. The affidavit of Francisco Lume Pereira filed as PW-1 shows that he claims to be a Director of the Company and is aware of the facts of the case. The affidavit nowhere discloses that Francisco Lume Pereira being a Director of the Company is authorized even by any resolution or by execution of any PoA. 65. Only during cross-examination, this fact was brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral Power of Attorney. The points of reference to the larger Bench are found in paragraph 15 whereas the findings are in paragraph 26, which reads thus: "26. While holding that there is no serious conflict between the decisions in M.M.T.C. Ltd. Vs. Medchl Chemicals and Pharma (P) Ltd., [(2002) 1 SCC 234] and Janki Vashdeo Bhojwani Vs. IndusInd Bank Ltd., [(2005) 2 SCC 217], we clarify the position and answer the questions in the following manner: (i) Filing of complaint petition under Section 138 of the NI Act through power of attorney is perfectly legal and competent. (ii) The power-of-attorney holder can depose and verify on oath before the court in order to prove the contents of the complaint. However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions. (iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in the complaint and the power of attorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case. (iv) In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent from the payee, the authorisation therefor and that the contents of the complaint are within his knowledge. When, the complainant/payee is a company, an authorised employee can represent the company. Such averment and prima facie material is sufficient for the learned Magistrate to take cognizance and issue process. If at all, there is any serious dispute with regard to the person prosecuting the complaint not being authorised or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that person could not have instituted and prosecuted the complaint, it would be open for the accused to dispute the position and establish the same during the course of the trial. As noted in Samrat Shipping Co. (supra), dismissal of a complaint at the threshold by the Magistrate on the question of authorisation, would not be justified. Similarly, we are of the view that in such circumstances entertaining a petition under Section 482 to quash the order taking cognizance by the Magistrate would be unjustified when the issue of proper authorisation and knowledge can only be an issue for trial." (Emphasis supplied) 72. In the case of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of it being a precondition, in the event of a dispute, it will become a subject matter of proof to be adduced at the time of trial. 76. Thus, the above observation, again, is a clear answer to the submission of Mr. Lotlikar with regard to the resolution being produced subsequently. 77. In the case of Bhupesh Rathod (supra), the Apex Court was dealing with a complaint having a cause title in the name of a person being the Managing Director of the Company wherein objections were raised that it is not a complaint received by the Company and thus taking cognizance of it was improper. In this regard, the Apex Court observed that the only criteria prescribed under Section 142(1)(Aa) is that the complaint must be by the payee or the holder in due course. In this regard, the Apex Court observed in paragraph 19 as under: "19. In the conspectus of the aforesaid principles we have to deal with the plea of the respondent that the complaint was not filed by the competent complainant as it is the case that the loan was advanced by the Company. As to what would be the governing principles in respect of a corporate entity which seeks to file the complaint, an elucidation can be found in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of PW-1. 81. When the objection was raised during the cross-examination of PW-1, he placed on record a certified true copy of such authorization which has been accepted by the Courts below and rightly so for the simple reason that such procedural defects and irregularities could be cured by granting opportunity to the Company. The contention with regard to such a resolution was that it is a forged one, has no substance at all. Thus, the second objection with regard to the maintainability of the complaint for not producing the PoA or the resolution being too technical and in fact, cured during the trial, needs to be rejected. 82. Accordingly, Points from (A) to (F) in paragraph 10 above are devoid of merits. 83. The last contention is that the Accused succeeded in rebutting the presumption under Section 139 of the N.I. Act from the evidence of the Complainant's witnesses as well as by entering into the witness box. An attempt has been made to show that the agreement dated 19.10.2007 was never executed by the Accused. In the alternative, it is claimed that it is an agreement for the advancement of a loan by the Company without any resolution. It is claimed that such an agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 383246 dated 19.10.2007 drawn on State Bank of India, Margao Branch. 86. In paragraph 15 of the affidavit, Applicant/Accused stated on oath as under: "15. I say that the disputed cheque was issued as security deposit for supply of 11,000 MT of Iron ore. I further say that Complainant has fraudulently mentioned that on the aforesaid representation and by way of an advance of the purchase price of such ore the Complainant had advance me a sum of Rs. 1,20,00,000/- (Rs. One Crore Twenty Lakhs Only)." 87. Thus, the Accused admitted that the disputed cheques were issued by him as a security deposit. It is surprising as to why the Accused issued such cheques though as a security deposit when in fact he was supposed to receive the purchase price of the ore from the Complainant-Company. It is unheard of that a person who is selling a product is required to hand over a cheque by way of a security deposit. This defence raised by the Accused itself would go to show that the disputed cheques were issued towards the amount which he has already received from the Complainant-Company by way of advance. Even otherwise, presumption under Section 139 of the N.I. Act gets more support from such c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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