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IN THE SUPREME COURT OF INDIA
P. Sathasivam and B. S. Chauhan, JJ.
Milind Shripad Chandurkar
Versus.
Kalim M. Khan and Anr.
Criminal Appeal No. 643 of 2011 (Arising out of SLP (Crl.) No. 3045 of 2008) and Special Leave Petition (Criminal) Nos. 3122 and 3124 of 2008
Decided On: 03.03.2011
Certainly. Based on the provided legal document, the key points are as follows:
The appellant, Milind Shripad Chandurkar, claimed to be the proprietor of Vijaya Automobiles, a firm involved in supplying fuel, and filed a complaint under Section 138 of the Negotiable Instruments Act for dishonour of a cheque issued by Respondent No. 1 (!) (!) (!) .
The cheque was issued by Respondent No. 1 to the firm, which the appellant alleged to be the proprietor of, towards discharging a liability. The cheque was dishonoured due to insufficient funds (!) (!) .
The appellant's case was that he was the sole proprietor of Vijaya Automobiles, and thus, had the locus standi to file the complaint. However, he failed to produce documentary evidence to substantiate his ownership or proprietary status of the firm, relying only on an affidavit and oral statements (!) (!) (!) .
The trial and appellate courts initially held that a sole proprietorship is not an independent legal entity separate from its proprietor, and thus, the appellant was considered the owner of the firm. Nonetheless, both courts also observed that the appellant did not produce sufficient documentary proof of his proprietary status, and this lack of evidence was a crucial factor (!) (!) .
The High Court set aside the judgments of the lower courts, primarily on the ground that the appellant did not produce any documentary evidence to prove his ownership of Vijaya Automobiles, thereby lacking the necessary locus standi to maintain the complaint (!) (!) .
The legal requirement for maintaining a complaint under Section 138 is that the complaint must be made by the payee or holder in due course of the cheque. In this case, because the firm was the payee, and the appellant could not establish himself as the payee or holder in due course, he was not entitled to initiate the proceedings (!) (!) (!) .
The court emphasized that mere statements or affidavits are insufficient to establish ownership or proprietary rights in the absence of supporting documentary evidence. The appellant’s failure to produce such evidence was a decisive factor in dismissing the appeal (!) (!) .
The overall conclusion was that the appellant did not meet the legal requirements to maintain the complaint, as he could not prove he was the payee or holder in due course of the cheque, and lacked the necessary legal standing. Consequently, the appeal was dismissed, and the High Court's decision was upheld (!) .
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JUDGMENT
B.S. Chauhan, J.
1. Leave granted.
2. This appeal has arisen out of judgment and order dated 18.2.2008 passed by the High Court of Judicature at Bombay in Criminal Revision No. 656 of 2007 by which the High Court has set aside the judgments and orders of the trial Court as well as of the Appellate Court convicting the Respondent No. 1 for the offences punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter called the Act 1881) and sentencing him for the period, till the rising of the Court and to pay compensation of a sum of Rs.7,00,000/-. Failing which, the Respondent would serve simple imprisonment for a period of six months.
3. The facts and circumstances giving rise to this case are that the Appellant/complainant claimed to be the sole proprietor of the Firm, namely, Vijaya Automobiles, which had the business of supplying fuel. The firm had supplied a huge quantity of diesel to Respondent no.1 in the month of March 2005. In order to meet the liability, the Respondent No. 1 made the payment vide Cheque No. 490592 dated 28.4.2005 in the name of the said proprietary Firm drawn on Development Credit Bank, Kurla Branch, Bombay for an amount of Rs.7,00,000/- (Rupees seven lakhs only). The Appellant/complainant deposited the said cheque in the account of the said Firm in Bank of India Uran Branch on 12.9.2005.
4. The Development Credit Bank returned the said cheque mentioning "unpaid" with a Memorandum "funds are insufficient". The Appellant/complainant sent notice dated 11.10.2005 by Registered A.D. post as well as under certificate of posting. The Respondent no.1/accused did not accept the notice sent by Registered A.D. post. However, the notice sent by certificate of posting stood served upon him as the Respondent No. 1 admitted the said fact in his statement under Section 313 of the Code of Criminal Procedure, 1973 (hereinafter called Cr.P.C.). The Respondent No. 1/accused neither replied to the notice, nor made the payment within 15 days of the receipt of the notice.
5. The Appellant/complainant filed a complaint case No. 545 of 2005 before the Judicial Magistrate, First Class, Uran under section 138 of the Act 1881 on 22.11.2005. The case was tried, however, the Respondent No. 1/accused did not enter the witness box and after considering the case, the trial Court vide judgment and order dated 22.12.2006 concluded the trial convicting the Respondent No. 1 to suffer simple imprisonment till rising of the court and to pay compensation of Rs. 7,10,000/- and in default of payment thereof, to suffer simple imprisonment for six months. It was directed that out of the aforesaid amount of compensation, a sum of Rs. 10,000/- be credited to Raigad District Legal Aid Committee.
6. Being aggrieved of the aforesaid judgment and order, the Respondent No. 1/accused filed Criminal Appeal No. 85 of 2006. The learned Sessions Judge vide judgment and order dated 18-19/9/2007 dismissed the said appeal, with the amount of compensation being reduced from Rs. 7,10,000/- to Rs. 7,00,000/-. Thus, the direction to credit the amount of Rs. 10,000/- to Raigad District Legal Aid Committee was set aside.
7. Being aggrieved, Respondent No. 1 preferred Criminal Revision Application No. 656 of 2007 before the High Court which has been allowed vide judgment and order dated 18.2.2008 (impugned) only on the ground that the Appellant could not produce any evidence to establish that he was the sole proprietor of the proprietary concern in question. Hence, this appeal.
8. We have heard Shri Shekhar Naphade, learned senior counsel for the Appellant, Shri Viraj Kadam, learned Counsel for Respondent no.1 and Shri Shankar Chillarge, Additional Advocate General for Respondent No. 2 and perused the record.
All the three courts below have dealt with the issues elaborately and recorded the following findings of fact:
(i) The cheque had been issued by the Respondent No. 1 in favour of the Firm concerned towards discharge of pre-existing liability a
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