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2006 Supreme(Kar) 155
2006(3) Kar. L.J. 397
In The High Court Of Karnataka At Bangalore
A.C. Kabbin, J.
Sarathi Leasing Finance Limited, Mangalore
V.
B. Narayana Shetty
Criminal Revision Petition No. 427 of 2004.
16th February, 2006
Sri G. Balakrishna Shastry, Advocate for Petitioner;
Sri R. Lokesh, Advocate for Respondent.
Headnote:Dishonour of cheque -Cheque amounty -Cheque amounty - Rs 65,200/- -Drawer sentenced to pay a fine of Rs 80, 500/- - Rs 80,000/- to be paid to the payee as compensation.
Cases Referred: Followed: 2001 (6) Kar. L.J 193; (1983) 4 SCC 701; (2002) 1 SCC 234; 1999 Crl. L. J. 1032.
Indian Penal Code, 1860 -Offence under -Section 420 -Offence under - Complaint for - Settled principle. See, Criminal Procedure Code, 1973 - Section 190.
Cases Referred: Followed: 2001 (6) Kar. L.J 193; (1983) 4 SCC 701; (2002) 1 SCC 234; 1999 Crl. L. J. 1032.
Negotiable Instruments Act, 1881 -Complaint on behalf of a company - Section 138 -Complaint on behalf of a company -Who can set law in motion - Need of authorisation. [A. C. Kabbin, J]: In a case of complaint on behalf of a Company for an offence punishable under Section 138 of the Negotiable Instrurnents Act filed by one of its officers or the Managing Director, the question of authorisation to such person to file the complaint arises only if the accused takes up a specific plea that the Company did not intend to prosecute him for the offence or that there is some material before Court to indicate that the complainant-Company has no intention to prosecute the accused. Since a responsible officer or office bearer of the company can set the law into motion by filing a complaint on behalf of a company, disclosing an offence under Section 138 of the Negotiable Instrurnent Act against the Company, the question whether such officer had been specifically authorised to file the complaint on behalf of the Company does not arise at all. In that view of the matter, the Learned Sessions Judge was wholly in error in allowing the appeal and setting aside the conviction solely on the ground that the revision petitioner had not produced the proper authorization.
Cases Referred: Followed: 2001 (6) Kar. L.J 193; (1983) 4 SCC 701; (2002) 1 SCC 234; 1999 Crl. L. J. 1032.
Negotiable Instruments Act, 1881 -Maintainability of complaint by a company -Section 138 -Maintainability of complaint by a company - Settled principles. Settled Principles: Pursuant to a memorandum of understanding, the respondent Company issued two cheques, one dated 31.10.1994 and another dated 10.11.1994, in favour of the appellant Company. Both the cheques when presented for payment were returned with the endorsement "payment stopped by drawer". After issuing notices, the appellant lodged two complaints under Section 138 of the Negotiable Instruments Act through one L, the Manager of its regional office. The respondent filed two petitions for quashing of the said complaints. Allowing the petitions the High Court held that the complaints were not maintainable. The High Court further held that the Manager (who had lodged the complaints) and the Deputy General Manager (who was substituted), were merely paid employees of the appellant Company and had not been authorised by the Board of Directors to sign and file the complaint on behalf of the Company or to prosecute the same. It further held that the authorisation in favour of the Deputy General Manager could not cure the defect. Since in the complaint there was no specific allegation of existence of any debt or liability, the High Court further held that the cheques were issued as security and not for any debt or liability existing on the date of issuance. Opposing the appeals, the respondent contended inter alia, that the cheque having bounced on account of stoppage of payment by the drawer and not on account of insufficiency of funds, Section 138 was not attracted. Setting aside the High Court s judgment, the Supreme Court. Held : The only eligibility criterion prescribed by Section 142 for maintaining a complaint under Section 138 is that the complaint must be by the payee or the holder in due course. This criterion is satisfied as the complaint is in the name and on behalf of the appellant Company. Therefore, even presuming, that initially there was no authority, still the company can, at any stage, rectify that defect. At a subsequent stage the company can send a person who is competent to represent the company. The complaints could thus not have been quashed on that ground [(2002) 1 SCC 234].
Cases Referred: Followed: 2001 (6) Kar. L.J 193; (1983) 4 SCC 701; (2002) 1 SCC 234; 1999 Crl. L. J. 1032.
Negotiable Instruments Act, 1881 -Sentence -Section 138 -Sentence - Cheque amounty - Rs 65,200/- - Drawer sentenced to pay a fine of Rs 80, 500/- - Rs 80,000/- to be paid to the payee as compensation.
Trade and Merchandise Marks Act -Infringment of trade marks -Sections 78 and 79 -Infringment of trade marks - Complaint for - Who can set law in motion - Settled principle. See, Criminal Procedure Code, 1973 - Section 190.
This revision petition is directed against the judgment dated 27-122003 passed by the learned III Additional Sessions Judge, Dakshina Kannada District, Mangalore in Criminal Appeal No. 42 of 2001, by which the conviction of the respondent in judgment dated 27-2-2001 recorded by the learned Judicial Magistrate First Class (IV Court), Mangalore in C.C. No. 215 of 2000 for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and consequent sentence have been set aside. The revision petitioner/complainant prays for restoring the conviction and sentence imposed by the learned Trial Judge.
2. The revision petitioner is a Company represented by its Managing Director. In the complaint filed on behalf of the said Company, it was alleged that one Vasanthkumar had borrowed a sum of Rs. 65,000/- from the revision petitioner and for repayment of the balance of the said amount with interest thereon he (the respondent/accused), as co-obligant, had issued a cheque for Rs. 65,200/-. The said cheque was dishonoured when it was presented for encashment. The complainant/Company claimed that despite service of notice of dishonour of cheque, the respondent having failed to pay the amount, the latter had committed an offence punishable under Section 138 of the Negotiable Instruments Act.
3. A contention was taken on behalf of the respondent/accused in the Trial Court that though his signature was on the cheque, contents of the cheque had not been filled by him and that he had not stood surety for repayment of any loan taken by Vasanthkumar. On consideration of the evidence, the learned Trial Judge held that issuance of cheque for repayment had been proved and that ingredients of the offence under Section 138 of the Negotiable Instruments Act having been disclosed, the accused/respondent was liable to be convicted of the offence punishable under Section 138 of the Negotiable Instruments Act. Consequently, he convicted the respondent and imposed a sentence of simple imprisonment for 3 months and a fine of Rs. 500/- in default to undergo simple imprisonment for one month. It was further directed that if the fine amount was realized, an amount of Rs. 80,000/- be paid to the complainant as compensation.
4. That judgment of conviction and sentence was challenged by the respondent in Criminal appeal No. 42 of 2001. In appeal, the accused sought for cross-examination of the complainant and also permission to adduce evidence. That prayer was allowed by the learned Appellate Judge. After cross-examining the complainant, the accused examined himself as DW. 1. A vague contention was taken by the respondent before the Appellate Court that he had kept certain signed blank cheques in his office and that one of such cheques, might have been taken by Vasanthkumar In effect his contention was that the said Vasanthkumar had stolen the cheque and had given it to the complainant. It was also contended by him in his evidence before the Appellate Court that when he asked Vasanthkumar about cheque leaves, the latter told that nothing would happen. Rejecting his contention, the learned Sessions Judge, held that the cheque had been issued for discharge of the loan.
5. There was another contention taken by the respondent. It was that there was no proper authorization by the Company empowering the Managing Director to file the complaint and to conduct the case That contention was upheld by the learned Sessions Judge relying on the observation of this High Court in Dr. Uma Gangadhar v. Classic Coffee and Spices Private Limited, Chichmagalur, to the effect that in order to launch prosecution or any legal proceedings on behalf of the Company, it is just and necessary that there should be a valid sanction and authorisation by the Company and merely by designation of a Manager, it would be impermissible in law to launch the prosecution without a specific authorisation.
6. In the result, holding that there was no proper authorisation, the learned Ap
