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2019 Supreme(Kar) 1696
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
JOHN MICHAEL CUNHA, J.
Sri. Mohammed Shabbir, M/s Gold Enterprises and Property Developers – Petitioner
Versus
Sri. Mohammed Azar Rafiq S/o M.R. Mohammed Rafiq Sait – Respondent
Criminal Petition Nos. 3944, 3945, 3946 of 2016
Decided On : 09-09-2019
Advocate Appeared:
For the Petitioner: Sri. Vishwanath R. Hegde.
For the Respondent: Sri. S.V. Giridhar.
Headnote:
Negotiable Instruments Act, 1881 - Section 138 - Partnership Firm Act, 1932 - Section 18 – Criminal Procedure Code - Section 319 - Power-of-attorney – Dishonor of cheques - Whether applications under section 319 Criminal Procedure Code could be entertained at appellate stage - Whether in facts and circumstances of case proposed party could be proceeded against for offences under section 138 of N.I. Act - Whether firm could be proceeded against for offence under section 138 of N.I. Act at stage of appeal - Whether word evidence used in Section 319(1) Criminal Procedure Code has been used in a comprehensive sense and includes evidence collected during investigation or word evidence is limited to evidence recorded during trial - Petitioner as power-of-attorney of Investments a partnership firm having its office at J.C. Road and also representing himself as Managing Partner of Gold Enterprises and Property Developers executed an agreement of sale in favor of respondent herein/complainant - As per said agreement petitioner agreed to sell of undivided share right title and interest in land bearing Municipal Corporation situated in Millers Road for a sale consideration - Apart from said agreement of sale he also entered into another agreement for construction for a total price - As per terms and conditions of said agreement complainants jointly paid an aggregate amount to petitioner under various cheques – Held, Constitution Bench has already held that after committal cognizance of an offence can be taken against a person not named as an accused but against whom materials are available from papers filed by police after completion of investigation - Such cognizance can be taken under Section 193 Criminal Procedure Code and Sessions Judge need not wait till evidence under Section 319 Criminal Procedure Code becomes available for summoning an additional accused - Section 319 Criminal Procedure Code significantly uses two expressions that have to be taken note of Inquiry Trial - As a trial commences after framing of charge an inquiry can only be understood to be a pre-trial inquiry - Inquiries under Sections 200, 201, 202 Criminal Procedure Code and under Section 398 Criminal Procedure Code are species of inquiry contemplated by Section 319 Criminal Procedure Code - Materials coming before Court in course of such enquiries can be used for corroboration of evidence recorded in court after trial commences for exercise of power under Section 319 Criminal Procedure Code and also to add an accused whose name has been shown in Column 2 of charge-sheet - In view of above position word evidence in Section 319 Criminal Procedure Code has to be broadly understood and not literally as evidence brought during a trial - In light of above proposition of law and more importantly in view of failure of complainant to comply with preconditions prescribed under sections 138 and 142 of N.I. Act, direction issued by Appellate Court to impaled Firms and to proceed against Firms namely Gold Enterprises and Gold Enterprises and Property Developers being contrary to law and settled canons of justice cannot be sustained - In that view of matter impugned order passed by Appellate Court allowing applications filed by complainant under section 319 Criminal Procedure Code and consequent remand of matter to trial court to impaled Firms as party to proceedings cannot be sustained - However insofar as finding recorded by Appellate Court that complaint as instituted by respondent/complainant without making Firm a party was not maintainable does not call for any interference - Said finding is based on sound principle of law and provisions of section 142 of N.I. Act - Said finding therefore requires to be confirmed - Petitions are allowed
ORDER :
1. These three Criminal Petition Nos. 3944, 3945 and 3946 of 2016 are directed against the impugned order dated 18.01.2016 in Crl. A. No. 992/2015, Crl. A. No. 993/2015 and Crl. A. No. 994/2015 respectively passed by learned LVI Addl. City Civil & Sessions Judge, Bengaluru City. Since common questions of law and facts are involved in the matters, all these petitions are disposed of by this common order.
2. The essential facts necessary for disposal of these petitions are as follows:-
(i) Petitioner (herein referred to as ‘accused’) as power-of-attorney of M/s. Anushka Investments, a partnership firm, having its office at J.C. Road, Bangalore and also representing himself as the Managing Partner of M/s. Gold Enterprises and Property Developers, executed an agreement of sale dated 2.1.2018 in favour of respondent herein/complainant. As per the said agreement, the petitioner agreed to sell 6.76% of undivided share, right, title and interest in the land bearing Municipal Corporation No. 17/1, situated in Millers Road, Bangalore-560046 for a sale consideration of Rs. 33,75,000/-.
(ii) Apart from the said agreement of sale, he also entered into another agreement for construction dated 2.1.2008 for a total price of Rs. 76,25,000/-. As per the terms and conditions of the said agreement dated 2.1.2008, the complainants jointly paid an aggregate amount of Rs. 64,50,000/- to the petitioner under various cheques.
(iii) Petitioner/accused being unable to perform his part of the obligation under the aforesaid agreement of sale and agreement of construction, sought for cancellation of the agreements and offered to refund the amount of Rs. 64,50,000/- to the complainants and accordingly, the parties entered into an Memorandum of Understanding dated 19.12.2011 whereunder the petitioner/accused agreed to repay a sum of Rs. 64,50,000/- with an additional amount of Rs. 80,50,000/- aggregating to Rs. 1,45,00,000/- and issued three post-dated cheques in favour of the complainants for Rs. 60,00,000/- and Rs. 71,00,000/- and Rs. 14,00,000/- respectively.
(iv) The said cheques, when presented for encashment were dishonoured for insufficient funds.
(v) The complainants issued a joint demand notice dated 06.11.2012 calling upon the petitioner/accused to pay amount of the cheques.
(vi) Petitioner/accused having failed to comply with the demand, respondent/complainants presented three separate complaints before the court below under section 138 of Negotiable Instruments Act, 1881 (for short N.I. Act) which were numbered as C.C. No. 3510/2013, C.C. No. 3511/2013 and C.C. No. 3512/2013 respectively.
(vii) In support of their claim, respective complainant in C.C. No. 3510/2013 examined himself before the Trial Court as PW-1 and produced in evidence 11 documents as per Ex.P1 to Ex.P11. In C.C. No. 3511/2013 and C.C. No. 3512/2013, 12 documents each were marked as Ex.P1 to Ex.P12.
(viii) In rebuttal, petitioner/accused examined himself as DW-1 and did not produce any documentary evidence.
3. In the course of trial, petitioner/accused took up the following contentions:-
(i) That the cheques in question belonged to M/s. Gold Enterprises - a firm, but the complaints were filed against the accused in his individual capacity. Since the cheques did not belong to the personal account of accused, the petitioner/accused is not liable to pay the amount of the cheques.
(ii) Cheques were drawn in the account maintained by M/s. Gold Enterprises which was a firm and since the firm was not arrayed as a party, the complaints were not maintainable.
(iii) The consolidated notice demanding payment of three separate cheques was not in accordance with section 138 of N.I. Act and based on the said notice, the complaints could not have been maintained.
4. The Trial Court negatived these contentions and by its order dated 02.07.2015, found the accused guilty of the above offences under section 138 of N.I. Act and accordingly, sentenced him to pay fine of Rs. 65,10,000/- in default, to under
