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SUPREME COURT OF INDIA
Ranjana Prakash Desai and N.V. Ramana, JJ.
Vinita S.Rao —Appellant
versus
M/s. Essen Corporate Services Pvt. Ltd. & Anr. —Respondents
Criminal Appeal Nos.2065 to 2066 of 2014 (Arising out of SLP(Crl.) Nos.4682 to 4683 of 2012)
Decided on 17.9.2014
For the Appellant:Mr. Gurukrishna Kumar, Sr. Advocate, Mr.Nikil Nayyar, Mr. Ambuj Agrawal, Mr. Akanksha & Mr. Dhananjay Baijal, Advocates
For the Respondents: Mr. Ajay Bhargava, Mr. Vanita Bhargava, Mr. Rajiv Bhatnagar, Mr. Nitin Mishra for Khaitan & Co.
IMPORTANT POINT
Dishonour of cheque—Complaint under Section 138 of NI Act can be filed through power of attorney holder.
Headnote:Negotiable Instruments Act, 1881—Sections 138 and 142—Criminal Procedure Code, 1973—Section 200—Dishonour of cheque—Complaint under Section 138 of NI Act can be filed through power of attorney holder—Power of attorney holder being husband of appellant has witnessed all transactions and he possesses due knowledge about them—Due to her ill-health, complainant was unable to come to court and complaint was being filed by her power of attorney holder who had knowledge of transactions—Power of attorney holder’s sworn statement was recorded and summons was issued—This exercise is in complete accord with Section 200 of Cr.P.C.—At that stage, power of attorney holder had stepped in shoes of appellant—Matter remanded to High Court for decision on question as to whether cheques in question were issued as a security or for the purpose of repayment of legally recoverable debt. (Paras 19, 21, 22 and 24)
Result: Appeals disposed of. Matter remanded to High Court for fresh consideration.
JUDGMENT
Ranjana Prakash Desai, J.—Leave granted.
2. The challenge in this appeal is to the orders dated 7/3/2012 and 12/3/2012 passed by a learned Single Judge of the Karnataka High Court allowing the criminal revision petition filed by the respondents under Section 397(1) of the Code of Criminal Procedure, 1973 (“the Code”). The prayer made by the respondents in the criminal revision petition was for setting aside order dated 17/9/2009 passed by the Fast Track Court (Sessions)-V, Bangalore in Criminal Appeal No.1897 of 2006 and also order dated 9/11/2006 passed by the Court of the XVth Addl. Chief Metropolitan Magistrate, Bangalore in C.C. No.4116 of 2004.
3. The appellant is the original complainant. The respondents are original accused 1 and 2 respectively. Respondent 1 is a private limited company and respondent 2 is its Managing Director who looks after the day-to-day affairs of respondent 1 company. The respondents are financial consultants and sub-brokers who are engaged in the business of trading inter alia on the National Stock Exchange, the Bombay Stock Exchange and the Bangalore Stock Exchange.
4. The appellant filed a complaint for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (‘the NI Act’) against the respondents. Gist of the complaint needs to be shortly stated.
The appellant and her husband had discussions with respondent 2 regarding trading in 10000shares of Hindustan Lever Limited belonging to the appellant. The respondents advised the appellant to entrust the said 10000 shares to them and it was represented that those shares would not be sold outright; that the respondents would utilize their expertise and knowledge of the markets to sell and buy back the shares regularly and they would thereby earn profits for the appellant. The shares were to be held in trust and any dividends and benefits accruing on the 10000 shares to the appellant were to be made over to her and, at the same time, the respondents undertook to trade in the shares when time was favourable, after studying market trends to make profit for the appellant. It was asserted that the appellant could, at any time, cease trading and take back the said 10000 shares. On this understanding, the appellant entrusted the said 10000 shares of Hindustan Lever Limited to the respondents by transferring the shares from her Demat Account to that of the respondents. On 05/03/2002 the respondents addressed a letter acknowledging receipt of the said 10000 shares. In the month of April, 2002, the appellant had a doubt about the intention of the respondents. On 25/04/2002 the appellant addressed a letter to the respondents requesting them to return the said 10000 shares. On 20/05/2002 the respondents replied, undertaking to return the said shares in lots of 500/10000 citing difficulties between them and their main broker as reason for delay. Another letter was addressed by the respondents undertaking that the first lot of 500 shares would be returned by 24/05/2002 and all 10000 shares would be returned by 30/06/2002. A separate letter was addressed in relation to the monies due to the appellant on account of dividends accruing and profits from transactions in the shares. On 25/06/2002 the respondents sought extension of time to return the shares and confirmed that a sum of Rs.1,54,000/- was due to the appellant on account of dividends and profits from share transactions. By August, 2002, the respondents returned only 1460 shares instead of 6000 shares as agreed by them. The appellant addressed a letter demanding the balance 8540 shares. The respondents sought time till 31/12/2002 to return the shares and, in return for extension of time, offered to give cheques as surety for the value of shares being Rs.20,75,220/- as well as Rs.1,79,500/- being the amounts due towards dividends and profits from transactions in shares. The appellant agreed to and extended time till 31/12/2002. On 26/12/2002, the respondents returned another 10
