Managing partners are vicariously liable for offences committed by firms under Section 138 of the NI Act.

ORDER :

This revision petition is at the instance of the 2nd accused in ST No.52 of 2013 on the file of Judicial First Class Magistrate-II, Manjeri, assailing the judgment in Crl.Appeal No.299 of 2015 on the file of Sessions Court, Manjeri, which upheld his conviction under Section 138 of the Negotiable Instruments Act (hereinafter referred as ‘the NI Act’), though his substantive sentence of six months was reduced into a single day till rising of court, while retaining the fine amount and its default sentence.

2. ST No. 52 of 2013 was based on a private complaint filed by the complainant/1st respondent, a Private Limited Company, by name M/s.Babin Technologies Pvt.Ltd., for dishonour of Exts. P2 and P3 cheques signed and issued by the revision petitioner (A2) in his capacity as the managing partner of M/s.Fortis Marketing (A1).

3. On appearance of the accused before the trial court, particulars of offence was read over and explained, to which they pleaded not guilty. Thereupon, PWs 1 and 2 were examined and Exts.P1 to P11 were marked from the side of the complainant/1st respondent. On closure of complainant’s evidence, the accused were questioned under Section 313 of Cr.P.C. and they denied all the incriminating circumstances brought on record. Exts.D1 to D5 were marked as exhibits from defence side.

4. On analysing the facts and evidence and on hearing the rival contentions from either side, the trial court found both the accused guilty under Section 138 of the NI Act and they were convicted thereunder. Since the 1st accused was a partnership firm and the 2nd accused was its managing partner, no separate sentence was awarded on the 1st accused. The revision petitioner (A2) was sentenced to undergo simple imprisonment for a period of six months and fine of Rs.3,99,500/- with a default sentence of simple imprisonment for a further period of six months.

5. Aggrieved by the conviction and sentence, the revision petitioner (A2) preferred Crl. Appeal No. 299 of 2015, and the appellate court dismissed the appeal, finding no reason to interfere with the conviction and sentence imposed on the revision petitioner (A2) by the trial court, against which he has preferred this revision.

6. At this juncture, it is pertinent to note that no appeal has been preferred by the 1st accused firm against the conviction under Section 138 of the NI Act, and hence it has become final.

7. Now this Court is called upon to verify the legality, propriety and correctness of the conviction and sentence imposed on the revision petitioner.

8. Heard learned counsel for the revision petitioner and learned counsel for the 1st respondent/complainant.

9. Learned counsel for the revision petitioner is challenging the competence of PW1 to prefer the complaint on behalf of the complainant company, on the strength of Ext.P1 power of attorney. According to him, Ext.P1 power of attorney was executed by the Managing Director of the complainant company, and the resolution of the company which authorised the Managing Director to execute such a power of attorney was not produced, to show that the Managing Director was empowered to execute such a power of attorney in favour of PW1. But PW1 deposed that the company resolved to authorise the Managing Director, for issuing power of attorney in favour of PW1. Moreover, he was the PRO of that company and he was aware of the disputed transactions, and he was competent to give evidence as an agent of the company, on the strength of Ext.P1. The revision petitioner is representing the 1st accused, as its managing partner. The 1st accused was convicted under Section.138 of the NI Act, finding competency of PW1 to file the complaint as well as to give evidence, with respect to the disputed transaction. Since the 1st accused has opted not to challenge the conviction based on the factual findings of the trial court, the revision petitioner, who is representing the firm as its managing partner, cannot take up a contention exceeding the contention