Bangalore District Court
Srimatha Mahila Sahakari Bank ... vs Smt. Aishvarya N on 17 February, 2025
1
CC No.17936/2022
KABC030467482022
IN THE COURT OF THE XXVI ADDL. CHIEF JUDICIAL
MAGISTRATE, AT: BENGALURU
Present : Smt. NIRMALA .S.,
B.A.L., LL.M.,
XXVI Addl., Chief Judicial
Magistrate, Bengaluru.
DATED THIS THE 17th DAY OF FEBRUARY 2025
JUDGMENT U/S 355 OF Cr.P.C.1973
1. Serial number : C.C. No.17936/2022
2. Name of the : Srimatha Mahila Sahakari
complainant Bank Niyamitha
# 403/803, 10th Cross, 8th
Main, Shastrinagar,
Bengaluru-560 028.
Rep. by its
authorized signatory
(By C.S.S. Advocate)
3. Name of the accused : Smt. Aishvarya N.
D/o Nandyappa
Aged about 49 Years,
R/at No.671, 4th Main,
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CC No.17936/2022
11th Cross, Vyalikaval,
Behind Muneeshwara
Temple, Bengaluru-560 003.
(By Sri. K.R.P. Advocate)
4. The offence : Section 138 of the N.I. Act
complained of or
proved
5. Plea of the accused : Pleaded not guilty
6. Final order : Accused is acquitted
7. Date of order : 17-02-2025
******
JUDGMENT
This complaint is filed by the complainant i.e., Srimatha Mahila Sahakari Bank Niyamitha against the accused for the offence punishable U/s.138 of Negotiable Instruments Act.
2. The brief facts of complainant case is that, the accused approached complainant bank seeking Loan from the bank 3 CC No.17936/2022 for the business improvement and availed the Loan under USL-4285 of Rs.2,00,000/- on 06-02-2019 and accused agreed to pay the said loan in 36 equated monthly installments regularly without fail and accused was paying the paltry sum now and then, but accused was a chronic defaulter and accused was postponing the payment of the debt due to the bank. On personal approach by the bank, accused issued a cheque bearing No.166784 dated 18-04- 2022 for a sum of Rs.2,01,140/- drawn on SVC Co-Operative Bank Limited, Malleshwaram Branch, Bengaluru. Further it is stated that when the complainant has presented the aforesaid cheque for encashment through its banker, it was dishonoured as 'Funds Insufficient' on 19-04-2022. Further even though the complainant brought the same fact to the knowledge of the accused through the legal notice dated 29-04-2022 by RPAD, it was returned with shara 'no such person', but notice sent through courier 4 CC No.17936/2022 on 04-05-2022 was duly served on the accused and even though it is served to the accused. Further the said notice has been sent through e-mail and Whats App to the accused, but the accused has neither replied nor complied with the demand made in the legal notice. Therefore the complainant aggrieved by the acts of the accused filed this complaint for dishonour of the cheque issued by the accused towards the discharge of legally recoverable debt. As such is the case failure on the part of the accused to repay the cheque amount the complainant has approached the court for the reliefs claimed in the complaint.
3. After filing this complaint, this court took cognizance of the offence and registered the criminal case against the accused and summons was issued to her. In response to summons, she appeared before the court through her counsel and she was enlarged on bail. Thereafter plea was recorded and accused pleaded not guilty. 5
CC No.17936/2022
4. The complainant has represented by its Recovery officer, the complainant by name Smt. K.R. Kathyayini and she has been examined as PW1 and she has produced 26 documents as per Ex-P1 to 26.
5. On perusal of entire case file and evidence available on record the following points would arise for my consideration are:
1) Whether the complainant proves that, the accused to due discharge of legally recoverable debt or other liability had issued the alleged cheque bearing No.166784 dated 18-04-2022 for Rs.2,01,140/- drawn on SVC Co-Operative Bank Limited, Malleshwaram Branch, Bengaluru?
2) Whether the complainant proves that, on presentation of said cheque, same was returned unpaid as "Funds Insufficient" and despite of 6 CC No.17936/2022 giving legal notice, she failed to pay the cheque amount, thereby she committed an offence punishable under section 138 of NI Act ?
3) What order?
6. Heard on both sides and I have also perused the entire materials available on record.
7. My findings on the above points are as under:
Point No.1 : In the Negative, Point No.2 : In the Negative, Point No.3 : As per the final order for the following:-
REASONS POINTS NO.1 and 2 :
Both points 1 and 2 are taken up together for common discussion to avoid repetition of facts.
8. It is the case of the complainant that, the accused approached complainant bank seeking Loan from the bank 7 CC No.17936/2022 for the business improvement and availed the Loan under USL-4285 of Rs.2,00,000/- on 06-02-2019 and accused agreed to pay the said loan in 36 equated monthly installments regularly without fail and accused was paying the paltry sum now and then, but accused was a chronic defaulter and accused was postponing the payment of the debt due to the bank. On personal approach by the bank, accused issued a cheque bearing No.166784 dated 18-04-2022 for a sum of Rs.2,01,140/- drawn on SVC Co- Operative Bank Limited, Malleshwaram Branch, Bengaluru, towards the outstanding amount, but when the complainant presented the said cheque, the same was dishonoured for the reason 'Funds Insufficient' on 19-04-2022. Further even though the complainant issued the legal notice on 29-04-2022 by intimating the dishonour of the cheque to the accused, the same was not served on the accused, but the notice sent to the accused on courier 8 CC No.17936/2022 on 04-05-2022 duly served on the accused. She has neither replied nor complied the demand made in the legal notice. Therefore, the accused having committed the offence punishable U/s.138 of N.I. Act. Hence, the complainant has come before the court with this complaint.
9. To prove the contentions of the complainant the Recovery officer of the complainant by name Smt. K.R. Kathyayini has been examined as PW1. PW-1 has filed his examination-in-chief by way of affidavit which is replica of complaint averments. Further PW-1 has produced Ex-P2 cheque which was issued by the accused towards discharge of loan amount of Rs.2,01,140/-. On presentation of the said cheque same has been returned as per the Ex.P-3 return memo as "Funds Insufficient". Further as per Ex- P4 the complainant issued legal notice on 29-04-2022 through RPAD to the accused, the same was not served to the accused, it can be seen from Ex-P-9, Ex.P-10 and 9 CC No.17936/2022 Ex.P-11. The Ex.P-11 shows that 'no such person' in the address. The complainant has also produced other document such as Ex.P-1 i.e., the Authorization letter, Ex.P-13 i.e., the loan application, Ex.P-14 is the USL and OSL Bond, Ex.P-15 is the Loan acceptance letter, Ex.P-16 is the Loan Process note, Ex.P-17 is the Loan agreement, Ex.P-18 is the On Demand Promissory Note Ex.P-19 is the Certificate U/s.65B, Ex.P-20 is the Print out showing mail has been sent to accused with regard to court summons and Ex.P-21 is the printed document summons served to the accused through whats App.
10. Before going to the merits of this case first of all I would like to glance over the law pertaining to the instant case. Admittedly the present case filed under section 138 of Negotiable Instruments Act to bring home guilt against the accused, the complainant must prove the 10 CC No.17936/2022 following ingredients of Section 138 of Negotiable Instruments Act.
i) That, there is a legally enforceable debt.
ii) That the cheque was drawn from account of bank for discharge in whole or in part of any debt or other liability which presuppose a legally enforceable debt;
iii) Cheque so issued had been returned due to insufficiency of funds.
11. In a proceeding under section 138 of NI Act, the first and foremost ingredient is that, the alleged cheque must be drawn on account maintained by the accused and signature on alleged cheque belongs to her. Admittedly the alleged cheque and signature belongs to accused. The accused has not at all disputed about the signature as well as the cheque in the cross-examination.11
CC No.17936/2022
12. On perusal of Ex-P2 cheque and bankers memo Ex-P3 it is clear that, on presentation of said cheque it was returned as "Funds Insufficient". The complainant has issued legal notice through RPAD as required under section 138 (b) & (c) of NI Act to the address of the accused, but the said notice was not served to the accused therefore it is very clearly appears on perusal of the Ex.P-5 and 6, Ex.P-9, 10 and 11 postal receipts and returned RPAD covers. Further on perusal of the Ex.P-7 and 8 shows that the notice has been sent to accused on 04-05-2022. But in the same Ex.P-8 it is show that on 08-05-2022 date has been mentioned, but further on perusal of the Ex.P-8 there is no signature shown in the receiver column. Here with regard to the service of the legal notice is concerned as far as service of legal notice is concerned, it is the main defence taken by the defence counsel that the legal notice has not been sent to the present address of the accused even though 12 CC No.17936/2022 the complainant very well knows about present address of the accused. As such the compliance of notice U/s.138b is not complied. With this regard the complainant advocate has argued that the notice has been sent to the correct address of the accused, but the same has been returned as 'no such person in the address' but the notice was sent on 04-05-2022 though courier, but the same was served to the accused. With this regard I have perused the address mentioned by the complainant in the cause title that it shows that Smt. Aishvarya N. D/o Late Nandyappa, aged about 49 years r/at No.671, 4th Main, 11th Cross, Vyalikaval, Behind Muneeshwara Temple, Bengaluru-560 003. Further I have perused the address mentioned in the Ex.P-4 i.e., the legal notice dated 29-04-2022 which shows the same address. Further with this regard I have perused the loan application given by the accused to the complainant as per Ex.P-13 where it shows No.671, 4th Main, 11th Cross, 13 CC No.17936/2022 Vyalikaval, Behind Muneeshwara temple. Further with this regard I have perused the cross examination of the PW-1. In the cross-examination of the PW-1 it was admitted by the PW-1 that "in the address shown in the Ex.P-22 and 23 where the accused is residing at present and the recovery team officers has been to the same address for recovery and to the same address the demand notice was also sent. Further the PW-1 admits that to the address mentioned in the Ex.P-22 and ex.P-23 legal notice has not been sent. Further the PW-1 deposes that as the address of the accused was changed hence it is sent to the changed address of the accused. Further the PW-1 denies that even though they know about the new address of the accused, only with a intention to not serve the notice to the accused, they have sent the notice to the old address. Further PW-1 admits that the address in the Ex.P-22 and 23 are the new address and whatever the address stated in the Ex.P-4 is the old 14 CC No.17936/2022 address. Further she admits that at the time of issuing notice as per Ex.P-4 they were having the new address of the accused. Further she admits that the notice sent to Ex.P-7 and 8 through courier was also not served to the accused". Here after perusing the admission made by the PW-1 I have perused the Ex.P-22 and 23. On perusal of the same it is found that address of the accused is No.10, New No.23 East Link Road, 2nd Cross, B Street, Malleshwaram, Bengaluru. Here on perusal of the documents Ex.P-4, 9, 10, 13 it is very clearly appears that the addresses are same where the notice was issued to the accused as per Ex.P-4, Ex.P-9 and Ex.P-10 but same was not served to the accused as "item returned and no such persons in the address". Further at this point of time on perusal of the above facts and the evidence on record it is very clearly shows that whatever the address mentioned in the Ex.P-4, 9 and 10 are the old address of the accused. whereas on perusal of the 15 CC No.17936/2022 admission made by the PW-1 that whatever the address mentioned in the Ex.P-22 and Ex.P-23 are the new address of the accused. As such further it is also clear that at the time of issuing the legal notice Ex.P4, 9 and 10 the complainant very well know about the present address of the accused. Here it is the very important point that has to be discussed that whatever the address in the Ex.P-4, 9 and 10 are the old address of the accused and the accused intimated the complainant about the new address so that the new address is forthcoming in the Ex.P-22 and 23. As such is the case when the complainant very well know about the present address of the accused there is no question arises and also there is no need for the complainant to send the legal notices to the accused to her old address. Further it is the common sense of the prudent man that when the person is residing in the new address there is no need for sending the legal notice to the old address, definitely where 16 CC No.17936/2022 the alleged person is not residing at present. Further admission of the PW-1 very clearly shows that even though the complainant very well know about the new address of the accused the notice has been sent to the old address of the accused. Thus the legal notice is not been served to the accused. Hence it can be said that the complainant has not complied the requirements U/s.138b of the N.I.Act.
13. Further with this regard defence advocate has furnished the citation i.e., Engineering Control Vs Banday Infratech Pvt. Ltd. of the Hon'ble High Court of Jammu and Kashmir where it is held by the Hon'ble court that;-
"12) The aforesaid observations were relied upon by the Supreme Court in the case of C. C. Alavi Haji (supra). However, it was observed by the Supreme Court that when the notice is sent by registered post by correctly addressing the drawer of the cheeque, the mandatory requirement of issue of notice in terms of Clause 17 CC No.17936/2022
(b) of proviso to Section 138 of the Act stands complied with. What the Supreme Court has emphasized is that the notice should have been sent on the correct address of drawer of the cheque. It is only then it can be said that notice has been received by the drawer of the cheque.
13) In Harman Electronics Private Limited and another vs. National Panasonic India Private Ltd, (2009)1 SCC 720, the Supreme Court has, while deliberating on the issue, observed as under:
"13. It is one thing to say that sending of a notice is one of the ingredients for maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the ingredients thereof are required t be proved. What would constitute an offence is stated in the main provision. The proviso appended thereto, however, imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken. If the ingredients for constitution of the offence laid down in provisos(a), (b) and (c) appended to Section 138 of the Negotiable Instruments Act are intended to be applied in favour of the 18 CC No.17936/2022 accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action for filing a complaint. As it is only on receipt of the notice that the accused at his own peril may refuse to pay the amount. Clauses (b) and ( c) of the proviso to Section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would".
15. In the instant case, the trial court record clearly shows that the address of the petitioner/accused is not correctly mentioned either in the complaint or in the notice of demand. It is for this reason that the respondent/complainant was directed by the trial Magistrate to furnish fresh particulars of the petitioner/accused. The address of the petitioner is shown as "Vasundra Enclave, Jammu" which is patently incorrect. The second address of the petitioner shown in the notice of demdn and the complaint as "Anand Prabt, New Delhi" is incomplete, inasmuch as it lacks necessary details that would enable a postman to locate the addresses. Once the material on record clearly suggests that the statutory notice of demand was sent by the respondent/complainant on a wrong address, the presumption of receipt of notice by the 19 CC No.17936/2022 petitioner/accuses does not arise. Thus, the pre- condition of filing a complaint under Section 138 of the N.I Act of sending a statutory notice has not been satisfied in the present case. Therefore, no cause of action arose in favour of the respondent/complainant to file the subject complaint. He, therefore, could not have instituted the complaint nor the trial court could have taken cognizance of the offence and issued process against the petitioner". On perusal of the above citation it very clearly apply to the circumstances of this case. As such adopting the ratio in this case it can be said that there is no cause of action arose in favour of the complainant to file the complaint. As such it is clear that the materials on record does not disclose commission of offence U/s.138 of N.I.Act against the accused. Therefore, even though notice has been sent to the accused, but that is not for the present address of the accused, as such the presumption U/section 27 of General Clauses Act and 114 of Indian Evidence Act, will not come 20 CC No.17936/2022 into play and thereby court cannot safely presume the service of legal notice. As such, it can be conveniently infer that, there is no service of legal notice to the address of the accused. Hence, it cannot be taken that the legal notice deemed to be served on accused.
14. Further with regard to the Sec.138 of N.I.Act is concerned with regard to the presumption as the accused has not disputed cheque and the signature in it, the presumption U/s.139 of NI Act has to be drawn as held by the Hon'ble Supreme Court in Rangappa vs. Mohan reported in AIR 2010(11) SCC 441.
15. It is true that, once the cheque relates to the accused and her signature on the said cheque is proved an initial presumption as contemplated U/s.139 of Negotiable Instruments Act has to be raised by the court in favour of the complainant. Sec.139 of the Negotiable Instrument Act 21 CC No.17936/2022 contemplates that it shall be presumed unless contrary is proved that the holder of the cheque received the cheque of the nature referred to in the Sec.138 for the discharge of the whole or in part any debt or liability. The presumption referred to U/s.138 of Negotiable Instruments Act is mandatory presumption and in general presumption.
16. The complainant Srimatha Mahila Sahakari Bank Niyamitha is represented through its Authorized Signatory by name Smt. K.R. Kathyayini In order to prove the same the complainant has produced the Authorization letter authorising the P.W.1 to prosecute the case. The Ex.P-1- Authorization letter which is clearly established that the complainant bank has issued the authorisation letter to the PW-1. Hence, the PW-1 has got authority to represent the instant case on behalf of the complainant Society. Further to avail the presumption the complainant has been examined herself as PW-1 and marked exhibits Ex.P-1 to 26. Ex.P-1 is 22 CC No.17936/2022 the Authorisation letter for the PW-1 to prosecute the case. Ex.P-2 is the cheque bearing No.166784 dated 18-04-2022. Ex.P-3 is the endorsement dated 19-04-2022, Ex.P-4 is the legal notice as the same is issued as a return memo for 'Funds Insufficient'. On perusal of the these documents it very clearly appears the accused in this case has availed the loan of Rs.2,00,000/- and the cheque was issued for the amount of Rs.2,01,140/- but when the same was presented before the bank for encashment but the same has been returned with the endorsement 'Funds Insufficient'. Further with this regard complainant has issued the notice to the complainant to the address that Smt. Aishwarya N. D/o Late Nandyappa aged about 49 years r/at No.671, 4th Main, 11th Cross, Vyalikaval, Behind Muneeshwara temple. Further notice was not served to the accused and the same was returned stating that 'no such person in the address'. Therefore, the notice was returned back to the complainant. 23
CC No.17936/2022
17. In support of the contentions complainant has filed the citation Sampelly Sathya Narayana Rao Vs Indian Renewable Energy Development Agency Ltd in which it is held by Hon'ble Supreme Court of India that;-
"Sec.482 r/w Sec.138 Negotiable Instrument Act 1881- Quashing petition-court to proceed on the basis of complaint- defence of accused cannto be considered at this stage- court does not adjudicate upon a disputed question of fact-once question of the cheque and signature thereon are admitted presumption of legally enforceable debt in favour of the holder of the cheque arises- accused may rebut the presumption but main statement of the accused may not sufficient".
Here the citation furnished by the complainant with regard to issuance of the cheque and signature thereon if admitted by the accused the presumption of legally enforceable debt in favour of the holder the cheque arises is very well applicable to the cases filed U/s.138 of N.I.Act universally. As such the same is applicable to the case of the complainant also. 24
CC No.17936/2022
18. In this case before going to the merits of the case and defence taken by the accused, here at this point it is very much necessary to mention the provision U/s.138 of N.I.Act which reads as follows:
138. Dishonour of cheque for insufficiency, etc., of funds in the account.--
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:Provided that nothing contained in this section shall apply unless--(a)the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is 25 CC No.17936/2022 earlier;(b)the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and(c)the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.Explanation.--For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.]
19. Here in view of the above section it is very clearly discussed in this case that the complainant already proved the issuance of the cheque by the accused and the same was also admitted by the accused in the statement recorded U/s.313 of Cr.P.C of the accused recorded in this case and hence the complainant also the accused has complied the main provision and also complainant has complied Sec.138(a) of N.I.Act.
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CC No.17936/2022
20. Further with regard to the compliance of Sec.138(b) is concerned complainant has issued a notice to the accused and demanded for the payment of the loan amount by giving notice to the drawer of the cheque for the receipt of information by him from the bank regarding the return of the cheque as unpaid. Here the complainant proved that the cheque was issued by the accused and the same presented before the bank and the bank has issued the endorsement dated 19-04-2022. Later on the complainant has issued legal notice dated 29-04-2022 and the same was returned as 'no such person in the address'. For that it is the defence of the defence counsel that whatever the notice issued by the complainant is not issued to the present address of the accused, but the notice is issued to the old address. Further even though the the complainant know about the new address of the accused. With this regard I have perused the cross-examination of the complainant in 27 CC No.17936/2022 which the PW-1 very clearly admits that she knows that accused is residing in the address mentioned in the Ex.P-22 and Ex.P-23 and even the recovery agent has been to the address stated in the Ex.P-22 and Ex.P-23 and he also admits that complainant has not send demand notice to the accused to the address mentioned in the Ex.P-22 and Ex.P-23. Further she also admits that whatever the address mentioned in the Ex.P-22 and Ex.P-23 is the new address of the accused and whatever the address mentioned in the Ex.P-4 is the old address of the accused. And also she admits that at the time of issuing of the notice the complainant has got the knowledge about the new address of the accused.
21. On perusal of the evidence of the PW-1 it is very clear that at the time of issuing of the demand notice the accused very well know about the present and correct address of the accused, but willing fully they have issued notice to the 28 CC No.17936/2022 accused to the old address. With this regard as already discussed above in this case as per the judgment passed by the Hon'ble Court in Engineering Control Vs Banday Infratech Pvt. Ltd held by the Hon'ble court that;-
"once the material on record clearly suggest that the statutory notice of demand was sent by the respondent/complainant on a wrong address of presumption of receipt of notice by the petitioner/accused does not arise. Thus pre condition of filing a complaint U/s.138 of N.I.Act of sending a statutory notice has not been satisfied in the present case. Therefore no cause of action arose in favour of the respondent/complainant to file the subject complaint".
22. Further in the judgment passed by the Hon'ble High Court of Judicature at Madras in S. Balamani Vs Vijayashanthi on 23-07-2015. The learned counsel for the petitioner also relied upon the judgment of this Court in the case of G. Thiagarajan v/s A. Annadurai (Crl.A.807 of 29 CC No.17936/2022 2009 dated 01.08.2012), wherein the relevant portion of the order reads as follows:-
Now this Court has to decide whether the notice was issued under sec.138 Proviso (b) of the Negotiable Instruments Act and whether cause of action arose? Admittedly, notice was issued within the stipulated time from the date of returning the cheque under Ex.P2 return memo. But in the notice, the respondent's address had wrongly been mentioned. The appellant, in his cross examination, himself admitted that the accused was working in P.S.G College of Technology. While perusing Ex.P.3 notice, it was mentioned as Thiru.C.Anandurai, Lecturer in Physics, P.S.G College of Science and Arts, Peelamedu, Coimbatore-641 004. In the returned cover also, the above said address was mentioned, which was returned s sender. The appellant himself admitted that the notice was sent to the wrong address of the respondent. While perusing the complaint, it was specifically mentioned as C.Annadurai, son of Arumugam, previously working as a Lecturer in Physics in P.S.G College of Arts and Sciecne and now residing at Door No.22/7, Housing Unit, Near P.S.G Hospital, Peelamedu, 30 CC No.17936/2022 Coimbatore. While the appellant herein had admitted that the accused was working in the PSG College of Technology, the notice was sent to the wrong address. Hence, the notice was not issued under Section 138 Proviso (b) of the Negotiable Instruments Act. In such circumstances, I am of the view that the trial Court is correct in holding that the notice was not sent to the correct address. Hence, no cause of action arose for preferring the complaint under Sec.138 of the Negotiable Instrument Act.
23. Therefore it can be said that the complainant even though very well know about the correct and present address of the accused and has issued demand notice to the old address of the accused. Therefore the notice has been returned as 'no such person in the address'. As such is the case as per the above ratios laid down by the Hon'ble Courts the requirements of sec.138(b) is not complied with. Therefore the basic requirement of Sec.138 is not complied. Therefore there is no commission of any offence. 31
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24. Further it has to be seen that the arguments of accused they have argued that the complaint before the court is not at all signed by the authorised person. Therefore there is no maintainability of the complaint. With this regard the accused counsel has furnished the citation in C.R.E.F. Finance Limited, Calctta Vs Sri Shanthi Homes Pvt. Ltd., Bengaluru and another in ILR 2014 Karnataka 2168 it is held that A) NEGOTIABLE INSTRUMENT ACT, 1881, SECTION 138 -Offence under-
Complaint filed by the Company-
Complaint signed by 'X', who has no authority in law to file the complaint- Maintainability of the complaint - HELD, The complaint instituted by the appellant in the Trial Court is not maintainable for the sole reason that 'X', who has signed the complaint has no authority in law to represent the Company as there is no Resolution by the Company authorizing 'X' to file the complaint.
32
CC No.17936/2022 Further it is held that despite the findings, the accused are due for the sum mentioned in the cheques-Exs.P4 to 7 and that P.W.1- Sri. Pramod Kumar has the authority to depose before the Court in the present case, the complaint instituted by the appellant in the Trial Court is not maintainable for the sole reason that Sri. Ravi Seth, who has signed the complaint has no authority in law to represent the Company as there is no resolution by the Company authorizing Sri. Ravi Seth to file the complaint. The Trial Court in addition to other grounds has dismissed the complaint of the appellant on this ground as well. In this appeal though the appellant is able to establish all other grounds, as the complaint itself is incompetent for the reasons aforesaid, the dismissal order passed by the Trial Court cannot be interfered with.
25. Further in the citation furnished by the defence counsel that Crl.Rn.Pt.No.929/2015 between M/s. Bandari Power Lines Pvt Ltd Vs M/s. Victor Electricals and another it is held that 33 CC No.17936/2022 The learned first Appellate Court has taken into consideration the provisions of Negotiable Instruments Act especially Sec.138 and 142 of the Act and have relied upon the judgments of co-ordinate Bench of this Court stated above in George's Case and CREF Finance case relied upon by the learned counsel for respondent-respondents. On scrupulous reading of these judgments of the co-ordinate Benches do lay down that, when a complaint is filed on behalf of the company and challenged, prosecuted by a person not duly authorised, it requires a delegation of such power only by way of resolution of the Board of Directors as per the Articles of Association of the Company. If there is lack of that authority, no such complaint can be entertained. By applying the ratio laid down in the said judgments, the learned Appellate Court has come to the conclusion that, in the absence of authorization, the said complaint cannot be entertained.
Sec.292 of the Companies Act, 1956 speaks with regard to certain powers to be exercised by the Board only at Meeting. In view of the strict provisions of 292 of Companies Act, 1956, if at all there is 34 CC No.17936/2022 delegation of power referred to with regard to such transaction, the Board resolution is quite necessary. That means as per provisions Companies Act 1956, even for the delegation of the power, the resolution of the Board of Directors is quite necessary. No doubt, under the provisions of N.I Act, complaint can be filed through the power of attorney which is perfectly legal and competent, but, a Board's resolution is quite necessary before issuing the power of attorney.
In the above citations it is the ratio laid down by the Hon'ble Courts that it is very clear that whatever the complaint filed by the complainant if filed without any authorisation and authorisation without Board Resolution than the complaint cannot be filed.
26. For the above said discussion it is very clear that even though the complainant has proved that cheque was issued by the accused and the same was returned for insufficient funds, but the complainant has failed to comply the 35 CC No.17936/2022 provision U/s.138(b) of N.I.Act. Further the complaint is filed without signature of the authorised person. As such the whatever the compliant filed by the complainant is not attracted by the offence punishable U/s.138 of N.I.Act as such there is no commission of offence. Further for the admission made by the accused in the statement U/s.313 Cr.P.C that the accused is ready to pay the amount before proper forum. Hence the complainant has got the remedy in the Civil Court. Therefore, I have answered these points No.1 and 2 in the Negative.
POINT No.3
27. In view of the findings on points No.1 and 2 Hence, I proceed to pass the following:-
ORDER Acting U/s.255(1) of Cr.P.C., the accused is acquitted for the offence punishable U/s.138 of Negotiable Instruments Act 36 CC No.17936/2022 The bail bond executed by the accused and surety stands canceled.
(Typed directly on computer to my dictation by the stenographer in the chamber, corrected and then pronounced by me in the open court on this the 17 th day of February 2025) Digitally signed by NIRMALA NIRMALA Date: 2025.02.21 14:53:41 +0530 (Smt. NIRMALA .S.) XXVI ACJM, Bengaluru.
ANNEXURE Witnesses examined for the Complainant:
PW.1 : Smt. K.R. Kathyayini. Witness examined for the accused: Nil.
List of Documents marked for the Complainant:
Ex. P-1 Authorisation letter
Ex. P-2 Cheque
Ex. P-2(a) Signature of the accused
Ex. P-3 Bank Endorsement
Ex. P-4 Copy of legal notice
Ex. P-5 & 6 Postal receipts
Ex. P-7 & 8 Courier receipts
Ex. P-9 & 10 Postal covers
37
CC No.17936/2022
Ex. P-11 & 12 Postal Track Consignment Ex. P-13 Loan application Ex.P-14 Loan Bond Ex.P-15 Loan agreement Ex.P-16 Process note Ex.P-17 Receipt Ex.P-18 On Demand Pronote Ex.P-19 Certificate U/s.65B Ex.P-20 & 21 E-mail copies Ex.P-22 Loan account statement Ex.P-23 Saving Bank Accounts statement Ex.P-24 Certified copy of Relieving letter Ex.P-25 Certified copy of cheque Ex.P-26 Certificate U/s.65B.
List of Documents marked for the accused:
Nil.
(Smt. NIRMALA .S.) XXVI ACJM, Bengaluru.