Karnataka High Court
M/S. Betala Associates vs Sri. Rajmohan Singh on 16 June, 2023
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF JUNE, 2023
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.80 OF 2011
BETWEEN:
M/S. BETALA ASSOCIATES
NO.85, 2ND STAGE, 2ND PHASE, W C ROAD
MAHALAKSHMIPURAM,
BENGALURU - 560 086
REPRESENTED BY ITS PROPRIETRIX,
SMT. NIRMALA BETALA
W/O M G BETALA, AGED 68 YEARS
...APPELLANT
(BY SRI. C N KESHAVA MURTHY, KLK LAW ASSOCIATES,
ADVOCATE)
AND:
SRI. RAJMOHAN SINGH
S/O DAROGA SINGH
AGED 45 YEARS
PROPRIETOR OF
M/S MUNNA CHEMICALS
NO.132, MAGADI ROAD
KAMAKSHIPALYA,
BENGALURU - 560 079
.....RESPONDENT
(BY SRI. A GANESH, ADVOCATE &
SRI. SITARAMA HEGDE, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF THE CODE OF CRIMINAL PROCEDURE PRAYING TO a) SET
ASIDE THE JUDGMENT DATED 08.10.2009 IN CRIMINAL
APPEAL NO.1279/2007 PASSED BY THE CITY FAST TRACK
(SESSIONS) JUDGE (FTC-VI), BENGALURU. CONFIRM THE
ORDER OF CONVICTION AND SENTENCE DATED 04.10.2007
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PASSED IN C.C.NO.31177/2005 ON THE FILE OF THE XV THE
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE,
BENGALURU; b) CONVICT THE RESPONDENT FOR THE
OFFENCE PUNISHABLE UNDER SECTION 138 OF THE
NEGOTIABLE INSTRUMENTS ACT; c) GRANT SUCH OTHER OR
FURTHER RELIEF AS THIS HON'BLE COURT DEEMS FIT TO
GRANT, IN THE INTEREST OF JUSTICE AND EQUITY.
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED ON 05.06.2023, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
JUDGMENT
This appeal filed under Section 378(4) of Cr.P.C, is by the complainant, challenging the impugned judgment and order dated 08.10.2009, by which Sessions Court reversed the conviction of respondent/accused rendered by the trial Court for the offence punishable under Section 138 of N.I.Act.
2. For the sake of convenience the parties are referred to by their rank before the trial Court.
3. It is the case of the complainant that she is the proprietrix of M/s Betala Associates, engaged in manufacture and supply of chemicals. Accused is the proprietor of M/s Munna Chemicals. On the request of 3 accused, complainant supplied Hydrochloric acid and caustic soda flakes for a total sum of Rs.1,30,714/- on different dates. Towards repayment of it, initially accused issued a cheque for a sum of Rs.55,224/-. However, when it was presented for realization, it was returned with endorsement "insufficient funds". In fact complainant issued a legal notice and after receipt of the same, accused approached the complainant, with a request not to take any legal action and issued a cheque for Rs.1,30,714/- dated 25.05.2005, with a promise that he would arrange for the amount.
3.1 However, when the said cheque was presented on the same day, it was also dishonored on the ground of insufficiency of funds. Therefore, complainant got issued legal notice dated 02.06.2005. It is duly served on the accused on 03.06.2005. Accused has neither paid the amount due under the cheque nor has sent any reply. Without any alternative, complainant has filed the complaint.
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4. After due service of notice, respondent/accused appeared through counsel and contested the matter. He has pleaded not guilty and claimed trial.
5. In support of her case, complainant got her husband examined as PW-1 in his capacity as her PA holder and got marked Ex.P1 to 19. Since accused disputed the fact that complainant has executed a Power of Attorney in favour of her husband, complainant has also stepped into the witness box by examining herself as PW-2 and reiterated the entire complaint averments.
6. During the course of his statement under Section 313 Cr.P.C, accused has denied the incriminating evidence. He has examined himself as DW-1 and one witness as DW-2 and relied upon Ex.D1 to 5.
7. Vide the judgment and order dated 04.10.2007, the trial Court convicted the accused and sentenced him to pay fine of Rs.1,40,000/- and out of the fine amount recovered, a sum of Rs.1,38,000/- be paid to the complainant by way of compensation.
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8. However, the Sessions Court was pleased to allow the appeal filed by the accused and acquitted him.
9. Being aggrieved by the same, the complainant is before this Court, contending that the impugned judgment and order of the Sessions Court is not tenable either on law or on facts and liable to be set aside. The Sessions Court has erroneously allowed the appeal contrary to the facts proved and with utter disregard to the law. The findings of the Sessions Court that the power of attorney at Ex.P2 is invalid and that it is not proved is not correct. The Sessions Court has failed to appreciate the fact that complainant has also entered the witness box as PW-2 and proved the execution of power of attorney in favour of her husband, who is examined as PW-1.
9.1 The Sessions Court without discussing the merits of the case has erred in setting aside the well reasoned judgment of the trial Court, only on the ground that the power of attorney is not proved. The Sessions Court has also erred in holding that there was no valid demand notice and the notice at Ex.P14 is not signed by the complainant, but it is signed by her husband. It has 6 also erred in holding that the demand notice is not served on the accused, though it is duly sent to the address of the accused and it is received by one of his subordinates and it bares seal of accused. The findings of the Sessions Court is contrary to the decision of the Hon'ble Supreme Court reported in V.Raja Kumari Vs. P.Subbarama Naidu & Anr. (V.Raja Kumari)1 and K.Bhaskaran Vs. Sankaran Vaidhyan Balan & Another (K.Bhaskaran)2.
9.2 The Sessions Court has failed to appreciate the fact that complainant has complied with all the requirements of Section 138 of N.I.Act. The Sessions Court has erred in giving a finding that as the power of attorney is not authenticated, it is invalid. It has failed to interpret the provisions of Section 85 of the Evidence Act correctly. There is no justification for Sessions Court reverse a well reasoned judgment of the trial Court and prays to allow the appeal, set aside the impugned judgment and order and confirm the order of the trial Court.
1 2004 AIR SCW 6344 2 AIR 1999 SC 3762 7
10. In support of his arguments, learned counsel for complainant has relied upon the following decisions:
(i) Devi Tyres, Bangalore Vs. Nawab Jan (Devi Tyres)3
(ii) D.Vinod Shivappa Vs. Nanda Belliappa (D.Vinod Shivappa)4
(iii) T.P.Murugan (Dead) Thr. LRs Vs. Bojan Posa Nandhi Rep. Thr. POA Holder (T.P.Murugan)5
(iv) Rohitbhai Jivanlal Patel Vs. State of Gujarat and Anr. (Rohitbhai Jivanlal Patel)6
11. On the other hand learned counsel for accused supported the impugned judgment and order and prays to dismiss the appeal.
12. In support of his arguments, learned counsel for accused has relied upon the following decisions:
(i) T.L.Nagendra Babu Vs. Manohar Rao Pawar (T.L.Nagendra Babu)7
(ii) Ranjitha Balasubramanian and Anr. Vs. Shanthi Group and Ors.
(Ranjitha Balasubramanian)8 3 (2000) 7 Kant LJ 185 4 Crl.A.No.1255-1261/2004 Dt: 25.05.2006 5 AIR 2018 SC 3601 6 AIR 2019 SC 1876 7 ILR 2005 KAR 884 8 ILR 2007 KAR 765 8
13. Heard arguments of both sides and perused the record.
14. It is not in dispute that complainant is the propreitrix of M/s Betala Associates, engaged in manufacture and supply of chemicals and respondent is a proprietor of M/s Munna Chemicals and there were transactions between the complainant and accused. Though initially, the accused has disputed that complainant has supplied chemicals total worth Rs.1,30,714/-, during the course of evidence, accused has taken up a defence that he has purchased chemicals worth Rs.63,000/- by paying cash and the remaining sum of Rs.67,000/- is paid by way of the same chemicals being supplied back to the complainant in small packing and thereby the entire amount is repaid. He has also taken up a defence that while supplying the chemicals, complainant has forcibly taken a blank signed cheque by way of security and misusing the same, she has chosen to file the present complaint.
15. The accused has also taken up a specific defence that there is no valid service of legal notice by the complainant and the one issued through her alleged PA 9 holder i.e., her husband is not valid. Accused has also taken up a plea that the notice is not duly served on him and therefore on the ground of non compliance of mandatory provisions of Section 138 of N.I.Act, the complaint is not tenable.
16. Before discussing the merits of the case, it is necessary to examine whether the notice issued through the PA holder of complainant is a valid notice and whether it is duly served on the accused. At the outset, it is relevant to note that the complainant has got issued the legal notice at Ex.P14 through her husband in his capacity as her power of attorney holder. The power of attorney in question is produced and marked at Ex.P2. It is dated 01.06.1996 as forthcoming from the signature of the complainant.
17. Admittedly, Ex.P2 is not executed or authenticated before the Notary or other Authorities. However, the question would be whether a power of attorney is compulsorily required to be executed or authenticated before Notary or other Authorities. In this regard the decision of the Co-ordinate Bench of Kerala High Court in Crl.A.640/2004 dated 27.01.2020 is relevant. In 10 this decision, it is clearly observed that under the Power of Attorney Act, 1882, no specific mode is prescribed for executing a power of attorney. The execution or authentication before the Notary or other Authorities is often resorted to as a matter of commercial expediency and as a matter of prudence.
18. It also clearly observed that Section 85 of the Evidence Act provides that if a power of attorney is executed or authenticated before a Notary or other Authorities as specified therein, then it is mandatory on the part of the Court to presume that it is so executed or authenticated. It means that the if a power of attorney is executed or authenticated before a Notary or other Authorities, the said Authorities need not be summoned to prove that it is executed or authenticated before such Authority. Of course, since the word 'shall' is used, it is for the Court to mandatorily raise such presumption unless the contrary is proved. Therefore, based on Section 85 of the Evidence Act, it is not open to the Court to say that since the power of attorney is not executed or authenticated before such authorities, it cannot be relied upon. 11
19. In fact after the accused took a specific defence that complainant has not executed the power of attorney, the complainant has chosen to enter into the witness box and speak specifically that she has executed the power of attorney at Ex.P2 and based on the same, her husband in his capacity as the power of attorney has sent the legal notice and also given evidence. As rightly held by the trial Court, after the complainant has entered into the witness box and specifically deposed that she has executed the power of attorney in question, its execution is proved and the admitted facts need not be further proved. Therefore, the trial Court rightly held that the power of attorney is duly executed and therefore the issue of legal notice through the power of attorney is valid.
20. Moreover, there is no specific form in which the mandatory notice is to be worded and issued. The object of issue of notice to the accused is to bring it his notice that the cheque issued by him is dishonored and to provide him an opportunity to either pay the amount due under the cheque or if he dispute his liability to answer the legal 12 notice by sending the reply. Therefore, no fault could be find with the fact that the legal notice is issued in the name of complainant's husband. In fact during the course of his evidence, he has clearly stated that in his capacity as the PA holder as well as the husband of the complainant, he was taking care of the business. Such being the case, the Sessions Court has grossly erred in holding that the power of attorney is not executed and there is no valid issue of legal notice.
21. Now coming to the question whether the legal notice is duly served on the accused. It is pertinent to note that the legal notice at Ex.P14 is sent to the address of the accused. Ex.P15 is the postal receipt and Ex.P16 is the postal acknowledgement. Even though the postal acknowledgement does not bare the signature of the accused, as admitted by him it bares his seal. It appears this notice is received by one of his employees. Section 27 of General Clauses Act provides that where any Act authorized or requires any document to be served by post, whether the expression "serve" or either of the expressions "give" or "send" or any other expressions is used, then, 13 unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. If the post is sent to the person to his correct address, it shall be presumed that it has duly served on him, if it is not returned.
22. As admitted by the accused, the address as stated in the legal notice is correct and if any postal letter or communication is sent to him to the said address, it would reach him. For reason best known to him, he is not ready to disclose the name of the person who has received it. Having regard to the fact that the acknowledgment bare the seal of the accused, it goes without saying that it reached the proper place and a person who is authorized by the accused has received it by affixing the seal of the concern. Such being the case, it is not open to the accused to say that the legal notice is not duly served on him. From the above discussion, I hold that there is valid service of notice. In fact the trial Court has discussed in detail these 14 aspects and come to a correct conclusion that there is a valid service of notice. However, the Sessions Court has chosen to disregard these aspects and hold that there is no due service of notice.
23. Admittedly, the accused has not chosen to send reply to the legal notice putting forth his defence. Thereby accused has lost an opportunity to contradict the claim of the complainant and put forth his defence.
24. Now when once it is held that the legal notice issued to the accused is valid and also there is due service, the next question that arise of consideration of the Court is to appreciate the merits of the complainant's claim. As per Ex.P3 to 6, the complainant has supplied chemicals to the accused. In fact he has received the goods sent through these receipts by affixing his signatures. Ex.P3, 4 and 5 also bares the seal of the accused concern. As per Ex.P17 to 19, the accused has claimed benefit under the CST and has sent the copies of these forms i.e., form of declaration as per Rule 12(1) to the complainant. These documents also supports the case of the complainant regarding supply 15 of chemicals in question for which the complainant has chosen to file the present complaint.
25. As already discussed, though at the outset the accused has disputed the supply of chemicals for a total sum of Rs.1,30,714/- by the complainant, during the course of trial, he has taken up a defence that out of the said amount, he has paid Rs.63,000/- in cash. With regard to the remaining amount, he has taken up a specific defence that he is engaged in re-packing the chemicals which is purchased from complainant and others in small batches in plastic cans and sell the same to various persons, including the complainant and with regard to remaining Rs.67,000/-, he has resold the said chemicals in small batches to the complainant. Admittedly, he has not issued any invoices for sale of the said chemicals by the complainant in small batches. Apart from his interested testimony, he is not having any documents to evidence the said fact.
26. To prove that he has paid Rs.63,000/- to complainant, accused has relied upon Ex.D1 to 5 - small chits of different dates and claimed that through these 16 chits, he has paid a total sum of Rs.63,000/- to the drivers and other employees of complainant concern. DW-2 Shashibhushan Singh is the nephew of accused. He claims to be working in the accused concern. Though he has also deposed with regard to the alleged payments made to the complainant, neither the accused nor he are able to prove exactly in whose hands these payments were made. Of course both complainant as well as PW-1 have denied the said fact. However, the accused has not chosen to lead further evidence to establish that he has made payments in the hands of the persons whose names are forthcoming in the said chits and they are employees of complainant. Consequently, no reliance could be placed on such chits.
27. The accused has also taken up a defence that the cheque in question was forcibly taken by complainant at the time of supply of the chemicals by way of security. As already noted the accused has not chosen to send any reply to the legal notice and take up such a defence at the earliest available opportunity. Except the interested testimony of the accused, there is no material to show that the cheque in question was taken by way of security. 17 Admittedly, after the alleged payment of the amount due and also the alleged supply of chemicals back to the complainant in smaller batches, the accused has not chosen to take back the cheque which he had allegedly given by way of security. He has also not intimated the Bank not to make payment with regard to the said cheque.
28. One more aspect which is operating against the accused is that according to the complainant earlier he had given a cheque for Rs.55,224/- at Ex.P7 towards part payment of the amount due and when it was presented for encashment, it was also returned with an endorsement "insufficient funds" as per Ex.P9. In respect of the dishonor of the said cheque also, the complainant has issued a legal notice dated 10.02.2005 as per Ex.P13. The complainant has taken up a specific contention that when the fact of dishonor of the cheque at Ex.P7 was brought to the notice of accused, he requested the complainant not to take legal action and choose to issue the subject cheque at Ex.P8.
29. Admittedly, Ex.P7 is also the cheque belonging to the accused drawn on the same Bank i.e., Federal Bank Ltd as Ex.P8. The accused is not having any explanation 18 with regard to issue of this cheque and dishonor of the same. This also supports the case of the complainant and falsifies the defence taken by the accused to escape from the legal liability. Ignoring these aspects, the Sessions Court only on the basis that the power of attorney executed by the complainant is not executed or authenticated before the Notary or other Authorities and also on the ground that the legal notice is not served on the accused, has come to a wrong conclusion and upset the well reasoned judgment of the trial Court. In fact the trial Court has considered each and every aspect of the contention of the complainant as well as the defence taken by the accused and held him guilty of the offence punishable under Section 138 of N.I.Act.
30. When once the complainant proves that the cheque in question which is drawn by the accused to his account maintained with the Bank and when presented it was dishonored for the reasons of insufficient funds, it is obligatory on the part of the Court to raise a presumption under Section 139 and it will operate till the accused choose to rebut the said presumption by leading legal 19 evidence. In fact in Devi Tyres, T.P.Murugan and Rohitbhai Jivanlal Patel, the Hon'ble Supreme Court has dealt with the presumption under Section 139 of the N.I.Act. In D.Vinod Shivappa, the Hon'ble Supreme Court has discussed about the due service of notice to the accused. In the light of these decisions, the complainant has proved the allegations against accused beyond reasonable doubt.
31. In T.L.Nagendra Babu, the Co-ordinate Bench of this Court dealt with the presumption under Section 85 of the Evidence Act, when the party wants the Court to draw such presumption. In the present case, power of attorney is not executed or authenticated before the Notary or other concerned Authorities and as such the complainant never sought to draw such a presumption.
32. In Ranjitha Balasubramanian, in view of the non production of power of attorney, the Co-ordinate Bench of this Court held that the contention of the complainant regarding the power of attorney cannot be accepted. However, in the present case, the power of attorney in question is produced and in fact by stepping into the 20 witness box, the complainant has in unequivocal terms deposed and proved that she has executed power of attorney in favour of her husband. In view of the same, these two decisions relied upon by the accused are not applicable to the case on hand.
33. Thus, the findings of the Sessions Court is contrary to the evidence placed on record and as such it is perverse and calls interference by this Court and to restore the judgment of the trial Court. In the result, the appeal filed by the complainant deserves to be allowed and the impugned judgment and order of the Sessions Court is liable to be set aside and the judgment and order of the trial Court is to be restored and accordingly, I pass the following:
ORDER
(i) Appeal filed by the complainant is allowed.
(ii) The impugned judgment and order dated 08.10.2009 on the file of City Fast Track (Sessions) Court, FTC-VI is set aside.
(iii) The judgment and order of the trial Court in C.C.No.31177/2005 on the file of XV Addl.CMM, Bengaluru City is restored.
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(iv) The registry is directed to send back the trial Court records along with copy of this Judgment to the trial Court forthwith.
(v) The trial Court is directed to secure the presence of accused to undergo the sentence of imprisonment, if he has failed to pay or deposit the fine amount imposed by it.
Sd/-
JUDGE RR