Karnataka High Court
Mantri Developers Private Limited vs M/S Aayas Trade Services Private ... on 31 March, 2021
Equivalent citations: AIRONLINE 2021 KAR 345, 2021 (2) AKR 787
Author: H.P.Sandesh
Bench: H.P. Sandesh
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31st DAY OF MARCH, 2021
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
WRIT PETITION No.15592/2020 (GM-RES)
C/W.
WRIT PETITION No.15650/2020 (GM-RES)
WRIT PETITION No.15682/2020 (GM-RES)
BETWEEN:
1. MANTRI DEVELOPERS PRIVATE LIMITED
A PRIVATE LIMITED COMPANY REGISTERED
UNDER THE INDIAN COMPANIES ACT.
REP.BY MANAGER SRI.RAVI SHANKAR
2. S.BAASKARAN
S/O SHRI.A.V.SUBRAMANIAN
AGED ABOUT 51 YEARS
3. GIRISH GUPTA
S/O SATHYANARAYAN GUPTHA
AGED ABOUT 53 YEARS
4. SUSHIL PANDURANGA MANTRI
S/O SHRI.PANDURANGA JIVRAJ MANTRI
AGED ABOUT 54 YEARS
5. PRATIK SUSHIL MANTRI
S/O SUSHIL PANDURANGA MANTRI
AGED ABOUT 35 YEARS
PETITIONER NOS.1 TO 5
REGISTERED OFFICE AT
M/S.MANTRI DEVELOPERS PVT.LIMITED
No.41, VITTAL MALLYA ROAD
BANGALORE-560001.
... PETITIONERS
COMMON
(BY SRI SHYAM SUNDAR.M.S., ADVOCATE)
2
AND:
M/S AAYAS TRADE SERVICES PRIVATE LIMITED
HAVING ITS REGISTERED OFFICE
AT NEW No.45, (OLD No.76)
2ND FLOOR, 2ND MAIN ROAD
41ST CROSS, JAYANAGAR, 8TH BLOCK
BANGALORE-560070
REPRESENTED BY ITS
AUTHORIZED SIGNATORY
MR.DHANANJAYA N.
... RESPONDENT
COMMON
(BY SRI.B.K.SAMPATH ADV., AND SRI.PRASHANTH.V.G. ADV., FOR
CAVEATOR/RESPONDENT)
THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF CR.P.C
PRAYING TO SET ASIDE THE ORDER PASSED IN CRIMINAL REVISION
PETITION Nos.316/2020, 317/2020 AND 325/2020, RESPECTIVELY
DATED.17.12.2020 PASSED BY HON'BLE DISTRICT AND SESSIONS
JUDGE IN (CCH-76) DISMISSING THE REVISION PETITION FILED BY
THE PETITIONERS ANNEXURE-M AND ETC.,
THESE WRIT PETITIONS HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 12.03.2021, THIS DAY, THE COURT PRONOUNCED
THE FOLLOWING:
ORDER
These petitions are filed by the same parties, the matters are similar and the reliefs sought in all the petitions are also similar, only challenging taking of cognizance and also dismissing of the revision petitions. Hence, all the matters are taken up together for common disposal.
3
2. W.P.No.15592/2020 and W.P.No.15650/2020 are questioning the order of taking cognizance dated 23.10.2019 and W.P.No.15682/2020 questioning the order of taking cognizance dated 16.11.2019 and also dismissal of Crl.R.P.No.316/2020, Crl.R.P.No.317/2020 and Crl.R.P.No.325/2020, respectively vide order dated 17.12.2020.
3. The factual matrix of the case is that the respondent herein in all the matters has filed a complaint under Section 200 of Cr.P.C. against the petitioners herein invoking the offence under Section 138 of the Negotiable Instruments Act, 1881 ('the NI Act' for short) for bouncing of the cheques issued by the petitioners herein and demand notice was issued. In spite of demand notice not complied the demand. Hence, the respondent has filed the complaint before the learned Magistrate.
4. The learned Magistrate taking cognizance proceeded to record the sworn statement and passed the impugned orders dated 23.10.2019 and 16.11.2019 taking note of the affidavit filed under Section 145 of the NI Act and also the documents which have been marked and while taking the cognizance referred the guidelines issued by the Hon'ble Supreme Court in 4 the case of Indian Bank Association and others v. Union of India and another reported in AIR 2014 SC 2528, and observed that the complaint is accompanied by documents and the same are found in order. While passing an order, an observation is made that the complainant has made out a prima facie case to issue process against the accused for an offence punishable under Section 138 of the NI Act. Hence, issued the process against the petitioners herein in all the matters. Hence, the present petitions are filed by the petitioners herein seeking the relief of issue a writ or order by setting aside the order passed by the Revisional Court in Crl.R.P.No.316/2020, Crl.R.P.No.317/2020 Crl.R.P.No.325/2020, respectively vide order dated 17.12.2020 and also issue a writ or order by quashing of taking cognizance.
5. The main grounds urged in all the petitions are common and it is contended that the notice was served upon the petitioners on 12.07.2019, but the private complaint was filed only on 02.08.2019 without considering the delay process has been issued. It is also contended that there was an agreement between the parties dated 19.04.2019 and in terms of clause 5 11.3, if any dispute has arisen same shall be referred to and finally resolved by arbitration. The other contention in terms of clause 7.1, the said agreement, if there is any default by the respondent in making payments, the said agreement would stand terminated and the consequences would follow. This clearly indicates the complainant has failed to establish that there is legally enforceable debt. There is no any iota of evidence to show that the complainant has been authorised by the Board of Directors to initiate the proceedings. It is also contended that the complainant has marked the printed postal receipts for proof of service of demand notice along with 65(B) Certificate and the same has been issued by the Advocate and the same is against the Bar Council Rules. None of the conditions of 65(B) has been complied. Hence, it requires an interference of this Court.
6. Learned counsel for the petitioners in his arguments vehemently contended that the case was filed before XLII Additional Chief Metropolitan Magistrate Court, Bengaluru and no cognizance was taken and record the sworn statement on the same day and the cognizance was taken by the XXVIII Additional 6 Chief Metropolitan Magistrate Court, Bengaluru. The other contention of the learned counsel is that no affidavit is filed and an advocate has given the certificate under Section 65(B) and the same is in violation of Bar Council Rules and in view of issuance of the certificate he became the witness and the Advocate should not witness and continue as an advocate on record. The learned Magistrate also while taking cognizance has not applied his mind. The learned counsel also brought to notice of this Court Annexure 'H' regarding Board of Resolution and the same was issued on 02.08.2019 and legal notice was issued prior to that. Hence, no authorization.
7. In support of his contention, the learned counsel also relied upon the judgment of the Bombay High Court in the case of Maharaja Developers and anr. v. Udaysingh Pratap Singh Rao reported in 2007 Crl.L.J. 2207, and brought to the notice of this Court paragraph Nos.27 and 28, wherein, the Bombay High Court discussed with regard to the scope of Section 200 of Cr.P.C. and 138 of the NI Act and an observation was made that the Magistrate is obliged and duty bound to examine upon oath of the complainant and his witnesses before 7 issuance of process under Section 204 of Cr.P.C, though there is a solemn affirmation at the foot of the complaint by the Complainant. He also brought to the notice of this Court that the Bombay High Court has made an observation that if the Magistrates are required to record verification statement of the complainant, under Section 200 of Cr.P.C., in a complaint under Section 138 of the NI Act, it would cause delay in disposing of the said complaint also cannot be accepted for the simple reason that the procedure laid down by law has to be followed and secondly it would not take much time if the verification statement of the complainant is recorded on the same day on which the complaint is filed or on the following day when the matter is fixed.
8. The learned counsel also brought to the notice of this Court the judgment of Hon'ble Supreme Court in Indian Bank Association's case (supra). The learned counsel referring to this judgment brought to the notice of this Court to the first direction, wherein, the Apex Court held that the Magistrate on the day when the complaint under Section 138 of the NI Act is presented, shall scrutinize the compliant and, if the complaint is 8 accompanied by the affidavit, and the affidavit and the documents, if any, are found to be in order, take cognizance and direct issuance of summons.
9. The learned counsel also relied upon the judgment of the Bombay High Court in the case of Shri Ashok Bampto Pagui v. Agencia Real Canacona Pvt. Ltd., reported in (2008) BC 348, wherein, in paragraph No.10, the Bombay High Court discussed with regard to quashing of proceedings and considering that the Apex Court in M/s.MMTC Ltd., and anr. v. M/s.Medchl Chemicals & Pharma (P) Ltd., and another, observed that even presuming that initially there was no authority, still the Company can, at any stage, rectify that defect.
10. The learned counsel also brought to the notice of this Court unless there was a resolution by the Board of Directors Shri Prashant Shirodkar had no power to lodge a complaint as an individual Director. The learned counsel also brought to the notice of this Court that paragraph No.20, wherein, it is observed that ordinarily the Court will not non-suit a person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. 9 It has far-reaching effects. It only authorizes them to sign and verify the pleadings on behalf of the Corporation. Thus, unless a power to institute a suit is specifically conferred on a particular Director, he has no authority to institute a suit on behalf of the Company. Such power can be conferred by the Board of Directors only by passing a resolution in that regard.
11. The learned counsel also brought to the notice of this Court, the Bar Council Rules to support his contentions. The learned counsel appearing for the complainant itself is issuing the Certificate and he should not appear in matters where he himself is a witness, bringing Rule-3 of the Rules on an Advocate's duty towards the Court. The learned counsel also produce some of the documents i.e., Special Power of Attorney, Letter dated 9.5.2019, Letter dated 10.7.2019, post dated cheques-3 in number.
12. Per contra, the learned counsel appearing for the respondent/complainant in his arguments he vehemently contend that a notification is placed before the Court that XLII Additional Chief Metropolitan Magistrate Court, Bengaluru was re-numbered as XXVIII Additional Chief Metropolitan Magistrate 10 Court, Bengaluru. In support of his contention, notification is also placed before the Court. The learned counsel also vehemently contends that in order to show that there was malafide on the part of the respondent; no material has been placed before the Court. The learned counsel also would vehemently contend that the complaint was filed two years ago and these petitioners are not appeared before the Trial Court instead they appeared through the Counsel and filed an application under Section 309 of Cr.P.C, and also the application under Section 205 of Cr.P.C. The order sheet discloses an undertaking was given on 26.11.2020; the Court has to look into the very conduct of the petitioners herein. The certificate was given by an Advocate only in respect of the postal acknowledgement, which was not returned. Hence, track sheet was placed and cheques are issued in respect of crores of rupees and instead of appearing before the Trial Court, the petitioners came before this Court questioning the cognizance order. The learned counsel would vehemently contend that the Bar Council Rules, no way comes in the way of issuing of the said certificate. The learned counsel also vehemently contends that the resolution is required for institution of a case and not for 11 issuance of legal notice. The petitioners have not disputed the issuance of the cheques. The Revisional Court also considered the matter on merits and rightly dismissed the Revision Petitions and while dismissing the Revision Petitions also given the reasoning. Hence, it does not require any interference of this Court. The learned counsel also placed the copy of the order sheet and also the order passed by the trial Judge dated 15.3.2021 in allowing the application filed under Section 82 of Cr.P.C. for issuance of proclamation against accused Nos.2, 4 and 5 since accused No.3 only appeared before the Trial Court.
13. Having heard the arguments of the respective counsel, the first and foremost contention of the learned counsel for the petitioners is that the cognizance is taken by XXVIII Additional Chief Metropolitan Magistrate Court, Bengaluru and a complaint was assailed to XLII Additional Chief Metropolitan Magistrate Court, Bengaluru. Having perused the cognizance order, it is clear that the cognizance was taken by XXVIII Additional Chief Metropolitan Magistrate Court, Bengaluru. The learned counsel appearing for the respondent also relied upon the Notification dated 20.09.2019 for re-designating the name of 12 the Court and this notification was issued prior to issuance of process against the petitioners herein. Hence, the very contention of the learned counsel for the petitioners cannot be accepted.
14. Learned counsel appearing for the respondent also placed the order sheet along with the Notification before this Court. Hence, the petitioners cannot find fault with in taking the cognizance. Now on perusal of the order dated 16.11.2019 and 23.10.2019, the learned Magistrate while issuing the process, perused the complaint and documents produced by the complainant, wherein, an observation is also made that cognizance was taken and examined the complainant through the affidavit as P.W.1 under Section 145(1) of the NI Act and in other case examined the complainant and got marked the documents and also having considered the complaint and the documents found the prima facie case to issue the process. Hence, such being the case, the contention of the learned counsel for the petitioners is that the learned Magistrate has not applied his judicious mind while issuing the process, cannot be accepted.
13
15. The other contention of the learned counsel for the petitioners is that the cognizance was taken on different date not on the date of filing of the complaint and also not recorded the sworn statement on the same day. He has relied upon the judgment of the Bombay High Court and also the Judgment of the Apex Court. It is also not in dispute the proceedings are initiated under Section 138 of the NI Act. The Judgments also says that on the presentation of the complaint, the Magistrate has to verify and in the case on hand, it discloses sworn statement was recorded subsequently and no statute that on the very particular date the complainant has to be examined and process has to be issued. In the case on hand, the Magistrate has complied Section 200 of Cr.P.C., on receipt of the complaint, a case was registered and thereafter cognizance was taken and then examined the complainant and having considered the material placed by the complainant, satisfying with the same issued the process in compliance of Section 138 as well as Section 142 of the NI Act. When such being the case, no doubt, the Apex Court in Indian Bank Association's case (supra), a direction was given, shall scrutinize the complaint and, if the complaint is accompanied by the affidavit, and the affidavit and 14 the documents, if any, are found to be in order, take cognizance and direct issuance of summons. In the case on hand, only the complaint is filed and no affidavit was filed and affidavit was filed subsequently invoking Section 145 of the NI Act. When such being the case, question of scrutinize the complaint and taking the cognizance and issuance of process on the very same day does not arise. In the case on hand, the affidavits are filed subsequent to filing of the complaint and procedure has to be followed invoking Section 200 of Cr.P.C. and also examined the witness in compliance of Section 200 of Cr.P.C and issued process under Section 204 of Cr.P.C. after satisfying with the material found prima facie to proceed against the petitioners herein. Hence, the petitioners cannot find fault with the procedure adopted by the learned Magistrate.
16. The other contention of the learned counsel for the petitioners is that the advocate has given the certificate and also brought to the notice of Bar Council Rules, wherein, Bar Council Rules says that the Advocate should not be a witness and in the case on hand, the certificate is issued with regard to the postal track for having issued the notice in the office of the counsel and 15 when the acknowledgement has not been returned, the same was verified by the Advocate for having served the notice on the accused. In this regard, he has issued the certificate since he has verified the same from the postal authority. Hence, the very contention of the learned counsel for the petitioner cannot be accepted.
17. The other contention that the board of resolution was passed on 2.8.2019 and the very contention of the learned counsel for the petitioners that resolution was passed subsequently after issuance of the legal notice and the said contention also cannot be accepted for issuance of legal notice there was no requirement of the resolution and only to institute the complaint or suit, the resolution is required, the same is also held in the judgment referred by the learned counsel for the petitioners. Hence, this contention also cannot be accepted.
18. Having considered the material available on record, I do not find any error committed by the Trial Court in issuance of the process against the petitioners herein. It is also important to note that the learned counsel for the respondent also brought to the notice of this Court that these petitioners have appeared 16 through the counsel before the Trial Court and also the counsel has given an undertaking on 26.11.2020, but they did not appear before the Trial Court instead of filed an application under Section 309 of Cr.P.C. and also an application under Section 205 of Cr.P.C. The very conduct of the petitioners also has to be taken note of. It is also important to note that the cognizance was taken in the months of October and November 2019 and till date even after lapse of two years, the accused persons have not appeared before the Trial Court except accused No.3 and others are protracting the matters without assigning the reasons. Instead of these writ petitions are filed invoking the writ jurisdiction of this Court to quash taking of cognizance and also dismissal of the revision petitions.
19. Having perused the order of the Revisional Court also, the Revisional Court in detail discussed whether the learned Magistrate while issuing the process has committed an error. In paragraph Nos.13 to 18, discussed the contentions of the revision petitioners i.e., petitioners herein and after considering the material on record, the Revisional Court came to the conclusion that the complainant has submitted the affidavit on 17 23.10.2019 and after considering the same and also the materials placed on record, the Trial Court has passed the order of registering the criminal case, the issuance of process and also observed that not found any error committed by the learned Magistrate in issuing the process. The Revisional Court also discussed the judgment of the Apex Court in Indian Bank Association's case (supra), at paragraph No.16 of its judgment and also came to the conclusion that on perusal of the said decision there is nothing that the complaint must be accompanied with the affidavit of the complainant at the time of presentation. It is also observed that in the said decision, the Apex Court has categorically held that the examination of complainant is permissible through affidavit. If an affidavit is filed for sworn statement then the same can be treated as examination-in-chief and there is no necessity to take affidavit evidence again after issuing the process.
20. Having considered the reasoning given by the Trial Court, I do not find any error committed by the Revisional court also in dismissing the Revision Petitions on looking into the materials available on record, rightly came to the conclusion that 18 there are no grounds to entertain the revision petitions and this Court also not find any error committed by the Revisional Court in dismissing the Revision petitions.
21. In view of the discussions made above, I pass the following:
ORDER Writ Petitions are dismissed.
Sd/-
JUDGE cp*