IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF DECEMBER 2019 BEFORE THE HON’BLE MR. JUSTICE ASHOK S. KINAGI CRIMINAL RP NO.1225 OF 2011 BETWEEN:
K. RAVI SHETTY S/O KUTTY SHETTY AGED ABOUT 45 YEARS SHAKTHI ELECTRICALS SHAKTHI APARTMENT BANNANJE, UDUPI.
…PETITIONER (BY SRI. S. VISHWAJITH SHETTY, ADVOCATE) AND:
RAMESH ELECTRICALS SITHARA COMPLEX OLD POST OFFICE ROAD UDUPI-576 101 BY PROPRIETOR ….RESPONDENT (RESPONDENT SERVED) THIS CRIMINAL RP IS FILED UNDER SECTION 392(2) CR.P.C PRAYING TO SET ASIDE THE ORDER OF CONVICTION DATED 27.01.2011, MADE IN C.C.NO. 1242/07 BY THE COURT OF III ADDL.CJ AND JMFC, UDUPI AND JUDGMENT AND ORDER DATED 03.11.2011 MADE IN CRL.APPEAL No.11/2011 BY THE FAST TRACK COURT, UDUPI.
THIS CRIMINAL RP HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 14.11.2019, COMING ON FOR PRONOUNCEMENT THIS DAY, THIS COURT MADE THE FOLLOWING:
O R D E R Petitioner aggrieved by the judgment dated 27.01.2011, passed in C.C.No.1242/2007, confirmed in Crl.A.No.11/2011 vide order dated 03.11.2011, passed by the Fast Track Court, Udupi, has filed the present revision petition.
2. Brief facts of the case are as under:
The petitioner had purchased materials vide bill No.127A/2005-06 dated 24.02.2006, from the respondent valued at Rs.49,010/-. Towards the aforesaid purchase, the petitioner issued cheque bearing No.372959 dated 12.06.2006 drawn on State Bank of India, Udupi for a sum of Rs.49,000/-. Respondent presented the said cheque for encashment, the same was returned dishonoured with an endorsement ‘account closed’ vide endorsement dated 12.06.2006. The respondent, immediately after the receipt of endorsement dated 12.06.2006, got issued a legal notice to the petitioner on 22.06.2006, informing the petitioner about the dishonour of the cheque and demanding payment of cheque amount within 15 days from the receipt of notice. The said notice was served on the petitioner on 29.06.2006. The petitioner has not paid the amount within stipulated period mentioned in the legal notice. Hence, the respondent filed a complaint under Section 200 Cr.P.C. for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (‘the N.I.Act’ for short).
The learned Trial Judge recorded the sworn statement and took cognizance and issued summons to the petitioner. Petitioner appeared and was enlarged on bail. He did not plead guilt and claimed to be tried.
PW-1 was examined in support of the contention of the complaint and got marked documents at Exs.P1 to P12 and closed his side. The Trial Court recorded the statement of the accused under Section 313 of Cr.P.C. Petitioner examined one Sri. R.P.Nayak as DW-1 and got marked Exs.D1 & D2. The Trial Court, relying upon the evidence of PW-1 and admission of petitioner regarding issuance of alleged cheque, has held that the complainant has proved that the alleged cheque was issued towards discharge of debt and drawn a presumption under Sections 118 and 139 of the N.I.Act and convicted the petitioner and sentenced him to pay a fine of Rs.50,000/- and out of the said fine amount Rs.49,500/- shall be paid to the respondent as compensation and remaining Rs.500/- shall go to the State, by way of penalty.
Aggrieved by the said order, the petitioner preferred an appeal in Crl.A.No.11/2011. The lower Appellate Court, after re-appreciation of the oral and documentary evidence, has affirmed the order of the Trial Court and dismissed the appeal filed by the petitioner. The petitioner aggrieved by the aforesaid order, has filed the present revision petition.
3. Heard arguments of the learned counsel for petitioner and perused the records. Though notice was issued by this court to the respondent, it remained ex parte.
4. The respondent has not produced or placed any materials before the Trial Court in regard to supply of electrical materials to the petitioner, except producing Ex.D8 which is on the letter head of Ramesh Electricals. The respondent has not produced any documentary evidence to prove that petitioner is due a sum of Rs.49,010/-. The court below, without considering the aforesaid legal aspect and also in the absence of materials in regard to supply of electrical materials, has drawn a presumption under Sections 118 and 139 of the N.I.Act on the ground that petitioner has admitted issuance of cheque and passed the impugned order. It is true that when the cheque in question contains the signature of the account holder, it is for the petitioner to explain the same, but merely because Ex.P2-cheque contains the signature of the petitioner, it cannot be said that same was executed by him. In this case it is relevant to note that petitioner has specifically denied the transaction alleged in the legal notice and complaint by issuing a reply as per Ex.P9 dated 01.08.2006, and has explained under what circumstances the alleged cheque was handed over to the respondent. Though the respondent/complainant is entitled to get the benefit of presumption envisaged by Sections 118A and 139 of the N.I.Act, the said presumption regarding consideration can be drawn only when execution is proved and therefore, it is clear that passing of consideration and existence of debt are not proved by the respondent/complainant. No doubt, it is the duty of the complainant to establish all the ingredients under Section 138 of the N.I.Act. It is also relevant to note that the respondent miserably failed to prove the supply of electrical materials and also legally enforceable debt. The petitioner filed an application under Section 245(2) of Cr.P.C. on 02.02.2009 before the Trial Court. The trial Court vide its order dated 02.05.2009, allowed the application in part and issued summons to the Commercial Tax Officer for production of documents which are in his custody, as mentioned in the application. In pursuance to the said order, one R.S.Nayak, the officer of Commercial Tax entered into witness box and deposed that the original of Ex.P8 is not in the office. Nothing has been elicited in the cross- examination of DW-1 in regard to Ex.P8.
5. The legal notice was issued by one Ramesh Shyanbhogue, Managing Partner of M/s. Ramesh Electricals, calling upon the petitioner to pay the amount mentioned in the alleged cheque within 15 days. But the complaint is filed by Ramesh Electricals, represented by Ramesh Bhat K., GPA holder of the proprietor. He contends that the complaint is not maintainable as the same is presented by unauthorized person and he also further contended that from the perusal of complaint it does not disclose as to who is the proprietor of Ramesh Electricals and the respondent has not produced any record to show that the petitioner is liable to pay the amount and both the courts below have not properly appreciated the materials on record and have committed error in convicting the petitioner.
6. The complaint is filed by Ramesh Electricals, represented by Ramesh Bhat K., GPA holder of the proprietor, as mentioned in the cause-title. In para-1 of the complaint, it is mentioned that the complainant is a proprietorship concern represented by Ramesh Bhat and it is involved in selling electrical goods. Perusal of Ex.P11, which is the power of attorney executed by Ramesh Shanbhogue, S/o. Narayan Shanbhogue, Managing Partner of M/s. Ramesh Electricals in favour of Ramesh Bhat, shows that the said power of attorney is not executed by the proprietor of Ramesh Electricals. Said Ramesh Bhat has not produced any authorization or power of attorney to present the complaint on behalf of the complainant which is a proprietorship concern. Ramesh Bhat has no authority to present the complaint on behalf of Ramesh Electricals which is a proprietorship concern. The legal notice is issued by the partnership firm, but the complaint is prosecuted by the proprietorship concern. The respondent has not placed any materials to establish whether the complainant is a partnership firm or a proprietary concern. Even in the complaint also, there is no averment as to who is the proprietor of the complainant- concern.
7. The alleged cheque issued is in the name of Ramesh Electricals. According to PW-1, complainant is a proprietorship concern. So the holder of the cheque is none other than the proprietorship concern viz., Ramesh Electricals, but the proprietorship concern as much under the name and style of ‘Ramesh Electricals’, cannot maintain a complaint for the simple reason that it has no independent and legal entity in the eye of law. The proprietorship concern is not a firm. A partnership firm consists of partners. Thus there is a basic fundamental difference between a firm and a proprietorship concern. Complainant in this case is Ramesh Electricals, which is not a firm. It is a proprietorship concern and cannot initiate legal proceedings. The proprietor or the owner of the said concern is the affected party and only he can file the complaint. This view was expressed in the decision reported in SATISH JAYANTHILAL SHAH VS. PANKAJ MEHRUWALA [I (1997) CCR 603] wherein it was held as follows:
“The sole proprietorship concern is not an independent, legal and juristic entity having legal recognition in the eye of law. Therefore, neither can it initiate any proceedings nor proceedings can be initiated against it. In case of proprietary concern, the proprietor is always an affected person who can either indict or be indicited.”
8. In view of the legal principles laid down in the aforesaid judgment, the proprietary concern in this case under the name and style of ‘Ramesh Electricals’, cannot maintain the complaint, because a proprietary concern has no independent and legal entity having recognition in the eye of law. Hence, on this ground, the court below could have acquitted the petitioner, but failed to consider the legal aspect and proceeded to pass the impugned order.
9. In the complaint, the name of the proprietor of the said concern is not disclosed and further in the cause-title also, name of the proprietor of the complainant-concern is not mentioned. The power of attorney produced by the complainant i.e., Ex.P11 discloses that Ramesh Shyanbhogue is the Managing Partner of Ramesh Electricals and he has executed the power of attorney in favour of Ramesh Bhat. But the said power of attorney does not reflect that Ramesh Electricals is a proprietary concern, but on the contrary it discloses that it is a partnership firm. The respondent has not produced any records to show that the complainant is neither a partnership firm nor a proprietary concern. The complaint presented by Ramesh Bhat is without authority of the proprietor of Ramesh Electricals. So on this ground also the complaint is not maintainable.
10. As observed above, the respondent has miserably failed to prove the supply of electrical items and also legally enforceable debt and failed to prove beyond all reasonable doubts.
11. When the courts below have failed to consider the above legal aspect and merely drawn presumption under Sections 118 and 139 of the N.I.Act and convicted the petitioner and sentenced him to fine, the impugned orders suffer from illegality and impropriety, are liable to be set aside.
12. Taking into consideration the facts and circumstances of the case, I hold that the complaint lodged by the complainant, in the name and style of ‘Ramesh Electricals’, without disclosing the name of the proprietor of the said concern in the cause-title of the complaint, is not maintainable in law and further the power of attorney holder/authorized agent has not produced any document to show that the proprietor of Ramesh Electricals is authorized to present the complaint. The complaint presented is not by duly authorized person. In the circumstances, the complaint is not maintainable. Hence, I proceed to pass the following:
Order The Criminal Revision petition is allowed.
The judgment and order of conviction dated 27.01.2011 passed in C.C.No. 1242/2007 by the III Additional Civil Judge & JMFC, Udupi and the judgment and order dated 03.11.2011 passed in Crl.A.No. 11/2011 passed by the Fast Track Court, Udupi, are set aside.
The petitioner is acquitted for the offence punishable under Section 138 of the N.I.Act.
The lower Appellate Court is directed to refund the fine amount, if any, deposited by the petitioner, forthwith.
Sd/- Judge RD