TaxTMI 
TaxTMI 
2002 (2) TMI 1341
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.... fell due to a sum of Rs. 1,55,87,952/- and in due discharge of the said liability, the accused issued a cheque dated 26.1.1995 drawn on the Corporation Bank, Kakinada for a sum of Rs. 6,00,000/- in favour of the complainant. The complainant presented the said cheque on 27.1.1995 and the same was returned for want of sufficient funds and this fact was intimated to the accused. At the request of the accused, the said cheque was represented on three more occasions i.e., on 2.2.1995, 8.2.1995 and on 6.7.1995. Even on these three occasions also, the said cheque met with the same situation. Therefore, the complainant got issued a registered notice dated 12.7.1995 and the accused received the same on 15.7.1997, but he failed to reply. Hence Sri S. Santhanaraman, Assistant Manager, Credit Control, representing the company, filed the present complaint. 4. In order to prove its case the complainant examined P. Ws. 1 to 4 and got marked Exs. P-l to P-7. On behalf of the accused, no witness was examined, except marking Exs. D-l to D-7. 5. The Trial Court on appreciation of evidence while ordering acquittal gave three findings in favour of the accused viz., that the complainant failed to....
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.... Manager who lodged the complaint on behalf of the company has no valid authorization. He further submitted that the Chief Executive who authorized the Assistant Manager, himself has no valid authorization, since no document like resolution of the company or any articles of association was filed tracing the authority of the Chief Executive to authorize the Assistant Manager. In support of these contentions, he relied on the judgment of this Court in Nayagam Lourd Prakash v. Standard Chartered Bank 2 (2001) BC 554 : 2001(1) ALT 97. 10. With the above contentions, he submitted that the impugned order does not warrant any interference and accordingly sought for dismissal of the criminal appeal. 11. In the light of the above contentions the following points would emerge for my consideration : (1) Whether the burden of proving the legally enforceable debt is on the complainant and if the same is not satisfactorily discharged, whether the accused is entitled for an acquittal and what is the effect of presumptions under Section 139 of the N.I. Act? (2) Whether the notice sent on the name of the proprietary concern can be treated as notice sent to the proprietor ? (3) Whethe....
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....ccessfully prove that there is no existing legally enforceable debt and that presumption has to be drawn in favour of the complainant-holder in due course. 16. In order to meet this issue, it is necessary to look into the relevant evidence on record. P.W. 1 is the Assistant Manager, Credit Control of the appellant-company and he is the person who issued the statutory notice to the accused under Ex. P-5. He deposed that their company used to supply the prawn feed on credit; that the accused is the proprietor of M/s. Butterfly Aquatech in Kakinada; that he fell due a total sum of Rs. 1,55,87,952/-; the statements of commission rent (?) by the accused for the business done by him are Exs. P-l and P-2 that towards the discharge of the said due, the accused issued a cheque for Rs. 6,00,000/- drawn on Corporation Bank, Kakinada on 26.1.1995; that the cheque is Ex.P-3; that the said cheque was presented on different occasions at CanaraBank, Kakinada; that it was bounced; that they issued Ex. P-5 registered notice to the accused; that Ex. P-6 is the postal acknowledgement and; that he was the complainant on behalf of the company. 17. In the cross-examination he stated that he does no....
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.... material to show that the accused is liable to by any amount, an inference can be drawn in favour of the accused that he is not liable to pay any amount. While disputing the aspect of presumption under Section 139 of the N.I. Act, he submitted that the accused had successfully rebutted the evidence, both oral and documentary adduced on behalf of the complainant, by producing the documentary evidence under Exs. D-l to D-6. 22. There is no dispute with regard to the question that initially a presumption on the basis of Ex. P-3 cheque has to be drawn in favour of the complainant unless the contrary is proved. But it has to be examined whether such presumption of fact has been successfully rebutted by the accused by marking Exs. D-1 to D-6. By marking the said documents, the defence of the accused appears to be that though the Ex. P-3 cheque was issued by the accused to the complainant, there were certain other transactions took place subsequent to the issuance of Ex. P-3 and those transactions pertain to the discharge of the amount covered under Ex. P-3. Except the suggestion made on behalf of the accused and marking Exs. D-l to D-3, no attempt was made by the defence to prove the....
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....ract Act. 26. Furthermore, it is on record that after the bouncing of the cheque, undisputedly Ex. P-5 statutory notice has been issued by the complainant and admittedly no reply has been given by the accused. Hence, this is another factor, which strengthens the case of the complainant and leads to drawing of an adverse inference against the accused. 27. Hence in my view" the accused failed to prove that he does not owe any legally enforceable debt to the complainant. In other words, he could only prove that he paid certain amounts to the complainant company subsequent to the date of issuance of the cheque, but could not prove that those payments were only towards the disputed cheque amount and in all probability those payments might be towards the total alleged outstanding amount of Rs. 1,55,00,0007- and odd or towards the subsequent transactions. Therefore, I am of the considered view that the presumption under Section 139 of file N.I. Act, which is in favour of the complainant still remained unrebutted. 28. In view of the above discussion, I answer this point in favour of the complainant. 29. Point No. 2 : Ex. P-5 is the statutory notice. A perusal of the said notice....
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....the company, in the normal run of things may be either its manager, partner, managing partner or director or any other person authorized by the company... 33. In M.M.T.C. 's case (cited supra), Their Lordships of the Supreme Court held at paragraphs 11 and 12 that the only eligibility criterion prescribed by Section 142 of the N.I. Act for maintaining a complaint under Section 138 is that the complaint must be by the payee or the holder in due course. This criterion is satisfied as the complaint is in the name and on behalf of the appellant company. 34. In the same decision. Their Lordships while referring to an earlier judgment in Associated Cement Co. Ltd. v. Keshvanand,: 1998CriLJ856 , recorded at paragraph No. 12 as under, : In the case of Associated Cement Co, Ltd. v. Keshvanand (supra) it has been held by this Court that the complainant has to be a corporeal person who is capable of making a physical appearance in the Court. It has been held that if a complaint is made in the name of an incorporeal person (like a company or corporation) it is necessary that a natural person represents such juristic person in the Court. It is held that the Court looks upon the nat....
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....n associated with the credit transactions of the company. He was the person who gave the notice referring to various transactions and he was the person who got the authorization from the Chief Executive of the company. No doubt there is nothing on record to show that the Chief Executive has got authorization to authorize P.W. 1 to represent the company. I am of the view that going into this question amounts to going into the root of the issue. But from the circumstances, it can safely be inferred that he has the implied authorization to act on behalf of the company and after all he represented the company only to safeguard its interest i.e., his acts are not to the prejudice of the company, but on the contrary they are for the benefit of the company. Most importantly the Board of the appellant-company never expressly or implicitly, disrobed P.W. 1 from the capacity of the Assistant Manager-Credit Control of the company, nor has disowned his acts representing the company. Therefore, a comprehensive look at the whole circumstances Would only go to show that P.W. 1 had definite authorization to represent the company. 39. Further Section 196 of the Indian Contract Act provides for t....