TaxTMI 
TaxTMI 
2024 (2) TMI 1075
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....unsel appearing along with Ms. Mahato for the Applicant and the learned Senior Counsel, Mr. Kantak appearing along with Mr. Talaulikar for the Respondent. 4. Mr. Lotlikar would submit that the learned Magistrate as well as the first Appellate Court committed serious error in considering the case put forth by the Applicant and the fact that the complaint was lodged by a Company through its duly constituted Attorney, without producing such Power of Attorney (PoA) along with the complaint or even during evidence. It is submitted that subsequently, the Company placed on record the fabricated resolution, which has been wrongly considered by the Courts below as authorization for filing a complaint. He would further submit that such authorization produced subsequently, ought to have been considered as fabricated and manipulated document since the cross-examination of PW-1 would clearly go to show that there is no proper procedure adopted before granting the power to the authorized Representative/Director. He would submit that such aspect goes to the root of the matter as the complaint has to be filed by the Managing Director or the authorized Representative or by the PoA holder duly au....
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....and cannot be accepted. 9. Mr. Lotlikar would further submit that by leading evidence, the Accused has shown his defence on preponderance of probabilities in all aspects, however, it has not been considered by the Courts below. He would further submit that the Representative of the Company, who stepped into the witness box as PW-1 had no personal knowledge of the transactions and therefore, his affidavit ought to have been discarded. 10. The contentions of Mr. Lotlikar could be summarized as under: (A) The complaint filed by describing Mr. Pereira as an Attorney without producing the Power of Attorney is not in accordance with Section 138 of the N.I. Act/incomplete and not a complaint on behalf of the Company. (B) In the alternative, such a complaint could be considered as a complaint filed by Mr. Pereira on his own, without any resolution. (C) There are no averments in the complaint that Mr. Pereira was authorized by any resolution and the subsequent filing of such a resolution is only an attempt to fill up the lacuna. (D) The complaint was stillborn/without authority and could not have been made alive with subsequent resolution. ....
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.... rebutted by the Applicant/Accused. It is submitted that the cheques were presented within the time limit, but they were returned unpaid. It is submitted that a notice was served on the Applicant/Accused, who failed to reply to it and thereafter, a complaint was filed within time. 13. Mr. Kantak would submit that the Representative of the Company as found mentioned in the cause title, is the Director himself, who was duly authorized by the resolution passed by the Company, which was produced subsequently. He submits that only because in the cause title, it was mentioned that the Company is represented by its duly constituted Attorney, it does not mean that such person must possess a PoA. He submits that the words "constituted Attorney" could be construed as a person with authority backed by a resolution. Since Mr. Pereira was one of the Directors of the Company and since he was authorized by a resolution of the Board of Directors, the complaint was filed with the Authority. 14. Mr. Kantak would then submit that the evidence on record clearly goes to show that the cheques were issued duly signed by the Accused and they were presented for encashment. It is submitted that there ....
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....ani Tex & Another Vs. P. Balasubramanian, 2021 SCC OnLine SC 75; iv. Haryana State Cooperative Supply and Marketing Federation Limited Vs. Jayam Textiles & Another, 2014 SCC Online SC 309; v. Bhupesh Rathod Vs. Dayashankar Prasad Chaurasia & Another, (2022) 2 SCC 355; vi. Credentials Finance Limited Vs. State of Maharashtra & Others, 1998 SCC Online Bom 515; vii. Samrat Shipping Co. Pvt. Ltd. Vs. Dolly George, (2002) 9 SCC 455; viii. TRL Krosaki Refractories Limited Vs. SMS Asia Private Limited & Another, 2022 SCC Online SC 217; ix. C.C. Alavi Haji Vs. Palapetty Muhammed & Another, (2007) 6 SCC 555. 19. The rival contentions fall for determination. 20. The complaint was lodged under Section 138 of the N.I. Act read with Section 142 of the said Act against the Accused/Applicant herein. The complaint was lodged by the Company through Mr. Francisco Lume Pereira claiming that he is one of the Directors of the Company and is aware of the facts of the case. 21. In a nutshell, it is the contention of the Complainant- Company that somewhere in 2007, the Accused approached them, being a sole Proprietor of 'MMC Commodities' claim....
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....livered to the Accused on 22.02.2011. However, he failed to comply with it within the stipulated period i.e. on or before 08.03.2011 and thus, the complaint was filed. 23. Along with the complaint, the agreement dated 19.10.2007, both the cheques, intimation from the Bank and the legal notice were placed on record. Mr. Francisco Lume Pereira (PW-1) stepped into the witness box by filing his affidavit in evidence claiming that he is one of the Directors and was aware of the facts of the matter. At that stage, neither PoA nor resolution was placed on record in favour of Francisco Lume Pereira. However, during cross- examination, when he was asked about his Authority to represent the Company, he disclosed that there was a resolution passed by the Board of Directors in his favour. Such resolution was subsequently produced on record during re-examination. The second witness Mr. Prakash Bhobe (PW-2) claimed that he personally served the notice on the accused on 22.02.2011. Mr. Bhobe claimed that he is one of the Consultants of the Company. Mr. Gaurav Kaushik (PW- 3), the third witness examined by the Complainant is the handwriting expert since the Accused even denied signing of the ag....
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....is raised in the Revision Petition on certain aspects. 31. The short question before this Court is whether, this Court while sitting as a Revisional Court, in the absence of perversity, would upset the concurrent findings of facts. It is well settled that while sitting in a revisional jurisdiction, this Court cannot re-analyze or re-interpret or re-appreciate the evidence on record. It is also to be kept in mind that the Revisional Court will not interfere, even if, a wrong order is passed by the Court having jurisdiction, in the absence of jurisdictional error, as held in the case of Southern Sales & Services & Others Vs. Sauermilch Design & Handels GMBH, (2008) 14 SCC 457. 32. Since the signature on both the cheques is admittedly of the Accused, the principles laid down by the Apex Court in the case of Hiten P. Dalal Vs. Bratindranath Banerjee, (2001) 6 SCC 16, shall come into effect, wherein it is held that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn. It is now well settled that Section 139 of the N.I. Act introduces an exception to the general rule as to the burden of proof and shifts the onus on to ....
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....t reiterated that the presumption is required to be drawn in case of voluntarily signed blank cheque leaf that it was issued under the legally enforceable debt. The statute mandates that once the signature of the Accused on the cheque/negotiable instrument is established, then these "reverse onus" clauses become operative. In such a case, the obligation shifts upon the Accused to discharge the presumption imposed upon him. While the onus is on the Accused, he has to raise a probable defence, which must meet the standard of preponderance of probability and not mere probability. 38. The points for determination which were framed by the Trial Court and also by the Appellate Court are required to be re-looked for the simple reason that if the Courts are unable to frame properly the points for determination, the discussion on it would also be affected and the Court is also duty bound to decide unnecessary and unwanted aspects to answer such points. 39. In criminal proceedings, unlike civil matters, issues are not required to be framed on considering the pleadings of both parties. The requirement of framing of points for determination is while pronouncing the judgment under Section....
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....milarly, the Magistrate has to keep it in mind provision of Section 140 of the Negotiable Instruments Act which says that it shall not be a defence in a prosecution for an offence under Section 138 that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that section. 15. Thus, framing of points is a stage only when the judgment is dictated and not prior to it. At that stage, entire material is available with the Magistrate including the arguments of both sides. In the light of above facts, the duty of the Magistrate is to frame the correct point so as to arrive at a proper finding. If incorrect points are framed, a burden is unnecessarily shifting on either complainant or the accused and accordingly reasons are also affected." 42. In the case of Rajesh Jain (supra), the Apex Court while highlighting the importance of points for determination observed in paragraphs 56, 57 and 58 as under: "56. The perversity in the approach of the trial court is noticeable from the way it proceeded to frame a question at trial. According to the trial court, the question to be decided was "whet....
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....s a manipulated document and cannot be looked into. Finally, it has been claimed that the Accused successfully rebutted the presumption under Section 138 of the N.I. Act by showing discrepancies in the evidence of the witnesses and also by leading defence evidence. 47. With regard to the first contention of issuance of notice, not been issued by the payee, Mr. Lotlikar strongly contended that the notice issued allegedly by the complainant was signed by one Mr. P.G. Bhobe (PW-2) who was not the employee of the Company. It is claimed that Mr. Bhobe had no authority on behalf of the Company to sign the notice. It is also claimed that such notice was never served on the Accused and his signature was forged on the copy of the notice, which is produced on record. 48. One of the ingredients of Section 138 of the N.I. Act and as held in C.C. Alavi Haji (supra), the Apex Court after considering the earlier decision observed that the provisions of the N.I. Act were incorporated with the object of promoting and inculcating faith in the efficacy of the banking system and its operations and giving credibility to negotiable instruments in business transactions. The introduction of the said....
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....erhead of the Company. It is also an admitted fact that the notice is signed by Mr. P.G. Bhobe for and on behalf of the Complainant-Company, which is clear from the notice itself. 52. PW-2, Mr. Bhobe was examined to prove the notice since it was hand-delivered to the Accused. The affidavit of Mr. Bhobe shows that earlier he was working as Chief Geologist of the Complainant-Company, but thereafter, he was retained by the Company as a Consultant. He deposed that when he was in his chamber, he received a message from Mr. Francisco Lume Pereira, the Director that he is sending a notice addressed to the Accused, which he should deliver personally to the Accused. Accordingly, on receipt of such notice, he signed on it and hand-delivered it to the Accused in his chamber thereby obtaining the acknowledgment. 53. The thrust of arguments on behalf of the Applicant is that Mr. Bhobe was not an employee of the Company and he was only a Consultant and therefore, the notice is not issued by the payee. First of all, such objection has no much force for the simple reason that the notice is on the letterhead of the Complainant-Company and it is signed by the Consultant. The notice has to be s....
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....ous drawers who never intended to honour the cheques issued by them, it being a part of their modus operandi to cheat unsuspecting persons." 17. It is also to be borne in mind that the requirement of giving of notice is a clear departure from the rule of criminal law, where there is no stipulation of giving of a notice before filing a complaint. Any drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Section 138 of the Act, make payment of the cheque amount and submit to the court that he had made payment within 15 days of receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complaint is liable to be rejected. A person who does not pay within 15 days of receipt of the summons from the court along with the copy of the complaint under Section 138 of the Act, cannot obviously contend that there was no proper service of notice as required under Section 138, by ignoring statutory presumption to the contrary under Section 27 of the GC Act and Section 114 of the Evidence Act. In our view, any other interpretation of the proviso would defe....
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....versity. 58. During the cross-examination of the expert evidence, much stress was raised that the document which was provided to him was only a copy and not the original notice. Such arguments are also of no substance for the simple reason that the original signature of the Accused was obtained on the office copy of the notice and such office copy was retained with the Complainant-Company. This office copy with the original signature of the Accused acknowledging receipt of notice becomes an original copy with acknowledgment. No doubt the original notice remained with the Accused, however, the office copy with the original signature of the Accused becomes the original document specifically in connection with the acknowledgment/signature of receipt of such notice. 59. The second contention raised by Mr. Lotlikar is that the complaint filed on behalf of the Company through its constituted Attorney Mr. Francisco Lume Pereira is not maintainable, firstly, for want of such PoA, which was not placed on record and secondly, there are no averments in the complaint as well as in the affidavit of Francisco Lume Pereira to that effect. He also claimed that the affidavit in evidence filed....
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....aken by the Court on a complaint in writing made by the payee or as the case may be, the holder in due course of the cheque. Thus, the mandate is to file a complaint in writing by the payee or as the case may be, the holder in due course of the cheque. 62. Admittedly, the Complainant is the Company, which needs to be represented by its authorized person. The cause title of the complaint clearly shows that the complaint is filed by the Company itself. The cheque in question is also admittedly issued in the name of the Complainant-Company. Thus, for all purposes, the complaint is lodged by the payee. 63. Now the question remains as to whether the person filing or signing the complaint for and on behalf of the Company is either a constituted Attorney or an authorized person in that behalf. The cause title of the complaint shows that the Complainant-Company is represented by its duly constituted Attorney Francisco Lume Pereira whereas paragraph 11 of the complaint reads thus: "11. The Complainant being a Company, this complaint has been signed and shall be verified by Shri Francisco Lume Pereira, the Director of the Complainant, who is also aware of the facts of the case....
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....tion was passed by the Board of Directors authorizing Mr. Francisco Lume Pereira to represent the Company. 69. Reliance placed on the decision in the case of A.C. Narayanan (supra) will not be of much help to the Applicant since in that case, the Company, M/s Surana Securities Limited by a resolution of the Board of Directors, authorized its Managing Director to appoint an agent to represent the Company. Pursuant to it, one Mr. V. Shankar Prasad was appointed as an agent by executing a general Power of Attorney, who was later substituted by Mr. Ravinder Singh by another general Power of Attorney. The points of reference to the larger Bench are found in paragraph 15 whereas the findings are in paragraph 26, which reads thus: "26. While holding that there is no serious conflict between the decisions in M.M.T.C. Ltd. Vs. Medchl Chemicals and Pharma (P) Ltd., [(2002) 1 SCC 234] and Janki Vashdeo Bhojwani Vs. IndusInd Bank Ltd., [(2005) 2 SCC 217], we clarify the position and answer the questions in the following manner: (i) Filing of complaint petition under Section 138 of the NI Act through power of attorney is perfectly legal and competent. (ii) The powe....
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....omplainant (Company) is represented by an authorised person who has knowledge, would be sufficient. The employment of the terms "specific assertion as to the knowledge of the power-of- attorney holder" and such assertion about knowledge should be "said explicitly" as stated in A.C. Narayanan (supra) cannot be understood to mean that the assertion should be in any particular manner, much less only in the manner understood by the accused in the case. All that is necessary is to demonstrate before the learned Magistrate that the complaint filed is in the name of the "payee" and if the person who is prosecuting the complaint is different from the payee, the authorisation therefor and that the contents of the complaint are within his knowledge. When, the complainant/payee is a company, an authorised employee can represent the company. Such averment and prima facie material is sufficient for the learned Magistrate to take cognizance and issue process. If at all, there is any serious dispute with regard to the person prosecuting the complaint not being authorised or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that pe....
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....ny averments to that effect were not made in the complaint and that the complaint was stillborn and would not have been made alive on production of resolution. 75. Again, in Credentials Finance Limited (supra), this Court observed in paragraph 15 that neither the N.I. Act nor the Companies Act imposes a precondition that there has to be an authorization as per the statutory provisions. When an artificial person like a Company has to file a complaint, it will be operated through one of its officials which may include even a Chairman or the Managing Director. All that can be insisted upon is the existence of authorization. In the absence of it being a precondition, in the event of a dispute, it will become a subject matter of proof to be adduced at the time of trial. 76. Thus, the above observation, again, is a clear answer to the submission of Mr. Lotlikar with regard to the resolution being produced subsequently. 77. In the case of Bhupesh Rathod (supra), the Apex Court was dealing with a complaint having a cause title in the name of a person being the Managing Director of the Company wherein objections were raised that it is not a complaint received by the Company and thu....
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.... the Federation, an opportunity ought to have been granted to the Federation to place the document containing authorization on record and prove the same in accordance with law. This is so because procedural defects and irregularities, which are curable, should not be allowed to defeat substantive rights or to cause injustice. The procedure, a hand- maiden to justice, should never be made a tool to deny justice or perpetuate injustice, by any oppressive or punitive use. 80. The above observation is a clear answer to the objections raised on behalf of the Applicant to the authorization or averments of any pleadings in the complaint as well as the evidence of PW-1. 81. When the objection was raised during the cross-examination of PW-1, he placed on record a certified true copy of such authorization which has been accepted by the Courts below and rightly so for the simple reason that such procedural defects and irregularities could be cured by granting opportunity to the Company. The contention with regard to such a resolution was that it is a forged one, has no substance at all. Thus, the second objection with regard to the maintainability of the complaint for not producing the ....
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....ed of execution of such an agreement, however, in his evidence, the Accused tried to canvass that there was some meeting between him, Francisco Lume Pereira and the Managing Director of the Complainant-Company on 25.02.2009 and at that time, he agreed to supply 11,500 metric ton of iron order to the group Company namely, Infrastructure Logistics Private Limited at the rate of 1,750/- per metric ton. He flatly refused execution of any agreement dated 19.10.2007. However, he did not dispute anywhere in his affidavit about the receipt of Rs.1.20 crores from the Complainant-Company as mentioned in the agreement dated 19.10.2007 with specific details of cheque bearing no. 383246 dated 19.10.2007 drawn on State Bank of India, Margao Branch. 86. In paragraph 15 of the affidavit, Applicant/Accused stated on oath as under: "15. I say that the disputed cheque was issued as security deposit for supply of 11,000 MT of Iron ore. I further say that Complainant has fraudulently mentioned that on the aforesaid representation and by way of an advance of the purchase price of such ore the Complainant had advance me a sum of Rs. 1,20,00,000/- (Rs. One Crore Twenty Lakhs Only)." 87. Thu....