V. Jagannathan, J.@mdashWhether a Counsel is disentitled to appear for thus complainant on account of the Counsel being a creditor to the complainant and whether the Power of Attorney holder is incompetent to file the complaint and give evidence in Section 138 proceedings of the N.I. Act and whether the cheques issued being dishonoured on account of the accounts being transferred to another branch of the same bank, attracts the offence u/s 138 of the N.I Act, are the questions that have cropped up during in the course of hearing of all these appeals, calling for an answer.
2. The respondent in all these appeals being one and the same person and the cheques issued by him to each of the complainants having been dishonoured and all the cheques being issued in respect of a memorandum of agreement reached between the complainant Vishnu Bharath and one Bhakthavatsalam and the respondent, the trial Court after having the evidence of the power of attorney holder being recorded in all the cases and the evidence of the respondent also being one and the same, excepting the differences in the cheque amounts, the trial Court thought it fit to dispose of all the complaints by a common judgment and hence this Court is also left with no other option than to dispose of all these appeals by this common judgment with the consent of both the parties.
3. The facts which are common to all the complaints filed before the trial Court u/s 138 of the Negotiable Instruments Act (''N.I Act'' for short) are to the effect that, under a Memorandum of Agreement entered into between one Bhakthavatsalam and Manjunath being the first party and the respondent herein K. Selvam and one Venkateshmurthy as the second party and the complainant Vishnu Bharath and his wife Anuradha Bhurath being the party of the third part, it was agreed, (under the said Memorandum of Understanding dated 19.2.01) that the second party of which the respondent herein is one of them has undertaken to pay the liability of the party of the first part and in this regard, the liability which the respondent K. Selvam owed to the 3rd party being Rs. 78,50,000/-, the respondent Selvam issued several cheques to the complainants party and all the said cheques were returned and thereafter the respondent Selvam issued the cheques which are the subject matter of all these appeals to the respective complainants. In respect of the complainant Vishnu Bharath (Crl.A. No. 352/07), the respondent issued six cheques, out of which four were for Rs. 10 lakhs and one was for Rs. 3 lakhs and last one for Rs. 5 lakhs as per Exs. P1 to P4, P5 and P6 respectively totaling to Rs. 48 lakhs and all these cheques on being presented were returned by the concerned bank to the said complainant with the endorsement "account closed and the account transferred to Shanthi Nagar branch" in respect of the first four cheques and in respect of the cheques as per Exs.F5 and P6, the endorsement issued was "insufficient funds". The cheques issued in favour of the complainant Chetan Bharath (Crl.A. No. 353/07) were three in number and they were for Rs. 10 lakhs in respect of two cheques and Rs. 2 lakhs for one cheque and all there three were returned with the endorsement "account closed" and these cheques are at Exs. P1 to P3 respectively. As far as the cheques issued to the complainant Smt Sindhu Bharath (Crl.A. No. 354/07) are concerned, they were three in number, each for Rs. 10 lakhs and all these cheques which have been produced at Exs.P1 to P3 respectively were returned with the endorsement "insufficient funds". As far as the cheques issued by the very same respondent to Smt. Anuradha Bharath (Crl.A. No. 355/07) is concerned, they were two in number for Rs. 10 lakhs and Rs. 1,50,000/- each as per Exs. P3 and P4 respectively and they were returned with the endorsement ''Insufficient funds''. Finally, in respect of the cheques issued to A. Sathyanarayana (Crl.A. No. 356/07) which were two in number for Rs. 10 lakhs each, the said cheques were also returned with the endorsement "account closed" and they were produced at EJW.P1 and P2. Thus, it is the case of the complainants that in respect of all the cheques issued which is the subject matter of the Crl.A. Nos. 352/07, 353/07 and 356/07, the said cheques were returned with the endorsement "account closed and account transferred to Shanthi Nagar branch" and in respect of the other cheques which the subject matter of Crl.A. No. 354/07 and Crl.A. No. 355/07, they were returned with the endorsement "insufficient funds," Therefore the complainants/appellants filed the complaints u/s 138 of the N.I. Act before the trial Court and after the evidence of the complainant, Vishnu Bharath who also happens to be the Power of Attorney Holder for the other complainants, being recorded and after considering the evidence placed by the respondent who were examined for DW-1 and another witness one Venkatesh Murthy as DW-2 and taking into consideration the documents filed and the rulings cited by the respondent''s side, the learned trial Judge dismissed all the complaints by acquitting the respondent herein and against the said orders of acquittal in each of the cases filed by the complainants, the present appeals have been preferred.
4. I have heard the learned Counsel Sri. K.R. Ashok Kumar for the appellants and the learned Counsel Sri. M.J. Alwa for the respondent Both of them argued at great length and also placed reliance on several decisions in support of their respective contentions.
5. Learned Counsel Sri. Ashok Kumar submitted that the trial Court could not have dismissed the complaints when it is an admitted fact that the cheques in question were issued by the respondent herein and the signature also being not in dispute. Secondly, when the cheques on being presented to the bank, returned with the endorsement either ''account closed and account transferred to Shanthi Nagar branch'' or ''Insufficient funds'', it is established that in effect the cheques were dishonoured and therefore when the complainants issued the legal notice to the respondent and the respondent having failed to pay the cheque amounts within the stipulated time, the complainants have resorted to 138 proceedings and more importantly the respondent himself has admitted his liability to each of the complainant by issuing a letter dated 31.7,02 and therefore when such are the undisputed facts, there was no other way but to have convicted the respondent for having committed the offence punishable u/s 138 of the N.I. Act in respect of each one of the cheques which were returned dishonoured. Thirdly, it was submitted that the trial Court also erred in holding that the learned Counsel for the complainant Sri. Ashok Kumar was disabled from appearing for the complainant and this finding is totally unsustainable in law and has caused professional toss to the Counsel Sri. Ashok Kumar and the trial Court could not have give such a finding in a matter which involves the career and prospects of a Counsel appearing in the Courts, merely because the Counsel for the complainant had given some amount on credit to one of the complainants, which is reflected in the statement produced before the trial Court, that itself could not have been made a ground to disable the Counsel from appearing on behalf of the complainant and as such the said finding is illegal and needs to be set aside. The fourth submission made is that the respondent having acknowledged his liability towards each one of the complainant as could be seen from his letter of acknowledgement dated 31.7.02, it is clearly established that there exists a legally recoverable debt and as such the necessary ingredients of Section 138 of the N.I. Act having been satisfied by each one of the complainants, the trial Court could not have recorded the finding to the contrary. As far as the finding of the trial Court that the Money Lenders Act is applicable and therefore in the absence of license being held by each one of the complainants, the complaints could not have been held to be maintainable, is also erroneous finding, in the light of the observations made by this Court in the several decisions. Two other contentions put forward are that the trial Court erred in taking a view that the notice issued to the respondent cannot be held to be sufficient when the cheques pertain to Proprietary concern and lastly the trial Court also ignored the feet of all the cheques in question being accompanied by, on demand promissory note, executed by the respondent and also referring to the meaning given to the word ''appearance'' in Black''s Law Dictionary, it is submitted that the trial court''s order of acquittal cannot be sustained on any one of the grounds given by it and as far as the competency of the power of attorney holder, to file the complaint and to give the evidence on behalf of the complainant in concerned, the law is well settled in regard to this area and there is no bar for a power of attorney holder either to file the complaint or to give the evidence on behalf of the complainant and as regards this, several decisions of this Court were not taken into consideration by the learned trial Judge. In support of the above submissions, the learned Counsel Sri. Ashok Kumar, placed reliance on several decisions of the Apex Court and of this Court The said decisions are:
(a)
(b) AIR 1998 SC 283
(c) AIR 2001 Kar. 2154
(d)
(e)
(f)
(g) ILR 2006 Kar 4287
(h)
(i)
(j) 1993(1) Crimes 269
(k)
(l) AIR 2008 SCW 738
(m) ILR 2006 Kar 3129
(n)
(o)
6. On the other hand, the learned Counsel Sri. M.J. Alwa for the respondent argued that the judgment of the trial court does not call for any interference in all these appeals in as much as the complainants haws failed to establish the necessary ingredients of Section 138 of the N.I. Act as regards the existence of legally recoverable debt. It is contended that the cheques in question are based on the Memorandum of Agreement dated 19.2.01 and as it is clear from the said document which has been marked at Ex.D1 and the original is also produced by the complainant, that the respondent clearing the ban will arise only subject to the balance material of Asphalt being released to the respondent and as the said goods were seized at Madras on 17.1.01, the respondent wan not liable to pay the ban amount to the complainants and therefore the trial Court has taken note of thin aspect of the matter and has rightly held that the complainants have failed to establish the existence of legally recoverable debt on the part of the respondent and as such the mere issuance of cheques by the respondents itself will not be sufficient to establish the case of the complainants. For this submission, the learned Counsel Sri. M.J. Alwa placed reliance on a recent decision of the Apex Court reported in AIR 2006 SCW 738. As far as the possibility of the Counsel Sri. Ashok Kumar to appear for the complainants before the trial Court is concerned, it is submitted that from the documents produced before the trial Court, it is established that the Counsel Sri. Ashok Kumar is one of the creditors to the complainant Smt. Anuradha Bharath and therefore the Counsel could not have to appeared for the said complainant because of likelihood of pecuniary advantage derived by the Counsel. In this regard the trial Court has taken into consideration the provisions of the Advocates Act as well as the relevant Rules of the Bar Council of India and as such the trial Court''s findings in this regard cannot be termed as erroneous in law. My attention was also drawn to the meaning of the word ''Pecuniary'' in the Black''s Law Dictionary. The other submission put forward is that the Power of Attorney holder Vishnu Bharath could not have deposed, as well as filed the complaints in all cases, except his own, and the documents which confer an the said Vishnu Bharath, the power to appear before the trial Court dose not give the power to the said Power of Attorney holder to file the complaint and to give the evidence on oath on behalf of the complainants. Therefore even on this ground, the complaints were liable to be dismissed. As far as the averments contained in the complaint and the legal notice issued in each of these cases is concerned, it is submitted that there is variance between the complaints'' averments and the stand taken in the legal notice in as much as there is no reference to the Memorandum of Understanding, in any of the complaints and on this core also the acquittal of the respondent will have to be upheld. The next submission put forward by the learned Counsel Sri. M.J. Alwa is that the Memorandum of Understanding was entered into not between the complainants and the respondent in individual capacity and therefore issuing notice to the respondent; in individual capacity by each one of the complainant: is also not correct and the Proprietary concern ought to have been issued the legal notice and there is no reference to the Proprietary concern either in the compliant or in the legal notice. Therefore even on this score, the complaints could not have been held to be maintainable and the trial Court has taken this also into consideration. It was also contended that the power of attorney holder could not have appeared before the trial Court without the permission of the Court itself and as such by drawing a reference to the parallel provisions contained in the Cr.P.C., Sections 196 and 199, it vu submitted that the power of attorney holder could not have appeared and give evidence apart from filing the complaint. The document of Power of Attorney itself, does not confer any right on the power of attorney holder to file the complaint or to give the evidence in all these cases. Thus the learned Counsel Sri. M.J. Alwa referring to the above contentions drew support for the same by inviting the attention of this Court to the following decisions. Hence, he prayed for dismissal of all the appeals:
(a)
(b) ILR 2006 Kar 3129
(c) AIR 2008 SCW 738
(d)
(e)
(f) 2007(1) SCJ 47
(g) AIR 2007 SCW 7008
(h)
(i) 1985(2) Kar.L.J. 189
(j)
(k)
(l)
(m) AIR 2006 (NCC) 1166
(o)
(q)
(q) 2007(1) SCJ 856
7. Having thus heard the submissions made by the learned Counsel for the respective parties and after taking note of the rulings cited by each one of them, the following points arise for consideration in these appeals:
(i) Whether the Counsel Sri. Ashok Kumar was disentitled to appear for the complainants before the trial Court?
(ii) Whether the Power of Attorney holder Sri. Vishnu Bharath was competent to file the complaint and give evidence on behalf of each of the complainants?
(iii) Whether Section 138 of the N.I. Act is not attracted in respect of the cheques, which were returned with the endorsement "account closed and transferred to Shanthi Nagar branch"?
(iv) Whether the complainants have established the existence of legally recoverable debt by the respondent?
8. Point No. 1: The first issue to be considered is as to the finding of the trial Court with regard to the disability of the Counsel Sri. Ashok Kumar to appear for the complainants. The learned trial Judge has referred to Rule 9 Chapter-II Part-6 of the Bar Council of India Rules and Section 29 of the Advocates Act and taking aid of the said provisions and noting that in C.C. No. 19275/03, there is a reference to the Counsel Sri. Ashok Kumar as a sundry creditor in Ex.P16, the learned trial Judge held that it is clear from the said documents and the entry that the complainant in the said case owes the debt to the Counsel and therefore the Counsel suffers from disability to appear and conduct the case and inspite of the same, the Counsel has proceeded with the case for the reasons best known to him. The said reasoning of the trial Court is strongly supported by the learned Counsel Sri. M.J. Alwa for the respondent in the course of his argument before this Court. On the other hand, the learned Counsel Sri. Ashok Kumar who happens to bet the Counsel appearing in the trial Court on behalf of each one of the complainants contended that the trial Court committed serious error in recording such a finding and it has not taken into consideration this consequence that flow from the said observation since the said finding will come in the way of the professional career of the Counsel himself, Moreover, it in submitted that as the case is one u/s 138 of the N.I. Act, involving the complainants on one side and the respondent on the other, merely because the Counsel happens to be a sundry creditor to one of the complainants that itself is not a factor to disable the Counsel from appearing on behalf of each one of the complainants. It is submitted that the Counsel was only canvassing the case of the complainants based on the dishonour of cheque issued by the respondent and such being the case and circumstances involved in all these cases, there was no scope for the trial Court to record a finding with regard to the possibility of the Counsel appearing for the complainants.
9. On the other hand, learned Counsel Sri. M.J. Alwa submitted that the fact that the Counsel Sri. Ashok Kumar happens to be one of the sundry creditor as seen from document Ex.P16, it is clear that the said Counsel Ashok Kumar has got a pecuniary interest in all these matters and therefore the trial Court has rightly recorded the finding that the Counsel for the complainant is disabled from appearing and conducting the case. It was also submitted by the learned Counsel Sri. M.J. Alwa that the amounts which is owed by the complainant in C.C. No. 19275/03 to the Counsel Sri. Ashok Kumar is also the amount that is involved the amount that is due by the respondent and therefore as there is some pecuniary interest of the Counsel being involved in all these cases, the said Counsel could not hove appeared for the complainant.
Section 29 of the Advocates Act, 1961 reads an under:
29. Advocates to be the only cognised class of persons entitled to practise law - Subject to the provisions of this Act and any rules made thereunder, there shall, as from the appointed day, be only one class of parsons entitled to practise the profession of law, namely, advocates.
Rule 9 contained in Chapter-II Part-VI of the Bar Council of India Rules reads as under:
9. An advocate should not act or plead in any manner in which he is himself peculiarly interested.
Illustration
I. He should not act in a bankruptcy petition when he himself is also a creditor of the bankrupt.
II. He should not accept a brief from a company of which he is Director.
A plain reading of the two illustrations given to Rule 9 will make it clear to any discernable reader, that it is only in such of the cases where the advocate is directly interested and where he derives benefit for himself that he cannot plead or act The first illustration makes it clear that when the advocate himself is a creditor of the bankrupt, he should not act in a bankruptcy petition and the second illustration also makes it clear that when he happens to be a director of a company, he should not accept brief of the very company of which he is the director. Therefore in such where interest of the advocate is directly involved that the said Rule 9 prevents him from acting or pleading in a Court of law. It is also relevant at this juncture to make a reference to a recent communication of the Bar Council of India dated 15.2.08 addressed to the President of all the High Court Bar Association and dealing with the subject "Relatives of Judges practicing in the same Courts". The Bar Council has clarified the position with regard to the appearance of the advocate before a Court, tribunal authority and Rule 6 of Chapter-II Part-6 of the Bar Council of India Rules was also referred to in the said communication and the said Rule is as under:
An advocate shall not enter appearance, act, plead or practice in airy way before a Court, Tribunal or Authority mentioned in Section 30 of the Act if the sole or any member thereof is related to the advocate as father, grandfather, son, grandson, uncle, brother, nephew, first cousin, husband, wife, mother, daughter, sister, aunt, niece, father in law, mother in law, son in law, brother in law, daughter in law or sister in law.
10. I have adverted to the above communication from the Bar Council of India only to drive home the point that where the advocate is in a way interested either because of he being a Director of the company or because of he being the creditor of the bankrupt and bankruptcy petition is filed by him or for that matter if one of the relatives mentioned in the above communication as per Rule 6 happens to as presided over the Court, Tribunal/Authority, that there is a bar actor the advocate to appear in a such case.
11. The case on hand in my opinion does not come within the purview of either the circumstances mentioned in the two illustrations to Rule 9 or will fall Rule 6 referred to above. Secondly, the Counsel Sri Ashok Kumar has appeared for the complainants in respect of the case felling u/s 138 of the N.I. Act and the said case concern issuance of a cheque by the respondent to each one of the complainants and the said cheques being dishonoured. Merely because the Counsel Ashok Kumar happens to be one of the sundry creditor as mentioned in Ex.P16, that itself will not and cannot prevent the Counsel from appearing for the complainants nor can it be said that the situation falls within Rule 9 of Chapter-II Part-6 of the Bar Council of India Rules. The expression that is used in the said rule, which is very relevant is "he is himself peculiarly interested" and if it is taken into consideration from the facts involved in all these cases, it can never be said that the Counsel Ashok Kumar has pecuniary interest in any one of these cases. The respondent has issued several cheques to the complainants and on his own showing the respondent has even, admitted in letter dated 31.7.02 that he owes the amounts shown against the complainants and it is with regard to the said amounts, cheques as well as On Demand Promissory Notes were issued fey the respondent. Therefore the mere co-incidence of the Counsel Sri. Ashok Kumar also happens to be a sundry creditor to one of the complainants, cannot disable the Counsel from appearing for the complainants.
12. To draw an analogy from every day experience, it is not uncommon that many of the advocates also happens to have their accounts in several banks and if they happen to appear for any such bank in which they have become an account holder and if the case does not pertain to or involve the account held by the advocate in the said bank, and if the bankruptcy petition or case pertains to an altogether different Bank totally unconnected with the account being held by the Advocate concerned, it is not impermissible for an advocate to appear for the bank in question, so long a. he himself does not derive any pecuniary interest for himself by appearing for the bank. It is on the very same analogy in the case on hand also, merely because the Counsel happens to be the creditor to one of the complainants, that itself cannot come in the way of the Counsel appearing before the trial court that too in respect of a case involving Section 138 of the N.I. Act between the between the complainants and the respondent.
13. Unfortunately, the trial Court has failed to notice these factors and has also not considered the relevant Rule 9 in proper perspective. Before recording a finding with regard to the disability of a Counsel to appear in the case, the trial Court ought to have considered the material so as to find out as to in what manner, the Counsel has pecuniary interest in the matter. Therefore the trial Court ought not to have made such an observation merely on account of the Counsel happening to be a creditor to one of the complainants. It is also unfortunate that the said finding of the trial Court has also come in the way of the professional career of the Counsel concerned. The trial Court ought to have kept in view, that any finding by it with regard to the disability of a Counsel will have a long term repercussion on him not only in respect of the case involved therein but even in other and it may also have the effect of affecting the professional career as well as the reputation of the Counsel. All these factors were lost sight by the learned trial Judge. The reasons assigned by the trial Court cannot be sustained in law and it has made the observations to the disadvantage of the Counsel and in doing so, the learned trial Judge has not applied his mind property and by merely mentioning that the document Ex.P16 produced shows the existence of debt, the trial Court proceeded to record such a finding. The said reasoning therefore cannot be sustained as it is totally a perverse finding recorded without any material being placed to show as to in what manner as the Counsel is pecuniary interest in the matter. It is also pertinent to observe at this juncture, that the Courts ought to take all the care and caution before making such observations in the proceedings before it, lest it will affect the professional career as well as the reputation of the Counsel appearing before the trial Court I, therefore answer the point under consideration fey holding that the finding of the trial Court that the Counsel Ashok Kumar is disabled from appearing in the case cannot be sustained either on facts or in law.
14. Learned Counsel for the respondent Sri. Alwa strongly contended that the complainant Vishnu Bharath in not competent to file the complaint on behalf of the other complainants and he is also not competent to give evidence on behalf of other complainants, not withstanding that the other complainants have given him the Rower of Attorney. In this connection he also placed reliance on several decisions.
15. On the other hand, learned Counsel for the appellants Sri Ashok Kumar argued that there is no bar for the Power of Attorney holder to file the complaint and also to give evidence on behalf of the other complainants and as such, no fault can be found in the complaint being filed by the Power of Attorney holder Vishnu Bharath. In this connection he also sought support from several decisions referred to by him in the course of his arguments.
16. Before I proceed to examine this aspect of the matter, it is necessary to refer to Section 142 of the N.I. Act, which in my opinion, will offer the solution to the contention put forward by the learned Counsel for the respondent. Section 142 of the N.I. Act reads as under:
142. cognizance of offence- Not withstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),-
(a) no court shall take cognizance of any offence punishable u/s 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause of action arises, under Clause (c) of the proviso to Section 138;
(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable u/s 138.
It is clear from a plain reading of Sub-section (a) of Section 142 that all that is required is that the complaint is to be filed in writing and the said provision does not insist upon the complaint also being signed by the very complainant himself.
17. Secondly, the said Section 142 also came up for consideration before this court in the case of
21. As noted already, this Court has taken a consistent view that a Bower of Attorney holder could present complaint. Further, Section 2 of the Power of Attorney Act, which empowers the donee of a Power of Attorney to do anything "in and with his own name and signature" by the authority of the donor of the power. Said Section declares that everything so done shall be as effectual as if it has been done by the donee of the power in the name and with the signature of the donor thereof and as such, the act committed by the holder of the Power of Attorney. So, when Power of Attorney holder could represent complainant and present complaint on behalf of the complainant, it could be said that examining the Power of Attorney holder on oath by Magistrate is sufficient compliance of Section 200 of Cr.P.C. To construe otherwise, will be preventing complaints being fifed by Corporation, body corporate, juristic person or even a natural person who, an account of inability either physical or otherwise, cannot appear before Court in person as complainant for any purpose, including examination on oath by learned Magistrate. This cannot be ignored though Section 200 of Cr.P.C. envisages examination of complainant on oath.
22. When the Power of Attorney holder of the complainant, who had stepped into the shoes of the complainant, was examined on oath and not the complainant as such, who could not have been examined at any time in any manner, such a thing cannot be taken as vitiating the cognizance or complaint, as the case may be.
The same is the view expressed by the learned Authors Bashyam & Adiga''s in their commentary on the N.I. Act and in page.745 the following comments are offered:
There is nothing unnatural in the proposition that a complaint u/s 142 of Negotiable Instruments Act can be filed even by an authorised representative or agent of the person in whose favour the cause of action for making such complaint has arisen.
There is nothing wrong in making of a complaint u/s 142 of N.I. Act by the authorised agent of the payee on the basis of Rower of Attorney executed by payee in his favour in this respect.
18. It is therefore clear from the above position in law as has been held by this court as well as the practice which is accepted in respect of the complaint u/s 138 of the N.I. Act, that there can be no bar for complaint being filed by a Power of Attorney holder. Apart from this, it is also necessary to refer to another decision of this Court. In the case of Bhimappa and Ors. v. Allisab and Ors. ILR 2006 Kar 3129, a learned single judge of this court has observed thus, while dealing with the competence of a person to testify as a witness before court as a Bower of Attorney holder.
Competency of a person to testify as a witness before a Court - Competency of Power of Attorney holder to give evidence -Evidentiary value of the deposition of the Power of Attorney holder when parties do not choose to appear as witness in the witness box - Held - There is no express bar made in the provisions of CPC to debar the Power of Attorney to be examined as a witness an behalf of the parties to the proceedings. Power of Attorney is a competent witness and is entitled to appear as such. His evidence cannot be refused to be taken into consideration on the ground that the parties to the suit i.e., plaintiff or defendant do not choose to appear as witness in the witness box. The question whether the GPA holder of a party can be competent witness on behalf of a party has to be answered in the light of Section 118 of the Evidence Act. The Power of Attorney of a party, only on the ground that he holds the Power of Attorney, cannot be said to be in the category of persons who are incapable of being witness as provided by Section 118 of the Evidence Act. Whether such Rawer of Attorney holder has personal knowledge about the matters in controversy, may be a question which can be thrashed out by cross-examining him and if it is found that the Bower of Attorney holder has no personal knowledge about the facts in controversy, the evidentiary value of his deposition may be determined, but that has nothing to do with the competence of such a Power of Attorney holder to depose before a Court or a Judicial Tribunal as a competent witness.
19. Having regard to the aforesaid law laid down by this court, I am of the view that there is no merit in the submission made by the learned Counsel for this respondent that a Power of Attorney holder cannot file a complaint or enter the witness box to depose on behalf of the complainant.
20. As far as the Power of Attorney deed that is produced in all these cases is concerned, the complainants have produced the said document at Ex.P9 and referring to the wordings used in the said Power of Attorney, it was argued by the learned Counsel Sri. Alwa for the respondent that all that the deed authorised the Power of Attorney holder is to "appear on behalf of the principal" and therefore the use of expression ''appear'' cannot be extended to cover the action of the Power of Attorney holder or to file the complaint or to give evidence on oath before the court. This argument also cannot be accepted because a plain reading of the contents of the General Power of Attorney executed in favour of Vishnu Bharath though mentions at para.6 as "To appear for and on behalf of me before all Authorities including civil, criminal, High and Supreme Courts", and further the Power of Attorney document will have to be read as a whole and not in isolation and mere mention of words General Power of Attorney at the beginning of the deed itself implies that the agent is given the general power by the principal to act on behalf of the principal and it is further clear from the preamble itself, wherein it is mentioned as under:
Whereas, I hereby appoint my lawful attorney and agent to do all or any of the acts, deeds and things.
21. Therefore, the use of the above expression coupled with the nature of authorisation given to the Bower of Attorney holder makes it clear that the Power of Attorney holder is given all the powers to do all that is necessary on behalf of the principal. In this connection I also refer to the decision of the Apex Court reported in (1969) 4 SCC 514 in the case of Atul Mathur v. Atul Kalra and Anr., wherein it has been observed that though the deed makes no reference to filing of the complaint, yet the deed contains a general Clause by which the company undertook to ratify an acts, deeds and things lawfully done by the Rawer of Attorney holder, and hence, it has to be construed that the Power of Attorney gives the general powers to the attorney to act on behalf of that principal. Therefore, I do not find any defect in the document produced on behalf of the complainants in all these cases. Yet another angle which requires to be seen in the instant case is that the trial court has not recorded any adverse finding against the complainants, merely because the Power of Attorney holder filed the complaint and gave evidence. No objection was raised by the respondent in this regard nor the respondent has questioned the decision of the trial court in permitting the said Power of Attorney holder to file the complaint and give evidence on oath on behalf of other complainants and therefore it must be held that objections, if any, also have been waived by the respondent and it is too late in the day to canvass such a point before tins court in appeal For all the above said reasons, I find that the submission made by the learned Counsel for the respondent with regard to the incompetence of the Power of Attorney holder to file the complaint or to give evidence, cannot be accepted as a tenable one.
22. Point No. 3 Another important contention put forward fay the learned Counsel for the respondent is that the cheques in question were returned by the bank with the endorsement "accounts clewed, transferred to Shantinagar branch" and therefore it is contended that when the account itself was transferred to another branch of the very same bank, nothing cheques in the branch to which the account had been transferred and secondly such an endorsement given by the bank does not come within the expression "insufficient funds or exceeds the amount to he paid from that account". The above said contention put forward, also does not carry ranch substance behind it in view of settled position in law in this regard as has been laid down by the Apex Court itself. In the case of
Reading Sections 138 and 140 together, it would be clear that dishonour of the cheque by a bank on the ground that account is dosed would be covered by the phrase ''the amount of money standing to the credit of that account is insufficient to honour the cheque''. Where cheque is returned by the bank unpaid on the ground that the ''account is closed'', it would mean that cheque is returned as unpaid on the ground that ''the amount of money standing to the credit of that account is insufficient to honour the cheque''. Because cheque is dishonored as the amount of money standing to the credit of ''that account'' wma ''nil'' at the relevant time apart from it being dosed. Closure of the account would be an eventuality after the entire amount in the account is withdrawn. It means that there was no amount in the credit of "that account" on the relevant date when the cheque was presented for honouring the same. The expression "the amount of money standing to the credit of that account m insufficient to honour the cheque" is a genus of which the expression "that account being closed" is specie. After issuing the cheque drawn on an account maintained, a person, if he closes "that account" apart from the fact that it may amount to another offence, it would certainly be an offence u/s 138 as there was insufficient or no fund to honour the cheque in ''that account''.
It is therefore clear from, the aforesaid proposition of law that the reason given by the bank ultimately has the effect of the cheque being dishonoured and the complainants could not draw the amount from the account of the accused/respondent in that particular branch. Therefore, the case of the complainants falls squarely within Section 138 of the N.I. Act. Whether the cheque was returned for the reason of the account being closed or the account being transferred to some other branch, is not the criteria, but the fact is that there was no fund available in that particular account of the respondent to honour the cheques thereon in. favour of the complainants. Therefore, as has been held by the Apex court, even the reasons given by the bank, "accounts closed and transferred to Shanthinagar branch" also can be brought within the expression "insufficient funds" and hence the question of the offence being not attracted u/s 138 of the N.I. Act, cannot be accepted. Another decision in this regard is in the case of
23. For the foregoing reasons and particularly having regard to the law laid down by the Apex Court in NEPC v. Magma''s case, I am unable to agree with the contention put forward by the learned Counsel for the respondent that no offence u/s 138 of the N.I. Act can be said to be attracted to the cases on hand. The decisions cited by him in this regard are not applicable because the facts and circumstances of those cases are all together different from one with which we are concerned in these appeals.
24. Point No. 4: The last of the contention put forward and an important one, by the learned Counsel for the respondent is that the complainants have not been able to prove that the cheques in question were issued in order to clear the existing legal liability or debt of the respondent. It is submitted that the presumption u/s 139 of the N.I. Act cannot be pressed into service with regard to the requirement of the complainant proving the existence of legally recoverable debt. In this connection learned Counsel for the respondent has referred to the decision of the Apex Court reported in AIR 2008 SCW 738 . The very same decision was referred to by the learned Counsel for the appellant as well. No doubt, in the said case the Apex Court has held that existence of legally recoverable debt is not a matter of presumption u/s 139 of the N.I. Act Learned Counsel for the respondent also placed reliance on the decisions reported in
25. From the evidence placed by each one of the complainants through their Power of Attorney holder Vishnu Bharath and documents produced, it is clear that the complainants have established that the cheques in question were issued by the respondent to clear the existing debt or in other words the debt in question is a legally recoverable one, this is clear not only from the cheque, issued in respect of each one of the complainants by the respondent. But at the same time the respondent has also issued on demand promissory notes which further proved the existence of debt. Apart from these documents, namely the cheques and the on demand promissory notes, there is another important document on which the learned Counsel for the appellants has placed reliance and that document according to him clinches the issue. The said document is nothing but the acknowledgement of debt by the respondent towards each one of the complainants. The said document has been marked as Ex.P12 in C.C. No. 7804/03 which has given rise to Crl.A. No. 356/07 and the very same document has been produced and marked in other well. The contents of the said document needs to be excerpted in order to show that the respondent has accepted his liability towards each one of the complainants and also the exact amount which he owes to each one of them. The said document reads as under:
I hereby gratefully acknowledge for having provided finance as and when required for my business. I confirm that total amount due is Rs. 1,27,00,000/- principal and interest due thereon from 1.6.2002. This amount includes the amount given to me directly by cash/by cheque to M/s Vigneshwara Construction & Asphalts, M/s Vigneshwara Transports and to M/s ITMS Co. On ray account, on the basis of Try party Agreement entered between M/s KMC Constructions Limited., myself and all of you, advance given to M/s MRK Constructions discounting their cheque No. 154143 of Tamilnadu Mercantile Bank Limited., of Rs. 20,00,000/- for which I took cash from you and cash given time to time and interest charged to my account on various advances.
I confirm that after looking into the accounts and as per our mutual understanding and for the sake of convenience, the amount due by me are bifurcated between five of you and the cheques are issued with support on On Demand Pronote.
(without interest)
AS Vishnu Bharath 43,00,000
Anuradha Bharath 13,50,000
Sindhu Bharath 28,00,000
Chetan Bharath 22,00,000
A. Satyanarayan 20,50,000
-----------
1,27,00,000
-----------
As surety, my wife is also signing this letter confirming that she is aware of my borrowings and she is also signing the On Demand Pronotes.
I assure you that I shall repay the entire loan before 31.12.2002 without fail.
Though it is clear from the contents of the above document that the respondent has admitted his liability towards each one of the complainants and has also mentioned exact amount which he owes to each one of them and cheques in question which haw been issued to the complainants are also of the same amount; the? contention put forward by the learned Counsel for the respondent that the liability of the respondent m depending upon the conditions mentioned in the Memorandum of Agreement and as the material in question had not been received by the respondent, he is not liable to pay any amount to the complainants, therefore, cannot be accepted. No such condition can be seen in the entire Memorandum of Agreement which is produced at Ex.D1 by respondent himself. That apart, it is also useful to refer at this juncture to a decision of the Apex Court in the case of
26. Applying the aforesaid ratio to the case on hand, the very fact that the respondent has admitted his liability towards complainants by having committed himself to pay the amounts mentioned in the letter of acknowledgement Ex.P12, it is not open to the respondent to take the plea that he is not liable to pay any amount to the complainants.
27. As far as the contention put forward by the learned Counsel for the respondent that there is variation between the contents of the complaint and the legal notice issued is concerned, I do not find much force in the said submission either, because all that is required by a complainant in a proceeding u/s 138 of the N.I. Act is to place the material for creating criminal liability in terms of Section 138 of the N.I. Act. The Apex Court in the case of Saroj Kumar Poddar v. State (NCT of Delhi) and Anr. (2007) 2 S.C.C.135 has referred to the essential ingredients to be satisfied by a complainant u/s 138 of the N.I. Act proceedings and at para. 10 of the said decision it has been observed thus:
10. For creating a criminal liability in terms of the said section, the complainant must show:
i) that a cheque was issued;
ii) the same was presented;
iii) but, it was dishonoured;
iv) a notice in terms of the said provision was served on the person sought to be made liable; and
v) despite service of notice, neither any payment was made nor other obligations, if any, were complied with within 15 days from the date of receipt of notice.
28. In the case on hand, all the above requirements namely; cheque being issued and the same being presented and it being dishonoured and following that the notice being issued by each one of the complainants to the respondent and finally despite service of notice, the respondent having not made any payment within 15 days from the date of service of notice are satisfied, and nothing remains for the complainant to prove further his case. In fact, in response to the legal notice issued to the respondent, in the reply, the respondent does not deny the cheques being issued by him and does not take up the plea that the liability is subject to fulfillment of any of the conditions contained in the Memorandum of Agreement and therefore it is impermissible for the respondent to canvass such contention before this court Therefore, I am of the view that not only the complainants in each one of the complaints have satisfied the necessary ingredients of Section 138 of the N.I. Act so as to fasten criminal liability on the respondent but the respondent himself has strengthened the case of the complainants by acknowledging his debt by issuing a letter as per Ex.P12. It is therefore unnecessary for me to go into the details of the cross-examination part of either PW-1 or DW-1 for that matter.
29. I, therefore hold that the complainants have also established the existence of a legally recoverable debt from the respondent. Apart from, this, it is also not out of place to mention that the bank account statements produced by each one of the complainants also go to show the amounts, which have been transferred from each one of the complainants to the respondent accounts. The trial court has also observed, that there is no dispute that cheques were issued by the respondent and they were signed by him and those cheques were dishonoured on being presented. As such, the trial court, in my view was wrong in not appreciating the documentary evidence placed by the complainants and the very documents produced themselves are sufficient to hold that the respondent is liable to pay the amounts mentioned in the cheques to each one of the complainants. As far as the submission made by the respondent''s Counsel that the Memorandum of Agreement indicates that the liability was cast upon Bhakthavatsalam and not on the respondent is concerned, even this argument does not appeal to me because the Memorandum of Agreement itself indicates that the liability of Bhakthavatsalam was taken over by the respondent Therefore, under the said circumstances, there is no force in the submission made by the respondent''s Counsel that the liability was not of the respondent but that of Bhakthavatsalam.
30. Another point which requires to be referred, before concluding the judgment, is with regard to the notice being issued to the proprietor of the firm. No doubt, the respondent has been issued with the notice and he has issued the cheques in question and also issued the letter of acknowledgement. It is not in dispute that the business concerns with which the parties were dealing were proprietary concerns and they being not a juridical person in view of definition of the word "person" as defined in the General Clauses Act, it is the proprietor who will have to indict or get indicated in the business transactions of the concerns to which he m the proprietor. In fact in the instant cases, the respondent examined as DW-1 has clearly admitted in the course of his cross-examination that he is the person who is managing the affairs and running the business and maintaining the accounts of all the concerns. These being the undisputed facts, I do not find any infirmity even in regard to the issuance of notice by the complainants. I rely on a decision reported in
31. For the aforesaid mentioned reasons, I am of the Anew that the judgment of the trial court acquitting the respondent cannot be sustained either on facts or in law and the reasoning given by the trial court cannot be accepted as a tenable one and the trial court has not taken pains to examine the contentions, issues in proper perspective keeping in view the settled position in law as has been laid down by the Supreme Court and by this court. As such, the trial court''s judgment cannot be upheld and the learned Counsel for the appellants also has pointed out that in rendering common judgment in all these cases, the trial court also committed the mistake of mixing up the facts of one case with the other case arid on the whole, the judgment of the learned trial judge suffers from various legal infirmities.
32. At this juncture Sri. M.J. Alwa, learned Counsel for the respondent submitted that in so far as the sentence of fine is concerned, in view of the fact that the respondent is a poor man, uneducated person and has suffered heavy loss in business, the fine amount may be imposed taking these factors into consideration. For this, the counter submission made by the learned Counsel for the appellants Sri Ashok Kumar is that the respondent is a business man having a turnover of Rs. 200 lakhs in 2001 and he is financially very well and therefore, there is no need for reducing the fine amount. It was also submitted by him that,, had the complainants kept the amount in fixed deposit way back in the year 2001 itself, the said amount would have doubled by this time and therefore this factor has also to be taken note of.
33. In conclusion, I hold that the complainants have proved beyond reasonable doubt the offence being committed by the respondent u/s 138 of the N.I. Act in respect of each one of the cheques which got dishonoured on being presented to the bank.
34. Therefore, the acquittal of the respondent is liable to be; set aside and he will have to be convicted in accordance�s with law and hence I pass the following:
ORDER
1. All the criminal appeals are allowed.
2. The acquittal of the respondent by the trial court in all these cases is set aside and he is convicted for committing the offence punishable u/s 138 of the N.I. Act.
3. In respect of the conviction of the respondent pertaining to C.C. No. 7805/03 which has given rise to Crl.A. No. 352/07, the respondent is sentenced to pay a fine of Rs. 96,00,000/- and in default of payment of fine, he shall undergo imprisonment for a period of six months and out of the fine amount, Rs. 10,000/- shall be paid to the State and the balance shall be paid to the appellant as compensation.
4. In respect of the conviction of the respondent pertaining to C.C. No. 19274/03 which has given rise to Crl.A. No. 353/07, the respondent is sentenced to pay a fine of Rs. 44,00,000/-and in default of payment of fine, he shall undergo imprisonment for a period of six months and out of the fine amount, Rs. 10,000/- shall be paid to the State and the balance shall be paid to the appellant as compensation.
5. In respect of the conviction of the respondent pertaining to C.C. No. 7816/03 which has given rise to Crl.A. No. 354/07, the respondent is sentenced to pay a fine of Rs. 60,00,000/- and in default of payment of fine, he shall undergo imprisonment for a period of six months and out of the fine amount, Rs. 10,000/- shall be paid to the State and the balance shall be paid to the appellant as compensation.
6. In respect of the conviction of the respondent pertaining to C.C. No. 19275/03 which has given rise to Crl.A. No. 355/07, the respondent is sentenced to pay a fine of Rs. 23,00,000/-and in default of payment of fine, he shall undergo imprisonment for a period of six months and out of the fine amount, Rs. 10,000/- shall be paid to the State and the balance shall be paid to the appellant as compensation.
7. In respect of the conviction of the respondent pertaining to C.C. No. 7804/03 which has given rise to Crl.A. No. 356/07, the respondent is sentenced to pay a fine of Rs. 40,00,000/- and in default of payment of fine, he shall undergo imprisonment for a period of six months and out of the fine amount, Rs. 10,000/- shall be paid to the State and the balance shall be paid to the appellant as compensation.
8. The respondent shall pay the fine amount within a period of three weeks from the date of receipt of this judgment.
9. The sentence passed in each one of the above cases shall run consecutively.
