IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR THURSDAY, THE 29TH JULY 2010 / 7TH SRAVANA 1932 Crl.Rev.Pet.No. 2791 of 2003(A) ------------------------------- CRA.256/2003 of addl.SESSIONS COURT (ADHOC-I), ERNAKULAM CC.1458/1999 of ADDL.CHIEF JUDICIAL MAGISTRATE (E & O),ERNAKULAM .................... REVN. PETITIONER(S)/APPELLANTS/ACCUSED: --------------------- 1) M/S.C.K.THOMAS & COMPANY, CHAMPAKASSERY, RESIDENCY ROAD, KADAPPAKKADA, QUILON. REP. BY ITS MANAGING PARTNER, SRI.MANUEL THOMAS, CHEMPAKASSERRY, RESIDENCY ROAD, KADAPPAKADA, QUILON. 2) SRI.MANUEL THOMAS, S/O.LATE MR.C.K.THOMAS, S/O.LATE MR.C.K.THOMAS, MANAGING PARTNER, C.K.THOMAS & COMPANY, CHEMPAKASSERRY RESIDENCY ROAD, KADAPPAKADA, QUILON. BY ADV. SRI.V.PHILIP MATHEW RESPONDENT(S)/RESPONDENT: --------------- 1) STATE OF KERALA, REP. BY PUBLIC PROSECUTOR HIGH COURT OF KERALA, ERNAKULAM. 2) MUTHOOT LEASING AND FINANCE LTD., PREETHI BUILDINGS, VYTTILA, KOCHI-19 REP. BY ITS ASST.BRANCH MANAGER AND POWER OF ATTORNEY HOLDER SRI.A.BALAKRISHNA MENON, S/O.M.P.APPU MENON, PREETHI BUILDINGS, VITTILA. R1 BY PUBLIC PROSECUTOR SMT.PUSHPALATHA SRI.ABRAHAM MATHEW (VETTOOR) FOR R2 THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 29/07/2010, ALONG WITH CRRP NO. 2795/2003 THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.SASIDHARAN NAMBIAR,J. ---------------------------------------------------- CRL.R.P.NO.2791 & 2795 OF 2003 --------------------------------------------------- Dated 29th July, 2010 O R D E R Petitioners, the accused 1 and 3 in C.C.1458/1999 and 1674/1999 on the file of Additional Chief Judicial Magistrate, Ernakulam were convicted for the offence under Section 138 of Negotiable Instruments Act. second accused, mother of second petitioner was acquitted. Petitioners challenged the conviction and sentence before Sessions court, Ernakulam in Crl.A.255/2003 and 256/2003. Learned Additional Sessions Judge on re- appreciation of evidence confirmed the conviction and sentence and dismissed the appeal. Revisions are filed challenging the conviction and sentence. Crl.R.P.2791/2003 CRRP 2791/03 2 is filed against the conviction in C.C.1458/1999 as confirmed in Crl.A.256/2003. Crl.R.P.2795/1999 is filed challenging the conviction and sentence in C.C.1674/1999 as confirmed in Crl.A.255/2003. 2. Learned counsel appearing for the petitioners and second respondent/complainant were heard. 3. Argument of the learned counsel appearing for the revision petitioner is that first petitioner firm and second petitioner the Managing partner were convicted for the offence under Section 138 of Negotiable Instruments Act, even though there was no notice served on the second petitioner as provided under Section 138(b) of Negotiable Instruments Act. It was pointed out that notices under Section 138(b) of Negotiable Instruments Act, were issued to the first CRRP 2791/03 3 petitioner firm and second accused and notice on the first petitioner was not served on the firm but only on the second accused who has no authority to receive the notices and in any case, as there has been no notice to the second petitioner, there is no cause of action as against the second petitioner and hence conviction is not sustainable. Learned counsel relied on the decision of Raman v. Shasun Chemicals (2007 (1) KLT 106) and argued that when notice on the first petitioner was not served on the second petitioner managing partner but was received by the second accused who has no authority, it is to be found that no notice was served on the first petitioner also and if that be so, no cause of action has arisen against both the petitioners and the cause of action would arise only on the failure of the drawer of the cheque to pay CRRP 2791/03 4 the amount on receipt of the notice. It is therefore, argued that the conviction is bad. Learned counsel also argued that even if, it is taken that registered notice served on the second accused is a valid notice to the firm. It is also argued that there is no evidence to prove that the Branch Manager was authorised to send a notice under Section 138(b) of Negotiable Instruments Act and therefore, even if there was service of notice, it is not a valid notice as provided under Section 138(b) and on that ground also the conviction is bad. Learned counsel finally submitted that PW1, who was examined on behalf of the second respondent, was authorised by the second respondent company by a power of attorney only subsequent to the institution of the complaint and therefore, his evidence is insufficient to establish that the dishonoured cheques were CRRP 2791/03 5 issued in discharge of any debt or liability and on that ground also the conviction is to be set aside. 4. Learned counsel appearing for the second respondent relying on the decision of this court in Target Overseas Exports (P) Ltd. v. Iqbal (2005 (2) KLT 45) argued that the notice contemplated under Section 138(b) of Negotiable Instruments Act is only to the drawer of the cheque and not to the signatory to the cheque and therefore, for the failure to serve notice on the Managing Partner of the firm, it cannot be said that there was no valid notice under Section 138(b) of Negotiable Instruments Act. Learned counsel also argued that fact that second accused was one of the partners of the firm was not disputed and the registered notice demanding the amount covered by the dishonoured cheques were sent CRRP 2791/03 6 in the correct address of the first petitioner firm and it was received by the second accused for the firm, who is a partner of the firm and therefore, there is valid notice to the first accused/first petitioner drawer of the cheque and in any case, when notice was sent in the correct address of the first petitioner, as held by this court Sheela v. Gopalakrishnan (2005 (1) KLT 877), petitioners are not entitled to contend that the conviction is bad. Learned counsel also pointed out that second petitioner the Managing Partner of the firm is now absconding as there are other criminal proceedings and civil suits pending against him and in such circumstances, there is no reason to interfere with the conviction or the sentence. 5. Second respondent is finance company. Fact that first petitioner partnership CRRP 2791/03 7 firm entered into a hire purchase transaction, with the second respondent spoken to by PW1 was not challenged. Evidence of PW1 is that first petitioner firm availed hire purchase facility for Rs.10,00,000/- agreeing to pay the amount in 18 monthly instalments and Ext.P2 cheque for Rs.66,200/- was issued as post dated cheque dated 27/11/1997 and when first petitioner presented the cheque it was dishonoured for want of sufficient funds. It is the further evidence that first petitioner firm had issued Ext.P6 cheque also for Rs.66,200/- being another post date 27/10/1997 and when that cheque was presented for encashment, it was also dishonoured. Ext.P4 is the notice sent demanding the amount covered by Exts.P2 cheque and Ext.P8 notice was sent demanding the amount covered by Ext.P6 cheque. Ext.P4 and P8 notices were sent to first petitioner firm as CRRP 2791/03 8 well as second accused being a partner of the firm, though no separate notice was issued to the second petitioner/third accused, Managing Partner of the firm. Exts.P5 and P9 postal acknowledgment establish that notice was received by second accused on her behalf as well as for the partnership firm. Admittedly no amount was paid as demanded. Though learned counsel appearing for the petitioners argued that there is no evidence to prove that Exts.P2 and P6 cheques were issued towards discharge of the liability. when the evidence of PW1 was put to the second petitioner, at the time of questioning him under Section 313 of Code of Criminal Procedure, he admitted that first petitioner is a partnership firm and accused 2 and 3 are its partners and second petitioner is the Managing Partner. When evidence of PW1 was that for the purchase of construction materials CRRP 2791/03 9 first petitioner had availed hire purchase facility for Rs.10,00,000/-, second petitioner admitted that fact also. When the evidence of PW1 that first petitioner had agreed to re-pay the amount in 18 equal monthly instalments and issued Exts.P2 and P6 post dated cheques for payment of instalments were put to him, version of the second petitioner was that payment was made by cash and for the same, security was furnished by the cheque. When the evidence of PW1 is that Exts.P2 and P6 cheques were issued towards payment of the instalments at the rate of Rs.66,200/- each, defence is that they were issued as security. When the fact that Exts.P2 and P6 cheques were dishonoured for want of sufficient funds were put, second petitioner admitted that it is correct. Though, when second petitioner was asked whether he has anything more to say, he disclosed that Ext.P2 CRRP 2791/03 10 and P6 cheques were issued as security and firm has paid that amount, no material is produced to establish any such payment. Even when PW1 was cross examined, no definite suggestion was put with regard to the payment of the amount covered under Exts.P2 and P6 on any particular day or mode. If there was any such payment, petitioner could have produced the relevant receipt to establish the payment. Therefore, on the evidence both courts rightly found that Exts.P2 and P6 cheques were issued towards discharge of liability on account of hire purchase facility availed by first petitioner firm. 6. Though learned counsel appearing for the petitioners argued that notices demanding the amount covered by the dishonoured cheques issued by Branch Manager, who was not authorised by the company to issue notice and CRRP 2791/03 11 therefore, there is no valid notice, I cannot agree with the submission. Cheques were issued in respect of the transaction entered with second respondent in a particular branch. When the amount was not paid as agreed and post dated cheques were issued towards that payment, the cheques were presented for encashment. As admitted by the second petitioner, those cheques were dishonoured for want of sufficient funds. In such circumstances, Branch Manager issued notices demanding the amount covered by the dishonoured cheques. I cannot agree with the submission of the learned counsel that it is not a valid notice, as Branch Manager is not authorised by the company to send notice. No separate authorisation is necessary to the Branch Manager to demand the amount covered by the dishonoured cheque, as it is part of his duty CRRP 2791/03 12 as Branch Manager. 7. Next argument of the learned counsel is that as no notice was sent to the second petitioner Managing Partner, no cause of action has arisen as against him and therefore, the conviction is bad. Though reliance was placed on the decision of Madras High Court in Raman's case (supra) this court considered the question in detail in Target Overseas Exports (P) Ltd.'s case (supra) and held that notice provided under Section 138(b) of Negotiable Instruments Act is only to the drawer of the cheque and not to the persons who are implicated by virtue of Section 141 of Negotiable Instruments Act . This court held. "Going by the language of proviso (b) to Section 138 and 141 of the N.I.Act and considering the purpose of notice under proviso (b) to CRRP 2791/03 13 Section 138 it follows that accused 2 and 3 who face prosecution under S.141 of the N.I.Act are not entitled to any notice under proviso (b) to S.138 of the N.I.Act." I fully agree with the view of the learned Single Judge. Therefore, conviction of the second petitioner cannot be challenged on the ground that there was no notice under Section 138(b) of Negotiable Instruments Act served on the second petitioner. Second petitioner is not entitled to be served with a separate notice. Notice served on the first petitioner firm is valid and sufficient notice. 8. There is no case for the petitioner that address of the first petitioner shown in Ext.P2 and P6 notices is not the correct address of the first petitioner. Ext.P5 series of postal acknowledgment and P9 series of CRRP 2791/03 14 postal acknowledgment establish that, notices were served on first petitioner. True, acknowledgment shows that notices were received by second accused for the firm and was not received by the Managing Partner. Question is whether notice received by one of the partners of the firm is a valid notice to the partnership firm. Though learned Magistrate found that as partnership deed was not produced, there is no evidence to prove that second accused was authorised to act on behalf of the firm and acquitted the second accused, admission of the second petitioner in his answers to the questions put to him under Section 313 of Code of Criminal Procedure establish that second accused, mother of the second petitioner was one of the partners of the firm. Suggestive question put to PW1 by the petitioners is that when the Managing CRRP 2791/03 15 Partner is out of station, second accused is looking after the affairs of the firm. Even without any such authorisation, a partner is definitely entitled to receive the notice on behalf of the firm. Hence, notice served on the second accused partner for the first petitioner are valid notices as provided under Section 138 (b). Therefore, on that ground also, I find no reason to interfere with the conviction. In such circumstances, conviction is perfectly legal and proper. 9. Then the only question is regarding the sentence. When the fact that second petitioner partner is absconding is considered, I do not find that it is in the interest of justice to modify the substantive sentence also. There is no merit in the revision. Revisions fail and are dismissed. Second petitioner is directed to appear before CRRP 2791/03 16 the Additional Chief Judicial Magistrate, Economic Offences, Ernakulam on 7/9/2010. Additional Chief Judicial Magistrate is directed to execute the sentence. M.SASIDHARAN NAMBIAR, JUDGE. uj.