IN TIlE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAI) DATED TillS THE 23 DAY OF SEPTEMBER 2011 BE F()RE lifE HON’BLF MR. JUSTICE ANAND BYRAREDDY CRIMINAL APPEAL No.125/2006 BETWEEN: AIMS FEEDS (PVT,) LTD., Manufacturers of Animal and Poultry Feeds, Tarihal Industrial Area Factory No.57/A & 58/A Tarihal village By its Managing Director Sri,S.S.Kuhsadgoudar by his General Power of Attorneyholder SrnLJaya S.Kuhasadgoudar. . . ,APPELLANT (By Shri S.N.Yaraguppi, Adv,) AND: Raviraj Shetty S/o Narayana Shetty Poultry Farm (Nandi farms) RIo Asodu, Tq.Kundapur Dist, Udupi. RESPONDENT (By Shri i./.akshman Shetty Sri .Nagappa Advocates.) This Criminal Appeal is RIed under Section 37X(4) oLhe Code of (‘rim inal Procedure. pray i na to set aside the udement and order dated 2$. I O2OO5 passed by the JMFC-l Court. I lubli. in C,C.No,534:i 997, acquitting the respondent/accused for the oflènce punishable under Section 135 of the Negotiable Instruments Act. This appeal coming on lhr hearing this day. the court delivered the following: J U D G NI E N T Heard the learned counsel br the appellant and the respondent. 2. Fhe appellant was the complainant before the trial court. The appellant is a company incorporated under the Companies Act, 1956 and is engaged in the manuficture of animal and poultry feeds. It is the case of the complainant - appellant that the respondent also osns a poultry farm and had pzrcIasecl poultry ièed from the appellant froni time to time on credit basis and there was an account maintained whereby the respondent would make pa\-ments from time to time. When the account stood at credit of Rs,4,3 1 ,594/-, a demand was made for payment against the same and the respondent had issued a cheque for the said sum dated 18.6.1996 drawn on Canara Bank. The same having been presented for encashment, was returned with an endorsement that the funds were insufticient. Accordingly, the appellant having issued a legal notice demanding payment covered under the cheque, the respondent had failed to do so. 3. Accordingly, proceedings were initiated for an offence punishable under Section 138 of the Negotiable Instruments Act. 1881 (hereinafter referred to as the Act’ for brevity). The matter was contested. The trial court has dismissed the complaint on the following findings: Firstly, that the notice issued in tenns of Section 138(b) of the Act. does not specify the requirements as contemplated therein as the notice does not make a demand on the respondent to make the payment and therefore, is invalid Secondly, it is held by the trial court that the cheque is found to he in two 4 different handwritings, in that, the signature of the accused is in one hand whereas the particulars on the cheque leaf are hued up in another handwriting. Therefore, it is evident that it is written by two different persons. Further that the cheque leaf which had been issued as security for the payment of the monies owed on the credit purchases has been misused by the complainant, as the cheque leaf was issued several years prior to the alleged date of the cheque and this according to the trial court was established to its satisfaction. Therefore. that was yet another ground to negate the case of the complainant that it was not issued in respect of any legally recoverable debt. Thirdly, the trial court has held that the complainant being a private limited company could not be represented by a power of attorney holder and the evidence tendered on behalf or the complainant is therefore not acceptable and has accordingly dismissed the complaint It is this which is sought to be challenged in the present appeal. ) S 4. The learned counsel, in support of the grounds raised in the appeal. would elaborate on the same and would seek to urge that the reasoning of the court below is not justi tied having regard to the material on record and the learned counsel for the appellant would take this court through the record to demonstrate the same. Insofar as the first point, namely, that the legal notice of demand issued under Section 138 was not in accordance with the terms thereof is sought to be dispelled by drawing attention to the tenor of the document to state that the court below having taken a strict view that the said notice does not contain the express words that a demand was being made would not bring it within the requirement under Section 138 and therefore, having rejected it is unfair and unjust, as a demand made by way of request, would also he no less a demand and since the notice employs the word that the respondent is requested to make payment, cannot be negated on the ground that it should be demand and not a request. It is secondly painted out that insofar as the contention that the C) cheque leaf being of the year 1992 and having been issued in the year 1996, and fUrther that the signature is of one person whereas the particulars are filled up by another. would also not be tenable, as there is no prohibition in law for the cheque being filled up by one person and signature being of another. The mere assertion that the cheque was issued as a document of security for due repayment of the amounts due from time to time, would also not be tenable as the presumption under Section 139 of the Act is in favour of a holder of a cheque and that it was issued in discharge or a debt and that there is legal liability, is a further presumption that would arise and if the respondent seeks to contend otherwise, namely, that it was not issued for due consideration, the burden of proof was on the respondent. who was required to lead rebuttal evidence and establish the same. When the respondent has not taken the initiative of doing so, the contention that it is not issued for a legal consideration is not available to the respondent, when it is not in dispute that there were transactions between the appellant 7 and the respondent and that there were dues even as on the date of the evidence and when it is clean) admitted that the dues ere still outstanding. [he signature on the cheque also not being denied would clearly establish the case of the complainant and therefore there is no substance in the contention and the reasoning of the court below accepting the same, He would further submit that een in respect of the allegation that the cheque was of the year 1992 and has been filled up as of the year 1996, therefore, indicating that there was misuse of the blank cheque issued by the respondent is also not tenable for certain cheques which have been issued in the year 1992 have been encashed then and there and it is onk the present cheque which as not issued in 1992, hut actualk issued in the year 1996. This is sought to he demonstrated th reference to the record. He ould further contend that insuf is the finding of the trial court that the power of attoine holder ho had tendered e idence on behalf of the appellant company v4 as incompetent to do so is also i ot 8 tenable for the reason that the Board of I)ireetors had passed a resolution authorising the power of attorney holder to tender evidence on behalf of the company and the resolution in that regard had been marked in evidence. i’lw power of attorney executed thereafter has already been marked in evidence, in which, there is no infirmity in the power of attorney having tendered evidence on behalfofthe private limited company and therefore, the learned counsel for the appellant would submit that the three primary grounds on which the complaint has been rejected would not stand the test of law as the trial court was clearly erroneous in its view on all the three points. 5. The learned counsel for the respondent, on the other hand, would seek to contend that the cheque leaf was certainly not issued in the year 1996 and that it was of the year 1992 and a counterfoil pertaining to the relevant cheque has been produced and marked in evidence, which would clearly indicate that it was of the year 1992. The same has been issued only as g b. 9 a security Ibr due payment of the monies from time to time in respect of credit purchases and the fact that there was an outstanding of Rs. 17,000/- even as on the date of the proceedings before the trial court would disclose that there was an apparent misuse of the cheque leaf which was a blank cheque issued in favour of the appellant as security. It is this which is sought to be emphasized in contending that the burden was certainly on the appellant to establish that there was due consideration for the issuance of the said cheque, which has been found as a fact by the trial court in favour of the respondent. Therefore. there is no warrant for interference by this court, in that, the trial court, in its well reasoned order, has dismissed the complaint on several grounds including the ground that there was no consideration for the issuance of the cheque in question. which is primarily held in favour of the respondent. Therelbre. he would submit that the appeal be dismissed. I0 e 6. In the light of the above contentions, the legal notice has been held to be invalid by the court below 11w not being in conformity with Section 138 of the Act. In the opinion of this court, the said notice would conform to the requirement. Use of the words that ‘demand is being made’ is not necessary. A polite request is no less a demand. Accordingly. the narrow view taken by the court below that there is no demand made is not the correct view. Accordingly. the first point on which the complaint is dismissed is on an incorrect view. Insofar as the second contention that there was no consideration 11w the cheque and that it was a blank document which was issued in the first instance, which is sought to be misused by the appellant is concerned, as rightly pointed out by the learned counsel for the appellant, the presumption is in Ibvour of the holder of the cheque. Insofar as the writing on the cheque being in two different handwritings is concerned, the Ilict that the signature is different from the handwriting, in which the particulars are tilled in. makes no difference. rhere is no legal 3 S. 11 prohibition in this regard nor is the fact that the cheque leaf may even be ofthe year 1992, whereas it has been issued in the year 1996, is also not a relevant consideration. •lhe respondents seeking to issue a cheque leafofthe year 1992 for a transaction in the year 1996 is not illegal nor does it raise a presumption that it was being misused by the appellant as long as the signature on the cheque is not denied. If a blank cheque had been issued by the respondent, he suffers the risk of the same being utilised even if it could be called misuse and there can be no presumption to the contrary. Accordingly, the contention that the cheque was issued as a security and not for any other consideration and that it was being misused by the appellant cannot be sustained. The third reasoning of the trial court that the evidence on behalfofthe complainant was tendered through a power of attorney holder and that it was invalid and impermissible is also not tenable as the law certainly requires a company, which is a legal entity, to be represented by competent persons, who could represent the company and the 12 a Company Law also provides that the company or the Board ol’ Directors of the company may. by resolution, delegate the power in respect of certain acts to a third person and in the present case on hand, the power of attorney having been authorised by a resolution duly passed by the Board ofdirectors in this regard, has been overlooked by the trial court in holding that there is no such authority conferred on the witness. Accordingly. the appeal succeeds and is allowed. The judgment of the trial court is set aside. The appellant has established beyond all reasonable doubt that the respondent has committed an offence punishable under Section 138 of the Act. Accordingly, the respondent is sentenced to pay a fine of Rs.436,000/-, of which Rs.4,3 1,595/-shall be shall be paid as compensation under Section 357 of the Code of Criminal Procedure in favour of the appellant and the remaining amount of fine shall be collected by the State. ‘[he tine amount shall be deposited by the respondent within a period of’ four weeks, 1% I, failing shich the respondent shall suffer simple imprisonment ol si months. Sd! JUDG 4