THE HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL APPEAL Nos.17, 49, 51, 53, 54 & 55 OF 2006 COMMON JUDGMENT These appeals are filed by the complainant against acquittal recorded by the lower Court against the respondent Nos.1 to 3/A1 to A3 for offences under Section 138 of the Negotiable Instruments Act, 1881 (in short, the Act). The complainant as well as A1 are companies incorporated under the Indian Companies Act, 1956. The complainant company is represented by Power of Attorney Holder/Authorized Signatory by name C.B.Srinivasu. The complainant filed copy of certificate of its incorporation apart from copies of Minutes of Board of Directors appointing C.B.Srinivasu as its Power of Attorney and Authorized Signatory. The complainant also filed copy of Power of Attorney executed by the company in favour of C.B.Srinivasu. A2 is Managing Director and A3 is Director of A1 company. The complainant indulges in manufacture and sale of pesticides and A1 is also dealing the same product during the course of its business. It is alleged that on the purchase orders given by A3, the complainant supplied pesticides to A1 company. One Agastya Agro Limited is stated to be packers of the product on behalf of A1 company. The complainant is stated to have delivered the product to Agastya Agro Limited on the order placed by A3 on behalf of A1 company. On behalf of the complainant, these six complaints were filed by its Power of Attorney in the lower Court alleging offence under Section 138 of the Act against A1 to A3. There is no dispute that the cheques which were dishonoured in these cases contained signatures of A2 as Managing Director of A1 company. After dishonouring of the cheques, the complainant got issued required notices under Section 138 (b) of the Act to the accused. There is no dispute that the accused after receiving said notices, did not give reply. After waiting for the statutory period, the complainant got the complaints filed in the lower court. Plea of the accused was one of total denial and not guilty. From the trend of cross-examination of the prosecution witnesses and evidence of A2 as DW1, it is version of the accused that the dishonoured cheques were signed by A2 when they were blank and that blank signed cheques were delivered by the accused to the complainant company in pursuance of the demand made by the complainant during the course of business of the accused with the complainant. Originally, the lower Court passed judgments in favour of the complainant. Questioning the same, the accused filed appeals before the Sessions Court. It is stated that the Sessions Court remitted the cases to the trial Court with direction to admit Ex.D1 letter addressed by the complainant company to the accused company and to re-call PW1 to mark the same. Subsequently, after giving due opportunity to both the parties, the lower Court passed the impugned judgments finding the accused not guilty of the offence under Section 138 of the Act. Therefore, the complainant is before this Court by way of these appeals. The lower Court found that the complainant has failed to prove existence of debts or liability supporting the dishonoured cheques in these cases. The Lower Court further found that since C.B.Srinivasu signed the complaints in his individual capacity and not representing the complainant company much less as Power of Attorney Holder or Authorized Signatory, presentation of the complaints is not proper and legal. No doubt, in the complaint, it was disclosed that the complainant company is represented by its Power of Attorney Holder/Authorized Signatory vide Power of Attorney dated 23-2-2000. Copies of resolutions of Board of Directors of the complainant company and also copy of Power of Attorney dated 23-2-2000 were filed along with the respective complaints in the lower Court. The Lower Court after satisfying itself about valid presentation of the complaints registered those complaints and ordered issue of summonses to A1 to A3. In all propriety while signing the complaints, C.B.Srinivasu should have signed the respective complaints at the appropriate places disclosing himself as Power of Attorney Holder/Authorized Signatory of the complainant company. He signed at the appropriate places in the complaints in his individual capacity without disclosing his capacity vis-à-vis the complainant company. Having held that filing of complaint by a Power of Attorney Holder representing a company is permissible under law, the lower Court should have seen that C.B.Srinivasu signing in the complaints without disclosing his capacity in the complainant company, is only irregularity which does not go to root of the case. Though capacity of C.B.Srinivasu vis-à-vis the complainant company is disclosed in the cause titles as well as in bodies of the complaints mere non-disclosure of the same at the places of his signature in the complaints cannot invalidate presentation of the complaints as such. The counsel who presented the complaints on behalf of the complainant company, should have taken more care and bestowed more attention in this regard and should have obtained signatures of C.B.Srinivasu disclosing his capacity vis-à-vis the complainant company at all places wherever he signed in the complaints. At any rate, it cannot be a ground to dismiss the complaints. It is contended by the Senior Counsel appearing for the appellants that the complainant examined PW1 and marked the entire documents relating to the transactions covered by the respective complaints. The complainant examined PW1 who is working as Junior Executive (Legal) in the complainant company. In the affidavits filed by PW1 in lieu of his examination-in-chief, he deposed the entire facts which are stated in the respective complaints and marked all the documents filed along with the complaints. But, PW1 had no personal knowledge with regard to the transactions covered by the complaints. In cross-examination PW1 admits that he joined in the complainant company subsequent to these transactions. In fact, he joined in the complainant company on 22-7- 2002, subsequent to filing of these complaints in the lower court. He was giving evidence mechanically as per record and without having any personal knowledge of the transactions and the documents. On the other hand, the second accused examined himself as DW1. It is his evidence that he gave blank cheques in other transactions to the complainant company as security. It is contended on behalf of appellants that DW1 did not give details relating to the other transactions in respect of which he gave these cheques as blank signed cheques. According to DW1, he did not give the dishonoured cheques in relation to the present transactions. Ex.D1 is the letter admittedly addressed by the complainant company to A1 company. In Ex.D1 letter dated 2-12-1999 the complainant company requested A1 company to provide them with cheques for all the pending payments without mentioning the dates, so that they can put the dates for the above cheques after mutual consultation and provide the same to accounts department for presentation. Basing on Ex.D1, it is contended by the accused in the lower Court that the dishonoured cheques herein were those cheques which were sent by A1 company to the complainant company as blank signed cheques. It is contended on behalf of the appellants that Ex.D1 letter relates to pending transactions as on the date of that letter in the year 1999 and does not relate to future transactions in the year 2000 which are subject matter of these complaints. It is true that Ex.D1 did not require issuance of blank signed cheques in respect of any future transactions. It is not DW1’s case that he issued the dishonoured cheques in favour of the complainant company in respect of the transactions which were mentioned in the respective complaints. It is DW1’s evidence that the dishonoured cheques were blank signed cheques in other transactions between the two companies given as security. Ex.D1 letter discloses that A1 company was compelled to deliver certain blank signed cheques to the complainant company in respect of the transactions which were pending by 2-12-1999. Further, if the present cheques relate to the present transactions, then they would bear the amounts which are equivalent to value of the present transactions. The amounts mentioned in the dishonoured cheques are not exactly of the same value of the transactions covered by the present complaints, but for a lesser amount than the value of the transactions mentioned in the respective complaints. This is another circumstance taken by the lower Court to non-suit the complainant because blank signed cheques issued in connection with some other transactions were utilized to press claims of the complainant in the present transactions. The lower court further commented that the complainant did not prove the present transactions between the parties by examining the persons connected with purchase orders, delivery challans etc., The presumption under Section 139 of the Act dissolves the moment one of the accused examined himself as DW1 and put forward his defence of blank signed cheque theory. (see K.N.Beena vs., Muniyappan[1] of the Supreme Court). The lower Court further noticed that date portions in the cheques are with rubber stamp whereas other portions in the cheques are in manuscript. It is another circumstance to show that the dishonoured cheques were issued without dates. The lower Court further noticed that in the delivery challans, there are no signatures much less stamps relating to the person who received the materials from the complainant. In the absence of proof of placing purchase order by examining the persons who received the said order and in the absence of proof of delivery of the materials under the purchase orders by examining the person who received the delivery on behalf of accused, it cannot be said that the complainant company has proved existence of “debt or liability” under the dishonoured cheques. In the absence of proof of existence of “debt or liability” for the dishonoured cheques, the complainant is not going to succeed in prosecuting the accused under Section 138 of the Act. On scrutiny of entire material on record, I have absolutely no doubt in my mind that the lower Court came to right conclusion against the complainant and in acquitting the accused in all these matters. In the result, all the six appeals are dismissed. __________________________________ SAMUDRALA GOVINDARAJULU,J rkk Dated: 27-10-2011 [1] AIR 2001 SC 2895