HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL APPEAL Nos.916 of 2006 and 1004 of 2006 COMMON JUDGMENT: These two appeals are ﬁled by legal representatives of the deceased-complainant questioning orders of acquittal passed by the lower appellate Court under Section 138 of the Negotiable Instruments Act, 1861 (in short, the Act). The 1st respondent/accused had drawn two cheques of the value of Rs.9,00,000/- each in favour of the deceased-complainant. It is the complainant’s case that the accused had drawn the cheques for the said amounts towards amounts payable by him as sale consideration under Ex.P.11 agreement for sale entered into between the accused and the deceased- complainant in respect of equipment and machinery of M/s Sperry Biological Vaccines Private Limited (in short, the Company) on 01.05.1997. The said cheques when presented for payment, were dishonoured by banker of the accused. After issuing relevant statutory notices as per Ex.P.5 and after receiving Ex.P.9 reply notice from the accused, respective private complaints were ﬁled before the Magistrate. The IX Metropolitan Magistrate, Hyderabad, after trial, convicted the 1st respondent/accused under Section 138 of the Act and sentenced him to simple imprisonment of one year and ﬁne of Rs.1,000/- in each case. Questioning the same, the 1st respondent/accused ﬁled respective appeals before the Metropolitan Sessions Judge, Hyderabad. The lower appellate Court, after hearing, allowed the appeals setting aside the convictions and sentences passed by the Magistrate. 2. The lower appellate Court recorded acquittal on two grounds namely that power of attorney holder of the complainant is incompetent in law to present the complaint before the Magistrate and that there is no debt or liability which is legally enforceable in discharge of which the dishonoured cheques were drawn by the accused. The lower appellate Court based its conclusion on the ﬁrst point on S.P.Sampathy v Manju Gupta[1] of this Court. There is no dispute that subsequently the said legal position was overruled by Full Bench of this Court in K.Ramachandra Rao v State of A.P.[2] Therefore, the 1st ground on which the lower appellate Court disallowed the complaints is now not available to the 1st respondent/accused. 3. It has to be seen whether there is debt or liability for discharge of which the two dishonoured cheques in these appeals were drawn and, which debt or liability is legally enforceable. As stated earlier, the amount of Rs.9,00,000/- each totalling Rs.18,00,000/- covered by the two dishonoured cheques represents sale consideration of Rs.18,00,000/- under Ex.P.11 agreement for sale. The lower appellate Court observed that the liability under Ex.P.11 agreement is not enforceable as the sale thereunder was by the complainant in his individual capacity and not on behalf of the company to which the equipment and machinery belonged to. As the matter now stands, there is no dispute that equipment and machinery which was proposed to be sold under Ex.P.11 belonged to the Company and is not private property of the complainant. It is contended by the appellants’ counsel that the Company is a Private Limited Company in which the complainant and his family members were shareholders and that therefore it is a matter of technicality whether it is private property or property belonging to the company. PW.1 who is father of the deceased-complainant went to the extent of saying that the registered company was converted into a proprietary concern of the complainant. Evidence of PW.1 further reads as if there were partners for the complainant in the company. But, the accused collected Exs.D.1 to D.3 certiﬁed true extracts of articles of association, annual returns and form No.32 relating to the Company from the Registrar of Companies through his Chartered Accountant- D.W.1 and ﬁled them in the lower Court. They show that the Company is incorporated under the Companies Act, 1956 and that any sale of property worth more than Rs.5,000/- cannot be undertaken by the company without there being resolution of Board of Directors of the Company therefor. No evidence is let in to show that the said Company was wound up or liquidated and was converted into a proprietary concern of the deceased-complainant. Therefore, the deceased- complainant was incompetent to enter into Ex.P.11 agreement for sale in respect of equipment and machinery belonging to the company muchless in his individual capacity. Further, Ex.D.3 shows that one M.A.Bari was Managing Director of the Company and not the deceased-complainant. It is contended by the respondent’s counsel that Ex.P.11 is only an executory contract and that there is no delivery of equipment and machinery of the Company thereunder to the accused. The accused also examined D.W.2 on behalf of his mother who is landlady of the premisis in which the Company and its machinery were located. According to D.W.2, the Company vacated the premisis after executing Ex.D.4 lease cancellation agreement and after removing the equipment and machinery therein. According to D.W.2, it was the Company which had removed the same at the time of vacating the premisis. 4. In any event, when the equipment and machinery agreed to be sold under Ex.P.11 belongs to the Company and not to the deceased- complainant and when there is no authorization or resolution in favour of the complainant for selling the same and when the complainant entered into Ex.P.11 agreement in his personal capacity, any liability arising thereunder cannot be legally enforceable by the complainant as against the accused, as he is neither owner of the equipment and machinery nor authorized representative of the Company for sale of the same. In that view of the matter, the lower appellate Court rightly came to the conclusion that there is no debt or liability which is legally enforceable, in discharge of which the two dishonoured cheques were drawn by the accused. The said reasoning and conclusion of the lower Court is neither illegal nor unjust nor perverse. Therefore, the acquittals recorded by the lower appellate Court are not liable to be interfered with in these appeals. 5. Accordingly, both the appeals are dismissed. _____________________________ SAMUDRALA GOVINDARAJULU,J Dt. 23rd November, 2011. PNV [1] 2000 (2) ALD (Crl.) 619 (AP) [2] 2005(2) ALT 607 (F.B)