1 IN THE HIGH COURT OF BOMBAY AT GOA CRIMINAL REVISION APPLICATIONS NO. 4 OF 2007, 4/2008, 5/2008, 6/2008, 7/2008, 8/2008 & 9/2008 Mr. Chico Ursula D'Souza, R/o. Dr. Cunha Gonsalves Rd., Behind Panaji Church, Panaji, Goa. .... Petitioner/accused V/s M/s. Goa Plast Pvt.Ltd., a company registered under The Companies Act, 1956, with Office at Velho Bldg., 3rd Floor, Panaji, Goa. .... Respondent/complainant Mr. A.F. Diniz, Advocate for the Petitioner. Mr. Sudesh Usgaonkar, Advocate for the Respondent. CORAM : N.A. BRITTO, J. DATE : 25th JUNE, 2008 ORAL JUDGEMENT : These revisions are filed by the accused who has been convicted and sentenced under Section 138 of the Negotiable Instruments Act, 1881 ('Act', for short) and whose convictions and sentences have been upheld by the learned Session Judges. 2. Since the facts involved are almost common, by consent of Counsel they are being disposed of by this common judgment. The cases from which these revisions arise, pertain to the cheques of different dates given by the accused, with letter dated 20/07/1992. The accused was the Managing 2 Director of the Complainant which is a registered company. The details of the said cheques are as follows: Cheque No. Date Amount Criminal Revision No. Case No. before JMFC 0160171 10/01/1993 40,000/- Decided by S.C. 2004 (2) SCC 235 149/2003 0160172 10/04/1993 40,000/- Crir no. 9/2008 150/1993 0160173 10/08/1993 40,000/- Crir no. 7/2008 372/1993 0160174 10/12/1993 40,000/- Crir no. 8/2008 10/1994 0160175 10/04/1994 40,000/- Crir no. 5/2008 37/1994 0160176 10/08/1994 40,000/- Crir no. 4/2008 5/1995 0160177 10/12/1994 40,000/- Crir no. 4/2007 66/1995 0160178 10/04/1995 40,000/- Crir no. 4/2007 66/1995 0160179 10/08/1995 40,000/- Crir no. 6/2008 32/1996 0160180 10/12/1995 40,000/- Crir no. 6/2008 32/1996 The case regarding the first cheque no. 0160171 dated 10/01/1993 finally ended in conviction against the accused by the judgment of the Hon'ble Supreme Court dated 20/11/2003 reported in 2004 (2) SCC 235. These cases had also landed before the Hon'ble Supreme Court at one stage and the Hon'ble Supreme Court was pleased to remand the cases by another judgment dated 7/03/2003 reported in 2003(3) SCC 232. 3. The case of the Complainant which is a registered company and whose factory apparently came to be closed down, is that the said cheques were issued because the accused owed the Complainant a certain amount and in order to pay the said amount, the accused had drawn the said post dated cheques. The cheques were presented for payment into the account of the 3 Complainant, and as far as Criminal Revision No. 4/2007 is concerned, the said cheque was returned on 12/05/1997 with remark 'present again'. The Complainant thereafter sent the notice to the accused demanding the payment. However, the accused did not reply to the notice. Thereafter, the complaints came to be filed on different dates and in support of the case of the Complainant, one I.B. Mulchandi came to be examined pursuant to a power of attorney purportedly given by Mr. Audhut Timblo, the Director of the Complainant. The case of the accused, when examined under Section 313 of the Code of Criminal Procedure, 1973, was that he had issued the cheques under a mistaken belief that the amount was due. It was further his case that on finding a note (letter from Mr. Timblo) he had realised that he had not owed any money to the Complainant and therefore he informed Mr. Audhut Timblo in writing that there was no liability due. The accused examined himself in support of his defence. 4. The learned trial Court in convicting the accused also referred to the first case (2004 (2) SCC 235) and guided by it, proceeded to convict and sentence the accused. The learned first appellate Court noted, and, in my view rightly, that under Criminal law each case has to be decided on its own merits, but did not accept the contention on behalf of the accused that the trial Court had convicted the accused based on the said first judgment of the Hon'ble Supreme Court and that the learned Magistrate had only noted 4 certain observations made by the Hon'ble Supreme Court in the said earlier case. 5. At the hearing of these revisions, Counsel appearing on behalf of both parties have also referred to the said judgment, in the first case in 2004 (2) SCC 235. 6. To challenge the convictions, three points have been raised by Shri Diniz, the learned Counsel on behalf of the accused. The first is that the complaint was filed by a person who was not authorized by the company and that too in favour of a stranger who had no connections with the said company and without any resolution in his favour. The second is that the Bank's endorsement 'present again' would not satisfy the ingredients of the offence for the purpose of launching a prosecution under Section 138 of the Act. Thirdly, learned Counsel has submitted that both the Courts below had misdirected themselves in interpreting the provisions of Section 139 of the Act and has further submitted that there is no presumption in law that debt exists and in support of this submission learned Counsel has placed reliance on the cases of Rajendraprasad Gangabishen Porwal V/s. Santoshkumar Parasmal Saklecha & Anr. (2008 (1) Bom Cr.Cri 647) and Krishna Janardhan Bhat V/s. Dattatraya G. Hegde (2008 AIR SCW 738). 5 7. As regards the first objection, there is no dispute that the Complainant in this case is a company registered under the Companies Act, 1956. On behalf of the Complainant, the power of attorney purported to have been executed by Shri Audhut Timblo, the Director of the company was produced. The authority of Mulchandi/PW1 was questioned before the trial Court and the learned trial Court did not entertain any objection observing that the accused at no point of time had raised any grievance about the authority of Shri Mulchandi to file a complaint or depose on behalf of the Complainant and said power of attorney clearly brought out that he was authorized by Shri Audhut Timblo, the Director of the company, pursuant to a resolution of the board of directors dated 30/06/1995. The first appellate Court also dealt with the said objection and the learned first appellate Court observed that Mr. Mulchandi/PW1 had not filed the complaint in his personal capacity and that the said power of attorney disclosed that Mr. Mulchandi/PW1 had been authorized by Mr. Audhut Timblo to make, sign, execute and affirm, present and file any application, written statement, plaint, reply complaints, affidavits, representations, declarations, cross objection, memos of appeal, revision, etc. and to make any statements, defences and to verify the same and further to give statements on oath or to depose on behalf of the said Company in any court of law and/or before the public authorities or authority. The learned first appellate Court also observed that since the said power of attorney was produced by Mr. Mulchandi/PW1 which authorized him to file 6 the complaint and to depose on behalf of the Complainant and as no challenge was made to the said power of attorney, it should be presumed to be admitted and therefore as proved. Counsel on behalf of the Complainant has submitted that the Director of the company is also entitled to file the complaint. Since the complaint was filed by the company, it was necessary for the said Mr. Mulchandi/PW1 to prove before the Court that he had authority to appear on behalf of the company. Shri Diniz, the learned Counsel on behalf the accused has placed reliance on two decisions of this Court. The first is in the case of Alka Toraskar V/s Vaishya Urban Co-op. Credit Society Ltd. & anr. (2006 (2) Bom.C.R. (Cri.) 717). That was a case where the complaint was filed by registered co-operative credit society registered under the Maharashtra Societies Co-operative Act, 1960 as applicable to the State of Goa. A resolution of the said Society was produced. When the said resolution was brought to the notice of the witness, who was examined on behalf of the Complainant, the said witness had stated that the resolution authorized him to attend Court cases and not to depose on oath. This Court observed that the said resolution did not authorize Shri Gaurish P. Shirodkar, the recovery officer of the Complainant-Co-operative Society either to file complaint on behalf of the Complainant which is a separate legal entity or to depose in support of the Complainant. This Court further observed that the complaint under Section 142 of the Act can be filed either by the payee or the holder in due course. The Complainant/Co- 7 operative Society was the payee in that case and the complaint was filed in its name. The authority produced did not sufficiently authorize Shri Gaurish P. Shirodkar either to file the complaint or to depose in support thereof. The Complainant was not sufficiently represented before the Court, therefore, it could not be said that the complaint filed or the evidence given in support thereof was in accordance with Section 142 of the Act, which required that the Complaint has to be made by the payee or the case may be, by the holder in due course, of the cheque. In the absence of any power of attorney or the valid authority by the Complainant in favour of the said recovery officer, the complaint itself could not have been entertained and conviction based on such a complaint was liable to be set aside. 8. The other is the case of Shri Ashok Bampto Pagui V/s. M/s. Agencia Real Canacona & Anr. (unreported judgment dated 8/06/2007 in Criminal Revision Application No. 56/2006). That was a case also filed by a private limited company. This Court after considering various authorities on the subject including the case of M/s. MMTC Ltd. and Anr. V/s. M/s. Medchl. Chemicals & Pharma (P) Ltd. & Anr. (2002 ALL MR (Cri.) 230 (S.C.)) on which reliance has been placed by the learned first appellate Court, and, after referring to Dale & Carrington Invt. (P) Ltd. & Anr. V/s. P.K. Prathapan & Ors. (2005 (1) SCC 212) held that: “A Director, as an individual Director, has no power to act on behalf of a company. He is only one of a body of Directors 8 called the board of directors and alone he has no power except such as may be delegated to him by the board of directors or given to him by the articles of association of a company. In the case at hand, the complaint was filed by one of the Directors and as already stated by a Director who had initially complained to the Police that the subject cheque was forged by the accused, and, without any resolution of the company or any authorization from the board of directors. The view held by me is consistent with the views expressed in decisions referred to herein above, namely, those of the Madras High Court in Ruby Leather Exports V/s. K. Venu (1995 Vol.82 Company Cases 776), Andhra Pradesh High Court and Delhi High Court which is now confirmed by the view held by the Apex Court in Dale and Carrington Invt. (P) Ltd. & anr. V/s. P.K. Prathapan & Ors. (supra) and therefore I hold that the complaint in this case was not filed by the company as required under clause (a) of Section 142 of the Act and on such a complaint no process could have been issued much less a conviction imposed.” This decision is squarely applicable to the facts of the case at hand. It is quite interesting to know that in this case a Director has purported to prosecute a Managing Director! An incorporated company is a separate juristic person distinct from its directors or shareholders. It acts through the resolutions passed by its board of directors. Mr. Mulchandi/PW1 could have deposed on behalf of the Complainant only in case there was a resolution of the board of directors or in case he was otherwise authorized by the articles of association of the company. A person who claims to represent another is expected to produce an authority or power which entitles him to so appear. Mulchandi/PW1 could have appeared and deposed on behalf of the company only in case he was authorized by a resolution of the board of directors or as already stated, by articles of the association of company. He had produced no such resolution and therefore the complaint filed on behalf of the company 9 could not have been entertained and much less a conviction imposed. A Director alone could not have given a power of attorney to Mulchandi/PW1 to prosecute the accused or depose on behalf of company unless there was a resolution in his favour passed by the company at its meeting of the board of directors. The complaint which was entertained, based on a purported power of attorney, given by one of the Directors could not in law be entertained and the accused convicted. 9. There is another aspect which needs to be looked into. Shri Diniz, learned Counsel on behalf of the accused has contended that the said power of attorney in favour of Mulchandi/PW1 does not authorize him to file a complaint. Learned Counsel particularly refers to clause 3 of the said power of attorney which authorizes “to make, sign, execute and affirm, present and file any application, written statement, plaint, reply complaints, affidavits, representations, declarations, cross objection, memos of appeal, revision, etc. and to make any statements, defences and to verify the same and further to give statements on oath or to depose on behalf of the said company in any Court of law and/or before the public authorities or authority”. Shri Usgaonkar on the other hand submits that the plaint referred to in the said clause could be understood only as a plaint as defined under the Code of Civil Procedure and the complaint referred to therein could be understood with reference to the Code of Criminal Procedure, 1973 and therefore the 10 expression “reply complaints” could be understood only as a complaint as contemplated under the Code of Criminal Procedure, 1973. A bare reading of the said clause 3 shows that it refers to “reply complaints” and not to any complaints. One does not know what the principal exactly meant by the said expression. Nevertheless, in Capt. Harcharanjit Singh Thind V/s. Deeksha Thind & Ors. (unreported judgment of this Court dated 22/02/2008 in Appeal From Order No. 89/2006) this Court had referred to Halsbury's Laws of England wherein it was stated that: “An instrument conferring authority by deed is termed a power of attorney. The person conferring the authority is termed the donor of the power, and the recipient of the authority, the donee. A power of attorney is construed strictly by the Courts, according to well-recognised rules, regard first being had to any recitals which, showing the general object, control the general terms in the operative part of the deed.” That the power of attorney must be strictly construed to confer an authority given expressly or by necessary implications is a view which can also be found at page 75 of Bowstead on Agency and at page 2118 of Pullock & Mulla. Viewed in that light, since the power of attorney confers power both of filing the plaint and written statement, as well as the complaint and reply, it could be understood that it does by necessary implication authorized the said Mulchandi to file a complaint as well. Nevertheless the matter cannot be allowed to end there. 10. Mulchandi/PW1 stated in his evidence that he had the power of 11 attorney of the Complainant and produced the same and which was marked as Exhibit 1. As already stated the complainant is a registered company and the said power is purported to have been given by the said Mr. Audhut Timblo. Mulchandi/PW1 however, did not even identify the signature of the said Mr. Audhut Timblo on the said power of attorney to show that it was issued by the said Mr. Audhut Timblo. It was the duty of Mulchandi/PW1 to have prima facie proved that he had entered the witness box pursuant to the power given by the said Mr. Audhut Timblo. In the circumstances, it must be stated that the said power of attorney was not at all proved and much less the endorsement made thereon that it was issued pursuant to the resolution of the board of directors dated 30/06/1995 regarding which Mulchandi/PW1 also remained silent. It was for Mulchandi/PW1 to have, prima facie, proved that he was authorized to depose on behalf of the Complainant, or on behalf of the Director to whom he purported to represent. There was no resolution from the board of directors authorizing Mulchandi/PW1 to depose on behalf of the company. Likewise, the power of attorney produced by him was not proved by him as having been executed by the said Audhut Timblo. The question of further cross-examination by the accused could have been insisted only in case Mulchandi/PW1, had, prima facie proved either that he had authority from the Company or from the said Mr. Audhut Timblo. Counsel on behalf of the Complainant has placed reliance on a decision of this Court in Bratindranath Banerjee, Director, Standard Chartered Bank V/s. Hiten P. 12 Dalal (1994 (4) Bom. C.R. 237) wherein this Court observed as follows: I am unable to accept these submissions. The said Bank undoubtedly is a legal entity. But it can only act through its officers. Mr. Bratindranath Banerjee is admittedly a Director of the said Bank and an officer of that Bank. On a plain reading of the complaint, it is clear that it has been filed by Mr. Bratindranath Banerjee as a Director of the said Bank and not as an individual. In fact the accused himself understood that this is a complaint by the said Bank. This is clear from Application No. 15 of 1992 which has been filed by the accused. In this application, in para 1 the accused himself states that he has received a copy of the complaint filed on behalf of the said Bank. Also there is no challenge to the statement of Mr. Banerjee was that he was authorized to file this complaint. There is also no challenge to the deposition of Mr. Banerjee that the complaint was filed on behalf of the said Bank. The contents and substance of the complaint also make it clear that it is by the said Bank. Accordingly I hold that the complaint is maintainable and is not barred under Section 142(a) of the Negotiable Instruments Act. 11. In my view, the said observations would be inapplicable to the facts of this case and disclosed herein above. The complaint was filed by registered company and firstly it was necessary for a company by resolution to have authorized Mulchandi/PW1 to file a complaint against the accused and depose in support of it. No such authority was produced by Mulchandi/PW1. Secondly, Mulchandi/PW1 did not even prima facie prove that the said power of attorney was given by the said Audhut Timblo by identifying his signature. He stated that it was given by the Complainant when in fact it was not. What follows from the aforesaid discussion is that the company itself did not authorize Mulchandi/PW1 to file a complaint and depose in support thereof. Secondly, Audhut Timblo being only a Director could not have authorized 13 Mulchandi/PW1 to depose on behalf of the company. Thirdly, the power of attorney produced by Mulchandi/PW1 was not prima facie proved as having been given by Mr. Timblo . In such a situation, and, as observed by this Court in Ashok G. Bagi (supra), since the complaint was not filed by the company as required under clause (a) of Section 142 of the Act, on such a complaint no process could have been issued and no conviction could have been imposed. In the absence of prima facie proving that Mulchandi/PW1 had an authority to depose on behalf of the company, the accused had the right to maintain profound silence. The question to cross-examine would have come only in case the authority produced was prima facie proved. 12. As regards the second objection, what follows from the evidence of Ulhas Narkar/PW2 is that on 15/03/1993 the accused had issued stop orders for the payment of 10 cheques. The accused at the time of issuing the said stop order did not have sufficient funds into his account. Although the cheques ought to have been returned with the endorsement that the accused had stopped payment, one fails to understand as to why the cheques were returned with endorsement “present again”. Ulhas Narkar/PW2 has stated that generally they give that reason when they except the funds to be deposited by the customer into the account. Learned Counsel on behalf of both the parties have not been able to throw any light as to why inspite of the stop instructions from the accused, the Bank returned the cheque with the 14 said endorsement “present again”, in as much as, the said Ulhas Narkar himself has not been able to give any explanation. Since the cheques were returned unpaid because of the said stop instructions from the accused, nevertheless it cannot be said that no offence was committed by the accused on that count. This matter has already been dealt by the Apex Court in the said case of Goa Plast (P) Ltf. V/s. Chico Ursula D'Souza (2004 (2) SCC 235) by stating that: “Once the cheque is issued by the drawer a presumption under Section139 of the Act must follow and merely because the drawer issues a notice to the drawee or to the bank for stoppage of the payment, it will not preclude an action under Section 138 of the Act by the drawee or the holder of a cheque in due course.” Even if it was a case of 'present again' the Complainant was not bound to wait to present the same again and since the Complainant had issued the notice and called upon the accused to make the payment of the dishonoured cheque, the Complainant was certainly entitled to proceed with the prosecution of the accused. The second objection therefore needs to be rejected. 13. As regards the merits of the case, at the very outset it must be stated that the handing over the letter dated 20/07/1992 along with the 10 cheques is a transaction which took place between the accused on one hand, as the Managing Director of the Company, and the said Mr. Audhut Timblo who was one of the Directors of the said company. The said Director Mr. Audhut 15 Timblo has not stepped in the witness box. Who was purportedly authorized was Mulchandi/PW1, who could not even claim to be associated with the said company either as an employee or otherwise. He does not appear to have had any knowledge about the said transaction in as much as he could not have deposed beyond the documents he produced. 14. Referring to the said documents, it can be seen that by the said letter dated 20/07/1992 addressed to the Complainant/company, the accused handed over the said 10 cheques stating that he was refunding the amount due and payable to Goa Plast Pvt. Ltd. The said letter is as short as that. Thereafter, the accused wrote to the said Director by his letter dated 12/02/1993 recalling the issue of the cheques for Rs. 4 lacs at his request. In the said letter, the accused stated that the Director had told him that the accounts had showed an unexplained expenditure of that amount and it was his duty as a Managing Director to see that the accounts were in order and it was for him to have checked the assets and liabilities position every month. The accused also categorically stated that the said letter dated 20/07/1992 was drafted by Mr. Rajan Kinnerkar at his instance and handed