*THE HON’BLE SRI JUSTICE K.C.BHANU +CRIMINAL APPEAL No.852 OF 2002 % Dated : 19.08.2009 #Sri Lakshmi Kanchana Finance Corporation ..... Appellant/Complainant AND $ The Sate of Andhra Pradesh, Rep. by its Public Prosecutor, High Courtof A.P., Hyderabad. ..... Respondent $ I.V.Nagaraja Rao ..... 2nd Respondent/Accused ! Counsel for Petitioner : Sri K.Srinivas Rao ^Counsel for 1st Respondent : Public Prosecutor ^Counsel for 2nd Respondent : Sri P.Prabhakar Reddy <GIST : >HEAD NOTE : ? Cases referred : (2009) 1 Supreme Court Cases (Cri) 513 IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE NINTEENTH DAY OF AUGUST TWO THOUSAND AND NINE PRESENT HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL APPEAL No.852 OF 2002 Between: Sri Lakshmi Kanchana Finance Corporation ..... Appellant/Complainant AND 1. The Sate of Andhra Pradesh, Rep. by its Public Prosecutor, High Courtof A.P., Hyderabad. … Respondent 2. I.V.Nagaraja Rao ..... 2nd Respondent/Accused The Court made the following: JUDGMENT: The criminal appeal under Section 378(4) of the Code of Criminal Procedure, 1973, is directed against the judgment, dated 30.10.2001, in C.C.No.51 of 2000, on the file of the learned V Metropolitan Magistrate, Visakhapatnam, whereunder and whereby, the second respondent/sole accused was found not guilty of the offence punishable under Section 138 read with 142 of the Negotiable Instruments Act, 1881 (For short ‘the Act’). Challenging the same, the complainant firm filed the present appeal. 2. The brief facts that are necessary for the disposal of the present appeal may be stated as follows: The accused, along with his father-I.J.Subrahmanyam, mother-Sarojini and brother-Venkata Chalapathi Rao, jointly borrowed an amount of Rs.23,500/- from the complainant firm on 30.06.1995, promising to repay the same with interest @ 36% per annum. Subsequently, father of accused paid an amount of Rs.500/- on 31.03.1998 and made an endorsement for the part payment on the reverse of the promissory note. In spite of several demands, the accused did not discharge the debt, but issued a cheque, dated 05.07.1999, bearing No.0373173, drawn on Vysya Bank Limited, Surya Bagh Branch, Visakhapatnam, for Rs.75,000/- towards part payment as against the amount due on the promissory note, which works out to Rs.81,551/- by 09.07.1999. When the complainant firm presented the said cheque for encashment through its banker-Indian Overseas Bank, Visakhapatnam, it was returned unpaid and dishonoured with an endorsement ‘account closed’. Then the complainant firm got issued a statutory legal notice, dated 09.07.1999, calling upon the accused to repay the entire amount due to the complainant firm. The accused did not choose to repay the amount nor send any reply. Hence, the complaint. 3. When the accused is examined under Section 251 Cr.P.C. for the offence under Section 138 read with 142 of the Act, he pleaded not guilty. 4. To substantiate the case of the complainant firm, the prosecution examined P.Ws.1 to 3 and got marked Exs.P1 to P11. 5. After closure of the prosecution evidence, the accused was examined under Section 313 Cr.P.C. with reference to the incriminating material found against him in the evidence of prosecution witnesses. He denied the same. On behalf of the accused, no oral evidence was adduced except marking Ex.D1. 6. The trial Court, after appreciation of evidence on record, came to the conclusion that the debt is time barred and therefore, there was no legally enforceable debt and so, the cheque was not given for any legally enforceable debt, and accordingly, acquitted the accused. Challenging the same, the present criminal appeal is filed. 7. Now, the point for determination is whether the complainant firm proved its case beyond all reasonable doubt for the offence under Section 138 read with 142 of the Act and whether the judgment of the trial Court is correct, legal and proper? 8. Learned counsel appearing for the appellant contended that the joint family consisting of the accused, his father, mother and brother jointly borrowed and executed a promissory note in favour of the complainant on 30.06.1995 and that on 31.03.1998, the father of the accused paid an amount of Rs.500/- and made an endorsement on the back of pronote, and the accused himself and his brother executed Ex.P11-letter, duly acknowledging the part payment, and so, a fresh limitation of three years starts from 31.03.1998; that on 05.07.1999, a cheque was given by the accused to discharge the legally enforceable debt, that P.W.1 was one of the partners of the firm and act of the firm includes an act of any one of the partner; that the trial Court committed an illegality in not calculating the compound interest on the debt borrowed on 30.06.1995 and that the calculation of principal and interest due under promissory note by the complainant firm would clearly go to show that as on the date of giving of cheque, an amount of Rs.81,551/- was due and towards the part payment of that debt, the cheque in question was given. Therefore, he prays to set aside the order of acquittal. 9. On the other hand, learned counsel appearing for the second respondent contended that the cheque was not given for legally enforceable debt and the debt under which the cheque was given was time barred; that Ex.P11-letter was not proved beyond all reasonable doubt, and that P.W.1 was not a payee and he was not duly authorized by the firm to prosecute the complaint and therefore, the trial Court rightly found the accused not guilty for the offence alleged against him and there are no grounds to interfere with the same. 10. One of the golden principles that was passing through the web of criminal justice system is that the accused is presumed to be innocent unless contrary is proved. That presumption of innocence is further strengthened by the order of acquittal. Ordinarily, the appellate Court would slow in interfering with the order of acquittal. The paramount consideration of the Court is to ensure that miscarriage of justice is prevented. A miscarriage of justice which may arise from acquittal of an accused person is no less than from the conviction of an innocent. In a case where admissible evidence is overlooked, a duty is cast upon the appellate Court to reappreciate the evidence. Similarly, inadmissible evidence has taken into consideration in acquitting the accused. If the impugned judgment is clearly unreasonable, it is a compelling reason of interference. 11. The specific case of P.W.1 is that the accused, his father, mother and brother jointly borrowed an amount of Rs.23,500/- on 30.06.1995 and executed Ex.P9-Promissory note in favour of the complainant firm agreeing to repay the same with interest @ 36% per annum. It is also the case of the complainant firm that on 31.03.1998, the father of the accused paid Rs.5,00/- towards part payment of debt due and made an endorsement Ex.P10 on the back of Ex.P9. Similarly, the accused and his brother gave Ex.P11-letter on the same day, acknowledging the part payment made by their father. It is also in the evidence of P.W.1 that Ex.P1-cheque in question, dated 05.07.1999, was given for Rs.75,000/-. When the cheque was presented for encashment, it was returned with an endorsement ‘account closed’, which is marked as Ex.P2. Then Ex.P3, a statutory legal notice, was got issued when the accused failed to pay the amount. Hence, the present complaint was filed. 12. Under Section 138 of the Act, “Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881.” To constitute an offence incorporated in the main enacting clause of Section 138 of the Act, three conditions have to be satisfied: (i) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. (ii) the payee or the holder in due course of the cheque makes a demand for the payment of the amount by giving a notice in writing within 15 days from receiving information from the bank regarding the dishonour of cheque. (iii) the drawer of the cheque fails to make payment within 15 days from the date of receipt of notice. 13. The execution of promissory note jointly by the accused, his father, mother and brother is not denied or disputed. The trial Court committed an illegality in arriving to the conclusion that if the interest is calculated for four years, it works out to Rs.35,000/-. The calculation of interest appears to be made on simple interest. If the compound interest is calculated on the borrowed amount of Rs.25,500/-, it will come to Rs.81,551/-. A specific plea has been taken in the complaint that as on the date of giving of the complaint, the amount due under Ex.P9-Promissory note with compound interest worked out to Rs.81,551/-. P.W.1 has categorically stated that the accused issued a cheque towards part payment of amount borrowed. Therefore, the calculation of interest by the trial Court is totally incorrect and it is a wrong calculation of interest. 14. Now, it is to be seen whether the debt incurred by accused is barred by limitation. It is the case of P.W.1 that the father of the accused paid part payment of Rs.500/- on 31.03.1998 and made an endorsement on the back of the promissory note, which is marked as Ex.P10. Similarly, the accused and his brother issued Ex.P11-letter, dated 31.03.1998, duly admitting the debt and admitting the part payment of Rs.500/- on 31.03.1998 and making an endorsement on the back of Ex.P9-Promissory note by the father of accused. 15. Learned counsel appearing for the second respondent contended that when the father of accused himself made an endorsement on Ex.P9-Promissory note, there is no need for the accused and his brother to give Ex.P11-letter. It is also contended by learned counsel appearing for the second respondent that existence of Ex.P11-letter was not mentioned either in the complaint or in the statutory notice, and for the first time, it was brought into existence during the evidence of P.W.1, that too after recalling P.W.1. Therefore, according to learned counsel appearing for the second respondent, Ex.P11 is a concocted document. It is suggested to P.W.1 that Ex.P11-letter was not executed by the accused and his brother. 16. There cannot be any dispute that when any fact is asserted by a party, the burden is on him to establish the same. When P.W.1 has specifically stated that Ex.P11-letter was executed by accused and his brother, the hand writing on Ex.P11 was shown to be that of accused. When it is denied, the burden is on the accused to show that it was not executed by him. He must have taken steps to send the document in question to an expert along with the admitted handwriting and signature of accused for comparison. Except giving a suggestion that Ex.P11 was not executed by him, the accused has not taken any steps to send the disputed document to an expert. Further more, the accused himself has not come to the witness box to deny the execution, i.e., the writings and contents and also the signature on Ex.P11- letter. From the evidence, it is clear that Ex.P11 was executed by accused. This aspect of the case has not been properly dealt with by the trial Court. Simply because it was brought into existence after recalling P.W.1, that does not mean that document was created for the purpose of this case. Except suggesting to P.W.1 that it is not executed by the accused, no where it is suggested that it was created or fabricated subsequent to the examination of P.W.1 so as to suit the case of the complainant. Therefore, the endorsement on Exs.P9 and P11 amount to an acknowledgement within the meaning of Section 18 of the Limitation Act, 1963. When the prescribed period has expired and there has been an acknowledgment before such expiration, the suit cannot be said to be barred by time. In order that an acknowledgment may give a fresh starting point under this Section, it must be signed by the party or his authorized agent. Therefore, under Section 18 of the Limitation Act,1963, a fresh period of limitation shall be computed from the time when the acknowledgment so signed. If that is so, the complainant firm can file a suit for recovery of the amount within three years from the date of acknowledgment. When a complainant firm can enforce its claim legally by filing a suit, it can be said that Ex.P1-cheque was given for legally enforceable debt or liability. These aspects have not been taken into consideration by the trial Court and came to wrong conclusion. 17. Now, the other contention raised by learned counsel appearing for the second respondent is that the Managing Partner of complainant firm is not duly authorized to file the complaint. Under Section 142(a) of the Act reads that no Court shall take cognizance of any offence punishable under Section 138 of the Act except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque. Admittedly, complainant is not the holder in due course of the cheque. Payee as defined in Section 7 of the Act, is the person named in the instrument to whom or to whose order the money is by the instrument directed to be paid. In this case, firm is the payee. 18. Learned counsel appearing for the second respondent placed reliance on the decision reported in National Small Industries Corporation Limited v. State (NCT of Delhi) and others[1], wherein it is held that: “If the payee is a company, necessarily the complaint should be filed in the name of the company. Section 142 of the NI Act does not specify who should represent the company, if a company is the complainant. A company can be represented by an employee or even by a non-employee authorized and empowered to represent the company either by a resolution or by a power of attorney.” No doubt, the above decision would clearly go to show that a company can be represented by an employee or even by a non-employee authorized and empowered to represent that company. If the payee is a company, an incorporeal body can alone lodge the complaint, under Section 142 of the Act. 19. But the learned counsel appearing for the appellant contended that the act of the firm means, any act or omission by all the partners or by any partner or agent of the firm, which gives raise to a right enforceable by or against the firm. Therefore, his contention is that without there being any authorization, any partner of the firm can file a complaint on behalf of the firm. 20. Under Section 19(2) of the Indian Partnership Act, 1932, which reads thus: “In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to- (a) submit a dispute relating to the business of the firm to arbitration, (b) open a banking account on behalf of the firm in his own name, (c) compromise or relinquish any claim or portion of a claim by the firm, (d) withdraw a suit or proceeding filed on behalf of the firm, (e) admit any liability in a suit or proceeding against the firm, (f) acquire immovable property on behalf of the firm, (g) transfer immovable property belonging to the firm, or (h) enter into partnership on behalf of the firm.” Therefore, except those acts which are barred under Section 19(2) of the Partnership Act, 1932, a partner can file a complaint because the act of the firm is defined under Section 2(a) of the Partnership Act, 1932, which means any act or omission by all the partners or by any partner or agent of the firm which gives raise to a right enforceable by or against the firm. The act of the firm in filing of complaint was exercised by one of the partners. Therefore, the partner was given a right enforceable on behalf of the firm or against the firm unless contrary is appearing in the partnership deed. Therefore, one of the partners exercised his right in filing the complaint. It is not in dispute that P.W.1 is one of the partners of the complainant firm. By virtue of the definition of “the act of the firm” includes any partner and any partner can enforce the right on behalf of the firm, one partner can file the complaint. Every partner is an agent of the firm and his other partners, for the purpose of the business of the partnership and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member binding the firm and his partners, unless the partner so acting has in fact no authority to act for the firm in the particular matter. Therefore, P.W.1 though not specifically authorized but by virtue of the definition under Section 2(a) of the Partnership Act, 1932, he can exercise his right to enforce on behalf of the firm. Hence, the contention of the learned counsel appearing for the second respondent that P.W.1 was not duly authorized to file complaint on behalf of firm is devoid of merit and wholly untenable. 21. Further more, Firm Registration Certificate is marked as Ex.P5. As seen from Ex.P5, P.W.1 was shown as one of the partners of the firm. In view of above discussion, P.W.1 is competent to file the complaint. It can be said that Ex.P9-Promissory note was executed by accused along with his other family members for legally enforceable debt and the debt was not time barred. When the initial burden placed on behalf of the complainant firm was discharged, the burden shifts to the accused under Section 139 of the Act, to rebut the presumption. The word ‘until contrary is proved’, found in Section 139 of the Act, would mean mere explanation is not sufficient but the accused must plead and prove the case that the cheque in question was not given for legally enforceable debt by preponderance of probability. To discharge the burden placed on the accused under Section 139 of the Act, the accused need not examine any witness but he can as well show in the evidence adduced on behalf of the complainant firm. Nothing has been elicited in the cross-examination of P.Ws.1 to 3 to show that the cheque was not given for legally enforceable debt or liability. Therefore, the burden placed on the accused has not been discharged and hence, for the aforesaid reasons, the complainant firm proved its case beyond all reasonable doubt for the offence under Section 138 read with 142 of the Act. Accordingly, the accused/2nd respondent is found guilty of the offence under Section 138 read with 142 of the Act and accordingly convicted of the said offence. 22. The debt is of the year 1995 and the compound interest is added from the date of execution of promissory note. Considering these aspects, a lenient view can be taken with regard to the sentence. The firm is also not interested to send the accused to jail but it is only interested to recover the amount due under Ex.P9-Promissory note. Considering these aspects, awarding compensation, twice the amount borrowed, would meet the ends of justice. Hence, the accused/2nd respondent is sentenced to pay a compensation of Rs.47,000/- within a period of eight (8) weeks from today, failing which the accused/2nd respondent shall undergo Simple Imprisonment for a period of six (6) months. 23. The criminal appeal is allowed accordingly. ______________ (K.C.BHANU, J) Date: 19th August, 2009. KL LR copy to be marked. (B/o) KL [1] (2009) 1 Supreme Court Cases (Cri) 513