Chandurkar Vs Kalim M. Khan & ANR.
J U D G M E N T
Dr. B.S. CHAUHAN, J.
appeal has arisen out of judgment and order dated 18.2.2008 passed by the High Court
of Judicature at Bombay in Criminal Revision No.656 of 2007 by which the High
Court has set aside the judgments and orders of the trial Court as well as of the
Appellate Court convicting the respondent no.1 for the offences punishable
under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter called
the Act 1881) and sentencing him for the period, till the rising of the Court and
to pay compensation of a sum of Rs.7,00,000/-. Failing which, the respondent would
serve simple imprisonment for a period of six months.
facts and circumstances giving rise to this case are that the appellant/complainant
claimed to be the sole proprietor of the Firm, namely, Vijaya Automobiles, which
had the business of supplying fuel. The firm had supplied a huge quantity of
diesel to respondent no.1 in the month of March 2005. In order to meet the
liability, the Respondent no.1 made the payment vide Cheque No.490592 dated 28.4.2005
in the name of the said proprietary Firm drawn on Development Credit Bank,
Kurla Branch, Bombay for an amount of Rs.7,00,000/- (Rupees seven lakhs only). The
appellant/complainant deposited the said cheque in the account of the said Firm
in Bank of India Uran Branch on 12.9.2005.
Development Credit Bank returned the said cheque mentioning "unpaid" with
a Memorandum "funds are insufficient". 2 The appellant/complainant
sent notice dated 11.10.2005 by Registered A.D. post as well as under certificate
of posting. The respondent no.1/accused did not accept the notice sent by
Registered A.D. post. However, the notice sent by certificate of posting stood
served upon him as the respondent no.1 admitted the said fact in his statement under
Section 313 of the Code of Criminal Procedure, 1973 (hereinafter called Cr.P.C.).
The respondent no.1/accused neither replied to the notice, nor made the payment
within 15 days of the receipt of the notice.
appellant/complainant filed a complaint case no.545 of 2005 before the Judicial
Magistrate, First Class, Uran under section 138 of the Act 1881 on 22.11.2005. The
case was tried, however, the respondent no.1/accused did not enter the witness box
and after considering the case, the trial Court vide judgment and order dated 22.12.2006
concluded the trial convicting the respondent no.1 to suffer simple imprisonment
till rising of the court and to pay compensation of Rs.7,10,000/- and in
default of payment thereof, to suffer simple imprisonment for six months. It
was directed that out of the aforesaid amount of compensation, a sum of Rs.10,000/-
be credited to Raigad District Legal Aid Committee.
aggrieved of the aforesaid judgment and order, the respondent no.1/accused
filed Criminal Appeal No.85 of 2006. The learned Sessions Judge vide judgment
and order dated 18-19/9/2007 dismissed the said appeal, with the amount of compensation
being reduced from Rs.7,10,000/- to Rs.7,00,000/-. Thus, the direction to credit
the amount of Rs.10,000/- to Raigad District Legal Aid Committee was set aside.
aggrieved, respondent no.1 preferred Criminal Revision Application No.656 of 2007
before the High Court which has been allowed vide judgment and order dated
18.2.2008 (impugned) only on the ground that the appellant could not produce any
evidence to establish that he was the sole proprietor of the proprietary
concern in question. Hence, this appeal.
have heard Shri Shekhar Naphade, learned senior counsel for the appellant, Shri
Viraj Kadam, learned counsel for respondent no.1 and Shri Shankar Chillarge, Additional
Advocate General for respondent no.2 and perused the record. All the three
courts below have dealt with the issues elaborately and recorded the following
findings of fact:-
cheque had been issued by the respondent no.1 in favour of the Firm concerned towards
discharge of pre-existing liability and not as security.
substantive sentence of imprisonment in default of payment could be imposed. So
far as the findings on the aforesaid two issues are concerned, the same are not
under challenge before us. Learned counsel appearing for the respondents have
accepted the aforesaid findings.
only issue involved herein is as to whether the appellant owns the said firm
i.e., whether he is the proprietor of the said firm? The trial Court as well as
the Appellate Court have held that a sole proprietary concern is no independent
legal entity and its identity remains inseparable from its proprietor. But it
merely remains a legal proposition. None of the said courts held that the appellant
was the sole proprietor of the said firm.
High Court has set aside the judgments of the trial Court as well as the
Appellate Court in Revision only on the ground that as the appellant did not produce
any evidence to show that he was the proprietor of the Firm, he had no locus
standi to file the complaint.
trial Court held that the complainant had deposed that he was proprietor of the
Firm, namely, "Vijaya Automobiles" which had the business of supplying
fuel etc. and the Firm had supplied the fuel on credit to respondent
no.1/accused. The Court also took note of the pleadings taken by the respondent
no.1/accused that he had given the cheque to the appellant for Vijaya Automobiles
but it was as a security and not to meet any legal liability. Therefore, the
respondent no.1/accused had admitted that the appellant had actual control over
the said firm. The respondent no.1/accused admitted his signature on the cheque
and execution of the cheque. Therefore, the presumptions under sections 118 and
139 of the Act 1881 were attracted.
with the issue involved herein, the Appellate Court has noted that perusal of the
cross-examination indicated that the appellant did not produce any documentary
evidence to show that he was the proprietor of Vijaya Automobiles. Rather it
was admitted by the appellant in the cross-examination that he did not have any
documentary evidence to show that the complainant was the owner of the petrol
spite of making the aforesaid observations, the appeal was dismissed on the
ground that admittedly diesel had been supplied to the respondent no.1/accused,
and the said respondent had issued the cheque to meet the liability, which
could not be encashed for want of funds. All other requirements in law, i.e.,
issuance of notice etc. also stood completed.
part of the affidavit filed by the appellant/complainant before the trial Court
reads as under: "I, Shri Milind Shripad Chandurkar, Aged about 37 years, Indian
Inhabitant, Occ. Business, Proprietor of M/s. Vijay Automobiles, having address
at Sector-29, Dronagiri Node, Uran, Dist. Raigad, take oath and state on solemn
affirmation as under..... I state that in due discharge of legal liability of
the accused as mentioned in foregoing paras, the accused issued one cheque dtd.
28.4.2005 in my name i.e. in the Name M/s. Vijaya Automobilies which was drawn on
Development Credit Bank, Kurla Branch, Mumbai-70 bearing Cheque No.490592, for
Rs.7,00,000/- (Rupees Seven Lakhs only)." Relevant part of his
cross-examination reads as under:- "It is true that till today I had not
produced any documentary evidence to show that I am owner of Vijaya Automobiles......Till
today I had not produced any documentary evidence to support."
complainant had also examined Shri S.K. Sharma, owner of M/s. Vikas Travels under
whom the respondent no.1 had been working as a sub-contractor. In his cross-examination,
Shri S.K. Sharma also stated as under:- "I have no documentary evidence to
show that complainant Milind Shripad Chandurkar owns the petrol pump."
from the above, it is evident that the appellant/complainant could not produce
any document to show that he was the proprietor of Vijaya Automobiles in spite
of the fact that the issue had been agitated by the respondent no.1/accused at every
stage. It is also evident from the documents on record that in the list of
witnesses the complainant had mentioned the name of his banker as a witness,
however, the said banker was not examined.
may also be pertinent to mention here that appellant did not make any attempt
to adduce additional evidence at the appellate stage also. No document has ever
been filed to substantiate his averment in this regard.
7 of the Act 1881 defines "Payee" as the person named in the instrument,
to whom or to whose order the money is by the 8 instrument directed to be paid.
Section 8 defines "the holder of the cheque" as any person entitled in
his own name to the possession thereof and to receive or recover the amount due
thereon from the parties thereto. Section 9 defines "holder in due
course" as any person who for consideration became the possessor of a
cheque if payable to a bearer or the payee or endorsee thereof. Section 138
provides for penalties in case of dishonour of certain cheques for
insufficiency of funds in the accounts. However, exception contained in clause
(c) thereof reads as under: "The drawer of such cheque fails to make the payment
of the said amount of money to the payee or, as the case may be, to the holder
in due course of the cheque, within fifteen days of the receipt of the said
notice." (Emphasis added)
142 provides for taking cognizance of the offence notwithstanding anything
contained in Cr.P.C. which reads as under: "(a) no court shall take
cognizance of any offence punishable under Section 138 except upon a complaint,
in writing, made by the payee or, as the case may be, the holder in due course of
the cheque." (Emphasis added)
Court in Shankar Finance and Investments v. State of Andhra Pradesh & Ors.,
(2008) 8 SCC 536, dealt with the issue 9 involved herein elaborately and held that
where the "payee" is a proprietary concern the complaint can be filed
the proprietor of the proprietary concern describing himself as the sole
proprietor of the "payee";
proprietary concern describing itself as the sole proprietary concern represented
by its proprietor; and
proprietor or the proprietary concern represented by the Attorney Holder under
the power of attorney executed by the sole proprietor.
However, it shall not
be permissible for an Attorney Holder to file the complaint in his own name as if
he was the complainant. He can initiate criminal proceedings on behalf of the
principal. In a case of this nature, where the "payee" is a company
or a sole proprietary concern, such issue cannot be adjudicated upon taking any
guidance from Section 142 of the Act 1881 but the case shall be governed by the
general law i.e. the Companies Act 1956 or by civil law where an individual
carries on business in the name or style other than his own name. In such a
situation, he can sue in his own name and not in trading name, though others can
sue him in the trading name. So far as Section 142 is concerned, a complaint shall
be maintainable in the name of the "payee", proprietary concern
itself or in the name of the proprietor of the said concern. The Court placing
reliance on earlier judgments, particularly, in Janki Vashdeo Bhojwani v.
Indusind Bank Ltd., (2005) 2 SCC 217, held that the general principles of company
law or civil law would apply for maintaining the complaint under Section 138 of
the Act 1881.
National small Industries Corporation Ltd. v. State (NCT of Delhi) & Ors.,
(2009) 1 SCC 407, this Court held as under: "The term
"complainant" is not defined under the Code. Section 142 of the NI Act
requires a complaint under Section 138 of that Act to be made by the payee (or by
the holder in due course)..."
in view of the above, the law stands crystallised to the effect that a person
can maintain a complaint provided he is either a "payee" or
"holder in due course" of the cheque.
the instant case, it is evident that the firm, namely, Vijaya Automobiles, has
been the payee and that the appellant cannot claim to be the payee of the
cheque, nor can he be the holder in due course, unless he establishes that the
cheques had been issued to him or in his favour or that he is the sole
proprietor of the concern and being so, he could also be payee himself and
thus, entitled to make the complaint.
The appellant miserably
failed to prove any nexus or connection by adducing any evidence, whatsoever, worth
the name with the said firm, namely, Vijaya Automobiles. Mere statement in the
affidavit in this regard, is not sufficient to meet the requirement of law. The
appellant failed to produce any documentary evidence to connect himself with
the said firm. It is evident that the firm had a substantial amount of business
as in one month it sold the diesel to respondent no. 1 - a single party, for a
sum of Rs. 7 lakhs. The appellant would, in addition, have also been carrying out
business with other persons. Thus, a person with such a big business must have
had transactions with the bank and must have been a payee of income tax, sales
tax etc. Thus, in such a fact-situation, there would be no dearth of material which
could have been produced by the appellant to show that he was the sole
proprietor of the said firm. The appellant failed to adduce any evidence in this
regard, nor made any attempt to adduce any additional evidence at the appellate
stage, in spite of the fact that the respondent is raising this issue from the
initiation of the proceedings.
view of the above, we do not see any cogent reason to interfere with the impugned
judgment and order of the High Court. The appeal is devoid of any merit and,
(Dr. B.S. CHAUHAN)
March 3, 2011 1
Chandurkar Vs Naimulla M. Khan & ANR.
Petition (Criminal) No.3124 of 2008
J U D G M E N T
Dr. B.S. CHAUHAN, J.
view of the judgment in Criminal Appeal No. 643 of 2011 arising out of Special
Leave Petition (Criminal) No. 3045 of 2008, the above Special Leave Petitions
..........................J. (P. SATHASIVAM)
(Dr. B.S. CHAUHAN)