Ms Himalayan Plastics Ltd. Vs Ram Singh

The present appeal is directed against the judgment dated 28.5.2010, passed by learned Judicial Magistrate First Class, Solan, District Solan, H.P. (learned Trial Court), vide which the respondent (accused before learned Trial Court) was acquitted of the commission of an offence punishable under Section 138 of Negotiable Instruments Act, 1881 (NI Act). (Parties

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Whether reporters of Local Papers may be allowed to see the judgment? Yes.

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shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.)

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Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the learned Trial Court against the accused for the commission of an offence punishable under Section 138 of the NI Act. It was asserted that the complainant is a Company duly incorporated under the Indian Companies Act. Madan Sharma is the Managing Director of the complainant Company. He executed a General Power of Attorney in favour of Sita Ram Verma to file the present complaint. The complainant is involved in the business of manufacturing and selling HDPE pipes, fittings, sprinklers, drip irrigation systems, PIB (silicon-coated), and HDPE Telecom Duct. The accused purchased various items from the complainant on credit. He issued a cheque of ₹6,56,202/drawn on Bharatpur Anchalik Gramin Bank, Sodawas Branch. The complainant presented the cheque before its Bank, but it was dishonoured with an endorsement ‘account closed’. A notice was served upon the accused asking him to pay the amount; however, the accused failed to pay any money despite

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receipt of the valid notice of demand. Hence, the complaint was filed to take action as per the law.

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The learned Trial Court recorded the preliminary evidence and found sufficient reasons to summon the accused. When the accused appeared before the Court, notice of accusation was put to him, to which he pleaded not guilty and claimed to be tried.

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The complainant examined Sita Ram (CW1), Ashok Jain (CW2), and M.L. Marwari (CW3) to prove its case.

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The accused, in his statement recorded under Section 313 of Cr.P.C., stated that he had business dealings with the complainant. He had paid the entire amount to the complainant. He had issued a blank cheque as security, and he had no liability to pay the amount. He was falsely implicated by misusing the blank cheque issued as a security. No notice was served upon him. He stated that he wanted to lead defence evidence, but did not lead any evidence.

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Learned Trial Court held that the complaint was filed in the name of the Company, which was represented by Sh. Sita Ram Verma. He produced an authority letter showing Madan

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Sharma as Managing Director. The memorandum of articles of association did not mention the name of Madan Sharma. The authorisation in favour of Sita Ram Verma was not proper. The complainant failed to produce any documentary evidence to show that the amount was legally recoverable, which corroborated the plea of the accused that he had issued a blank cheque as security. The accused also proved a letter written to the complainant asking for the return of a blank cheque. All these circumstances made it doubtful that the cheque was issued in discharge of legal liability. Therefore, the accused was acquitted of the commission of an offence punishable under Section 138 of the NI Act, and the complaint was dismissed.

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Being aggrieved from the judgment passed by the learned Trial Court, the complainant filed the present appeal, asserting that the learned Trial Court has drawn the conclusion based on conjectures and surmises. The matter was appreciated in a slipshod and perfunctory manner. Sita Ram Verma was authorised to file the complaint by Madan Sharma, who was appointed as Director of the Company, and this aspect was ignored by the learned Trial Court. The accused did not dispute the issuance of the cheque, and there is a presumption that it

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was issued in discharge of legal liability. Issuing a blank, signed cheque conferred sufficient authority on the complainant to fill in the amount in the cheque. The accused admitted the business dealings with the complainant, and the conclusion that there was no consideration is contrary to the record. Therefore, it was prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside.

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I have heard Mr. O.C. Sharma, learned counsel for the appellant/complainant, Mr. Jitender Pal, learned counsel for respondent No.1, and Mr. Jitender K. Sharma, learned Additional Advocate General, for respondent No.2-State.

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Mr. O.C. Sharma, learned counsel for the appellant/complainant, submitted that the learned Trial Court erred in holding that Sita Ram Verma was not authorised to file the complaint. The complaint cannot be dismissed for want of authorisation. The issuance of the cheque was not disputed. Therefore, a presumption would arise when the cheque was issued in discharge of the legal liability. The accused did not rebut this presumption by leading any satisfactory evidence. Learned Trial Court erred in shifting the burden to prove the

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consideration to the complainant. The complainant is not supposed to prove the existence of the legally enforceable debt because it is a matter of presumption. Therefore, he prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside. He relied upon the following judgments in support of his submission: -

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(i) M/s Naresh Potteries Vs. M/s Aarti Industries and another 2025: INSC:1;

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(ii) M/s Mohan Meakin Limited Vs. M/s Spirit and Beverages L-1 2018(2) Shim. LC 944,

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(iii) Rajesh Jain Vs. Ajay Singh (2023) 10 SCC 148,

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(iv) Kalamani Tex and Another Vs. P. Balasubramanian (2021) 5 SCC 283;

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(v) Rahul Sudhakar Anantwar Vs. Shivkumar Kanhiyalal Shrivastav (2019) 10 SCC 203;

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(vi) Bir Singh Vs. Mukesh Kumar (2019) 4 SCC 197;

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(vii) Kishan Rao Vs. Shankargouda (2018) 7 SCC 165;

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(viii) Sampelly Satyanarayana Rao Vs. Indian Renewable Energy Development Agency Limited (2016) 10 SCC 458;

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(ix) Rangappa Vs. Sri Mohan (2010) SCC 441;

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(x) Manoj Sharma Vs. Anil Aggarwal 2012(3) Criminal Court Cases 853 (Delhi); and

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(xi) Ashok Debbarma @ Achak Debbarma Vs. State of Tripura 2014(2) Criminal Court Cases 246 (SC).

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Mr. Jitender Pal, learned counsel for

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respondent/complainant, submitted that the learned Trial Court had taken a reasonable view based on the material placed before it, and this Court should not interfere with the reasonable view of the learned Trial Court even if another view is possible. This Court has already held in a complaint filed by the present complainant that Sita Ram Verma was not an authorised person to file the complaint, which finding is binding upon the complainant. Therefore, it is not permissible for the complainant to say in the present proceedings that Sita Ram Verma is a competent person to file the complaint on behalf of the Company. Hence, he prayed that the present appeal be dismissed. He relied upon the following judgments in support of his submission: -

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(i) Director, Maruti Feeds & Farms Private Limited, Dharwad Vs. Basanna Pattekar 2007 (4) CCC 385 (Karnataka);

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(ii) Milind Shripad Chandurkar Vs. Kalim M Khan & Anr. 2011(2) CCC 690 SC;

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(iii) Ashok Leyland Finance Limited Vs. State of Rajasthan & Anr. 2012(4) CCC 807 (Rajasthan);

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(iv)( Lakshmi Srinivas Savings & Chit Funds Syndicate Pvt. Ltd. Vs. S. Bhojarajan 2007(2) CCC 803 (Madras);

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(v) Meeta Rai Vs. Gulshan Mahajan 1999(2) CCC 553 (P&HS);

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(vi) V.U. Pathrose Vs. V.K. Jeevalan 2017(2) CCC 832 (Kerala);

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(vii) B. Krishna Reddy Vs. Sayed Hafeez (Died) per L.R. Smt. Naseema Begum & Anr. 2019(3) Apex Court Judgments 732 (SC);

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(viii) Ghanshyamdas Lalchand Chandak Vs. Sheikh Hamid Sheikh Gulab & Anr. 2018(4) CCC 619 (Bombay);

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(ix) Hans Kumar Jain Vs. Renu Gandotra @ Poonam 2016(1) Criminal Court Cases 364 (Delhi);

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(x) M/s Bajaj Finance Limited Vs. Pooja Narayan Khetan 2021(3) CCC 724 (Gujarat);

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(xi) Susamma Raju Vs. K.M. Wilson 2018(2) CCC 530 (Kerala);

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(xii) M.S. Narayana Menon @ Mani Vs. State of Kerala & Anr., Criminal Appeal No. 1012 of 1999, decided on 4.7.2006;

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(xiii) M/s Shreya Agro Services Pvt. Ltd. Vs. Chandrakumar S.B. 2006(4) CCC 459 (Karanatka);

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(xiv) Vishnudas Vs. Vijaya Mahantesh, Criminal Appeal No. 1697 of 2006, decided on 6.12.2006;

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(xv) Krishna Janaradhan Bhat Vs. Dattartraya G. Hegde, Criminal Appeal No. 518 of 2006, decided on 11.1.2008;

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(xvi) K. Basheer Vs. C.K. Usman Koya 2021(3) CCC 438 (Kerala (DB);

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(xvii) Abdulkhader K.P. Vs. C. Pankajakshan Nambiar and ors. Crl.A. 1504 of 2008, decided on 7.2.2020;

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(xviii) Sachin Food Processor Vs. Sanjay T. Pathak (Kulkarni), 2016(3) CCC 654 (Bombay);

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(xix) Santhi Vs. Mary Sherly 2011(3) CCC 619 (Kerala); and

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(xx) M/s Himalayan Plastics Ltd. Vs. Tej Singh and another, Criminal Appeal No. 263 of 2010, decided 1.10.2021.

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I have given considerable thought to the submissions made at the bar and have gone through the records carefully.

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The present appeal has been filed against a judgment of acquittal. It was laid down by the Hon’ble Supreme Court in Surendra Singh v. State of Uttarakhand, 2025 SCC OnLine SC 176: (2025) 5 SCC 433 that the Court can interfere with a judgment of acquittal if it is patently perverse, is based on misreading of evidence, omission to consider the material evidence and no reasonable person would have recorded the acquittal based on the evidence led before the learned Trial Court. It was observed:

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“11. Recently, in the case of Babu Sahebagouda Rudragoudar v. State of Karnataka 2024 SCC OnLine SC 4035 , a Bench of this Court to which one of us was a Member (B.R. Gavai, J.) had an occasion to consider the legal position with regard to the scope of interference in an appeal against acquittal. It was observed thus:

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“ 38. First of all, we would like to reiterate the principles laid down by this Court governing the scope of interference by the High Court in an appeal filed by the State for challenging the acquittal of the accused recorded by the trial court.

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This Court in Rajesh Prasad v. State of Bihar [Rajesh Prasad v. State of Bihar, (2022) 3 SCC 471: (2022) 2 SCC (Cri) 31] encapsulated the legal position covering the field after considering various earlier judgments and held as below : (SCC pp. 482-83, para 29)

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“ 29. After referring to a catena of judgments, this Court culled out the following general principles regarding the powers of the appellate court while dealing with an appeal against an order of acquittal in the following words: ( Chandrappa case [Chandrappa v. State of Karnataka, (2007) 4 SCC 415: (2007) 2 SCC (Cri) 325 ], SCC p. 432, para 42)

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‘ 42. From the above decisions, in our considered view, the following general principles regarding the powers of the appellate court while dealing with an appeal against an order of acquittal emerge:

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(1) An appellate court has full power to review, reappreciate, and reconsider the evidence upon which the order of acquittal is founded.

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(2) The Criminal Procedure Code, 1973 puts no limitation, restriction or condition on the exercise of such power and an appellate court, on the evidence before it, may reach its

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own conclusion, both on questions of fact and law.

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(3) Various expressions, such as “substantial and compelling reasons”, “good and sufficient grounds”, “very strong circumstances”, “distorted conclusions”, “glaring mistakes”, etc., are not intended to curtail the extensive powers of an appellate court in an appeal against acquittal. Such phraseologies are more in the nature of “flourishes of language” to emphasise the reluctance of an appellate court to interfere with an acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion.

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(4) An appellate court, however, must bear in mind that in case of acquittal, there is a double presumption in favour of the accused. Firstly , the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly , the accused, having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed, and strengthened by the trial court.

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(5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.”

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Further, in H.D. Sundara v. State of Karnataka [H.D. Sundara v. State of Karnataka, (2023) 9 SCC 581: (2023) 3 SCC (Cri) 748] this Court summarised the principles governing the exercise of appellate jurisdiction while

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dealing with an appeal against acquittal under Section 378CrPC as follows: (SCC p. 584, para 8)

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“ 8. … 8.1. The acquittal of the accused further strengthens the presumption of innocence.

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8.2. The appellate court, while hearing an appeal against acquittal, is entitled to reappreciate the oral and documentary evidence;

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8.3. The appellate court, while deciding an appeal against acquittal, after reappreciating the evidence, is required to consider whether the view taken by the trial court is a possible view which could have been taken on the basis of the evidence on record;

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8.4. If the view taken is a possible view, the appellate court cannot overturn the order of acquittal on the ground that another view was also possible; and

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8.5. The appellate court can interfere with the order of acquittal only if it comes to a finding that the only conclusion which can be recorded on the basis of the evidence on record was that the guilt of the accused was proved beyond a reasonable doubt and no other conclusion was possible.”

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Thus, it is beyond the pale of doubt that the scope of interference by an appellate court for reversing the judgment of acquittal recorded by the trial court in favour of the accused has to be exercised within the four corners of the following principles:

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41.1. That the judgment of acquittal suffers from patent perversity;

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41.2. That the same is based on a misreading/omission to consider material evidence on record; and

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41.3. That no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.”

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12. It could thus be seen that it is a settled legal position that the interference with the finding of acquittal recorded by the learned trial judge would be warranted by the High Court only if the judgment of acquittal suffers from patent perversity; that the same is based on a misreading/omission to consider material evidence on record; and that no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.”

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A similar view was taken in Bhupatbhai Bachubhai

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Chavda (supra), wherein it was observed:-

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“ 6. It is true that while deciding an appeal against acquittal, the Appellate Court has to reappreciate the evidence. After re-appreciating the evidence, the first question that needs to be answered by the Appellate Court is whether the view taken by the Trial Court was a plausible view that could have been taken based on the evidence on record. Perusal of the impugned judgment of the High Court shows that this question has not been adverted to. The Appellate Court can interfere with the order of acquittal only if it is satisfied after reappreciating the evidence that the only possible conclusion was that the guilt of the accused had been established beyond a reasonable doubt. The Appellate Court cannot overturn the order of acquittal only on the ground that another view is possible. In other words, the judgment of acquittal must be found to be perverse. Unless the Appellate Court records such a finding, no interference can be made with the order of acquittal. The High Court has ignored the well-settled principle that an order of acquittal further strengthens the presumption of innocence of the accused. After having perused the judgment, we find that the High Court has not addressed itself to the main question.”

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The present appeal has to be decided as per the

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parameters laid down by the Hon’ble Supreme Court.

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The complainant had filed a complaint previously through Sita Ram Verma. It was held by this Court in Himalayan Plastic Ltd. v. Jas Ram, 2021 SCC OnLine HP 7442. Sita Ram Verma was not authorized to file the complaint. It was observed:

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“19. After analyzing the evidence on record, it is clear that Sita Ram Verma was not authorized as per the resolution of the Board of Directors' of the Company nor he was a Principal Officer of the Company and his title to maintain the present complaint was to be considered vis-a-vis his capacity to depose in the Court of law.”

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A similar finding was recorded in Himalayan Plastics

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Ltd. v. Tej Singh, 2021 SCC OnLine HP 7441, wherein it was observed:

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“15. After analyzing the evidence on record, it is clear that Sita Ram Verma was not authorized as per the resolution of the Board of Directors of the Company nor he was a Principal Officer of the Company and his title to maintain the present complaint was to be considered vis-a-vis his capacity to depose in the Court of law.”

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These findings were recorded in the complaints

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instituted by the present complainant, and once it has been held

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that Sita Ram was not properly authorised to file a complaint on behalf of the Company, it is difficult to see how the complainant

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can take a plea contrary in the present proceedings.

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Memorandum of Article of Association of Himalayan Plastics confers the power upon the Directors to institute, conduct, defend, or compound any legal proceeding by or against the Company or its officers or officials concerning the affairs of the Company. Article 93(23) authorizes the Directors to appoint any person or persons to be the attorney of the Company for such purposes and for such period and subject to such conditions as the Board of Directors may from time to time prescribe. Article 93(24) provides for the delegation of the power, authority, and discretion vested in the Directors to any Person, Firm, or Company.

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It is apparent from Article 93 that power has been conferred upon the Directors and not upon a Director. The term Directors has been defined in Article 2 as Directors for the time being of the Company or, as the case may be, the Directors assembled at a Board. It is undisputed that the Power of Attorney was given by Madan Sharma, the Managing Director, and not by the Directors assembled at a Board. The list of Directors (Ex.CW1/B) also mentions B.N. Verma and Rajesh Sharma. Thus, the power under Article 93 was to be exercised by all three Directors and not by a single Director. It was laid down

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in the Director, Maruti Feeds and Farms (P) Ltd. v. Basanna Pattekar, (2007) 140 Comp Cas 17 that where the resolution passed by the Board of Directors was not brought on record, the person does not have any authority to represent the Company. It was observed:

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I have considered the contentions of learned Counsel with reference to the material on record. It is not disputed that the complainant is a company registered under the Companies Act, 1956 and PW1 apart from his own selfserving statement that he is the Director who is authorised to depose on behalf of the company, has not produced any documentary evidence to show that he is the Director and he has been authorised by the company to depose on behalf of the company. The resolution of the company has not been produced, and he has pleaded his ignorance in the cross-examination about the resolution passed by the Board of Directors. Since the company is a juristic person, any person on behalf of the company has to be authorised by the company under the Articles of Association or by a separate resolution to depose on behalf of the company and therefore, finding of the Trial Court is justified and it is unnecessary to go into the other reasons recorded by the Trial Court in dismissing the complaint and acquitting the accused.

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A similar view was taken in Milind Shripad

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Chandurkar (supra), and it was held that before a person can represent a juristic person, he must show his connection to such juristic entity. It was observed:

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“ In the instant case, it is evident that the firm, namely, Vijaya Automobiles, has been the payee and that the

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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 the payee himself and thus, entitled to make the complaint.”

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A heavy reliance was placed on behalf of the complainant upon Naresh Potteries (supra) , however, it was held in the said judgment that the complaint on behalf of a Company can be filed by an employee or a non-employee authorized and empowered to represent the Company either by a resolution or by a Power of Attorney. In the present case, there is no resolution or power of attorney by the Board of Directors, as was

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held in the earlier cases as well. Therefore, the cited judgment does not apply to the present case.

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In M/s Mohan Meakin Limited (supra), the Court held that the Board of Directors had executed a Power of Attorney in favour of the Secretary of the Company. No such resolution has been filed in the present case, and this judgment does not assist the complainant.

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