Dismissed¶65

M/s Marketing Consultants and Agencies Limited v. S M Pasha

Karnataka HC18 Feb 2026RFA/236/2014

Case brief

AI extract

What is this about?

Regular First Appeal, Section 96 CPC, money recovery suit, excise supervision charges, sales tax, remittance to RBI, deficit of Rs.28,10,725, cashier, Senior Accounts Officer, misappropriation, departmental enquiry, failure of supervision, charge sheet under Sections 406/408/471/420 IPC filed only against defendant No.1, plaintiff-company versus its own employees, this Court found no proof of defendant No.2's involvement and held only defendant No.1 responsible for the deficit remittance; appeal dismissed without costs.

What did the court decide?

None; appeal dismissed without costs and the impugned judgment and decree upheld. ¶65

M/s Marketing Consultants and Agencies Limited Vs S M… — Cheating and Forgery | Karnataka HC (2026)

What the court decided

AI extract

Outcome

None; appeal dismissed without costs and the impugned judgment and decree upheld.

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Issue for consideration

Whether the plaintiff proved that the first defendant, as cashier, and the second defendant, as Senior Accounts Officer, in the plaintiff company were responsible for collection of Excise Supervision Charges, Sales Tax money and to maintain proper accounts of the said amounts. +1 more

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Court's answer

The plaintiff could not prove the involvement of respondent No.2/defendant No.2 in the misappropriation of Rs.28,10,725/-; the only allegation against him was failure to properly supervise the functioning of the cashier.

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Ratio / Principle

The departmental enquiry (Ex.P8, Ex.P9) showed defendant No.1 directly involved in the alleged dishonest and fraudulent act and nowhere showed defendant No.2 involved; Ex.P10 showed the entire accounts branch, including the cashier's work, was handled by defendant No.1.

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Key takeaways

The plaintiff failed to prove that defendant No.2 was in any manner responsible for the deficit remittance of Rs.28,10,725/-; only defendant No.1 was responsible for the deficit remittance in the RBI account, and no error was found in the impugned judgment and decree.ratio¶65

Detailed headnote1 paragraphs

High Court of Karnataka, Bengaluru (D K Singh and S Rachaiah JJ.; judgment per D K Singh J.) dismissed RFA No. 236 of 2014 (MON), filed under Section 96 CPC by M/s Marketing Consultants and Agencies Limited against the judgment and decree dated 09.07.2013 of the III Additional City Civil and Sessions Judge, Bengaluru in O.S.No.8758/1996, a money-recovery suit for Rs.28,10,725/- being the deficit in excise supervision charges collected between 01.04.1994 and 30.09.1996 but not remitted to the RBI. The Court held that the plaintiff failed to prove any involvement of defendant No.2 (Senior Accounts Officer) in the misappropriation: the departmental enquiry (Ex.P8, Ex.P9) implicated only defendant No.1, the cashier, and Ex.P10 showed the entire accounts branch, including the cashier's work, was handled by defendant No.1, the only allegation against defendant No.2 being failure to supervise. The judgment records that the police charge sheet under Sections 406, 408, 471 and 420 IPC was filed only against defendant No.1. Finding no error in the impugned judgment and decree, the appeal was dismissed without costs.

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NC: 2026:KHC:10117-DB RFA No. 236 of 2014

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18^TH DAY OF FEBRUARY, 2026

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PRESENT

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THE HON'BLE MR. JUSTICE D K SINGH AND

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THE HON'BLE MR. JUSTICE S RACHAIAH REGULAR FIRST APPEAL NO. 236 OF 2014 (MON)

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BETWEEN:

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M/S MARKETING CONSULTANTS AND AGENCIES LIMITED, A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT HAVING ITS OFFICE AT NO.42, MEHRA COMPLEX, MILLERS ROAD, BANGALORE AND REPRESENTED BY ITS MANAGING DIRECTOR MR. G.S. BABU SIDDAKUMAR

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…APPELLANT

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(BY SRI. K R KRINSHA MURTHY., ADVOCATE)

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Digitally signed by VASANTHA KUMARY B K Location: HIGH COURT OF KARNATAKA

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AND:

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S M PASHA AGED ABOUT 56 YEARS, S/O SYED AZZIMULLA, NO.1400, B-36,GROUND FLOOR, BDA QUARTERS, BANGALORE 47

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A.N.M. RAO AGED ABOUT 63 YEARS, S/O SRI. ACHAR, R/AT NO.46, 6TH CROSS, SARVOBHOUMA LAYOUT, CHIKKALASANDRA, SUBRAMANYAPURA POST, BANGALORE 560061

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…RESPONDENTS

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NC: 2026:KHC:10117-DB RFA No. 236 of 2014

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HC-KAR

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(BY SRI. B R VISHWANATH, ADVOCATE FOR R2; NOTICE TO R1 IS DISPENSED WITH, VIDE ORDER DATED:04.02.2019)

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THIS RFA IS FILED UNDER SECTION 96 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED:09.07.2013 PASSED IN O.S.8758/1996 ON THE FILE OF THE III-ADDL. CITY CIVIL AND SESSIONS JUDGE, BENGALURU, DECREEING THE SUIT FOR RECOVERY OF MONEY.

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THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE D K SINGH and

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HON'BLE MR. JUSTICE S RACHAIAH

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ORAL JUDGMENT

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(PER: HON'BLE MR. JUSTICE D K SINGH)

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The present appeal under Section 96A read with Order XLI Rule 1 of the Code of Civil Procedure, 1908 (CPC) impugning the judgment and decree dated 09.07.2013 passed by the III Additional City Civil and Sessions Judge, Bangalore City (CCH25) in O.S.No.8758/1996 filed by the appellant/plaintiff. This was a money recovery suit for an amount of Rs.28,10,725/against the respondent and one Mr.S.M.Pasha/respondent No.1 was defendant No.1 and respondent No.2 was defendant No.2 in this aforesaid original suit.

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3 - NC: 2026:KHC:10117-DB RFA No. 236 of 2014

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HC-KAR

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The appellant-Company is subsidiary of MSIL, a Government of Karnataka undertaking. The plaintiff was given a contract to print and sell the excise adhesive labels with effect from 01.01.1990. The plaintiff was required to collect excise supervision charges and sales tax from the distilleries and then remit the same in the RBI account on behalf of the Excise Department. The plaintiff had collected Rs.82,61,653/towards the excise supervision charges from 01.04.1994 to 30.09.1996 for which necessary cashbook was maintained based on the indent from the Excise Superintendent. The said collection was in the proper supervision and control of Deputy Superintendent of Excise at the company's premises.

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Mr. Pasha/defendant No.1 was the cashier, who was

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to collect the cash based on the indent by issuing the receipts and to tally the cash receipts and cash book to get verification shara by the Senior Accounts Officer namely the defendant No. 2, the respondent herein. The said amount was to be remitted on the next day to the share of plaintiff-Company and the sales tax to the Bank.

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4 - NC: 2026:KHC:10117-DB RFA No. 236 of 2014

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HC-KAR

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Respondent No.2 who was the Senior Accounts Officer was the in-charge of the entire department and also the in-charge of the Accounts Section. It is stated that the respondent No.2 was not only responsible for the collection of the amount but also for its remittance. It appears that the statutory auditors of the plaintiff-Company had observed during statutory audit in July-1995 that the excise cash book was not maintained properly. The transactions were not entered on a day-to-day basis. The entries to the register from the supporting bills were not made accurately. There were overwritings, alterations and wrong quantities entered in the book, for which, certain instances were given in the audit report. It was said that out of the total collection amount of Rs.82,61,653/-, the amounts covered by the challans were only Rs.54,50,928/- resulting a deficit amount of Rs.28,10,725/which was not remitted to RBI by the defendants.

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The defendant No.1 did not contest the suit whereas the respondent No.2/defendant no. 2 filed a written statement. It was stated that the respondent No.2 being the only Officer in the Accounts/Finance Department since 1991 as

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5 - NC: 2026:KHC:10117-DB RFA No. 236 of 2014

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HC-KAR

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against 3-4 officers earlier to that period had various responsibilities also without him having additional assisting hands despite repeated demands for suitable hands, it was not possible for him to supervise the functioning of his department properly. It was further stated that the cashier was absconding. The statutory auditor has cleared the accounts of the year 1995-96 in absence of the certificate for the audit from the Excise Department and without noticing any discrepancies of remittance in PD/RBI in their audit reports the statutory auditor came to a conclusion that it is not the liability of the company.

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It was further stated that the defendant No.2 was

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not in any way responsible for not effecting the total remittance by the cashier. Therefore, he prayed for dismissal of the suit.

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On the basis of the pleadings, the following issues were framed by the trial Court:

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"i. Does plaintiff prove that the first defendant as cashier and 2^nd defendant as Senior Accounts Officer in Plaintiff Company were responsible for collection of Excise Supervision

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NC: 2026:KHC:10117-DB RFA No. 236 of 2014

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HC-KAR

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Charges, Sales Tax money and to maintain proper accounts of said amounts?

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ii. Does the plaintiff prove that the defendants did not give accounts regarding the amount collected towards Excise Supervision Charges, Sales Tax in the extent of Rs.28,10,725/during the period between 1.04.94 and 30.09.96?

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iii. What decree or order?"

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To prove its case, the plaintiff-Company had examined the Manager as PW1. PW1 led documentary evidence in Ex.P1 to Ex.P17. The defendant No.2 rendered his own evidence as DW1 and also examined Ex-Production Manager of the plaintiff-Company as DW2 and led documentary evidence in Ex.D1 to Ex.D4.

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The learned Trial Court did not dispute the fact that

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the total collection from 01.04.1994 to 30.09.1996 was Rs.82,61,653/- and there was deficit deposit of Rs.28,10,725/during the said period. The Trial Court also took note of the fact that criminal case has been lodged against defendant No.2 under Sections 408, 420 of IPC, for which the charge sheet was

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NC: 2026:KHC:10117-DB RFA No. 236 of 2014

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HC-KAR

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filed for offences under Sections 406, 408, 471 and 420 of IPC. But the said charge sheet was filed only against defendant No.1 and not against defendant No.2. Thus, the police in its investigation did not find the involvement of defendant No.2 in any manner.

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The learned Trial Court also noticed that the

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plaintiff-Company itself has promoted the defendant No.1 even after holding the disciplinary proceedings.

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We have considered the evidence on record.

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The department enquiry which went against him as per Ex.P8 and Ex.P9 would show that he was directly involved in the alleged dishonest and fraudulent act and nowhere it shows that defendant No.2 was involved in alleged act. Ex.P10 would show that the entire accounts branch including the work of the cashier was being handled by the defendant No.1. The contents of Ex.P10 would also show that the culpability of defendant No.1 and defendant No.2 was found only in not supervising the transaction of the cashier and defendant No.1. Once the plaintiff could not prove the involvement of the

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NC: 2026:KHC:10117-DB RFA No. 236 of 2014

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HC-KAR

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respondent No.2/defendant No.2 in misappropriation of the amount of Rs.28,10,725/- and the only allegation was not supervising properly the functioning of the cashier.

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The Trial Court has dismissed the suit against defendant No.2 for recovery of the said amount. Hence, we are of the considered view that the plaintiff has failed to prove that defendant No.2 was in any manner responsible for deficit remittance of Rs.28,10,725/- and it was only defendant No.1 who was responsible for the said deficit remittance in the RBI account. We, therefore, find no error in the impugned judgment and decree and thus, we dismiss this appeal, however, without cost.

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(D K SINGH) JUDGE

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Sd/(S RACHAIAH) JUDGE

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RKA

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List No.: 1 Sl No.: 6

M/s Marketing Consultants and Agencies Limited v. S M Pasha

Case brief

What is this about?

What did the court decide?

M/s Marketing Consultants and Agencies Limited v. S M Pasha

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

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