Allowed

M/S.Eminent Sea Foods Pvt. Ltd. v. T.a.Koyakutty

Kerala HC20 Aug 2008CRL.A/380/2000

Case brief

AI extract

What is this about?

In this criminal appeal arising from a Section 138 cheque dishonour case, the High Court of Kerala set aside the lower court's acquittal. The court held that the complainant's representative was competent to file the complaint and dismissed the defense's challenge regarding authority to represent the company. The appeal was allowed.

What did the court decide?

The order of acquittal was set aside; the accused was held guilty under Section 138; the case remanded to the lower court for sentencing.

M/S.Eminent Sea Foods Pvt. Ltd. Vs T.a.Koyakutty — Cheque Dishonour | Kerala HC (2008)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT :

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THE HONOURABLE MR. JUSTICE V.GIRI

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WEDNESDAY, THE 20TH AUGUST 2008 / 29TH SRAVANA 1930

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CRL.A.No. 380 of 2000()

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------------------------------CC.431/1997 of JUDL.MAGISTRATE OF FIRST CLASS-II, KOCHI ....................

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APPELLANT/COMPLAINANT :

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M/S.EMINENT SEA FOODS (PVT) LTD, PLOT NO.9, FISHERIES HARBOUR, THOPPUMPADY, KOCHI-5, REPRESENTED BY ITS MANAGING DIRECTOR, SRI.C.J.THOMAS.

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BY ADV. SRI.M.N.MATHEW

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SRI.THOMAS T.VARGHESE

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RESPONDENTS/ACCUSED AND STATE :

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1 T.A.KOYAKUTTY , PROPRIETOR, BISMI MARINE EXPORTERS, C.C.18/313 A, BINNY ROAD, PALLURUTHY, KOCHI-6.

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STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM

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BY PUBLIC PROSECUTOR SRI.PUZHAKKARA MOHAMMED

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THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 20/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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V.GIRI, J.

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Crl.A. No.380 OF 2000

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Dated this the 20^th day of August, 2008

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JUDGMENT

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The complainant in C.C.No.431/97 on the files of the Judicial First Class Magistrate - II, Kochi is the appellant herein. The case arose from a complaint lodged by the complainant against the 1^st respondent herein in alleging that he had committed an offence punishable under section 138 of Negotiable Instruments Act (for short “the Act”). The accused appeared before the court below and it was contended by him that Sri.C.J.Thomas who has presented the complaint on behalf of the complainant company, M/s.Eminent Sea Foods private limited company, is not the Managing Director of the complainant company and is not competent to represent it as such. Apart from the same, the accused had also contended that no amounts are due from him to the complainant company and therefore he is entitled to be acquitted.

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The complainant examined PW1, the person who had presented the complaint on behalf of the company as its

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Crl.A.380/2000

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Managing Director Sri.Thomas and PW2. Exhibits P1 to P9 were marked. The accused examined himself as DW1.

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The following points were raised for consideration by

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the court below.

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(i) Whether Sri.C.J.Thomas is entitled to represent M/s.Eminent Sea Foods Pvt. Ltd to file this complaint against the accused as alleged?

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(ii) Whether the accused had committed the offence punishable u/s.138 of the N.I. Act as alleged by the complainant?

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(iii) If found guilty what is the sentence or order to be passed?

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On considering the evidence, the court below came to the conclusion that the complainant company was having a cause of action to file a complaint under section 138 of the Act. It was further found that the plea of discharge raised by the accused on the basis of Exhibits D1 and D2 are not sufficient to rebut the statutory presumption in favour of the complainant company. It was further found that the accused had failed to prove the

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Crl.A.380/2000

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contentions raised by him as probable and thereby rebut the statutory presumption in favour of the complainant.

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After having found so, the accused was acquitted especially on the premise that PW1, who represents the complainant company, has failed to prove his authority to represent the company and therefore the payee in Ext.P2 cheque is not properly represented in the complaint. Accordingly the complaint was found to be not maintainable and the accused was acquitted u/s.255(1) Cr.P.C. The appeal is preferred against the same.

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I heard learned counsel for the appellant and perused the records. Though notice was issued to the 1^st respondent by this Court, there is no appearance on his behalf. In fact notice is seen to have been taken by paper publication.

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The complainant company, as noted above, is a limited company. Exhibits P7 and P8 are the certified copies of its Articles of Association and Memorandum of Association. Sri.C.J.Thomas who is shown as the Managing Director of the company is seen to be one of promoters of the company.

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Crl.A.380/2000

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Sri.Thomas has given evidence as PW1. Exhibits P7 and P8 have not been seriously challenged by the accused. PW1, the person who presented the complaint on behalf of the company, also referred to Exhibit P1 resolution which specifically authorises him to conduct proceedings on behalf of the company. The court below referred to the Articles of Association to find that the normal tenure of a director is 3 years and thereafter he is eligible for re-election. The court below has come to the conclusion that there is no reliable documents placed on record to show that Thomas was the Managing Director of the company during the year 1997.

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In my view the approach made by the court below is untenable. Once the admissibility of Exhibits P7 and P8, as such, was not a matter in dispute and there is material to show that Sri.Thomas was one of the original promoter directors of the company, then, in the absence of any other cogent material to indicate that Sri.Thomas had ceased to be the Director of the company, the presumption would be that he continues to be a director. The accused is a debtor insofar as the affairs of the

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Crl.A.380/2000

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company is concerned. The degree of proof required insofar as the competence of a person, who claims to be the Managing Director of a company, is concerned would be minimal in a case where his authority to do so is questioned, at the instance of another person who is not interested in the affairs of the company, as such. The accused, who is situated in the position of a debtor insofar as the company is concerned, cannot require a more stringent proof insofar as the authority of Sri.Thomas is concerned.

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Moreover, the court below had apparently proceeded on the premise that the absence of sufficient proof, as regards the competence of Sri.Thomas to represent the affairs of the company, would result in making the complaint itself not maintainable. This cannot be so. The complainant company is a separate legal entity and a juristic person. It is a private limited company having a Memorandum of Association and Articles of Association, which clearly indicate that the human agency, who has represented the company, was originally one of its directors. Exhibit P1 resolution also affirms the same. No further proof is

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Crl.A.380/2000

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therefore required or warranted.

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I also take note of the fact that the accused as DW1

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has also admitted that Sri.Thomas definitely was associated with the affairs of the company. To a specific question as to whether PW1 was the Managing Director, put to him in a chiefexamination, he simply said that he does not know. His deposition would further indicate that he had personally negotiated with Sri.Thomas in the latter's capacity as a managing representative of the company. This matter has not been adverted to by the court below.

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For all these reasons, I am of the view that the court below went wrong in holding that the complaint was not properly instituted by a person, who is competent to represent the company as the Managing Director. Point No.1 raised by the court below ought to have been answered in favour of the complainant. In reversal of the finding of the court below, in this regard, it is so held. It is also held that Sri.Thomas, who is examined as PW1, was competent to represent the complainant company and the complaint was therefore properly instituted and

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Crl.A.380/2000

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maintainable. Since point No.2 has already been held against the accused and the said finding has not been challenged by the accused, the Order of the acquittal has to be set aside and it has to be held that the accused is guilty of the offence under Section 138 of the Act.

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In the facts and circumstances of this case, it will be appropriate that a suitable sentence may be imposed on the accused by the court below.

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In the result the appeal is allowed. The order of acquittal is set aside. It is held that the accused is guilty of the offence under section 138 of the Act. The court below shall proceed to issue summons to the accused and after hearing him, proceed to pass an appropriate sentence on him, in accordance with law. The case is remanded to the court below for the said limited purpose.

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Parties shall appear before the court below on 13.10.2008 .

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V.GIRI, JUDGE

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pac

M/S.Eminent Sea Foods Pvt. Ltd. v. T.a.Koyakutty

Case brief

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M/S.Eminent Sea Foods Pvt. Ltd. v. T.a.Koyakutty

Case brief

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