Allowed

M/s Traders N Traders, v. The State of Andhra Pradesh

Telangana HC29 Aug 2011CRLA/806/2006

Case brief

AI extract

What is this about?

The High Court allowed the criminal appeal and set aside the acquittal. It held that the proprietor of a proprietary concern can validly file a complaint under Section 138 of the Negotiable Instruments Act on behalf of the concern without proving corporate registration, distinguishing such concerns from companies under the Act.

What did the court decide?

Accused convicted under Section 138; sentenced to six months simple imprisonment and fine of Rs. 5,000 each; acquittal set aside.

M/s Traders N Traders, Vs The State of Andhra Pradesh — Cheque Dishonour | Telangana HC (2011)

¶1

*THE HON’BLE SRI JUSTICE R.KANTHA RAO

¶2

+Criminal Appeal No.806 of 2006

¶3

% 29-08-2011 # M/s. Traders “N” Traders Represented by its Proprietor V. Bhaskar Murthy … Appellant/Accused

¶4

Vs.

¶5

$ State of Andhra Pradesh, Rep. By Public Prosecutor, High Court, Hyderabad … Respondent/State

¶6

! Counsel for the Appellants: Sri M. Sridhar

¶7

Counsel for the Respondent: Addl. Public Prosecutor, High Court of A.P., Hyderabad.

¶8

< Gist:

¶9

> Head Note:

¶10

? Cases referred:

¶11

1) [2007] 5 SCC-183

¶12

2) [2008] 8 SCC-536 IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD

¶13

MONDAY THE TWENTYNINETH DAY OF AUGUST TWO THOUSAND AND ELEVEN

¶14

PRESENT

¶15

THE HONOURABLE SRI JUSTICE R. KANTHA RAO

¶16

CRIMINAL APPEAL NO. 806 OF 2006

¶17

Between: M/s. Traders “N” Traders Represented by its Proprietor: V. Bhaskar Murthy … Appellant-Accused V/s. The State of Andhra Pradesh Represented by its Public Prosecutor High Court of AP Hyderabad. … Respondent-Complainant

¶18

Counsel for the Appellant : Mr. S. Sridhar Counsel for the Respondent : Addl. Public Prosecutor The Court made the following : (Judgment follows 2^nd page).

¶19

THE HONOURABLE SRI JUSTICE R. KANTHA RAO

¶20

CRIMINAL APPEAL No. 806 OF 2006

¶21

JUDGMENT :

¶22

This Criminal Appeal is filed against the judgment dated 13-2-2006 passed by the XI Metropolitan Magistrate, Secunderabad, in CC.No. 810 of 2004 acquitting the accused for the offence under section 138 of the Negotiable Instruments Act.

¶23

2. The complainant, feeling aggrieved filed the present appeal against the order of acquittal.

¶24

3. Heard the learned counsel for the appellant-complainant. Though served with notice, there is no representation on behalf of the respondents, since several adjournments. This Court therefore, proceeded to dispose of the criminal appeal on merits.

¶25

4. The brief facts necessary for the disposal of the appeal may be stated as follows :

¶26

The complainant is the proprietory concern and authorised dealer of Seamless Pipes, G.I. Pipes, Valves, Fittings etc., of several reputed companies. In its regular course of business, the respondents 2 to 4 (A-1 to A-3) approached the complainant and requested for supply goods worth Rs.5,04,950/- and the appellantcomplainant supplied goods worth Rs.4,87,152/-. The respondents in

¶27

discharge of the amount due in respect of the goods supplied by the appellant, issued three cheques each for an amount of Rs.1,60,384/bearing Nos.710561, 710562 and 710563 drawn on Andhra Bank, Sultan Bazaar, Hyderabad dated 25-4-2004, 25-5-2004 and 25-6-2004 respectively along with covering letters. When the first cheque was presented by the appellant for collection in the Andhra Bank, Secunderabad on 26-4-2004 the same was dishonoured by the bank of the respondent-accused. The appellant then brought the said fact to the notice of the respondents, the respondents having expressed regrets requested to present the cheques after one month. Accordingly, the appellant presented the first two cheques with their bank on 02-6-2004. Again the cheques were returned dishonoured by the bank on the ground of insufficient funds.

¶28

Thereafter, the appellant got issued a legal notice to the respondents demanding payment of the amounts under the cheques and also stating therein that on failure to pay the amounts a complaint would be filed under section 138 of the Negotiable Instruments Act. The respondents-accused received the notice on 10-6-2004 but did not choose to reply. Subsequently a complaint was filed before the learned Magistrate by the appellant under section 138 of the Negotiable Instruments Act, against the respondents.

¶29

5. In the course of the trial before the learned Magistrate, the complainant examined PW-1 and marked Exs.P-1 to P-11. The respondents did not propose to examine any witnesses on their behalf nor did they mark any document.

¶30

6. On consideration of the entire evidence on record, the learned trial court acquitted the respondents of the offence under section 138 of the Negotiable Instruments Act. The ground on which the respondents were acquitted was that M/s. Traders “N” Traders, which is the payee of the cheques is the company, it is a juristic person and it must not only be registered but a complaint on its behalf shall be filed by the authorised person and in the instant case, there is no evidence to show that the company was registered or that the complaint was filed by any authorised person.

¶31

7. The contention of the learned counsel for the appellantcomplainant is that M/s. Traders “N” Traders is not a Company but it is a proprietory concern, the complaint being filed by the proprietor Mr. V. Bhaskar Murthy, who represents the proprietory concern and therefore the trial court erroneously acquitted the respondentsaccused.

¶32

8. The learned counsel appearing for the appellant relied the following decisions :

¶33

RAGHU LAKSHMINARAYANAN V/s. FINE TUBES^[1] ,

¶34

wherein the Supreme Court at para No.9 held as follows :

¶35

“The description of the accused in the complaint petition is absolutely vague. A juristic person can be a company within the meaning of the provisions of the Companies Act, 1956 or a partnership within the meaning of the provisions of the Partnership Act, 1932 or an association of persons, which ordinarily would mean a body of persons, which is not incorporated under any statute. A proprietory concern, however, stands absolutely on a different footing. A person may carry on business in the name of a business concern, but he being proprietor concern is not a company. Company in terms of the Explanation appended to Section 141 of the Negotiable Instruments Act, means any body corporate and includes a firm or other association of individuals. Director has been defined to mean in relation to a firm, a partner in the firm. Thus, whereas in relation to a company incorporated and registered under the Companies Act, 1956 or any other statute, a person as a Director must come within the purview of the said description, so far as a firm is concerned, the same would carry the same meaning as contained in the Partnership Act”.

¶36

SHANKAR FINANCE AND INVESTMENTS V/s. STATE OF ANDHRA PRADESH AND OTHERS^[2] , wherein the Supreme Court held as follows :

¶37

“ The attorney holder is the agent of the grantor. When the grantor authorises the attorney holder to initiate legal proceedings and the attorney holder accordingly initiates legal proceedings, he does so as the agent of the grantor and the initiation is by the grantor represented by his attorney holder, and not by the attorney holder in his personal capacity. Therefore, where the payee is a proprietary concern, the complaint can be filed (i) by the proprietor of the proprietory concern, describing himself as the sole proprietor of the “payee” (ii) the proprietory concern, describing itself as a sole proprietary concern, represented by its sole proprietor, and (iii) the proprietor or the proprietary concern represented by the attorney holder under a power of attorney executed by the sole proprietor. But attorney holder cannot file the complaint in his own name as if he was the complainant. He can initiate criminal proceedings on behalf of his principal” .

¶38

9. In the instant case, Mr. V. Bhaskar Murthy filed the

¶39

complaint on behalf of M/s. Traders “N” Traders, which is a proprietory concern representing the said proprietory concern in the capacity of its sole proprietor. Since Mr. V. Bhaskar Murthy is the proprietor of M/s. Traders “N” Traders and he is carrying on business in the name of the said business concern, he being the sole proprietor of the said business concern is solely responsible for conduct of its business. Therefore, he can file a complaint on behalf of the proprietory concern. The learned trial Court took an erroneous view of the matter that the appellant-complainant did not file any document showing that he is the proprietor. Even if the complainant is considered to be a proprietory concern, the view taken by the learned trial Court is erroneous because in the cause title it is mentioned that the complaint is filed by M/s. V. Bhaskar Murthy representing M/s. Traders “N” Traders, a proprietary concern as its proprietor. No further evidence is needed on behalf of the appellant-complainant. Further no reply notice has been issued by the respondents-accused to the notice issued by the appellant-complainant calling upon to pay the amount due under the cheques and also stated therein that the complainant is going to file a complaint on failure to make the payment. During the course of trial, therefore, the respondentsaccused shall not be permitted to take trivial objection that no

¶40

evidence is produced by the complainant to show that M/s. V. Bhaskar Murthy is the proprietor of the complainant proprietary concern. The judgment passed by the learned trial Court acquitting the respondents 2 to 4 (A-1 to A3) is not in accordance with law and is unsustainable. The judgment passed by the learned trial Court, is therefore, set aside in this appeal and the respondents 2 to 4 (A-1 to A-3) are convicted for the offence under section 138 of the Negotiable Instruments Act. Each of the respondents is sentenced to undergo simple imprisonment of six months and to pay a fine of Rs.5,000/each. The judgment passed by the trial Court acquitting the respondents 2 to 4 (A-1 to A-3) under section 138 of the Negotiable Instruments Act, is therefore, set aside and the criminal appeal is allowed.

¶41

________________________ JUSTICE R. KANTHA RAO. 29-08-2011 I s L NB: LR copy to be marked

¶42

THE HONOURABLE SRI JUSTICE R. KANTHA RAO

¶43

CRIMINAL APPEAL No. 8 0 6 OF 2006

¶44

Circulation No. 4 Date:29-08-2011 Court Master : I s L Computer No.43

¶45

LR copy to be marked.

¶46

[1] ) (2007) 5 Supreme Court Cases-183