1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE H.P. SANDESH CRIMINAL REVISION PETITION NO.724/2021 BETWEEN: M/S. BALAJHI DESIGNER JEWELLARY, NO.S-112, 1ST FLOOR, MANIPAL CENTRE, NO.47, DICKENSON ROAD, BENGALURU – 01. REPRESENTED BY ITS PROP: MR. BALAJI, S/O BABU. … PETITIONER (BY SRI. JAYAPRAKASH SHETTY, ADVOCATE) AND: M/S. FOREVER PRECIOUS JEWELLERY AND DIAMOND LTD., NO.42, 4TH ‘B’ CORSS, 5TH BLOCK, KORAMANGALA INDUSTRIAL ESTATE, BANGALORE – 560 034. REPRESENTED BY ITS REGIONAL MANAGER MR. PRABHAKAR PARSHI. … RESPONDENT (BY SRI. VINEETH REDDY, ADVOCATE) THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W 401 OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 23.06.2020 PASSED BY THE LXIX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH-70) BENGALURU IN CRL.A.NO.417/2016 THEREBY CONFIRMING THE JUDGMENT AND ORDER DATED 02.03.2016 PASSED BY THE XXI ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU 2 IN C.C.NO.8529/2009 BY ALLOWING THE ABOVE REVISION PETITION. THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 06.02.2025, THIS DAY, THE COURT PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR. JUSTICE H.P.SANDESH CAV ORDER This appeal is filed against the conviction of the petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act (‘NI Act’ for short) and also imposing of the fine and default sentence and also order of confirmation passed in Crl.A.No.417/2016. 2. The factual matrix of the case of the complainant before the Trial Court is that the complainant is a Company carrying on jewellery and diamond business represented by its official, whereas the accused is also carrying on jewellery business represented by its Proprietor. The accused there and then approached the complainant and purchased diamond and gold articles. Accordingly, the complainant sold the gold and diamond articles to the accused on credit basis. As per the business transactions, the accused is liable to pay credit purchase balance of Rs.67 lakhs on articles and in order to 3 discharge the debt and legal liability, the accused issued ten cheques. When the said cheques were presented, cheque Nos.1 to 7 were returned with an endorsement “funds insufficient” and cheque Nos.8 to 10 were returned with an endorsement “stop payment on 08.12.2008. Having received the said intimation, the complainant issued legal notice calling upon the accused to make the payment and he did not make the payment inspite of service of notice and gave reply in terms of Ex.P.46 and hence complaint was filed and cognizance was taken and the accused did not plead guilty and claimed trial. The complainant in order to substantiate its case, examined its official as P.W.1 and got marked the documents at Exs.P.1 to 54. The accused was subjected to 313 statement and thereafter he led evidence by examining himself as D.W.1 and marked the documents at Exs.D.1 to 12. The Trial Court having considered both oral and documentary evidence placed on record and also having considered the reply given in terms of Ex.P.46 dated 26.11.2008, extracted the contents of the reply notice in paragraph No.13 and also taken note of Section 58 of the Indian Evidence Act that there is an admission. The Trial Court also taken note of that there is no rebuttal evidence inspite of the 4 accused led evidence by examining himself as D.W.1 and no material is placed for having repaid the amount to the tune of Rs.67 lakhs and hence convicted him to pay the fine amount and in default to undergo simple imprisonment for six months and directed to pay the amount within three months. 3. Being aggrieved by the said order, an appeal is filed in Criminal Appeal No.417/2016. The Appellate Court considered the grounds urged in the appeal in respect of the merits as well as the grounds which have been urged that the very complaint itself is not maintainable. The Appellate Court taken note of the documents of Exs.P.49 and 50, where there is an authorization to the representative of the Company to conduct the proceedings and also taken note of that in the Articles of Association there is a delegation of power under Article 163 (27)(28), wherein there is a power to delegate authority to any person which is vested with the Directors and extracted Article 164(a)(b) of the Articles of Association and comes to the conclusion that the complaint is in order. The Appellate Court also re-analyzed the material on record and appreciated both oral and documentary evidence placed on record and comes to the conclusion that the accused fails to rebut the fact that he has not issued any cheques for 5 discharge of liability for purchase of jewels from the complainant and held that the complainant has proved its case and dismissed the appeal in coming to the conclusion that the Trial Court has not committed any error. 4. Being aggrieved by the concurrent finding, the present revision petition is filed before this Court. 5. The main contention of the learned counsel for the petitioner before this Court is that both the Courts have committed an error in coming to the conclusion that the complaint is maintainable and actually the complaint itself is not maintainable and the witness who has been examined is without any resolution. The learned counsel contend that both the Courts have committed an error in not appreciating and applying the mind that the respondent Company did not prefer the complaint in question. The complaint filed by the complainant is not in accordance with the provisions of the Companies Act. The complaint filed by the Regional Head of the Company was not authorized to file the same, which was not at all considered by both the Courts while passing the impugned order and passed the conviction solely on the basis of Exs.P.1 to 10 and 46, which 6 are totally irrelevant. It is contended that the petitioner has categorically made the statement that Ex.P.46, which is the reply notice, is not issued by him, but it was created by the officials of the complainant Company and the same was not properly appreciated. It is contended that the learned Magistrate and the Appellate Court failed to appreciate the fact that the respondent in his cross-examination stated that the complaint filed by the Regional Manager, namely Prabhakar Parshi who was not authorized to present the said complaint and he had filed the complaint without taking the permission of the complainant Company and he has filed the complaint in his personal capacity. It is contended that the alleged reply notice Ex.P.46 does not bear the signature of the petitioner and the alleged reply notice was disputed by the petitioner. This aspect is not considered by both the Courts. Both the Courts have totally misread and misunderstood the material on record and hence it requires interference of this Court by exercising the revisional jurisdiction. 6. The learned counsel for the petitioner in support of his arguments relied upon the judgment of the Apex Court in the case of A.C. NARAYANAN v. STATE OF MAHARASHTRA AND 7 ANOTHER reported in AIR 2015 SC 1198, wherein it is held that there is no whisper in verification statement about filing of complaint as power of attorney holder and issuance of cognizance is held not proper. The complaint allegedly filed by employee of Company claiming to be general power of attorney of the complainant Company and the complaint was not signed either by the Managing Director or Director of the company and subsequently the Deputy General Manager of the Company gave evidence on behalf of the Company though he does not know anything. There is nothing on record to suggest that he was authorized by the Managing Director or any Director and acquittal of the accused was held proper. The learned counsel also brought to the notice of this Court paragraph Nos.18 and 20 of the said judgment. 7. The learned counsel also relied upon the judgment of this Court in the case of M/S. CANARA WORKSHOPS LIMITED v. SHRI MANTESH reported in (2014) 1 Kar.L.J. 449, wherein this Court relied upon paragraph Nos.24 and 25 of the Madras High Court judgment in the case of Shakthi Concrete Industries Limited and others v. Valuable Steels (India) Limited reported in (2000) 100 Company Cases 8 429, wherein discussion was made with regard to Sections 142 and 142(a) of the NI Act. The learned counsel also brought to the notice of this Court paragraph No.4, wherein discussion was made regarding holding the view that the Company being a juristic person, any person on behalf of the Company would have to be authorized by the Company in the Articles of Association or by a separate resolution to depose on behalf of the Company and also discussion was made with regard to Section 291 of the Companies Act. 8. The learned counsel also relied upon the judgment of this Court in the case of DIRECTOR, MARUTI FEEDS AND FARMS PRIVATE LIMITED v. BASANNA PATTEKAR reported in 2007 SCC ONLINE KAR 210 and brought to the notice of this Court paragraph Nos.3 and 4 of the said judgment, wherein an observation is made that the resolution of the Company is not produced and he has pleaded his ignorance in the cross- examination about the resolution passed by the Board of Directors. In paragraph No.4 discussion was made that since the Company is a juristic person, any person on behalf of the Company has to be authorized by the Company under the Articles of Association or by a separate resolution to depose on 9 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. 9. The learned counsel also relied upon the judgment of this Court in the case of GEORGE JOSEPH AND ANOTHER v. HMT (INTERNATIONAL) LIMITED, BANGALORE AND ANOTHER reported in 2015 (1) AKR 822, wherein it is held that complaint on behalf of the Company if could be presented and prosecuted by a power of attorney holder, appointed by the Chairman of the Board of Director, a letter of authorization or a power of attorney executed by Chairman or other officer of the Company without delegation of the power to institute such proceedings having emanated from Board of Director, the same would invalidate proceedings. 10. The learned counsel referring these judgments would contend that P.W.1, who has been examined before the Trial Court is without any resolution and the complaint itself is not maintainable and but both the Courts failed to consider the said fact into consideration. 10 11. This Court in the previous date of hearing made it clear that if the learned counsel for the respondent does not appear on the next date of hearing, the matter will be heard in his absence. The learned counsel for the respondent fails to appear and address his arguments and hence this Court reserved the matter for orders. 12. Having heard the learned counsel for the petitioner and considering the material on record and the principles laid down in the judgments referred supra, the points that arise for the consideration of this Court are: (i) Whether both the Courts have committed an error in convicting the revision petitioner without examining the issue of maintainability of the complaint, as contended and requires interference of this Court by exercising the revisional jurisdiction? (ii) What order? Point No.(i): 13. Having heard the learned counsel for the petitioner and also considering the grounds urged in the revision petition, which is already narrated above, the very case of the complainant is that the complainant is engaged in the business 11 of supplying gold and diamond articles and the accused had approached the complainant there and then and availed the credit benefit by purchasing diamond and gold articles. It is the case of the complainant that as per the business transaction, the accused was liable to pay Rs.67 lakhs as credit purchase balance. The learned counsel contend that ten cheques were issued by the accused and when the same were presented, they were dishonoured with an endorsement “insufficient funds” for cheque Nos.1 to 7 and “stop payment” for cheque Nos.8 to 10. Hence, legal notice was issued to the accused and the same has been served and reply was given in terms of Ex.P.46. The Trial Court and the Appellate Court having taken note of both oral and documentary evidence placed on record, convicted the petitioner and confirmed the same. 14. The main contention of the learned counsel for the petitioner is that the very complaint itself is not maintainable. In order to consider the said contention, the Court has to take note of the very complaint and the complaint is filed on behalf of the Company represented by its Regional Manager, Mr. Prabhakar Parshi. While filing the complaint, authorization was given in terms of Ex.P.49. Having perused Ex.P.49, it is the true copy of 12 the resolution passed by the Board of Directors of Forever Precious Jewellery and Diamonds Limited at its meeting held on 24.10.2008 at Mumbai, wherein it is resolved that Mr. Prabhakar Parshi, Regional Manager of the Company is authorized to initiate legal proceedings for and on behalf of the Company. It is important to note that the same is signed by the Managing Director on behalf of the Company. Hence, it is clear that resolution was passed on 24.10.2008 to initiate the proceedings against the revision petitioner herein. It is important to note that as per Ex.P.50, P.W.1 is authorized to give evidence and while giving the authorization, it is made clear that Sri Munendra Singh Chauhan is authorized to represent the Company in the complaint, particularly to this case and while giving such authorization it is made clear that the Company was earlier represented by Mr.Prabhakar Parshi, Regional Manager of the Company, who is no longer in the service of the Company and hence Mr. Chauhan is authorized to tender evidence on behalf of the Company, present himself for cross-examination and file necessary documents/pleadings as may be required till the disposal of the case. 13 15. It is important to note that the complainant also produced the document of 15th Annual Report 2010-2011, which is marked as Ex.P.51 and so also produced the document of Memorandum and Articles of Association of Forever Precious Jewellery and Diamonds Limited, which is marked as Ex.P.52. Article 163(12), (27) and (28) of the Articles of Association reads as under: “163. Without prejudice to the general powers conferred by Article 160 and the other powers conferred by these present but subject however to the provisions of the Act, it is hereby expressly declared that the Directors shall have the following powers: (12) to institute, conduct, defend, compound or abandon any legal proceedings by or against the Company or its officers or otherwise concerning the affairs of the Company and also to compound and allow time for payment or satisfaction of any debt due or of any claims or demands by or against the Company. (27) generally subject to the provisions of the Act and these Articles to delegates the powers, authorities and discretions vested in 14 the Directors to any person, firm, company or fluctuating body of persons as aforesaid. (28) to delegate, sub-delegate or attorney all or any of the powers, authorities and discretions for the time being vested.” 16. Article 164(a) and (b) of the Articles of Association reads as follows: “164(a) Subject to the provisions of the Act, the Directors may from time to time appoint or re- appoint one or more of their body to be the Managing Director or Directors or the whole time Director or Directors of the Company for such term not exceeding five years and subject to such remuneration, terms and conditions as they may think fit. (b) Subject to the provisions of the Act, the Directors may from time to time entrust to and confer upon the Managing Director or the whole time Director, for the time being such of the powers exercisable under these presents by the Directors as they may think fit, and may confer such powers for such time and to be exercised for such objects and purposes and upon such terms and conditions, and with such restrictions as they think expedient, and they may confer such powers, either collaterally 15 with or to the exclusion of and in substitution for all or any of the powers of the Directors, in that behalf and may from time to time revoke, withdraw, alter or vary all or any of such powers.” 17. Having considered the grounds urged by the learned counsel for the petitioner, it is clear that the complaint was filed by an authorized person and resolution was passed on 24.10.2008 and the said resolution was issued by the Managing Director of the Company consequent upon the resolution passed by the Board of Directors. Hence, it is clear that authorization was given to the Regional Manager of the Company to initiate the proceedings against the petitioner. The document of Ex.P.50 is also very clear that the said Regional Manager had left the Company and hence the Managing Director of the Company in exercise of the power under Articles 163 and 164 of the Articles of Association, authorized Mr. Munendra Singh Chauhan to examine himself and lead evidence. P.W.1 who has been examined before the Trial Court is the authorized person, who gave evidence and hence the petitioner cannot find fault with the evidence led by P.W.1. No doubt, the learned counsel for the petitioner relied upon the judgment of the Apex Court in the case of A.C. Narayanan (supra), wherein the Apex Court held 16 that the complaint was not signed either by the Managing Director or Director of Company and subsequently Deputy General Manager of the Company gave evidence on behalf of the Company though he does not know anything. Nothing on record to suggest that he was authorized by Managing Director or any Director. Hence, the acquittal of the accused was held proper. 18. But in the case on hand, the factual aspect is different and before initiating the proceedings, general body meeting was held and resolution was passed in terms of Ex.P.49 and when the person who was authorized left the Company, authorization was given to P.W.1 by the Managing Director in terms of Ex.P.50 and also powers are conferred to the Director and Managing Director in terms of Articles 163 and 164 of Ex.P.52 i.e., Memorandum and Articles of Association of the complainant Company and hence the said judgment is not applicable to the facts of the case on hand. 19. The learned counsel also relied upon the judgment of this Court in the case of M/s. Canara Workshops Limited (supra), wherein in paragraph Nos.24 and 25 of the Madras High Court judgment in the case of Shakthi Concrete Industries 17 Limited and others v. Valuable Steels (India) Limited reported in (2000) 100 Company Cases 429, an observation is made that there is no dispute in the concept that the Company being by itself a legal person as a payee or a holder in due course, alone could file the complaint under Section 142 of the NI Act. It is also not in dispute that a Director or a Manager in his individual capacity cannot be said to be a payee or a holder in due course in terms of Section 142(a) of the Act. It is also taken note of that the complainant Company has approached the Court through some human agency, namely, a Director of the Company, in preferring the complaints, as the Company has no soul, mind, body and, limbs. If the Company approaches the Court through some other person, who is not connected with the affairs of the Company, then necessarily it has to authorize that person to file the complaint on its behalf. 20. In the case on hand, the factual aspects are different. The Regional Manager of the Company was authorized to file a complaint and resolution was passed in the general body meeting and thereafter on account of he left the Company, further authorization was given to Sri Munendra Singh Chauhan by the Managing Director who was authorized to do the same. 18 Hence, this judgment is also not applicable to the facts of the case on hand. 21. The learned counsel for the petitioner also relied upon the judgment of this Court in the case of Basanna Pattekar (supra), wherein discussion was made that since the Company is a juristic person, any person on behalf of the Company has to be authorized 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. In the case on hand, I have already pointed out that there was a resolution by the Company and the Managing Director was authorized to exercise his powers under Articles 163 and 164 and hence the very contention of the learned counsel for the petitioner that the complaint is not maintainable cannot be accepted. 22. The learned counsel for the petitioner also relied upon the judgment of this Court in the case of George Joseph (supra), wherein it is held that a letter of authorization or a 19 power of attorney executed by Chairman or other officer of the Company without delegation of the power to institute such proceedings having emanated from Board of Directors would invalidate the proceedings. This judgment is also not applicable to the facts of the case on hand, since the document of Ex.P.49 is very clear that the Company itself has authorized the Regional Manager to initiate the proceedings against the petitioner by passing a resolution in the general body meeting and subsequently on change of the Regional Manager, further authorization was given to P.W.1 in terms of Ex.P.50 and the same is also in terms of the power conferred on the Director and the Managing Director as envisaged under Articles 163 and 164 of Articles of Associations, which I have referred above and hence the first and foremost contention of the learned counsel for the petitioner that the complaint itself is not maintainable cannot be accepted. 23. The learned counsel for the petitioner mainly argued with regard to the maintainability and not touched upon the merits of the petition. This Court having considered the merits also, it is not in dispute that cheques Exs.P.1 to 10 have been issued. In one breath the petitioner says that those cheques are 20 issued as security and in other breath says that the cheques were obtained by coercion in the police station. The issuance of cheques is not disputed and the same is signed by the petitioner is also not in dispute. The petitioner cannot blow hot and cold. The fact that there were business transactions between the complainant and the accused is not in dispute. It is important to note that the Trial Court relied upon Ex.P.46 reply notice issued by the accused. In the reply notice, the accused categorically admitted the relationship between the parties and also the business and admits that he has done business with the complainant to the extent of 3½ Crores so far and the complainant used to give jewellery to the accused to be kept in safe custody and for sale worth Rs.2 Crores always and in turn the accused used to sell them or part thereof and settle the transaction by remitting dues and return the balance jewellery on the complainant’s demand. In paragraph No.4 of the reply notice, the accused admits that the complainant has sold diamond jewellery item to the accused worth Rs.67 lakhs and that the diamond jewellery articles worth Rs.60 lakhs have been resold by him to third parties and the payments pertaining to those transactions have not yet been received by him and 21 balance of articles worth Rs.7 lakhs are also pending on account between him and third parties. It is also stated that the complainant must be aware of the fact that for this type of transaction by the accused with third parties there is due consent and permission by the complainant and acknowledges the receipt of diamond jewellery articles supplied by the complainant and therefore requests the patience of the complainant by waiting for some time till all the payments are received by the accused from third parties and repay them to the complainant. Hence, this averment made in paragraph No.4 of the reply notice is clear that reply was given and notice was served and admitted the transaction. 24. It is important to note that the very reply notice issued by the petitioner was disputed by the petitioner that no such reply was given. If no such reply was given through his advocate, the petitioner ought to have examined the advocate who issued the notice on his behalf and who gave the instructions to issue such notice. But only contention was taken that the same is created and mere taking of defence is not enough and the same has to be proved and no cogent evidence is placed before the Court to accept the contention of the 22 petitioner. Both the Courts have taken note of Ex.P.46, wherein specific admission was given and the Trial Court also observed that Section 58 of the Indian Evidence Act is very clear that admitted facts need not be proved. 25. The Appellate Court also in detail discussed both oral and documentary evidence placed on record and also discussed with regard to the grounds which have been urged that the complaint itself is not maintainable. The Appellate Court in paragraph No.17 discussed both oral and documentary evidence placed on record with regard to the merits of the case and also the defence. In paragraph No.18 discussed with regard to authorization is concerned and relied upon Exs.P.49 to 52 and even taken note of Article 163 (27) and (28) as well as Article 164(a) and (b) of the Articles of Association and extracted the same. The Appellate Court considering both oral and documentary evidence placed on record, in detail discussed the same and relevant materials were also taken note of and in paragraph Nos.20 and 21 taken note of the business to the extent of Rs.67 lakhs and the liability admitted by the petitioner and comes to the conclusion that the complainant has discharged his initial burden. It has also taken note of 23 presumption under Section 139 of the NI Act since cheques are admitted and also taken note of the issuance of the cheques by the petitioner for discharge of liability for the purchase of jewels from the complainant and in the reply also it is stated that the complainant has to wait for some time for clearance of payment by third parties to whom he has sold the articles. 26. Having considered all these materials on record, both the Trial Court and the Appellate Court comes to the conclusion that the complainant has proved the case. No doubt, the revision petitioner examined himself as D.W.1 and got marked the documents at Exs.D.1 to 12, but no material is placed on record to show that the accused has repaid the amount of Rs.67 lakhs. He gave admission in the cross-examination regarding transaction is concerned, particularly admitted the memorandum of agreement in terms of Ex.P.47 with regard to the business and also categorically admits that earlier he was having good and cordial relationship with the Company and also admits that he did not take any action in respect of issuance of reply notice in terms of Ex.P.46 as against the advocate. 24 27. Having taken note of all these admissions and evidence on record, it is not a case for exercising of revisional jurisdiction and no perversity is found in the findings of the Trial Court and the Appellate Court. Both the Courts have given detailed consideration and meticulously examined the documents of Exs.P.1 to 10, 46, 47, 49, 50, 51 and 52 and hence the order of both the Courts not suffers from its legality and correctness and the same is based on material on record and question of law not involved in the matter and hence it is not a case for interference by exercising the revisional jurisdiction. Point No.(ii): 28. In view of the discussions made above, I pass the following: ORDER The criminal revisional revision is dismissed. Sd/- (H.P. SANDESH) JUDGE MD