IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI MONDAY ,THE TWENTIETH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE V SRINIVAS CRIMINAL REVISION CASE Nos. 1291 OF 2014 & 2234 of 2016 CRIMINAL REVISION CASE NO: 1291 OF 2014 Revision filed under Section 397 R/w 401 of Cr.P.C, aggrieved by the Calendar and Judgment dt.15.05.2014 passed in Crl.A.No.108 of 2012 on the file of the court of learned VII Additional Sessions, Prakasam Division, Ongole thereby dismissing the appeal and confirming the conviction and sentence passed in Calendar and Judgment dt.14.05.2012 in CC.No.77 of 2008 on the file of the court learned Addl. J.F.C.M., Chirala. Between: 1. Sri Sai Enterprises, Rep.,by its Proprietor Ch. Adilakshmi, W/o. Sudhakar, aged 52 years, R/o. Mukthniuthalapadu Village, Ongole Mandal, Prakasam District. 2. Ch.Adilakshmi, W/o. Sudhakar, Proprietor Sri Sai Enterprises,aged 52 years, R/o. Mukthniuthalapadu Village, Ongole Mandal, Prakasam District. ...Petitioners/Accused AND 1. The State of A.P., Rep., by its Public Prosecutor, High Court at Amaravathi ...Respondent 2. Are Srinivasa Reddy, S/o. Subbarami Reddy, Occ:Business, Chirala town and Mandal, Prakasam District ...Complainant Counsel for the Petitioner : Ms. P.Satya Haritha, representing Sri Nimmagadda Satyanarayana Counsel for the Respondent No.1 : Public Prosecutor Counsel for the Complainant: Thota Ramakoteswara Rao CRIMINAL REVISION CASE NO: 2234 OF 2016 Revision filed under Section 397 and 401 of Cr.P.C, against the Judgment dated 15.05.2014 passed by the VII Additional District and Sessions Judge, Ongole in Criminal Appeal No.115/2012 confirming the judgment dated 14.05.2012 on the file of II Additional Judicial First Class Magistrate, Chirala in C.C No.77/2008 convincing the petitioner under Section 225 (2) of Cr.P.C for the offence punishable under Section 138 of N.l Act and sentenced to undergo simple imprisonment for period of 1 year on 14.05.2012. Between: A.Srinivasa Reddy, S/o. Subbarami Reddy, age 43 years, R/o. Chirala Prakasam District. ...Petitioner AND 1. Sri Sai Enterprises, rept. by its Proprietor Ch.Adilakshmi, W/o.Sudhakar, aged 53 years, Mukthinuthalapadu Village, Ongole Mandal, Prakasam District. . Ch.Adilakshmi, W/o. Sudhakar, Mukthinuthalapadu Village, Ongole Mandal, Prakasam District. 3. The State of AP., rept. by the Public Prosecutor, High Court, Amaravathi ...Respondents Counsel for the Appellant: SRI. THOTA RAMAKOTESWARA RAO Counsel for the Respondent No.2 : SRI NIMMAGADDA SATYANARAYANA Counsel for the Respondent No.3 : Public Prosecutor The Court made the following: COMMON JUDGMENT THE HON'BLE SRI JUSTICE V.SRINIVAS CRIMINAL REVISION CASE Nos. 1291 of 2014 & 2234 of 2016 COMMON JUDGMENT: Assailing the judgment dated 15.05.2014 in Crl.A.No.108 of 2012 on the file of the Court of learned VII Additional Sessions Judge at Ongole, confirming the conviction and sentence passed against the accused Nos. 1 and 2 by the judgment dated 14.05.2012 in C.C.No.77 of 2008 on the file of the Court of learned Additional Judicial Magistrate of First Class at Chirala, for the offence under section 138 of Negotiable N.I. Act”), the Instruments Act (hereinafter referred to as petitioners/accused Nos.l and 2 filed the Criminal Revision Case No. 1291 of 2014 under Section 397 r/w.401 of the Criminal Procedure Code, 1973. Assailing the judgment dated 15.05.2014 in Crl.A.No.ll5 2. of 2012 on the file of the Court of learned VII Additional Sessions Judge at Ongole, for not awarding compensation to the complainant under Section 357(3) of Cr.P.C., when found the accused guilty of the offence under Section 138 of N.I. Act, by the judgment dated 14.05.2012 in C.C.No.77 of 2008 on the file of the Court of learned Additional Judicial Magistrate of First 2 Class at Chirala, the petitioner/complainant filed the Criminal Revision Case No.2234 of 2016 under Section 397 r/w.401 of the Criminal Procedure Code, 1973. 3. Since both the revisions are arisen out of same cause of action, between the same parties and as material facts are common, the same are being disposed of by this judgment. common These revision cases were admitted on 24.06.2014 and 4. 01.09.2016 respectively and the sentence of imprisonment imposed against the accused No.2 was suspended, vide order dated 24.06.2014 in Crl.R.C.M.P.No.2067 of 2014 in Crl.R.C.No.l291 of 2014. Now, it is required to be noted the fact that as per the letter received from the Trial Court they could not trace the Trial 5. Court record, which was received from the Sessions Court concerned on 24.05.2014 itself in Dis.No.340, thereby, this Court, vide proceedings dated 26.04.2024, ordered the Registry to receive the certified copies of the documents from the learned counsel for the accused for reconstruction of the bundle as well directed the learned Principal District Judge, Prakasam at Ongole to take appropriate disciplinary action against the staff concerned for misplacing the original record. As such, the 3 reconstructed entire material part of the record is only available before this Court to proceed with the matter. 6. The shorn of complainant case in the complaint before the Trial Court is that: The accused No.2 is the proprietor of accused firm. The accused No. 1 firm is having credit katha maintained with the partnership firm of the complainant and indebted an amount of Rs.2,50,000/-. On that, the accused got issued Ex.P. 1 cheque bearing No.276403, dated 14.09.2007 for Rs.2,50,000/- drawn on Indian Overseas Bank, Ongole towards full and final settlement. On presentation of the same for realization by the complaint, the said cheque was returned under Ex.P.2 cheque returned memo, dated 18.09.2007 with an endorsement that “insufficient funds”. Then the complaint got issued Ex.P.3 legal notice to the accused on 22.09.2007 requesting them to repay the cheque amount within fifteen days from the date of receipt of notice, the same was received by the accused and kept quiet. Hence, the complaint. The complaint was taken on file and numbered as 7. C.C.No.77 of 2008 on the file of the Court of learned Additional 4 Judicial Magistrate of First Class at Chirala, after full-fledged Trial, yide judgment dated 14.05.2012, found the accused Nos.l and 2 guilty of the offence under Section 138 of N.I. Act, sentenced accused No.2 to undergo simple imprisonment of one year for the said offence. 8. Aggrieved by the same, the accused Nos.l and 2 as well complainant preferred appeals, vide Crl.A.Nos. 108 and 115 of 2012 respectively, before the Court of learned VII Additional Sessions Judge at Ongole, the same were dismissed, vide judgment dated 15.05.2014, by confirming the judgment passed by the trial Court. Against the said judgments of the first Appellate Court, the present criminal revision cases were preferred by the accused No.l and 2 as well complainant, respectively. 9. Heard Miss.P.Satya Haritha, learned counsel representing Sri Nimmagadda Satyanarayana, learned counsel for the 10. accused and Sri T.Ramakoteswara Rao, learned counsel for the complainant. 11. Now the point that arises for determination in this revision is “whether there is any manifest error of law or flagrant miscarriage of justice in the findings recorded by the Trial Court, which were affirmed by the first Appellate Court?” 5 Miss.P.Satya Haritha, learned counsel representing Sri Nimmagadda Satyanarayana, learned counsel for the accused submits that the complainant did not produce any certificate of registration of their firm to show that he is the partner of the firm and he is having right to initiate legal proceedings in favor of the firm, thereby, he has no locus-standi to file the present complaint; that there are no transactions between the accused firm and complainant and a false case is foisted against the accused by using the cheques issued in favour of Jaganmohanredy and Hari Madava Reddy towards purchase of oil; that as per the testimony of P.W.2 after 2010 the accused did not operate their account, thereby she never issued cheques in favour of complainant; that there is no legally enforceable debt between the accused and complainant; that the trial Court as well first Appellate Court failed to appreciate the material record in one on proper perspective, erroneously convicted the petitioners and the same is liable to be set aside. In support of the above contentions, she relied upon a pronouncement of HonTDle Supreme Court in Shankar Finance and Investments / "N 6 V. State of Andhra Pradesh^ as well judgment of the Karnataka High Court in Govind Ram Chanani v. Latha?. Per contra, Sri T.Ramakoteswara Rao, learned counsel for the complainant submits that the Trial Court after appreciating the material on record in right perspective came to the conclusion that the accused Nos.l and 2 are found guilty of the offence under Section 138 of N.l. Act, which was affirmed by the first Appellate Court after thorough appreciation of the matter, thereby, there is no error in the judgments passed by the Courts below in convicting the accused for the said offence, however, the Courts below failed to award compensation to the complainant under Section 357(3) of Cr.P.C, which is required to be ordered by this Court, thereby, prays to consider the revision preferred by the complainant by awarding compensation. 13. 13. In view of the above rival contentions, this Court perused the material available on record. The foremost contention of the 14. accused is that the complainant has no locus-standi to file the complaint on behalf of the firm against the accused, thereby, the complaint itself is liable to be rejected and the authorized ' (2008) 8 see 536 2 2010 (2) euree 26 (erl.A.No.553 of 2005 decided on 23.01.2009) 7 person of the said firm can only file the complaint against the accused. To decide the above-mentioned point, it is now required to refer the factual aspects culled out from the pleadings as well testimonies of the witnesses. As per the case of the complainant as well testimony of P.W.l during chief examination, testified that the accused No.l firm, which is represented by its proprietor accused No.2, is having credit Khata maintained with their company and indebted an amount of Rs.2,50,000/-. Thereby, accused got issued Ex.P. 1 cheque for an amount of 15. Rs.2,50,000/- towards full and final settlement. On presentation of the same by the complainant for realization of the said amount, the said cheque was returned under Ex.P.2 memo dated 18.09.2007 with an endorsement that “insufficient funds”. On that, the complaint/P.W. 1/Srinivasareddy got issued Ex.P.3 notice and the same was received by the accused under Ex.P.5 acknowledgment and kept quiet. In view of the above facts stated by the complainant, it is crystal clear that the accused No. 1 was a firm, is having credit Khata maintained with their company(complainant), which is a partnership firm, and indebted to the said firm an amount of 16. Rs.2,50,000/-. But, on perusal of the Ex.P.l cheque, it was 8 issued in the name of complainant/Are Srinivasareddy, but not in favour of complainant’s firm. However, the entire pleadings well testimony of P.W. 1 revolving around the debt regarding the partnership firm of complainant, but not in the individual capacity of the complaint. Furthermore, as 17. P.W. 1 / complainant examination categorically admitted that he filed the present case in his individual capacity and the accused is not indebted to him in his individual capacity. He cannot file any recorded proof regarding the liability of accused due to him. He also during cross categorically admitted that he has not filed any documents to show that the accused is in due of amount to him pertaining to the cheque which is based on the complaint. Thereby, it is evident from the cogent admissions made by the complainant during cross examination that the accused is not indebted any amount to the complaint under individual capacity and he is not issued Ex.P. 1 cheque to discharge any debt transaction between him and complainant. However, it is evident from Ex.P.3 that it was issued in its individual capacity as admitted by P.W. 1. Even on perusal of Ex.P.3 legal notice, it is quite categorical that it was issued on the individual capacity of the complainant, but not on behalf of 18. 9 the partnership firm of the complainant to which the accused said to be indebted the cheque amount as pleaded by the complainant in the complaint as well evidence affidavit. Thereby, the case of the complaint is quite contrary to the contents in Ex.P.3 statutory notice, which vitiates the entire case of the complainant per Section 139(b) of Negotiable as Instruments Act. More so, it is also admitted by the complainant during cross examination that he has not filed any documents to show that the accused is in due of amount to him pertaining to the cheque which is based on the complaint. For the sake of argument, it is assumed that the accused issued Ex.P. 1 cheque to discharge the debt regarding the partnership firm of the complainant; it has to be proved that the complainant is authorized to file complaint against the accused on behalf of the firm. 19. As per the condition No.5 of Ex.P.6 partnership firm “The Party of the Fourth Party shall be the Managing Partner of the firm and he shall be responsible for the smooth running of the business”. So, the fourth party i.e., Pamulapati Hari Madhava Reddy is authorized to file any complaint or suit against the third parties regarding the transactions of the firm, but not complainant, who is third party m Ex.P.6 Partnership firm. It is not the case of the complainant 10 that he was authorized to sue the accused regarding the debt transaction of firm by any authenticated document or power of attorney from the remaining partners of the firm. Thereby, the complainant is not authorized to file any complaint against the accused regarding the debt transaction between the said firm and accused. 20. On this aspect, it is apposite to refer the categorical observations made in a pronouncement of Karnataka High Court in Govind Ram Chanani case (referred to supra), that; “The authorized person should file the complaint only representing the said firm and not in his individual capacity or any other capacity which he is not legally entitled to do so. In order to file a private complaint for an offence, punishable under Section 138 of Negotiable Instruments Act, one must have a competency to file such complaint. The complainant must necessarily be a payee or holder in due course or must be an authorized person to file the complaint on behalf of the payee or holder in due course. If the complaint is filed by a manager in his personal capacity. then the authorization is required. Only the power of attorney, agent or a person authorized in writing by the payee or holder in due course of the cheque, is a competent person to present the complaint, as under Section 142 of Negotiable Instruments Act. Even if it is presumed that Govind Ram Chanani is looking after entire 11 business affairs of partnership firm, he cannot file such complaint without authorization from the partners of the firm.” 21. It was also categorically held at paragraph No. 10 of the said judgment {Govind Ram Chanani case) that: “ considering the fact that complaints filed by the appellant is not maintainable in the eye of law and since the appellant issued legal notice and presented the complaints before Court in his individual capacity without any authorization from the M/s.Alloy Steel Emporium, the Court below had rightly dismissed the complaints filed by appellant, consequently acquitted the respondents for the offences alleged against them in all the cases.” In view of the above settled legal position, the complaint is not authorized to file the complaint on behalf of the firm against the accused regarding the alleged debt transaction between the firm and accused as pleaded by him in the complaint as well evidence affidavit. 22. 23. It is also not the case of the complainant that he examined the Managing Partner of the said firm to prove the said debt transaction between the firm and accused, which is definitely fatal to the case of the complainant as observed by the Horl^le Supreme Court in Shankar Finance and Investments casi (referred to supra), wherein it was held that: “where the was 12 attorney holder of the complainant is in charge of the business of the complainant payee and the attorney holder personally aware of the transactions, and the alone is complaint is signed by the attorney holder on behalf of the complainant. Moreover, where the cheque is drawn in the name of the proprietor of a proprietary concern, but an employee of such concern (who is not an attorney holder) has knowledge of the transaction, the payee as complainant and the employee who has knowledge of the transaction, may both have to be examined. 24. As discussed supra, even if it is presumed that Ex.P.l cheque was issued on the individual capacity in favour of the complaint, the complainant failed to discharge the initial burden of proving that the same was issued to discharge the legally enforceable debt in view of the above categorical admission made by him during cross examination that ‘the accused is not indebted to him in his individual capacity’. As such, he is taking a different footing in his complainant that the Ex.P.l cheque was issued regarding the debt transaction of the partnership firm, which is quite contrary to the contents of Ex.P.3 statutory notice. 13 25. Even though it is presumed that the Ex.P.l cheque issued regarding the transaction between the partnership firm of the complainant and accused, as discussed supra, the complaint is not authorized to sue the accused in his individual capacity, in view of the above settled legal position. Thereby, viewing from any angle, the complaint is not maintainable in the eye of law. was 26. Furthermore, it is also required to be noted that, the testimony of P.W.2 Bank Manager, after 2010 only the account of the accused is not operated. The account of the accused is in good condition till 10.10.2008. Ex.P.l transaction is not mentioned in Ex.P.lO since it is not honoured. Thereby, the accused firm maintained current account for its business transaction till 2008, but not operating the transactions for individual capacity. as per any 27. In view of the above discussion, it is categorical that the complainant failed to discharge his initial burden that Ex.P.l cheque was issued in respect of the legally enforceable debt between the complainant and accused and that there is no creditor and debtor relationship between them. Viewing from any angle, the Trial Court as well as the first Appellate Court failed to appreciate the above said 28. aspects. 14 which cuts the root of the case, mechanieally proceed with the case and erroneously eonvicted the aecused for the said offence, which is not tenable under law. Having regard to the above discussion, this Court is of the considered opinion that there is manifest error of law and flagrant misearriage of justice in the findings recorded by the trial Court as well first Appellate Court, thereby, the criminal revision preferred by the accused has merits and liable to be considered. Since the complaint filed by the eomplainant itself is not maintainable, the criminal revision case preferred by the complainant for not awarding compensation under Section 357(3) Cr.P.C. is liable to be dismissed. 29. 30. In the result, the Criminal Revision Case No. 1291 of 2014 is allowed. The conviction and sentence passed against the petitioners/accused Nos.l and 2 by the judgment dated 14.05.2012 in C.C.No.77 of 2008 on the file of the Court of learned Additional Judicial Magistrate of First Class at Chirala, whieh was affirmed by the judgment dated 15.05.2014 in Crl.A.No.108 of 2012 on the file of the Court of learned VII Additional Sessions Judge at Ongole, are hereby set aside. The petitioners/aecused Nos.l and 2 are acquitted of the offence under Section 138 of N.I. Act. 15 31. Consequently, the Criminal Revision Case No.2234 of 2016 is dismissed. Interim orders granted earlier if any, stand vacated. As a sequel, miscellaneous applications pending, if any, shall stand closed. Sd/- V DIWAKAR DEPUTY REGISTRAR //TRUE COPY// SECTION OFFICER To, 1. The VII Additional Sessions, Ongole, Prakasam Division Additional Judicial First Class Magistrate, Chirala, Prakasam 2. The Division 3. One CC to Sri. Nimmagadda Satyanarayana Advocate [OPUC] 4. One CC to Sri. Thota Ramakoteswara Rao Advocate [OPUC] 5. Two CCs to the Public Prosecutor, High Court of Andhra Pradesh at Amaravathi [OUT] 6. The Section Officer, Criminal Section, High Court of Andhra Pradesh. 7. Three CD Copies Stu vna HIGH COURT DATED:20/01/2025 ORDER CRLRC.Nos.1291 of 2014 & 2234 of 2016 19 FEB K:5 ^ Cufreot Seciior. , iVO ALLOWING THE CRLRC 1291 OF 2014 AND DISMISSING THE CRLRC 2234 OF 2016