- 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MS JUSTICE J.M.KHAZI CRIMINAL REVISION PETITION NO.995 OF 2016 BETWEEN: SMT K ROOPA RANI AGED ABOUT 45 YEARS, DIRECTOR OF RPR HOSPITALITY SOLUTIONS PRIVATE LIMITED, R/AT NO.96, 41ST CROSS, 3RD MAIN, 8TH BLOCK, JAYANAGAR, BENGALURU - 560 082. ...PETITIONER (BY SRI.Y RAJENDRA PRASAD SHETTY, ADVOCATE) AND: MRS RADHA A AGED ABOUT 44 YEARS, W/O MR. A MADHUSUDHAN RAO, R/AT NO.C-701, SPRING BEAUTY APARTMENT, BOOKEFIELDS, KUNDALAHALLI, BENGALURU - 560 093. …RESPONDENT (BY SRI.B.RANGASWAMY, ADVOCATE) THIS CRL.RP IS FILED U/S.397(1) AND 401(1) CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO SET ASIDE THE JUDGMENT DATED 23.12.2015 MADE IN C.C.NO.27284/2012, PASSED BY THE COURT OF THE XXXIII A.C.M.M., BANGALORE CITY, CONVICTING THE PETITIONER/ACCUSED NO.2 FOR THE OFFENCE U/S 138 OF N.I.ACT WHICH WAS CONFIRMED BY THE LXVI ADDL. CITY CIVIL AND SESSIONS JUDGE, BANGALORE CITY (CCH-67), AND IN SO FAR AS CONFIRMING THE CONVICTION PASSED BY - 2 - THE TRIAL COURT AND DIRECTED TO PAY THE FINE OF RS.21,10,000/- OUT OF WHICH RS.21,00,000/- PAID AS COMPENSATION TO THE RESPONDENT/COMPLAINANT AND RS.10,000/- IS DEFRAYED TO STATE IN DEFAULT PETITIONER/ACCUSED NO.2 SHALL UNDERGO SIMPLE IMPRISONMENT FOR 6 MONTHS, VIDE ITS JUDGMENT DATED 26.07.2016 MADE IN CRL.A.NO.58/2016 AND ETC., THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 09.04.2025, THIS DAY ORDER WAS PRONOUNCED THEREIN AS UNDER: CORAM: HON'BLE MS JUSTICE J.M.KHAZI CAV ORDER In this petition filed under Section 397 r/w 401 of the Code of Criminal Procedure, petitioner who is accused before the trial Court has challenged his conviction and sentence for the offence punishable under Section 138 of Negotiable Instruments Act (for short 'N.I. Act'), which came to be confirmed by the Sessions Court by dismissing the appeal filed by him. 2. For the sake of convenience, parties are referred to by their ranks before the trial Court. 3. Complainant filed the complaint against accused Nos.1 and 2 alleging that accused No.2 is the Director of - 3 - accused No.1 - company. Accused No.2 issued cheque dated 15.03.2012 for ₹21 lakhs in favour of complainant. However, when presented it was dishonoured for want of sufficient funds. Complainant got issued legal notice to accused No.2. Despite service, she has not chosen to pay the amount due. She has also not sent any reply. 4. In response to the summons, accused appeared through counsel and contested the case by pleading not guilty. 5. In order to prove the allegations against accused, complainant examined herself as PW-1 and got marked Exs.P1 to 21. 6. During the course her statement under Section 313 Cr.P.C, the accused has denied the incriminating evidence led by the complainant. 7. She has also given evidence by examining herself as DW-1. Accused has relied upon Exs.D1 to 11. - 4 - 8. The trial Court acquitted accused No.1, on the ground that the cheque in question was issued by accused No.2 in her individual capacity and it has nothing to do with accused No.1 - company. 9. However, the trial Court convicted accused No.2 and sentenced her pay twice the cheque amount as fine with default sentence of imprisonment. 10. Aggrieved by the same accused No.2 filed Crl.A.No.58/2016. The Sessions Court not only confirmed the conviction and sentence passed by the trial Court, but also imposed default sentence in the event of failure of accused No.2 to pay the fine amount. 11. Aggrieved by the concurrent findings of the trial Court as well as the Sessions Court, the accused has filed this petition contending that the same is illegal, arbitrary and unsustainable in law. The Courts below have failed to properly appreciate the provisions of Section 138 and 141 of N.I Act. They have failed to appreciate that Ex.P1 cheque was drawn on the account of accused No.1 and she - 5 - has nothing to do with the transaction between complainant and accused No.2. Rightly the trial Court has dismissed the complaint against accused No.1. Since the cheque does not belong to accused No.2, the Courts below have erred in convicting her. When the complaint is dismissed as against accused No.1, the Courts below have committed error in convicting accused No.2. Under Section 141 of N.I Act, a Director is liable only when the company is liable. Both Courts have failed to appreciate that there are no pleadings in the complaint with regard to the transaction between complainant and accused No.2 and no evidence is produced to establish the same. Ex.P12 is between complainant and accused No.2. Both of them have not complied with its terms. Ex.P12 clearly indicate that ₹21 lakhs paid by complainant was an investment, for starting the business and it was non-refundable. A civil suit is pending between the parties in O.S.No.25278/2015, which indicates that the dispute between the parties are civil in nature. Viewed from any angle the complaint is not sustainable and hence the petition. - 6 - 12. In support of his arguments, learned counsel for accused has relied upon the following decisions: (i) Aneeta Hada Vs. Godfather Travels and Tours Private Ltd.(Aneeta Hada)1 (ii) Anil Gupta Vs. Star India Pvt. Ltd. and Anr. (Anil Gupta)2 (iii) N. Harihara Krishnan Vs.J.Thomas (Harihara Krishnan)3 (iv) Dilip Hariramani Vs. Bank of Baroda (Dilip Hariramani)4 (v) Siby Thomas Vs. M/s Somany Ceramics Ltd. (Siby Thomas)5 (vi) Bijoy Kumar Moni Vs. Paresh Manna and Anr. (Bijoy Kumar Moni)6 13. On the other hand, supporting the impugned judgments and orders, the learned counsel for complainant submitted that since the cheque is drawn on the account of accused No.2 and on its dishonour and on non-compliance of legal notice, rightly she is convicted and sentenced. The findings of the trial Court and Sessions Court are based on evidence on record and there are no 1 (2012) 5 SCC 661 2 AIR 2014 SC 3078 3 AIR 2017 SC 4125 4 Crl.A.No.767/2022 (SLP (Crl)No.641/2021) Dt: 09.05.2022 5 2023 LiveLaw (SC) 869 6 Crl.A.No.5556/2024 (SLP (Crl)No.13133/2024) Dt: 20.12.2024 - 7 - justified grounds to interfere with the same and pray to dismiss the petition also. 14. In support of his arguments, learned counsel for complainant has relied upon the decision in Mainuddin Abdul Sattar Shaikh Vs. Vijay D. Salvi (Mainuddin)7 15. Heard arguments and perused the record. 16. Even though the complainant prosecuted accused No.2 in her capacity as the Director of accused No.1, the evidence led by both parties clearly indicate that the as per Ex.P21, complainant has paid a sum of ₹21 lakhs for the purpose of establishing a project subject to certain conditions. One of the condition was to secure finance from Karnataka State Finance Corporation, after which a joint company would be established. After the establishment of the said company, complainant would further invest ₹29 lakhs. 17. The cross-examination of accused clearly indicate that accused No.2 has received a sum of ₹21 lakhs 7 Crl.A.No.1472/2009 Dt:07.06.2015 - 8 - on 16.11.2011. She has also admitted that as on 16.11.2011, there was no agreement with regard to establishment of Sampradhaya hospitality service, though she has denied that since the conditions specified in Ex.P12 are not fulfilled, there was no obligation on the complainant to invest further sum of ₹29 lakhs. The contents of Ex.P12 support the suggestion. 18. The accused has also admitted that she has signed Ex.P12 as the proprietrix. She has admitted that for starting the said company she was required to make additional investment of ₹1,25,00,000/- and she was not in a position to make such investment. She has also admitted that the company by name Sampradhaya hospitality services is not established and no account is opened in the name of said company and on account of financial constraint, no business could be carried out in the name of said company. 19. Though the accused has denied that as per Ex.P20 complainant has submitted her resignation as the Director of the company,.tThe contents of Ex.P20 and the - 9 - endorsement issued by the Registrar of Companies on the said document clearly indicate the said fact. During the cross-examination of PW-1 a suggestion is made to her that forcefully she has taken Ex.P1 cheque from accused No.2, when she suffered loss. During her examination-in- chief, accused No.2 has deposed that till the companies formed, as a security complainant she has taken the cheque. By making this suggestion, the accused No.2 is admitting the issue of cheque. However, she has not taken any steps against the complainant for forcibly taking the cheque or received the same by way of security. At least she could have instructed the bank not to honour the cheque giving the reasons, which she has not done. 20. If the cheque in question is taken by way of security, then the burden is on the accused No.2 to establish that the obligation for which the cheque was taken as security was fulfilled and therefore a complainant was required to return the cheque. When accused No.2 failed to fulfill the condition specified in Ex.P12 and could not establish the company, then she was required to return - 10 - the amount received from the complainant. Otherwise, there was no necessity for her to issue the cheque to the complainant. 21. Appreciating the oral and documentary evidence placed on record the trial Court as well as the Sessions Court have rightly held that though in Ex.P1, it is stated that the cheque is drawn on the account of RPR Hospitality Solutions Private Ltd and the accused No.2 has signed it as the authorised signatory, it is a proprietorship concern of accused No.2. It is an individual transaction for which accused No.2 has issued the subject cheque. Therefore, on its dishonour and on the failure of accused No.2 to comply with the legal notice, the complainant is justified in filing the complaint. 22. On facts it is established that the transaction in between complainant and accused and RPR Hospitality Solutions Private Ltd has nothing to do with it and as such the decisions relied upon by the accused are not applicable to the case on hand. - 11 - 23. In fact in Mainuddin referred to supra and relied upon by the complainant, it is held that a Managing Director who has issued his personal cheque is liable personally and company is not necessary party. In the present case, the company in question has nothing to do with the personal transaction between complainant and accused and as such arraigning it as a party is not necessary. 24. Appreciating the oral and documentary evidence placed on record, rightly the Courts below have convicted and sentenced the accused No.2 and this Court finds no justifiable grounds to interfere with the same. 25. In the result the petition fails and accordingly the following: ORDER (i) Petition filed by the accused under Section 397(1) r/w 401(1) Cr.P.C is hereby dismissed. - 12 - (ii) The impugned judgment and order dated 23.12.2015 in C.C.No.27284/2012 on the file of XXXIII ACMM, Bengaluru and judgment and order dated 26.07.2016 in Crl.A.No.58/2016 on the file of LXVI Addl.City Civil and Sessions Judge, Bengaluru are confirmed. (iii) The Registry is directed to send back the trial court and Sessions Court records along with copy of this order forthwith. Sd/- (J.M.KHAZI) JUDGE RR