ALSO REGIONAL OFFICE AT HAVING ITS OFFICE AT ALSO AT; RAGHOGI BUILDING NEHRU GUNJ GULBARGA4... RESPONDENTS (FORMERLY KNOWN AS LUPIN AGRO CHEMICALS COMPLEX, BANDHRA EAST, MUMBAI 400 051 PARTNER OF M/S JAJEE PESTICIDES FILTERED ROAD, GULBARGA FILTERBED ROAD, GULBARGA FILTERBED ROAD, GULBARGA PARTNER OF M/S JAJEE PESTICIDES 2. MR KEDRANATH K JAJEE 3. SMT LALITHABAI A JAJEE REPRESENTED BY ITS AREA MANAGER PARTNERSHIP FIRM REPRESENTED BY PARTNERS NO. 2 & 3 1. M/S JAJEE PESTICIDES AND (BY SRI PRAH LAD, ADV. FOR M/S RAO PRASAD & CO.) NO.19, J.C.ROAD KESHAVA NO.7W FLOOR BHANDRA KURLA.APPELLANT M/S CHEMINOVA INDIA LIMITED BETWEEN CRIMINAL APPEAL No.376/2007 BEFORE DATED THIS THE 25 TH DAY OF FEBRUARY 2012 THE HON BLE MR.JUSTICE JAWAD RAHIM IN THE HIGH COURT OF KARNATAKA AT BANGALORE INDIA LIMITED) HAVING ITS REGD. OFF AT JASMINE MANSION
Companies Act initiated prosecution against respondent The appellant/company incorporated under the COURT DELIVERED THE FOLLOWING: 3. The contextual facts needing reference are: the N.I.Act. supplementation thereto. for the respondents/accused. Perused the record in for the appellant and Sri.Pramod N Kathavi, learned counsel 2. Heard learned counsel Sri.S.Prahlad appearing respondents for offences punishable under Section 138 of Complainant s appeal against acquittal of the JUDGMENT THIS CRL.A COMING ON FOR HEARING THIS DAY, THE P/U/S.138 OF N.I.ACT. BE PLEASED TO SET ASIDE THE JUDGMENT AND ORDER OF CRL.A FILED U/S.378(4) CR.RC BY THE ADVOCATE FOR THE APPELLANT PRAYING THAT THIS HONBLE COURT MAY ACQUITTAL DT.30.12.2006, PASSED BY THE 14 C.M.M BANGALORE IN CC.NO.26541/2OO4 ACQUITTING THE RESPONDENTS/ACCUSED FOR THE OFFENCE TH ADDL. (BY SRI PRAMOD N KATHAVI, ADV.)
r Section 138 of the N.I.Act on material allegation that it had deal with the agricultural products manufactured by it. The appointed the accused/partnership firm as its distributor to first respondent was represented by its partners acknowledging its liability to pay Rs.1,50,000/- issued the material indented by the accused, the transaction was compiete. The accused/firm was liable to pay the value of impugned cheque which on presentation to the Bank was dishonoured necessitating issuance of statutory notice resulting Wi filing of the complaint before the jurisdictional raising a demand for paying the amount covered under the which was documented in the Invoice. On delivery of the the first respondent/accused and suppiied its products the products so supplied and delivered. The accused respondents 2 and 3. During the course of said business transaction, the complainant accepted the order placed by they failed to comply with the demands made therein 4. The notice was duly served on the accused but cheque and also Interest at 24% p.a. No.1, a partnership concern for offences punishable under 3
summoned the respondents/accused. Magistrate who took cognizance of the offences alleged and formulated against them for offences under Section 138 of examination by the respondents/accused on which day, as cross examination was not done the case was posted to behalf of the accused. The position continued. However, P12. The case was then adjourned to 16.03.2006 for cross which his cross examination couid not be done by and on represented itseif through its attomey and Manager appeared in person on 24.02.2006 for further examination 23.03.2006. On that day and subsequent dates to which case was posted PW1 remained absent, consequent to the N.I.Act. 5. The accused denied the substance of allegation 4 6. In the trial that ensued, the complainant Mr.C.P.Suresh Kumar. Thus, Mr.C.P.Suresh Kumar flied sworn statement in the form of an affidavit in examination- In-chief before the Trial Court on 17.02.2006 and then in-chief, and produced documents marked as Ex.P1 and S
examination and no other witness was present, the complainant s evidence was closed. Order dated 24.7.2006 dispensed with examination of the was adjourned to 05.08.2006 and on which date, an application under Section 311 of Cr.P.C. was filed by and on behalf of the complainant to recall PW1 which was allowed cross examination of PW1 (C.K. Suresh Kumar) to on cost of Rs.1,200/- and again, the case was posted for for argument to 28.07.2006 and then to 31.07.2006, on accused under Section 313 of Cr.P.C and posted the case 7. In the circumstances, the learned Trial Judge by noticing continuous absence of PW1 (Sri.C.K.Suresh Kumar) and as he had not tendered himself for cross- for appearance of PW1 till 24.07.2006 on which date, which date, accepting the request of both sides, the case the Trial Court showed indulgence and adjourned the case 19.08.2006. Again PW1 did not tender himself for Cross examination. Instead of tendering him for the cross examination the complainant filed an application for substitution of its representative Sri.C.P.Suresh Kumar by
permitted to represent the complainant company substituting him in place of C.D.Suresh. Thereafter, 8. Such request of the complainant was not to represent the complainant company. one Sri.B.K.Swamy, the present power of attorney holder opposed by the accused and thus, B.K.Swamy was evidence, he merely produced a deed of power of attorney executed in his favour by the company and was cross examined by the accused on 17.10.2006, only on that evidence of the complainant was closed and dispensing with date, he was examined himself as PW2 and during such aspect as he did not depose anything more. Thereafter, the Sri.B.K.Swamy appeared only on 18.09.2006 on which impugned judgment has been passed on 30.12.2006. Section 378(4), Cr.P.C. 9. Assailing it, complainant is in appeal under Cr.PC., the case was posted for argument and the the examination of the accused under Section 313 of 6
Impugned judgment on several grounds amongst which the I) The learned trial judge has seriously erred In produced Exs.P1 to P12 Including the Impugned II) PW2-B.K.Swamy was permitted by the court PW1-Sureshkumar. Therefore, B.K.Swamy s evidence was continuation of the evidence led III) Section 145 of the N.I. Act permits the N.I. Act. statutory notice issued under SectIon 138 of the Sureshkumar through whom complainant had cheque, Intimation from the bank and also have held complainant had led no evidence through PW2. complainant to produce evidence personally or through affidavit which the complainant had done. Therefore, the evidence of the complainant through affidavit flied by PW1 was charge against the respondent under SectIon subject himself for cross examination. 138, N.I. Act, irrespective of fact he did not Ignoring the evidence tendered by PW1-C.K. following grounds are main contentions: by PW1 and hence, the trial court could not 10. Learned counsel for the appellant assails the Itself to represent the complainant substituting sufficient materiai on record to establish the 7
the company was the trial court to give an opportunity to the the grounds urged in the appeal, seeks citatlonal support to be represented only by a particular 1 substituted by PW2- Sureshkumar who was earlier appointed as attorney to represent it, had dissociated with a juristic person; it could not have compelled It individual. The Complainant had shown 11. Learned counsel for the appellant, in support of substitution of PW1. Thus, PW2 could have he was representing the complainant in been Cross-examined by the accused for the evidence led by PW1. to conclude the evidence of PW2 was not VI) Alternatively, it was submitted if this court were hence, the provisions of the Evidence Act enactment, it overrides the Evidence Act and cannot be brought into play in the facts and circumstances of this case. complainant to recall PW2 and for further evidence and to mark the documents. sufficient, then the case may be remanded to B.K.Swamy. Thus for all intent and purposes, IV) The trial court failed to notice complainant was 8 V) The Negotiable Instruments Act, being a special
9 from the decision in the case of ASSOCIATED CEMENT COMPANY LIMITED.vs. KESHAVANAND (AIR 1998 SC 596). He also refers to the opinion of the learned author, Mr.Sen Gupta in his book, NEGOTIABLE INSTRUMENTS ACT, 1881, on interpretation of Section 145(2). 12. In negation of all these grounds, Sri Pramod Katavi would submit that proceedings before the trial court though commenced were not taken to its logical end by the complainant. Complainant had, on its own volition, withheld its witness from cross-examinations. PW1 was examined in-chief by filing affidavit and Exs.P1 to P12 were marked, but he failed to subject herself for cross examination. Consequently he was discharged and his depositions was not legal evidence and had to be ignored as rightly done by the trial court. 13. He submits so far as PW2 is concerned, though he was permitted to represent the complainant, he tendered only one-sentence evidence in his examination-inchief to produce the deed, i.e. general power of attorney,
10 authorising him to represent the company. He spoke nothing relating to material allegations against the accused to support the charge under Section 138, N.J. Act. Therefore, there was nothing on record through PW2 consequent to which the complaint had to fail and rightly, the learned judge has rejected the complaint. Alternatively, he submits, even if it is held that the complainant had produced Exs.P1 to P12 in evidence and they were on record, accused has been deprived of a valid right in law to dislodge the incriminating aspects appearing in such evidence by testing it in cross-examination. Since the accused was deprived of such opportunity of crossexamining there was no legal evidence and the only logical conclusion is that the complainant had not established the charge against the accused in the manner known to law. 14. Sri Pramod Katavi would further submit even if such evidence is taken on record, in view of the decision of the apex court in the case of KRISHNA JANARDHANA BHAT.v. DATTATREYA G.HEGDE (2008 AIR SCW 738), accused had only to show by preponderance of possibilities
words, the issue raised is, merely because there is an conviction unless facts constituting ingredients of offence 1205) element of statutory presumption engrafted in Section establish the charge under Section 138, N.J. Act. In other 118(1) and Section 139, N.J. Act, it does not warrant Companies Act, 1956. It is a juristic person and had to be vs. STATE OF KARNATAKA (ILR 1990 KAR 3) SANNAREVANAPPA BHARAMAJAPPA KALAL 1) THE ASSOCJATED CEMENT CO. LTD..vs. D SOUZA (AJR 2003 SC 2035) 2) GOA PLAST (P) LTD vs. CHJCO URSULA KESHVANAND (AJR 1998 SC 596); 15. In support of his contentions, he relied on the following decisions: under Section 138 of N.J Act. 1325(1)) complainant is a company incorporated under the 16. As could be seen from the facts not in dispute, DATTATRAYA G.HEGDE (AIR 2008 SC 4) KRISHNA JANARDHAN BHAT vs. that the case as made out by the complainant did not ii
will be the de facto complainant. managing director because for all intent and purposes, he person named in the Companies Act. Undoubtedly, it is the represented in a civil suit or other proceedings through a incorporeal body was represented by a particular individual of the complainant to choose its representative. If the person who will be de facto complainant. It will be the right presence in court, it has to be represented by a living de jure complainant, and as it is incapable of physical that when the complainant is ajuristic person, it will be a 18. As regards the first issue, it is now well settled fails to tender himself for cross-examination? Act in examination in chief is legal evidence, if he on affidavit as permissible under Section 145 of NI 2) Whether the evidence tendered by the complainant complaint to another person. represented it at the time of initiation of the substituting in the place of one who had earlier be permitted to change its representative 1) Whether complainant who is juristic person could 17. The questions now needing consideration are: 1 ) I
at the time of presenting the complaint, there is no the administration of the company. This issue was the company by another person subject to contingencies in only by him. He could be substituted in the discretions of compulsion that the entire proceedings should be concluded complainant-de jure, and a complainant-de governed by the Code, but by the relevant law complainant and where the complainant is an proceedings, becomes de facto complainant. complainant is an incorporeal body, there is a or representative can be examined on its Thus, in every complaint, where the the complainant is a company, who will representative, representing it in criminal represent the company and how the company jure complainant and its employee or other behalf. As a result the company becomes a de incorporeal body, evidently only an employee mandatorily requires an examination of the will be represented in such proceedings, is not Section 142 only requires that the complaint should be in the name of the payee. Where relating to companies. Section 200 of the Code N.I. Act and Section 200, Cr.P.C. is necessary. purposive interpretation of Section 142 of the In the circumstances, a harmonious and 1284) wherein the apex court has observed thus: v. STATE (NCT OF DELHI) reported in AIR 2009 SC of NATIONAL SMALL INDUSTRIES CORPORATION LTD. CEMENT COMPANY (supra) and more elaborately in the case considered by the Apex court in the case of ASSOCIATED 1-, Ii
in signing and presenting the complaint, he public servant is the de facto complainant and by one of its employees, the employee who is a complainant and his witnesses. Where the complainant is an incorporeal body represented servant, it will not be necessary to examine the facto. Clause (a) of the proviso to Section 200 provides that where the complainant is a public from the impugned judgment, the trial court has noticed the provisions contained in the Evidence Act. As we see be tested with reference to Section 145 of the NI Act and 20. As regards question nos.(2) and (3), it has to substitution to be represented by PW2-B.K.Swamy. company, complainant was within its right in seeking changed circumstances, in view of PW1 walking out of the learned counsel for the appellant/complainant that due to 19. Therefore, I accept the contention of the tendered evidence during trial. the statement for taking cognizance had not subsequently be dismissed only on the ground that the person who gave The affirmative view of the apex court is, no complaint can to Section 200 of the Code will be available. Therefore, it follows that in such cases, the exemption under clause (a) of the first proviso acts in discharge of his official duties. 14
compelling the trial court to close evidence. Therefore, it for cross-examination, despite several opportunities Exs.P1 to P12 were marked, but he failed to tender himself PW1-Sureshkumar having filed affidavit in Examination-inchief during trial did enter the witness box and through him provisions of Section 145 which permits complainant to give 22. Thus the moot question would be: Whether the the N.J. Act, application in a trial for the offence under Section 138 of N.J. Act, the provisions of the Evidence Act have no 21. Appellant s contention is, in view of Section 145, through sworn statement in the affidavit is of no avail. the evidence tendered by him (PW1) in examination in chief discharged. The consequence flowing from such order is, appear for cross-examination. Consequently, he was legally that application was being allowed, again PW1 failed to Cr.P.C. after the evidence of PW1 was closed and though complainant had filed an application under Section 311, amounts to discharging PW1. Besides, it has to be noticed 15
the language of Section 145 itself. The language of Section obviously has to be In the negativç as could be seen from 145 Is clear. It begins with the non-abstante dause evidence on affidavit, is legal evidence? The answer facts contained therein. It leaves no scope for doubt that mere filing of affidavit by the complainant is no evidence in examine any person giving evidence on affidavit as to the application of the prosecution or the accused, summon and mandates the court may, if it thinks fit, and shall on 23. Sub-section (2) of Section 145 is relevant which without any riders. on affidavit, it is subject to all exceptions and is not trial or other proceedings under the said Code. It no doubt permits evidence of the complainant may be given by him subject to all exceptions be read in evidence in any enquiry, complainant may be given by him on affidavit and may, of Criminal Procedure (2/1974), evidence of the envisages notwithstanding anything contained in the Code Procedure and not the Evidence Act. Sub-section (1) referring only to the provisions of the Code of Criminal 16
(which could be written application or even oral as the court may, if It thinks fit, but shall on the application 17 I V Despite the court s direction, if the person giving evidence prosecution or the accused, summon and examine any person giving evidence on affidavit as to the facts contained thinks fit to summon a person who has flied affidavit to person giving evidence on affidavit on the application of the applies to the court, then the court has no discretion but to examination as to the facts contained in the affidavit. mandatory for the court to summon and examine any discretion of the court is capped with a direction In sub examine him as to the facts contained therein. This complainant has given evidence on affidavit, if the accused summon the deponent in the affidavit to appear for therein. Therefore, discretion is given to the court if it section does not insist on written application), of the section (2) itself by use of the word shall making it prosecution or the accused. That means, when the contained in the affidavit whén, cailed upon to do so. The law if such person(witness) falls to depose to the facts
requirement is in line with the provisions of the Evidence affidavit will not translate into legal evidence. This tender himself to be examined, then the. deposition in the in examination-in-chief on affidavit fails to appear and 24. Besides the iegisiative intent is very ciear from prescribing the procedure for trial of summons case was Shl offence under Section 138 of the N.I. Act as a summons to the facts contained therein. Even if the court does not the procedure to be followed in the conduct of trial for the inserted in view of Section 143 of the Act which prescribes examine the person who has given evidence on affidavit as made applicable in trial of cases under Section 138, N.I. requirement Is the court, If it thinks fit, may summon and affidavit, but by sub-section (2) of Section 145, a legal Act, SectIon 145 was incorporated permitting evidence on a virtue of SectIon 143 of the N.I. Act the provisions case as prescribed In the Code.of Criminal Procedure. As by the language of Section 145, N.I. Act. This provision was the following paragraphs. Act, particularly in SectIon 138 to which we shall refer in 18
think fit to summon such person, right is given to the application or oral request to examine such person who has accused to apply to the court which may be written Undoubtedly it refers to the right of cross-examination. As given evidence by affidavit as to the facts contained therein. evidence of any fact, the judge may ask the party evidence: When either party proposes to give S. 136. Judge to decide as to admissibility of confers on the judge special power. It reads thus. Section 136 deals with admissibility of evidence which examined. It shall be regulated by law and practice for the time being relating to civil and court. absence of any such law, by the discretion of the criminal procedure respectively, and, in the The order in which witnesses are produced and situation like in the instance case. Section 135 prescribes: 139 in Chapter X of the Evidence Act deals with the 25. Conspectus of the provisions of Sections 135 to Act would be applicable. trial of offences under Section 138 of the Act, the Evidence Evidence Act has been made inapplicable to proceedings for in Section 145, N.J. Act there is no other indication that the 19
shall be cross examined. shall be called his cross-examination. examined in Chief, if the adverse party desires, then, he court admits such evidence. desires) cross-examined, then (if the party calling him so desires) re-examined. Thus, a witness after being first first examined-in -chief, then (if the adverse party so 27. Section 138 postulates a witness shall be Section 137. It reads the examination of a witness by on oath before the court is not evidence in law unless the fact, if proved, would be relevant, and not fudge shall admit the evidence if he thinks that the It clarifies that every statement by a witness even given and cross-examination of a witness is spewed out in alleged fact, if proved, would be relevant; and the otherwise. 26. What is the meaning of examination-in-chief the party who calls him shall be called his examination-inchief. The examination of a witness, by the adverse party proposing to give the evidence in what manner the 20
28. The contention of the complainant is what PW1 should be taken as evidence of PW-2 Is a strange a case of this nature is evidence relating to matters of fact deposition of PW-1 C.K.Sureshkumar through affidavit In examination-in-chief being not legal Evidence had to be his deposition in evidence is rejected. Such deposition only spoke in examination-in-chief being on record that part of Therefore, the evidence we expect from the complainant in Ad as could be seen under Section 3 which reads: preposition worthy of only rejection. eschewed. The second preposition canvassed by him is that 21 (2) all documents including electronic records such documents are called documentary evidence. produced for the inspection of the court; relation to matters of fact under inquiry; requires to be made before it by witnesses, in (1) all statements which the court permits or such statements are called oral evidence; EvIdence* means and indudes: 29. What is evidence is spelled out in the Evidence
tender himself for cross-examination. Merely because he was not brought into controversy by the accused and in fact, he had consented for substituting him in place of PW1. not tendering PW1 for cross-examination. From the blame itself for the predicament in which it has landed by will certainly not be legal evidence. The complainant has to The statement of a witness to be called evidence must be incomplete evidence. Court precluded from acting on such If witness does not submit to crossexamination after examination-in-chief Complete evidence calls for crossexam ination not examination-in-chief alone KARNATAKA (ILR 1990 KAR 1205) where this court this court while referring to Section 319, Cr.P.C. in the case observed thus: capable of being tested in cross-examination, otherwise it 30. In fact, this issue was incidentally considered by of SANNAREVANAPPA BHARAMAJAPPA KALAL VS. STATE OF is the attorney appointed by the company. That statement under enquiry and not a solitary statement of PW2 that he appellant there is no statement why PW1 had refused to
complainant, even then his presence could have been secured by issuing coercive process provided under the extreme case, if he had developed adverse animus to the keep him away from cross-examination. Taking the had left the company (complaint) was no justification to which are on record and admissible. impediment or restriction to receive in evidence documents same documents in his evidence as there is no legal complainant, the successor could have referred to the very and in the event of change of person representing the no personal claim. The documents were already on record the complainant company-a juristic person in which he had mark documents which were not his personal effects, but of sustainable for the simple reason, what PW1 spoke was to appellant that it is legally impermissible is hardly on record. The contention of the learned counsel for the chief and through him to mark the documents which were convenient course to subject PW2 to fresh examination in 31. Alternatively, complainant had a very easy and Cr.P.C. 23
provisions of Sections 160 and 161 of the Evidence Act purpose of tendering evidence. This could be found in the 32. That apart, there is no bar in the Evidence Act for any witness to refer to the documents filed for the remained merely a statement and had not transformed into tested in cross-examination due to his own default, it As the statement of PW1 in examination-in-chief was not 33. Now we have to see what is the resultant effect. documents on record is discounted. could not have been examined with reference to the Therefore, the contention of the learned counsel that PW2 pleases, cross-examine the witness thereupon. must be produced and shown to the adverse party if he requires it; such party may, if he the provisions of the two last preceding sections refresh memory Any writing referred to under 161. Right of adverse party as to writing used to in the document. he is sure that the facts were correctly recorded no specific recollection of the facts themselves if as is mentioned in Section 159, although he has mentioned in section 159 - testify to facts mentioned in any such document a witness may also 160. Testimony to facts stated in document which are extracted hereunder: 24
legally acceptable evidence. Besides as PW2 who entered into the witness box spoke nothing of the facts in issue, it Evidence Act which envisages: was no evidence. This could be found In SectIon 136 of the 25 S proceeding unless court admits it. make his statement as evidence admissible in the court on oath or otherwise as provided by the Code wiil not 34. That means, examination of a person before fact, and the court is satisfied with such undertaking. fact. other fact, such last-mentioned fact must be proved another alleged fact being first proved, the Judge If the fact proposed to be proved is one of which If the relevancy of any alleged fact depends upon Judge shall admit the evidence if he thinks that the alleged fact, W proved, would be relevant; and the proposing to give evidence in what manner the evidence of any fact, the judge may ask the party evidence is admissible only upon proof of some before evidence is given & the fact first-mentioned, may, in his discretion, either permit evidence of the proved, or require evidence to be given of the evidence - when either party proposes to give fact, if proved, would be relevant, and not otherwise. unless the party undertakes to give proof of such first fact to be given before the second fact is second fact before evidence is given of the first 1.36. Judge to decide as to admissibility of
could be no two opinions that though the proceedings are against the accused under SectIon 138, N.I. Act. There complainant had succeeded In establishing the charge 35. In this background we have to see whether the 26 I & case to the trial court for fresh evidence. It Is not 36. In this appeal, a request Is made to remand the in respect of an existing debt or legal liability, mere reasonable doubt. To prove the charge beyond reasonable transaction, nor did It establish that the cheque was Issued When the complainant s evidence did not establish the the Ingredients constituting the offence under Section 138. any concession except to prove the charge beyond Therefore, when a person Is liable to be sentenced for doubt, evidence must be the clincher, dear, establishing; all Imprisonment upto two years, complainant cannot be given Issuance of It and Its dlshonour does not constitute the quasi-criminal, but the ultimate effect Is penal In nature. offence.
rejection of evidence shall not be ground of Itself rejection of evidence - The Improper admission or 167. No new trial for improper admission or Evidence Act would come Into play which mandates: acceptable because In the fact situation, Section 167 of the 27 a -t Vg/vgh* fl?r%fll? Sd/a dismissed, confirming the Impugned judgment. trial Is Impermissibie. The appeal fails and It Is accordingly there be any unjust admission or rejection of evidence, re 37. I am satisfied In view of this provision, even if not to have varied the decision. the rejected evidence had been received, It ought sufficient evidence to justify the decision, or that, if case, If it shall appear to the court before which for a new trial or reversal of any decision In any such objection is raised that, independently of the evidence objected to and admitted, there was