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2021 DIGILAW 512 (KAR)

Café Coffee Day v. H. R. Lalithamma Wife Of Kapimipathaiah

2021-03-31

H.P.SANDESH

body2021
ORDER : 1. This petition is filed under Section 482 of Cr.P.C, praying this Court to quash the entire proceedings in C.C.No.13758/2020 for the offence punishable under Section 138 of the Negotiable Instruments Act, (for short ‘NI Act’) pending on the file of XVIII Additional Chief Metropolitan Magistrate, Bengaluru. 2. The factual matrix of the case is that respondent herein has filed the private complaint under Section 200 of Cr.P.C. invoking the offence punishable under Section 138 of the NI Act against the petitioners herein. Learned Magistrate, after considering the sworn statement filed by way of affidavit by the complainant, issued the process against the present petitioners. Hence, the present petition is filed before this Court. 3. The main contention of the learned counsel appearing for the petitioners is that the complaint is filed against the Directors of the M/s. Café Coffee Day, who are the petitioners herein but M/s. Café Coffee Day is not a juristic person. In para No.9 of the petition, it is averred that M/s. Café Coffee Day is not a juristic person and there is no compliance of Section 141 of the NI Act. Nothing is averred with regard to the fact that the petitioners are incharge of the affairs of the Company. The complaint is filed by the Power of Attorney Holder and no averment is made in the complaint that the Power of Attorney Holder is having knowledge about the transaction. The cheque is signed by Lakshman for M/s. Coffee Day Global Limited and the complaint does not disclose that the Power of Attorney Holder is having the knowledge of the same. The sworn statement constitutes an affidavit but the said affidavit filed by the complaint is also defective. The documents are also not exhibited by the Trial Court before issuance of the process against the petitioners herein. 4. The sworn statement constitutes an affidavit but the said affidavit filed by the complaint is also defective. The documents are also not exhibited by the Trial Court before issuance of the process against the petitioners herein. 4. Learned counsel 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 ANOTHER reported in 2013 AIR SCW 6807 wherein at para 15, the points that came up for consideration before the Apex Court were:- (i) Whether a Power of Attorney Holder can sign and file a complaint petition on behalf of the complainant?/ Whether the eligibility criteria prescribed by Section 142(a) of NI Act would stand satisfied if the complaint petition itself is filed in the name of the payee or the holder in due course of the cheque? (ii) Whether a Power of Attorney Holder can be verified on oath under Section 200 of the Code? (iii) Whether specific averments as to the knowledge of the Power of Attorney Holder in the impugned transaction must be explicitly asserted in the complaint? (iv) If the Power of Attorney Holder fails to assert explicitly his knowledge in the complaint then can the Power of Attorney Holder verify the complaint on oath on such presumption of knowledge? (v) Whether the proceedings contemplated under Section 200 of the Code can be dispensed with in the light of Section 145 of the N.I. Act which was introduced by an amendment in the year 2002? An elaborate discussion has been made by the Apex Court with regard to filing of the complaint by the Power of Attorney Holder and in the said judgment, the Apex Court clarified that the Power of Attorney Holder can sign and file the complaint on behalf of the complainant – payee. However, whether the Power of Attorney Holder will have the power to further delegate the functions to another person will completely depend on the terms of the General Power of Attorney. The Apex Court further observed that the Power of Attorney Holder can depose and verify on oath before the Court in order to prove the contents of the complaint. However, the Power of Attorney Holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions. The Apex Court further observed that the Power of Attorney Holder can depose and verify on oath before the Court in order to prove the contents of the complaint. However, the Power of Attorney Holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions. It is further observed that it is required by the complainant to make specific assertion as to the knowledge of Power of Attorney Holder in the said transaction explicitly in the complaint and the Power of Attorney Holder, who has no knowledge regarding the transactions cannot be examined as a witness in the case. 5. Learned counsel also relied upon the judgment of the Apex Court in the case of V.R.KAMATH V. DIVISIONAL CONTROLLER, K.S.R.T.C., BANGALORE AND ANOTHER reported in 1998 (1) Kar. L.J. 529 regarding the defective affidavit and entering the name and prescribed particulars of deponent and obtained his signature in the register. The entries must be in serial order and affidavit shall bear the serial number and the place of attestation must also be written on affidavit. The affidavit not containing these particulars cannot be accepted as duly attested. 6. Learned counsel referring to these judgments would vehemently contend that there is no declaration of the Power of Attorney Holder for having knowledge of the facts and the affidavit is also defective and hence, there cannot be any order of taking cognizance against the petitioners herein. 7. Learned counsel for the respondent, in support of his arguments, would vehemently contend that out of 17 cheques, only 6 cheques were presented and M/s. Café Coffee Day is the division of the juristic person. Learned counsel also would vehemently content that Section 12 of the Companies Act is clear that the registered office of the Company is a party to the proceedings and hence, the same is mentioned in the complaint. The registered office is capable of receiving and acknowledging all communications and notices as may be addressed to it. Learned counsel referring to the same, would vehemently contend that notice was issued against a juristic person itself and the petitioners herein, while giving reply, have not disputed the issuance of cheques. The registered office is capable of receiving and acknowledging all communications and notices as may be addressed to it. Learned counsel referring to the same, would vehemently contend that notice was issued against a juristic person itself and the petitioners herein, while giving reply, have not disputed the issuance of cheques. In the reply, the issuance of cheques has been admitted and also the part payment in terms of Annexure-B. The petitioners have also sought time, when the notice was given and now they cannot contend that a juristic person is not made as a party to the complaint. The mis-description of the name of the Company is not a ground for seeking quashment of the proceedings against the Company. The exclusion of the word “Global” will not take away the case of the respondent herein. 8. Learned counsel also would contend with regard to the documents are concerned that the originals could not be secured due to Covid-2019 and the SOP was also issued regarding the function of the Court. When the SOP was directed, the petitioners cannot contend that the original documents are not placed before the Court. The complainant, who had represented through the Power of Attorney Holder categorically stated in the affidavit that he is aware of the facts of the case. When such being the case, it cannot be contended that the complainant is not having the knowledge. 9. Learned counsel also would contend that in para Nos.5, 6 and 13 of the affidavit filed before the Court, it is categorically mentioned with regard to compliance of Section 141 of the NI Act. Hence, the petitioners cannot find fault with the complaint and its enclosures, when the averments made in the complaint are specific. 10. Having heard the learned counsel for the petitioners and also learned counsel appearing for the respondent, the question that would arise before this Court is whether the complaint is maintainable as against the petitioners herein and the very contention of the learned counsel for the petitioners that complaint is not against a juristic person, is to be accepted or not. Having heard the learned counsel for the petitioners and also learned counsel appearing for the respondent, the question that would arise before this Court is whether the complaint is maintainable as against the petitioners herein and the very contention of the learned counsel for the petitioners that complaint is not against a juristic person, is to be accepted or not. On perusal of the complaint, a specific averment has been made in the complaint at para No.5 that for the discharge of the said admitted liability, the Company represented by its Directors, who are accused Nos.1 to 9 herein collectively took a decision to clear the liability and convinced the complainant to accept the post dated cheques. Hence, issued totally 17 cheques signed by the authorized signatory, namely, Accused No.10 herein. Out of 17 cheques, the complainant initially presented 6 cheques for encashment for a sum of Rs.34,59,464/-, the details of the said cheques are also furnished in the complaint. It is also averred in the complaint that on presentation of those 6 cheques, the cheques had bounced for want of sufficient funds. The legal notice also got issued to all the Directors and Authorized Signatory/ies, who are in charge of the day-to-day affairs of the Company, namely, all the accused herein i.e., accused Nos.1 to 10. The copy of the notice issued against all the Directors are also produced before the Court. 11. Having taken note of the averment made in para Nos.5 and 6, it is clear that these accused persons were in the realm of affairs of the Company and also the specific pleading is made that they were in charge of day-to-day affairs of the Company. It is to be noted that in para No.5 of the complaint, a categorical allegation has been made that the accused persons collectively took a decision to clear the liability and convinced the complainant to accept the post dated cheques. Learned counsel for the petitioners also not disputed the issuance of the cheques and so also the cheques being dishonoured. 12. Learned counsel appearing for the respondent also brought to the notice of this Court that in the sworn statement, the Power of Attorney Holder has categorically stated that he is the authorized Power of Attorney Holder of the complainant and he was authorized to file the complaint on behalf of the complainant. 12. Learned counsel appearing for the respondent also brought to the notice of this Court that in the sworn statement, the Power of Attorney Holder has categorically stated that he is the authorized Power of Attorney Holder of the complainant and he was authorized to file the complaint on behalf of the complainant. In para No.1, the Power of Attorney Holder has categorically stated that he knew the facts of the case and has been authorized to swear the affidavit. In the affidavit also, he has sworn to that accused Nos.1 to 9 are the Directors, who are in charge of the day-to-day management of the Company and accused No.10, who had issued the cheque is an authorized signatory of the Company. 13. It is also contended that the complainant had supplied the large quantity of coffee beans, for which, the payment was not made. Despite several requests, the complainant was assured that the payment will be made and accordingly, accused had issued the post dated cheques in favour of the complainant. In his affidavit, it is sworn to that notice was issued to all the Directors and Authorized Signatories. The contention of the petitioners that the Power of Attorney Holder has not stated that he is having the knowledge of the facts of the case, cannot be accepted for the reason that in the affidavit, the person, who has been authorized to sworn the affidavit had deposed that he is having knowledge and information about the transaction. When such being the case, the petitioners cannot contend that the Power of Attorney Holder is not having the knowledge. No doubt, the Apex Court in the judgment referred supra categorically held that the complaint filed by the Power of Attorney Holder should have the knowledge about the transaction. In the case on hand, the authorized signatory i.e., the complainant had made an averment in the affidavit and also in the complaint for having knowledge and information about the transaction. Whether the complaint had knowledge or not would come to light only when he is subjected to the cross-examination. At the stage of taking cognizance, the Court has to take note of the averment made in the complaint and also the sworn statement. It is not in dispute that the affidavit has been filed before the Court. Whether the complaint had knowledge or not would come to light only when he is subjected to the cross-examination. At the stage of taking cognizance, the Court has to take note of the averment made in the complaint and also the sworn statement. It is not in dispute that the affidavit has been filed before the Court. However, it is to be noted that the affidavit has been filed on 12.12.2020 that is during the course of the pandemic situation and it is also to be noted that in the list of documents filed along with the complaint, all the documents are referred but not marked. In para No.4 of the affidavit, the averments are made with regard to the documents and particulars of the cheques. In the circumstances, the petitioners cannot find fault with the complaint. 14. The main contention of the learned counsel for the petitioners is that the complaint is not lodged against a juristic person. On perusal of the complaint, it discloses that the same is filed against M/s Café Coffee Day, represented by its Directors, whereas the word “Global” is missing. In order to substantiate the contention of the respondent, learned counsel also brought to the notice of this Court that Annexure-A notice was issued against a juristic person i.e., M/s. Café Coffee Day Global Limited and the specific averments are made against the representative of the Company i.e., its Directors and Authorized Signatories. It is also important to note that the notice was acknowledged and reply was given by M/s Café Coffee Day, but in the reply, the only dispute raised is with regard to the recipient Nos.5, 7, 8 and 9 stating that they are irrelevant parties. However, recipient No.5 is not a Director and others are not directly connected to M/s. Café Coffee Day Global Limited and they are not aware of recipient No.5. It is further pertinent to note that in para No.2 of the said reply, they have not disputed the supply of coffee beans to their Company, but an averment is made with regard to the payments for supply of coffee beans in the year 2019, though the complainant is well aware of the situation that their Company, has been facing due to the unfortunate incident, on account of untimely demise of the Chairman and Managing Director. It is further averred that in view of which their Company had approached the complainant and had assured that all the commitments shall be honoured and payments will be cleared during the said financial year and had sought time to make the payment till May, 2020. 15. Having perused the reply notice, it clearly depicts that they made part payment of Rs.12 lakhs to the complainant and now, only on the ground of technicality, the petitioners cannot contend that a juristic person is not made as a party to the proceedings. Annexure-C discloses that the rejoinder was given to the reply notice at Annexure-B and so also Annexure–D was given to M/s. Coffee Day Global Limited. When such being the facts and circumstances of the case, now the petitioners cannot contend that the complaint is not maintainable. It is also important to note that though “M/s. Coffee Day Global Limited” has not been arraigned as the accused, it is rightly pointed out by the learned counsel for the respondent that when the notice was issued against M/s. Coffee Day Global Limited and reply was given, they cannot find fault with filing of the complaint by the complainant since they took defence that some of the recipients are not having any connections with the Company. The fact that the Company had purchased the Coffee Beans is not in dispute. It is also important to note that in the cause title of the complaint, it clearly discloses that the respondent is also having its registered office at The Coffee Day Global Limited, K.M.Road, Chikmagalur, Karnataka. Hence, the very contention of the learned counsel for the petitioners that the complaint is not made against a juristic person, cannot be accepted. The defences which have been taken by the petitioners are to be considered only during the course of the trial and not at this stage. 16. Having perused the material on record, the contentions raised by the petitioners herein cannot be accepted at this stage since it is a matter of trial. The complainant can even array the Company at any stage. Herein, it is a case of issuance of notice against a juristic person and its Directors. 16. Having perused the material on record, the contentions raised by the petitioners herein cannot be accepted at this stage since it is a matter of trial. The complainant can even array the Company at any stage. Herein, it is a case of issuance of notice against a juristic person and its Directors. Hence, I am of the opinion that it is not a case for quashment of the proceedings on the ground of technicality and the Court has to look into the substantative material available on record and substantative justice has to be done. Hence, I do not find any merit in the petition to quash the proceedings initiated against the petitioners herein. 17. In view of the discussion made above, I pass the following:- ORDER The petition is hereby rejected. In view of disposal of the main petition, I.A.No.1/2020 for stay does not survive for consideration and the same stands disposed of.