{"id":266598,"date":"2010-02-05T00:00:00","date_gmt":"2010-02-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sri-kagodu-thimmappa-vs-sri-albert-danti-on-5-february-2010"},"modified":"2017-11-04T03:45:16","modified_gmt":"2017-11-03T22:15:16","slug":"sri-kagodu-thimmappa-vs-sri-albert-danti-on-5-february-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sri-kagodu-thimmappa-vs-sri-albert-danti-on-5-february-2010","title":{"rendered":"Sri Kagodu Thimmappa vs Sri Albert Danti on 5 February, 2010"},"content":{"rendered":"
Karnataka High Court<\/div>\n
Sri Kagodu Thimmappa vs Sri Albert Danti on 5 February, 2010<\/div>\n
Author: Subhash B.Adi<\/div>\n
 \n\nIN THE HKBH coum or: KARNATAKA AT BANGALORE\nDATED ms THE 5\" DAY OF FEBRUARYD2'o.1:'o\u00abhadr@smAJac'a Glass anc\u00e9 Frame Wor\u00a5<s.\nOpp: $0 f\\\/lmicrpai Office.\n\nBH. \ufb01oari.\n\nShimoga'\n\nF%epressemed by its Partner.\n\nSr\u00e9. SB" Rav\u00e9 Ksmzar. ..  \n\n(By Sr%.C?:. La\u00e9<shme3s%\"a Rat). AC\u00e9v.:=   -\niN CF\u00a7EiVEiNAL PETYHON 507152007\n\nSmt. Tagleaem Zak\u00e9ya.\n\nAged about 3': years.\n\nW50 MA C2::1yoom\n\nHVNo.Ei~408;\u00bb97']\n\n\"Ahamed Manzi!\"T\n\nKhaja Coiony,   2   \n\nGutbarga ':05.   _   .. RESPDNDENT\n\nBy smviord. SiIa?\u00a7--.1;dd%\u00a7, 1_r~c:y';; \n\ncw CRawasNA1;-ini\u00e9jjifidkiz;:,;r:.gg28.25)?20-08- 3. 2826\/2008\n\nE3{iv 8.8 925914 Knnms\ufb01 V'  4\nAged abou\u00e9 323\/ea_:'s\u00a7  V . --\nS C} SM E3a33avVa:_a\u00a7\u00e9.~;ppa,. '\nRio Par?E:::Ie3ns\u00e9of':,., ' \"\n\n__.S;h\u00a7.mog:;\u00bb:f:,. ' \" . . RESPONDENT\n\n_E':';g,: S\u00e9\u00e9\u00e9 L,::2'r<.z1\u00a7h--;:V:A{-\u00a7s~:esh Reaay' '&dv \n\nEN \u00a7i;.s3*'i'j:;.2I:%;:-:.\u00a7'z_:""i:*~_v.E":':i'i\u00e9N 282952608\n\n Szi.S.H.'j"SiC\u00a7'dapp"\u00e9:\u00e9.\n\n..  ,A'g.e6 ab9qf5'f years,\n SEQ $.,?\u00a7ai1&iD'QaA P:'og;:r:e%0r'.\n .__E%'53\u00e9:rat?'a B{;'%E\u00a7tr3EE"%L\u00a7\u00a7 C0,.\n\nf*J_~?\u00a7__ ';TxP'.F\\:$\u00a33, Yard;\n\n __"$"m.m;;:ga. VI RESPONQENT\n\n {By Smi\ufb01 L::$<s\u00a7'wr'1'7e:9as%1 R363. Ada-h_;:\n\n\n\n \n\n 'x'(\ufb01'Lmju\u20ac\u00a7*;\u20ac1.\u00e9'i  \nAgeci \u00e9z\ufb01scui .,3E},\\;e-\u00e9a\n\n ___Fi.\u00a7jed ;=3bc.uf_ 3\n_ R'="s..{\\\u00a3\u20ac3\u00e9\u00e9G, 7*" F!ki..:%:\u00ab:'] . . \nBa$aves%'1w.3ra'*Nagj'\u20ac.r.\nShimoga.  \n\n      \n\naw cR:mi\u00a7:.m__ P\u00a7'*z\"i1.f :Ac:>'e\u00ab: .v48\u00e9a;2ii08\n8.51:7. __ Y:';;1_s3 G? AB -31l7\\_'i}':r. _ ' 1.'\n\nRec mo:  :\"4\u00ab ~c:,>,::.:;\ufb01f.\u00bb 'f:\"':\u00ab\u00a7\ufb01\u00a3'.h3r3aga;'.\n\nErian g'al<3i":1;T \n\n ?3L'__c:1.az:=\u00a2-?r"'{;f .t%0mey Harder,\n" ._M':< _ )5' gym b?~E.} 2* Q3 E: ma :2.\n\n533:: 3\/fli,i'!"z'Z':f;5i;2f Pagha,\n\nI ysaears.\n\n'E\u00a7':<':%: Marszi\u00e9 i\ufb01pp': Boys Hasiei,\n\n Road:\n\n.. RESPONDEN?\n\n. __J"::;:;A';i~; P@:xa{3E:\\a? = %'\n\n1. HESPONDEN?\n\n\n\n \n\nthe file of J.M.F.C., Thirthahalli;\n\nPrl.C.J.M., Shimoga; ll Addl.J.M.F.C.,\nGulbarga;\n\nl Adollcivil Judge (Sr.Dn.)\n\n& Addl.C.J.M., :\u00a7hi.moga;\nAddI.Civil Judge (\n\nl\nSr.Dn.) 8: Addi.C.J.M.,\n\n& Addl.C.J.lVl., Shimoga;\nAddl.C.J.M., Shlmoga; I\n\nShimoga; I; Judge\nI Addl.CivH '\n\nAddl.Civil Z.-.'u'dge\u00ab .  \nShimoga; C.J.l\\\/L, Shimoga; l Addl.C.J.i'M.V, \u00a7.hlAmoga;H..AtAAdd~l.Ciitlril"\u00bbJuctgge\n(Sr.Dnt) i i\n\n3. Addl.CtJ.M., shimog\u00a7';*t-....l_ Addl.(_3ivit_qJvudg:e%V(S'r.Dn.) 'Va\nAddl.C.J.M., Shimoga; l Addl.Cl\\(i_lr_ufJu_dge,_\n\n(Sr'.D'n;}~l\u00bb ta" Addl.C.J.M.,\nShimoga and Civil Judge\ufb01(Jr.Dn.}v:.,':t3<u"3X\u00a7idAl:.J._M.F.C., Bhadravathi\nrespectively. n   \n\n2. Ftespondents3l.are cotrrrp_lvai~nants'"a\u00bbnd- have filed\n\nseparate private\ncomplaints gu_ndei*t.__S'ecti;;)n_ 20:U'--._ol 'C'r;'t'\u00bb';~""\n\n:3. for an offence punishable\nte..l:\\4leg'o'tia_t5le lnstruments Act (\n\nunder Section .t38vVot'utl\nas the 'Act') a'ntdSectioi'*.  \n\nin short referred to\n\n Presid\u00abents,i accusjed..t:No.6 is the Secretary, accused Nos.7 to 9 are the\n Joint Secrle.tai'lesV4and accused No.10 is the Treasurer of the first\n V'\n\nV  Accused t\\tos.2 to 10 personally approached the complainants\n .!n_rera!ra alleging that, they have constituted a Trust in the name and\n\n \n\n\n\n~i(}~\n\nNo.2 as the President and other trustees are inchaige and responsibie\n\ntor the affairs of the first accused -- Trust and have committed.dthe\n\noffence punishabie under Section t38 of the Act and  Lot'\n\ncheating punishable under Section 420 of WC.\n\n6. Learned Magistrate atter taking\ufb01cogirizanceti 'irecoictdct_ the\n\nsworn statements of the compiainar'-tsxand con.si'dering"'thfevcompliaint, \n\nsworn statement and the materiai  by the'coVrnp'iainants found\nthat, the complaint discioses   the accused for\nan offence punishabieunder Sectio--n 'i\u00a7\u20ac\u00a7;e.t'--V"and Section 420\nread with Section   otdei\u00a7ed";for:"rd:\u00a7;istr'atidit of case and further\n\nordered for issue of s_i;r'r;rrmorts._'\u00b0t.'fisAiat-t'his'gstage, these petitions have\n\nbeen filed by accusef}v.No.f{4i'ri aiiivthe cases.\n\n7. Heard"'iearrted' Ciounsei:-S\u00e9ri.C.V.Nagesh for the pptitioner and\n\n.Sri.T.N.Baghupathy,"'~.SriV.'G.L:akshmeesh Ftao, Sri.t\\\/tohd.Shafiuddin,\n\n SL"i..rShastri, Sri.R.B. Deshpandet Sri.J.Gopaiakrishna,\n\n Pinto, learned Courtsei for the compiainants.\n\n8. 'Sri.V1C3_V.VNagesh, teamed Counsei submitted that, the petitioner\n\n Iwas the"P_resident of the Trust. However, he has resigned to the same\n\n  1AA3\u00a7.tt.S2006 and it is accepted on 21.11.2006 and since 21.11.2008,\n\n'V V  'petitioner is neither a President nor a trustee of the Trust. tn this regard,\n\n5?';-\u00bb~\n\n\n\nhe referred to the dates of issue of cheques and submitted that, cheques\nwere issued on 15.8.2006 in ah the cases. They were presented for\nencashment on 3i.1.2007, 5.2.2007, $422007, 14.2.2007, \n7.2.2007, 13.2.2007, 24.ii.2006, 14.2.2007, 26.9.2006,--'.'26'._94.'20,06.,\n269.2006, 189.2006 and 18.9.2008 respectively. \nwere dishonoured by the Bank on \n152.2007, 152.2007, 7.2.2007, t\u00bb4..2.2OAt)'"?.,Ai:"2_A5..11.8088,," i9.2i,2007',--..,'\n26.9.2006, 26.92006, 27.92006,  aid626.9.2co\u00e9iiieisip6ciiveiii8\nand legal notices were issued  t4.8.2'0O7, 7.3.2007,\n12.3.2007, 12.3.2007, 6.3.28\ufb02C)7,_"l8:3:i880%,:i'i.t"4;.i"2'.'_2008, 10.3.2007,\n25.10.2006, 25.i0.,2rj0s.._  and 6.10.2006\nrespectively.   petitioner in his reply has\nstated that, hei.h.as" President and trusteeship\nof the Trustitand. _,\u00e9etit'iv4o'ner"*.5s'neither inchargeror responsible for\n\nthe business otithei trus"t,_h'e,rice,"'_tihe allegations in the complaint do not\n\nconstitutefan o.ffence"un_r:ler Section 138 of the Act.\n\nV "in  his argument, he referred to the provisions of\n\n V..vSections"'t88  of the Act. He relied on the provisions of Section\n\n  of the Acltiand submitted that, the cheque must have been drawn for\n\n  amount towards the discharge of whote or any part of debtor\n\n ii--a'biii'ty. and that, merely because the cheque is issued by the trustees,\n\n '  thiativbly itself will not constitute an offence punishable under Section 138\n\n9:?\n57%;!\u00bb i r\n\n\n\nof the Act, not even dishonour of the cheque wouid constitute an offence,\nuntii the amount involved in cheque is demanded by issue of Eegai notice\nand despite the iegai notice, the accused had faiied to payggtldeiasame\nwithin the stipuiated time, oniy then the offence \ncommitted. Further, in case of offence by Company__(i:n:th'is_.:ca4se,f  \nTrust), the accused against whom the aEiegatio:n's are \ncharge and responsibie for the conduct of  of trust' \n\ndate of commission of offence.\n\n10. in these cases, Va-sfffoni the  of aiieged\noffence, the accused No.2 (peti.ti.o:n_e.r)  nei't'h'e:r:-av-President nor was a\nTrustee, hence, d.esciose these ingredients\nagainst the    xcogriizance and issue of\nsummons,   provivsions of Section 138 read with\n\nSection I-ditufof the i5\\ct._ \n\n1, .1_%,.A' if the Trust heid: to be Company within the meaning of the\n\n"'V.Explanation1io. Sjectvion 141 sub-section (2), every person who, at the\n\ntime.the__oifevn'ce,:wa'scommitted, was in-charge of, and is responsible to\n\nV if the con'duct..__'of the business of the company, as weii as the company,\n\n be deemed. to be guilty of the offence and shaii be iiabie to be\n\nfproceedend against. if, as on the date of commission of offence, this\n\nif ':'pe.titi.oner not being either in-charge or responsibie to the company for\n\n,.i'\n\n\n\nthe conduct of its business, he cannot be he-id as guilty of offence\n\npunishable under Section 138 of the Act.\n\n12. To support his contention, he relied on the da.te'ot"is,s\u00bbt,tVet.of\ncheques and its clishonour in Cr|.P.I\\tos.5070\/20'Cl':7j', \n2826\/2008, 2828\/2008, 2829\/2008, 4433\/2068,. 489:0\/2:cj'oieI.,'4'aasryieoesV'\n\nand 17592009 and submitted that, the res:ignat_i_on'lVof \n\nmuch before the presentation of cheqvues in scrne Vcases*an'd~irt":some"\n\ncases, before the dishonour\ufb01of cheAqu,e:sz.__ 'T_hus,.as.on date of\ncommission of the offence, the"'p.e'titi,o't--1er?.:was"ttot,:a'trustee, and as such,\nthe learned Magistratewas notv%t.tsttified\u00abE.in"2t.akvi,n'o7cognizance of the\noffence and further  petitioner. He aiso\nsubmitted that,   2:325\/\u00e9oloa, 2827\/2008, 3503\/2008\nand 3504\/2:f,:i}ut3--V,V ti1eV"'divsitonour of cheque was before his\nresignation,  will not constitute an offence and\n\nwhen the offence is s_aio'~to haveibeen committed, this petitioner was not\n\nfaVtr=usteei,..i\u00b0Fieiying,.on thevvlproi\/isions of the Act and aiso reiying on the\n\n"mrtiitelris4u'bmi'tted that, in repiy to the legal notice, the petitioner\n\n' V"-,-has madelliit cle.ari:'ti1'at the petitioner is not a trustee, the minimum that\n\nrequirecf}.by the complainants was to verify the necessary\n\n'fft:l_oet}:mienit's~r,. to find out as to whether this petitioner is trustee or not or is\n\n  r__esponsible and in-charge of the affairs of the trust.\n\n5%\n:5\n\n\n\n13. To support his contention, he relied on the reply notice and\nalso relied on amended Trust Deed, resignation and acceptance of\nresignation and submitted that, accused N033, 5, 6, 7, 8, 9, and 10 have\nnot disputed the resignation and its acceptance. Even accusedwg'tT\\1'os.3, 5,\n6, 7. 8, 9 and 30 by their letter dated 12.5.2006 have \ndebt and have also informed the complainants that theyriiare  \nfor the discharge of the debt. tn view otzthe a'drnis.sion<''byi ' T\nNos.3, 5, 6, 7', 8, 9 and 10 and in View of  the \nto the post or trustee and its acCep'tan'ce and  trust\u00bb\ndeed, as on the date of commission &of"citence;tsneitherthe petitioner was\nin-charge nor responsible  and as such, the\n\ncomplaint as against this petitioner  m'isco.nco~ivedV';\n\n14.:,:To  he relied on a judgment reported in\n2007(2) crrrngs- %%183(S'(3lf~i.n"the'"niatter of S.M_S.PHAFr'MACEUTICAL\n\nLTD. ~vs--- ..NEEfA  ANOTHER<\/a> and submitted that, only the\n\n ipersorivs.Ai'n--t:harge and re's'p'oVnsible for the conduct of the business of the\n\n 'fVfL,t_:Sf'_EiS on the date of the commission of offence atone\n\n--   coutd  prosecuted for the alleged offence. He also retied on the\n\nVi\u00b0a.,_';'udgment ~ reported in AIR 2009 SC 1013 in the matter of RUKM\/NI\n\n  r\u00a7tAaV\u00a3*t{An mvs\u00bb l\/IJA YA SA TARDEKAR AND erases and submitted\n\n ____\"tnatV;;the High Court in exercise of power under Section 482<\/a> of Cr.P.C.\n\nV  land in the interest of justice and to arrive at a just decision can look into\n\n('@232 g.\n\n\n\n .-or \u00b0sA.erTHA aAMAMueTH~r' AND ANOTHER\n\nthe document produced by the accused. He also relied on a decision\nreported in AIF? 2007 SC 912 in the matter of SAROJ KUMAR PODDAR\n\n-1\/s~ STATE (NOT OF DELHI) AND ANOTHER and subr.T.1itie'di..,that,\n\nperson responsible means, a person, who has signed t_ije\"'ch.fequ_e :.a___nd_\n\nsubmitted that, the petitioner is neither signatory to th.e..c4h'equ'e::rior i1e\"is.. \n\nperson in\u00abcharge and responsible for the  ofth\u00e9\u00e9busi\u00e9n-ess_uo\u00a3,,_th?e\n\ntrust.\n\n15. He further submitted that,  of offence\ncommitted by the company,A----..._h5'ust \"t'h.e'v.:p'erson in--charge and\nresponsible for the conduct of..the_ of.\"tvhogcompany. it is not\nreproduction of the:  Act, but a specific\naverment in the    regard, he relied on the\ncomplaints filediivby  --f complainants and submitted that,\nthere is no specific and as regards to the persons. who\n\nwere in~charge land \"r'?l5F',:Ons-?_lb3l'e~i\"ifor the conduct oi' business of the\n\nv,co.inpan\\,r\"rnuc_h' less allegation' against the petitioner and to support this\n\ncoritentiion, it.e\"~ei'o,o\"'treiied on the decision reported in 2007 sAi=2\n\n(cni}irriNA.L) T'5\u00e9.\"'r\"n. tiiemetter of K. SH\/KANTH SINGH -1\/s~ M\/SNOB' TH\n\n t\u00a7AsT 8r\u00a7C?\u00a3.Jr?laTlL\u00a3:\"\".\u00a7 LTD. a ANH. and 2006(6) KLJ 151 (sci in the\n\n...VS..\n\n F?_,_t3,tS;.\u00a3V'HAf\\\/NABASAVARADHYA. Further he relied on a decision\n\n reported in (.2005) 8 sec 89 in the matter of\n\nti}\n\n'L,\n\nera\n\n\n\n--l(1~\n\n8.M.S.PHAf3'MACEUTlCAL8 LTD. \u00ab\u00bb~\u00abvs-- NEETA BHALLA AND\nANOTHER and submitted that, it is not the designation or the status of\n\nthe parties, but it is the person, who is in--charge and responsiVbie_:'of_ the\n\nconduct of the business of the company, which constitutes'a\u00abn\"o:ffence,y_\n\nnot every Director or the person in the company._.~l~~l\u00bbe_:'ialsso-Lre!.ied_on.D \n\nanother decision reported in (2008) 3  (Q!-4\"?l)jj.-citilfi\u00e9\u00e9n' \n\nDOM FINANCIAL SERVICES Lv\u00bb\",l'~'v'H\"TED'V\"tj1.\/.\u00a7'3- J.f}!.\u00a7C%'A.FiEAEN:'; .\"\/liiirtii.\n\nANOTHER and submitted that,  mulstciiearlyllidislclose as\nregard to the persons in-charge.g_and_\u00ab\"responsibvE'e.for tnemconduct of the\nbusiness of the company as onthe  of  of offence and\nthis being the reqt.eirernent   Act without these\nallegations  the specific allegation\nmaking eveiyl\"'rtr-uisitele'tars;\"an:'acc'used\"'in\"\u00a7his complaint is neither in\nconsonance'~~.wit'h\"_ 138 nor Section 141 of the\n\nAct. And suchxa\u00ab._4corriplvaintAprirn.a\"'facfe does not constitute any offence,\n\n__rror Magistrate' couid.lh'a-veV__ta_l<en the cognizance ot the offence alleged.\n\n --T:o\u00bb,tavE\u20acVe\u00ab.cognizance of the offence, the allegation in the\n\nl  t'\u00bb.compl--ai.n:t mustmfcoinstitute an offence and once the court takes\n.co'gnizance' tinder Section 196<\/a> of Cr.P.C. before it could register a case\n process, it must satisfy that there is a prima facie case to\n ..__procexed against the accused and particularly when the offence alteged is\n\n  'punishable under Section 138 of the Act, the complaint must disclose all\n\n\n\nthe ingredients of Section 138 of N.l,Act and if it is Company, the\ningredients of Section 141 of N.l.Act. if the ingredients prima facie are\n\nnot present in the complaint, no offence punishable under Sectionr\u00a7r38 of\n\ni\\t.i.Act could be alleged against the accused and submE't*t--ed;th__at',\n\ncomptaint as it is read with the material produced,,al'o'n..g  ia.a.a_\u00a2,\n\nconsidered in the light of the provisionsizhof Seotivoiiis arid of\n\nN.l.Act, it wili not make out any case _agains--tAthi_s petitiioner'. \"Pve1tit'i'o,ne;=,Vg\n\nhaving resigned as a Trustee much before the oftence,.'.atie'geVdV to have\n\nbeen constituted, no complaint could.it'a'yevrbeeVrt~fi_led agairist\"him.\n\n17. He further submitte,dt-that,.there._m'u'st  intention to cheat\nand the intention\u00e9\ufb02tov  wi:ii,arE,sex amount is not paid,\nthat wouid be ontygoipi  iiegial Vnotiice was issued and in repiy\nto the lega:_:vnotiVc_e  responsible, had not made the\n\npayment, \u00e9ntentionyof'\"of\"'cheating arises and not before that.\n\n VOH then'oth,er_____hand, learned Counsei appearing for the\n\nA\"r_espo'ndents '~\u00a2o.ompiainants submitted that, as per the Trust Deed, the\n\npelt'it~i.oneVr'is\"the_\u00bbPresident of the Trust and he being an E><--l\\\/linister, who\n\nV ted the"oth*er. 'trustees, on his promise, the complainants made the\n\n and some of them supptied the materiai, when the\n\n':_c'ompl'ain'ants teamt that the protect of medical college is not likeiy to\n\n.:,'_"commence and there was no sign of any progress, they doubted the\n\n 'bonafides of the accused and insisted for payment, in response to the\n\n\n\ndemand, the accused issued the cheques to the complainants. lt is also\nsubmitted that the accused were in--charge and responsible for the\nconduct of the business of the trust. ln this regard, they reliednonhthe\nTrust Deed itself and submitted that, under the trust deed, \nare coilectively responsibie for the conduct of business.    \nmanagement of the Trust in terms of the\u00a5Jdoc:u'men"ts is \nTrust and under the provisions of tndian:4'f7.rAus--t_zAct,i.g'e'tyfegry' \nequally in--cinarge and responsible and"s\u00abteVt\/ery dvecisionuof  is \ncollective decision of the trustees. \\\/tfh'en*.t.hje'uirlist [)\ufb02eed"rr'i'at<es it ctear\nthat all the trustees are responsible of the Trust and\nthe financial transac.tion:s':-opeiiateg@:;th.ith'e"cognsenjtvyivot the President and\nSecretaty, petiti;o'ne'r_\u00ab\u00ab..being   is responsible for the\n\nconduct of  ithe=tru--st. if \n\n19.  _regards__.tojfthe"*-altetged resignation of the petitioner is\n\nconcerned,tearned._:Ccurisel"'-forvthe respondents seriously disputed the\n\n\ufb01\u00e9aine.  this regard';"'they also pointed out that, this Court under\n\nSecti"on  cannot go into the disputed facts as it requires an\n\ni   evidence. ltis 'also; submitted that, whether he has resigned or not is a\n\nf\u00b0a..4matter of eviidence and cannot be gone into at this stage. Apart from\n\n ._this, itisalso contended that: offence atleged against the petitioner is not\n\nV"-..__"onlyV'gpunishable under Section 138 of N.l.Act, but is also punishable\n\n  thunder Section 420<\/a> of IPC and the dishonest intention is clear from the\n\nP' we\n\n\n\nconduct of the petitioner himself, as he being the President, he induced\nall the complainants to part with money and the material on the promise\nthat the Medical College will be established and the amount would be\npaid immediately. When the said institution is not established___despite\n\niapse of several years, when these complainants approaelt.ed~w. the\n\npetitioner and other trustees, they had promised that, themedi'cV\u00e91lg:'c_olle.ge.V\n\nwould be established and in this regard, they also.'pr'omised\"tthat,  . \n\nwould pay. It is against their promise, the1..:cheque?s were.'issued;:.___'Assn\n\nthe date of issue of the cheques, the i-n__tentio\"\"r:. of the  was clear\".\n\nthat they were not intended to honourvi\u00e9theb ptomise.  turn to cheat\nthe complainants, with a dish,_o\"nest.'lntentii'o\u00abn_,\u00bb.th'e.y issuedthe cheques,\nwhich they were aware that thehcheques :wo--'u'ld bejVd'i--shonoured for want\n\nof fund. F.a'Ct*that\"j;the\u00abf:\u00e9:,; wa\"s.,n'o ifund\ufb02niifhe account and despite that,\ncheques were 'issued  the dishonest intention on the part of\n\nall the accusedand,sdbmititedtthat, the averments in the complaint, the\n\n.swornstaten*ient and '--the____d_ocuments produced along with the complaint\n\nfafcr'e,vdiscto:s'e the offence punishable under Section 138<\/a> of l\\l.l.Act\n\nand Sectifon' of ;\n\nz  regards to the reply given by the petitioner, learned\n\n '\u20ac\":eu'rlsel_.\u00e9appearing for the complainants submitted that, the amendment\n\nof Trustlieed or resignation was only with an intention to see that the\n\nupetitiioner escapes the liability. Petitioner himself being the President\n\n  \n\n\n\nand it is mainly at his instance, the amounts having been paid to absolve\nhimsetf from the said obligation knowing futlwell that the recovery is not\npossible otherwise, has issued. the repty to the legal notice,i.,vh'o_we_ver,\n\nalong with the repty, no such material was produced.\n\n21, To support their case, they also-retied ,on7_a decisionireportned '\n\nin AIF? 2005 so 2506 and submitted that, wh_etherii't'h,e -~aVccusie'd..#ar'e_g\n\nresponsibte or not, is a matter whichreouigred to be gone in'to'\"at\"the trial\"\n\nand not a case to be considered at they_fhrgeshot.d'. ln'th'is.rega\u00a7rd, teamed\nCounsel referred to the complaintavierrrtrehitsz\"a'ndg:submitted that, in the\ncomptaint, a specific attegvationyistriadst'h.at,__acc'used\"hlos.2 to 10 in their\nrespective capacity,3..they:'t'a'r'e  _.anj_d,responsible for the affairs of\nthe Trust and this   the prima facfe case for\nthe offence   .138 of N.l.Act. They also relied on\na judgment Viiireported'   \"Supreme 626 in the matter of\n\nN.r:2ANoA,criAei'ii';vs\u00abvi\u00a7mi=2A'r SANCHAF? MGAM LIMITED and\n\n:-',subrrtttte'd-itha-tgnwhether theiitrustees are responsibte or not, it is a matter\n\nofievidencei to be estabtished during the course of the trial\n\n' if '\u00ab...v.and not a'tVithisV.stag.e'iVand it is burden on the trustees to prove the same.\n\n is._also contended that, even otherwise, the trial court has power to\n\nrr_iat{e outh\u00e9jase for any other offence based on the atlegation and the\n\n rriatieriats. Hence, based on the attegecf documents produced in these\n\nif  petitions and which are disputed, the proceeding may not be quashed.\n\nY ;\n\n\n\n22. The points that arise for consideration in these petitions are:\n\n(7) Whether this Court in exercise of power under Section\n482<\/a> of Cr.P.C. could go into the question as to whether\nthe person is in-charge and responsible for the conduct.._ot\nbusiness by considering the disputed document produced\nin these petitions?   \n\n(2) Whether there is prima tacie materiai for   :\"\n\npunishable under Section 138 of Negotiabie__instrurnents S'\nAct and Section 420<\/a> of i.P.C_? 5 *  I\n\n23. in all these criminat petitions, p\u00e9'tiAtioi't_er\"is aCo_us.e,o .Nc.\u00a7:2\u00ab.g'h.--d._\nhe is shown as President of first accused-.7 Trust. V V\n\n24. Facts<\/pre>\n
, which are not_dEspt;it\u00e9d=areuthat, theiicornptainants —<\/p>\n
respondents had ctairned certain an:o’un.ts;:’fro_rh’:the vTr_ust_, alleging that,<\/p>\n
the Trust is duet’t.QAV.AttternVf\u00a7:.;t’t~ is”-also riot”‘in'”dispute that, on behait of the
\nfirst accused-.5 Trust,  “issued to the complainants and they<\/p>\n
were dishohoured,thereatter.._ ‘the~~’i’comptainants had issued notice and<\/p>\n
for non–pa\u00a7yme’i*tt ot the amo_u_nt, the complaints have been tiied.<\/p>\n
V  ailege that the accused No.1 is a Trust and<\/p>\n
S VH…\u00bbaccused__No.2:<ipetitiioner herein is the President and other accused are<\/p>\n
 bearers of the Trust. it is not in dispute that the Trust is registered.<\/p>\n
  deedis produced aiong with the complaint. From the deed of trust,<\/p>\n
V'  _i_t_"a'ppears that, one Sreecfhar l\\\/1.8., sto late Srinivasamurthy S.N.i was<\/p>\n
 _the.author of the Trust, same was registered in the name and style as<\/p>\n
-73s<\/p>\n
“Shivappanayaka institute of Medical Sciences (S\/MS) The
\nrectification of Trust Deed was registered on 1.t2.2004, this petitioner
\nwas co-opted as Trustee and President of the Trust by the Boagrd of<\/p>\n
Trustees.\n<\/p>\n
26. Under the terms of the Trust Deed,’ Trust’.w’il’i”be:’_ay p’errnanent’= , <\/p>\n
body and the trustees are collectiveiy responsible for all Tthe”aff’ai:,:~;r,_’_of:.the<\/p>\n
trust inciuding the financiaf matter.7Tru_st is entitled t.o”iopen_, rn;aintlain:”i.<\/p>\n
and operate on bank accounts in the’ina_rne.VVof   event of
\ntrustee vacating the office  retirement, death or
\nany other reason, thelegal iraoutd be entitled to
\nbecome a trustee.  trustees’  exceed more than 9
\nmembers. The    properties and affairs of the
\nmedical   at! the meetings of the Trust
\nshail be called by  absence Vice President. At the<\/p>\n
discretion of the4″Presideynt or tvhef Secretary, any member ot the Trust or<\/p>\n
“any author\u00a7_sed..y_person’may represent Trust in all tegal proceedings.<\/p>\n
Fromthete.rrns’of:’the trust deed, what appears is that ail the Trustees<\/p>\n
   witl be coltectiveljfyrresponsible for the affairs of the Trust.<\/p>\n
 AA _27… Complainants have alleged that, accused No.1 – Trust aiong<\/p>\n
 y\\iith”acciused Nos.2 to 10 have committed an offence punishable under<\/p>\n
Vi’:’~.S.eetion 138 of the Negotiable instruments Act interafia alleging that,<\/p>\n
 ” -. \u00abaccused Nos.2 to to were in-charge and responsible of the affairs of the<\/p>\n
Trust and in terms of Section 141 of the Act, they are Eiable for the
\noffence punishabfe under Section 138 of the Act. The learned
\nMagistrate considering the averments made in the compiain.tV’a’rtd_g_the
\nmaterial produced along with the same, has registered  _<\/p>\n
and has ordered for issue of summons to the accused.   ‘ <\/p>\n
28. Main contentions raised are as u”ndet’f:_’_’i ~ <\/p>\n
(1) The petitioner was not a”P_res.ldentr’erVa .Trustee’a–t..th’e<\/p>\n
time of commission of the offence, _<\/p>\n
(2) Complaint being againsgt l_thej_’  ._No.t — Trust,
\nvicarious liability wouldV’a:rise’_onVly against..t\u00a7’7e person in.
\ncharge and responsib\/eg fofrytneg rcoitduct  business of the<\/p>\n
Trust anti”n4OF3ag–alnst’all’the Trustees.,’<\/p>\n
(3) As-~on  dategof  the offence, petitioner
\nhad resigne:.:f-\u00abto'”the’office of? President as well as to the<\/p>\n
post of Trustee’ ainci h’e.__is ‘ not liable for prosecution;<\/p>\n
(4); ‘f’h.-Ls. Court _in’exercise of power under Section 482<\/a> of
\n‘- C: can interfere with the proceedings by looking into
\n‘  -..th’e_Vdocurnents produced by the petitioner to meet the<\/p>\n
  ends”_of_ju~sti”ce,”\n<\/p>\n
V  Thvispg Court can quash the proceedings, if the materials
\n ..  produced by the complainants prima facie do not
\nit v  tconsti’tute an offence and continuing the proceedings
\nwou\/d amount to abuse of the process of court and<\/p>\n
further, defence document could be looked into to secure<\/p>\n
the ends of justice. i . 3<\/p>\n
29. it is not in dispute that the complaint is basically against the
\naccused No.1 -~m Trust and other accused are made iiable vicariousiy,
\nwhich is akin to the normal criminal proceedings, as theA.a’ccVu’sed.V’ar.e<\/p>\n
made iiable for the offence committed by the Trust.<\/p>\n
30. in case of an offence committe;d’AAby:,the
\nthree categories of the person ( ‘-which”1corn_rnitte;d.u
\noffence; (2) every one, who was in–ch’arr.g_e\u00bb and was ‘responsible for the
\nbusiness of the company and ‘{3} anymo_ther__  is Director or
\nManager or a Secretary or’   with whose
\nconnivance or due:  has committed an
\noffence. in this i’t..ji:-sJno.t company registered under the
\nCompanies \/\\c–tV,~ ho:w.e’veri;\u00a7:,by  o’f’E’xpia\u00a7nation to Section 141<\/a> of the
\nNegotiable  also covered within the meaning of<\/p>\n
Company.\n<\/p>\n
a.i_j.”~Triie Apgex Cioiurfin a judgment rendered by three i-lon’ble<\/p>\n
“rep’o:rted* 2005(8) SOC 89 in the matter of<\/p>\n
Z”\u00bb..___srvi.s;er\u00a5i’AHn\/rA’t\u00e9i:frj’TrcALs LIMITED -vs- NEETA BHALLA AND<\/p>\n
 ANOTHER<\/a>‘ while considering the question as regards to the requirement<\/p>\n
Vto”.conAstiit’u.te an offence punishable under Section 138<\/a> by the Company<\/p>\n
 has  that, the persons responsible for conduct of business of the<\/p>\n
 company are generally referred as Directors, Managers, Secretaries,<\/p>\n
c
\n[J
\n‘J:\n<\/p>\n
Managing Directors, etc., and it is not sufficient to simply state in a
\ncomplaint that a particular person was a director of the company at the
\ntime the offence was committed and nothing more. Referring to the role<\/p>\n
of a Director in a Company under Section 2<\/a> ctause  the<\/p>\n
Companies Act<\/a>, the Apex Court observed that:\n<\/p>\n
” . . . . . . . mere use of a parti’cular designation__oi’–an’ officer 9
\nwithout more, may not be enough b__v…way of an iai\/errnentin<\/p>\n
a complaint. When the requirement in Section-1’l.4t_fV,’–which’
\nextends the liability to officers of a :Company, is._tha_t’ such–.ai1.c_’
\nperson should be in charge of and “responsible to they ‘
\ncompany for the conduct of ‘business of the cofr_npariy,_how
\ncan a person be subjected to liability of cifmirial prosecution
\nwithout it being at\/erred in the complaint that he s}atisfies
\nthose requirements. fl”i’.OI every ‘p_e’r.so’n_ connected” with a
\ncompany is made liable tinder Secti’on_’t4 _ Liability is cast
\non persons who may have =.sornething\u00bb…to-. do with the
\ntransaction com.plai’ned.of., _A.pe.rson tit\/h.o is Iincharge of and
\nresponsible _ii::r_ conduct of ‘busine,ss._ of a company would
\nnaturally know wily thecheoue in._quest.”on was issued and<\/p>\n
why it got di’s’i’rono-u”:i_jed.  __ <\/p>\n
However, insofar as’Managiing._:Dire~ctor or a Joint Managing Director of
\nthe Cotnpany is 4ccncerned,ithe\u00b0A’pex Court at para~9 observes as under:<\/p>\n
V-‘T9? The position eta’ ‘managing director or a joint managing
\n, ‘ . director  at company may be different. These persons, as
\n* gthe. de_signa.ti’o’n of their office suggests, are in charge of a
\n._ “-company’  are responsible for the conduct of the
\nA gbiusinesssiofirthe company. in order to escape liability such
\npersons -may have to bring their case within the proviso to
\nSection 141(1)<\/a>, that is, they will have to prove that when the
\n_ Vt offense was committed they had no lrnowledde of the
\nV offence or that they exercised all due diligence to prevent the<\/p>\n
‘ ‘\u00bb-commission of the offence.”\n<\/p>\n
( underlined by me)<\/p>\n
This judgment is followed in another judgment reported in (2007) 2 SCC
\n(CR!) 444 in the matter of EVEREST ADVERTISING (P) LTD. –vs–
\nSTATE, GOVT. OF NCT OF DELHI AND OTHERS<\/a>. By virtue of the
\noffice of the Managing Director or the Joint Managing Director,g–“they are
\ndeemed to be in charge and responsibte for the conduct <\/p>\n
of the company.\n<\/p>\n
32. In this case, the Trust Deed disctosesfjthuaat thAe*peti.t’iognVe.ris a ‘<\/p>\n
President and he has been enitru_sted”‘wit’h the.”‘i~*esoo’nsit\u00a7gitity’ of<\/p>\n
conducting business meeting. Apartthis,  Deed discloses
\nthat, it is the collective respo:t1si_bitit3}lot_ithezgtrustees. iricese of a Trust
\nregistered under the provisions ot_thi.e_Vlndia_n.:iiT’vir.i;;’st__’Act, all the Trustees<\/p>\n
are cotlectively respionsible tor   Trust. if the Deed of<\/p>\n
Trust is aione cons:r:Fer_e:d..A it .cle\u00abavrty_sl1ows that, petitioner as a President
\nis in chargeand Tresponsi’b–leV4io_r.the conduct of affairs of the Trust along<\/p>\n
with other trusteesn ‘-\n<\/p>\n
‘  _33…_Howei’ier, the case of the petitioner is that, he was not a<\/p>\n
PresidentVno’r”_*iTrugstee as on the date of commission of the offence. in<\/p>\n
this re’g.ard–V4’he “referred to the dates of issue of cheques, dishonour and<\/p>\n
it notice and reply in respect of Criminal Petition i\\ios.507’Oi’20071<\/p>\n
gtg~g.5t;7i’r2oo7, 2826\/2008, 2828\/2008, 2829\/2008, 4433\/2008, 489012008,<\/p>\n
O  489ii2008 and 1759\/2009. He submitted that, ati the cheques issued to<\/p>\n
D’ these complainants are dated 15.8.2006 and they were dishonoured in<\/p>\n
February 2007 and November 2006. Legai notices are issued in
\nFebruary 2007, March 2007′ and in one case. December 2006.
\nHowever, in response to the iegai notice. petitioner has caused a reply<\/p>\n
and in the repiy, he has speoiticaiiy averred that, petitioner is vno..i_on.ger a<\/p>\n
President of the Trust and on account of enormous irreguE.a’i*i.ti_es;_.ar:d<\/p>\n
impropriety found in the administration of the said Trust._h’e_ha.s:’tendered’b <\/p>\n
his resignation on i3.ii.2oos. He aiso aiibeyged”‘t_hat,A’he–i.s._;notAy_tvhe<\/p>\n
signatory to the cheque nor he is resp_onsibieto’r. the”aftairs”ot’ the \u00abTrust’.a<\/p>\n
As far as repiy given by the petitioner ‘i’s;co\u00bbncerned.J_ _it”di.scio’s.esHhis stand<\/p>\n
as regard to his resignatiori._A_on’.'”tf3.”‘i andivvfrom the dates
\nmentioned by the iearned Counset toiojthe  as regards to the<\/p>\n
iegal notice issue.d\u00ab–.t:;y-.th\u00e9e.A’ corrj’piai.na’nts’_uin “the above mentioned<\/p>\n
petitions, they’\/”rare;\u00e9;ubse;:iuen’t.to~-the re’sign:ation.\n<\/p>\n
34. zLearned– Cou_i’n.siei’.._:ia’poearing for the compiainants have<\/p>\n
seriousiy_disput\u20ac:d theyaiieged'”resignation given by the petitioner and<\/p>\n
:_f”‘i\\,a_ve Aythaitg\ufb02’th–e—\u00abaiieged resignation is produced in these
\nVpeititiwons\u00bb. intention to circumvent the iiab\u00e9iity. Aiong with
\n  these\u00abcriminatiiip\u00e9titions, the Detitioner has produced addendum to the
\n itteed out  dated 12″‘ November 2006 registered on 22″” November
\n   ‘vv’h.erein it is stated that the petitioner has resigned from the Board
\n  trustees on 13.11.2006 and the Board of Trustees accepted the<\/p>\n
“-\u00abresignation in a meeting heid on 21.11.2006. However, this addendum<\/p>\n
to the Deed of Trust is not the part of the record before the learned
\nMagistrate. The material that was available before the teamed<\/p>\n
Magistrate was a complaint, sworn statement, dishonouredxC’h_e’ques,<\/p>\n
notice and reply, Reply is given in Aprit 2007 and;subs\u00a7>d_u\u00e9ntty.,<\/p>\n
Question that arises for consideration is, as to whether  could, <\/p>\n
consider these defence documents at this stage 3in’\u00ab_ex*er’ci_se.ggoffpotrtier<\/p>\n
under Section 482 of CLPICH?\n<\/p>\n
35. Magistrate is not required  into  document
\nat the time of framing of charg’e.:f:tf’teAhfas   frame the charge
\nonly on the basis otthge pro-s’ecutionV’-ntateri’at.1V”.tiofwever, in case of
\nexercise of   :Se:c:tion 482 Cr,P.C., the
\nApex Court   SC 128 in the matter of
\nit\/I\/S.PEPSi   m~–vs- SPECIAL JUDICIAL<\/p>\n
MAGiSTFiA’TE_i1′.ND’ OTi\u00a5iEi7t_S;._g:’ref\u00e9rring to the earlier decision of the<\/p>\n
Apex ceutt tepo}’tettitt- t’e9\u00a72 sftijtap (1) scc 335 in the matter of STATE<\/p>\n
 oi”? HA’r2.irA\u00bbN,4 4l>vs– euajziiii LAL has observed as under:<\/p>\n
=  it tssettied that High Court can exercise its power of
\nA ,iudicia.i review in criminal matters. in State of Haryana v.
\nBhajan Lat, 1992 Supp (1) SCC 335, this Court examined
\n the Vextraordinary power under Art.226<\/a> of the Constitution
\nis and also the inherent powers under 8.482 of the Code<\/a>
\n, tit’\/i_ht’ch it said could be exercised by the High Court either to
\n“prevent abuse of the process of any Court or otherwise to
\nsecure the ends of justice. White iaying down certain
\nguidelines where the Court wiii exercise iurisdicti’on under
\nthese provisions, it was atso stated that these guidelines
\ncould not be mfiexibie or laying rigid formuiae to be foiloweo’<\/p>\n
43. in this case, complainants allege that the petitioner is a
\nPresident of the Trust. Trust deed discloses that the President is
\nresponsible for the affairs of the Trust. By virtue of the office that the<\/p>\n
petitioner holds, he becomes in-charge and responsible of the conduct of<\/p>\n
the business of the Trust. The cheque is also issued by  <\/p>\n
is dishonoured and even after the legal notice, the amount <\/p>\n
These materials are before the learned l\\[la’gis’t–rate.”., ‘i_’aci’e.,twhe3se T<\/p>\n
materials do disclose the offence alleged  Slectiicnigi’ :38<\/p>\n
Section M? of N.l.Act.\n<\/p>\n
44. As far as the resignation,and”the*-.amended–..Tru\u00a7st Deed is
\nconcerned, no doubt, these doCuz_.nent,s  in these petitions,<\/p>\n
but the complainants”–.__ resoondents_”h\u00a7*\u00bbr_6′ serziioxusly disputed these<\/p>\n
documentsuandiyxhave the resignation has come into
\nexistence after the ‘d,iVsfiofrtoui\u00b0..,_::o’fr”some of the cheques. ln these<\/p>\n
circumstances, itiumavy not’ be”pro”per for this Court to rely on the disputed<\/p>\n
 and give a rih’d’i’ng.\n<\/p>\n
 ._   Court can look into the documents or evidence<\/p>\n
it produced by-..thevd’efence side, to achieve the purpose of securing justice
\nifH”in4.4’orr.V_Epreventing; the abuse of process of the court. To invoke the
\n there must be clinching and clear material and not on
\n‘.,’_4Cl’\u00a7s\u00bbpu\u00a7ted documents. When there is a serious dispute as regard to the<\/p>\n
 “evidence produced by the petitioner, in my opinion, it may not be safe to<\/p>\n
*6”?\n<\/p>\n
\n
V33.\n<\/p>\n
refy on those documents. if these documents are ignored, I find that the
\nmateriat produced along with the comptaints and averments made in the<\/p>\n
comptaints ,ori’ma facie show the offence atleged.<\/p>\n
46. in view of the above circumstances, E am  jopvinion <\/p>\n
the order of the tria! court does not call for t’nte’r\u00abfete’nce;\u00ab  9.<\/p>\n
Accordingly, these petitionsVfai.t_and  are d\u00bbi’simis:sVed. <\/p>\n
KNM\/~<\/p>\n","protected":false},"excerpt":{"rendered":"
Karnataka High Court Sri Kagodu Thimmappa vs Sri Albert Danti on 5 February, 2010 Author: Subhash B.Adi IN THE HKBH coum or: KARNATAKA AT BANGALORE DATED ms THE 5″ DAY OF FEBRUARYD2’o.1:’o\u00abhadr@smAJac’a Glass anc\u00e9 Frame Wor\u00a5<s. Opp: $0 f\\\/lmicrpai Office. BH. \ufb01oari. Shimoga' F%epressemed by its Partner. Sr\u00e9. SB" Rav\u00e9 Ksmzar. .. (By Sr%.C?:. La\u00e9<shme3s%”a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,20],"tags":[],"class_list":["post-266598","post","type-post","status-publish","format-standard","hentry","category-high-court","category-karnataka-high-court"],"yoast_head":"\nSri Kagodu Thimmappa vs Sri Albert Danti on 5 February, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/sri-kagodu-thimmappa-vs-sri-albert-danti-on-5-february-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sri Kagodu Thimmappa vs Sri Albert Danti on 5 February, 2010 - 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