Telangana High Court
Y.Shanmukha Prasad vs K.V.S.Tharmmi Raju on 17 June, 2025
Author: Juvvadi Sridevi
Bench: Juvvadi Sridevi
THE HONOURABLE SMT JUSTICE JUVVADI SRIDEVI
CRIMINAL REVISION CASE Nos.388 and 390 of 2020
COMMON ORDER:
Crl.R.C.No.388 of 2020
Challenging the judgment dated 06.07.2020 passed in
Criminal Appeal No.912 of 2017 by the learned Additional
Metropolitan Sessions Judge for the Trial of Jubilee Hills Car
Bomb Blast Case-cum-Additional Family Court-cum-XXIII
Additional Chief Judge-cum-IX Additional Metropolitan Sessions
Judge, Hyderabad (for short ‘learned Sessions Judge’), this
Criminal Revision Case is filed. By the impugned order, the
judgment dated 31.07.2017 passed in C.C.No.272 of 2016 (old
C.C.No.1079 of 2016) by the learned XXI Special Magistrate,
Hyderabad (for short ‘trial Court’), was confirmed, wherein, the
petitioner-appellant-accused was convicted for the offence under
Section 138 of the Negotiable Instruments Act, 1881 (for short
‘the Act’) and he was sentenced to undergo simple imprisonment
for one year and to pay a fine of Rs.1,01,50,000/- (One Crore
One Lakh Fifty Thousand only), in default to undergo
imprisonment for four months.
Crl.R.C.No.390 of 2020
Challenging the judgment dated 06.07.2020 passed in
Criminal Appeal No.913 of 2017 by the learned Sessions Judge,
this Criminal Revision Case is filed. By the impugned order, the
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judgment dated 31.07.2017 passed in C.C.No.274 of 2016 (old
C.C.No.1069 of 2016) by the trial Court was confirmed, wherein,
the petitioner-appellant-accused was convicted for the offence
under Section 138 of the Act and he was sentenced to undergo
simple imprisonment for six months and to pay a fine of
Rs.42,80,000/- (Fourty Two Lakhs Eighty Thousand only), in
default to undergo imprisonment for three months.
2. Since the parties and issue involved in both these criminal
revision cases is one and the same, they are heard together and
being disposed of by way of this common order.
3. For the sake of convenience, the parties are referred to as
per their array before the trial Court.
4. The brief facts of the case are that the accused and
complainant are well acquainted with each other since long time.
Out of said acquaintance, the accused requested the complainant
to arrange amounts of Rs.30,00,000/- and Rs.70,00,000/- to meet
his business necessities in the year 2013. In view of close
acquaintance, the complainant has transferred amounts of
Rs.30,00,000/- and Rs.70,00,000/- through RTGS into the
account of wife of accused on 11.12.2013. The accused promised
to pay the principal amounts along with interest of 18% per
annum within six months, however, he failed to repay the same.
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On repeated demands made by the complainant, accused issued
two cheques bearing Nos.418295 and 418300, dated 28.03.2016
for Rs.1,01,00,000/- and Rs.42,50,000/- respectively in the name
of Adda Bar and Restaurant. When the said cheques were
presented for clearance by the complainant, the same were
returned with an endorsement ‘Account closed’. Thereafter, the
complainant got issued legal notices, dated 18.04.2016 and the
same were received by the accused on 21.04.2016. However, the
accused neither replied nor repaid the cheque amount within the
stipulated time. Therefore, complaints under Section 138 of the
Act were filed by the complainant against the accused.
5. During the course of trial, the complainant himself was
examined as PW1 and Exs.P1 to P6 were marked on his behalf.
On behalf of accused, Bank Manager was examined as DW1;
Exs.D1 and D2 were marked in C.C.No.274 of 2016 and no
documents were marked in C.C.No.272 of 2016.
6. On considering the oral and documentary evidence on
record, the trial Court found the accused guilty for the offence
under Section 138 of the Act in both the complaints and
sentenced him to undergo imprisonment for one year and six
months respectively and also directed to pay the cheque amounts
towards compensation, in default to undergo imprisonment for
four and three months respectively. Aggrieved by the said
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conviction and sentence recorded by the trial Court against him,
the accused preferred Criminal Appeals. On perusing the material
available on record and hearing, the learned Sessions Judge
dismissed the Appeals confirming the conviction and sentence
imposed by the trial Court. Aggrieved further, the accused
preferred the present Criminal Revision Cases before this Court.
7. Heard Mr. A.Tulsi Raj Gokul, learned counsel appearing for
the petitioners and Mr. Rajagopallavan Tayi, learned counsel
appearing for respondent No.1-complainant.
8. Submissions of learned counsel for the accused:
8.1. The trial Court as well as the appellate Court have not
considered the evidence in a proper perspective and recorded
conviction mechanically without applying judicious mind. The
subject transactions are not loan transactions and the
complainant invested the said amounts in Vandana Conceptual
Ventures Private Limited. To get the said money back, somehow
the complainant got the possession of cheque leafs pertaining to
Adda Bar and Restaurant through other means/common friends,
manipulated them with his own handwriting and filed these
complaints suppressing the real facts. In fact, the complainant is
the Director of Vandana Conceptual Ventures Private Limited.
Even though there is no legally enforceable debt, the trial Court
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as well as appellate Court had erroneously held that the accused
is liable to pay the cheque amount.
8.2. The accused is being prosecuted in his individual capacity
and he was not even described as the owner or authorized
signatory of the Adda Bar and Restaurant. The cheques in
question were issued by the accused as an authorized signatory
of Adda Bar and Restaurant and not by the accused in his
individual capacity, however, without impleading the said
establishment as party to the complaints, connecting the accused
to the said establishment, the present complaints were filed. The
evidence adduced and admissions made by the complainant
during the course of his cross examination were self-
contradictory. The complaint suffers from fatal defects i.e.,
Vandana Conceptual Venture Private Limited was not impleaded
as a party, no notice was issued to the drawer of the cheque i.e.,
Adda Bar and Restaurant. There is no material to show that
there is nexus between the accused, Adda Bar and Restaurant
and Vandana Conceptual Venture Private Limited.
8.3. In order to constitute an offence under Section 138 of the
Act, the cheque must be drawn by a person on an account
maintained by him with a banker for payment of money to another
person to discharge a debt or liability and if the bank returns the
cheque due to insufficient funds or it exceeds the agreed limit,
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then that person is said to have committed an offence. In the
instant case, the dishonoured cheques were issued by ‘Adda Bar
and Restaurant’, which is the account holder. However, the said
establishment was not impleaded as party to the proceedings. In
the absence of drawer being made as a party to the proceedings,
the prosecution of the accused is not legally sustainable.
Furthermore, the accused has been prosecuted solely in his
individual capacity and has not even been described or identified
as the authorized signatory of the said establishment.
8.4. In support of his contentions, learned counsel for the
accused relied on the judgment of N.Harihara Krishnan v.
J.Thomas 1, wherein, the Hon’ble Supreme Court referred to the
judgment of Aneeta Hada v. Godfather Travels and Tours (P)
Limited 2. In the said judgment, it is held that a complaint under
Section 138 of the Act cannot be maintained against the Directors
of the Company or authorized signatory of the cheque, without
making the Company as an accused. Impleading the Company
as one of the accused is a mandatory requirement.
8.5. He further relied on the judgments of the Hon’ble Supreme
Court in Himanshu v. B.Shivamurthy and another 3 and Dilip
1
(2018) 13 SCC 663
2
(2012) 5 SCC 661
3
(2019) 3 SCC 797
7
Hariramani v. Bank of Baroda 4, wherein, it is held that without
the Company being arraigned as an accused, and with the
demand notice solely served to the authorized signatory of the
firm, but not to the Company, the complaint against the appellant,
who is the authorized signatory of the Company, was not
maintainable.
8.6. He further relied on the judgment of Hon’ble Supreme
Court in Bijoy Kumar Moni v. Paresh Manna and another 5 and
drawn attention of this Court to paragraph No.43, wherein, it is
held as follows:
43. This Court in one of its recent decisions in the case of
Shri Gurudatta Sugars Marketing (P) Ltd. v. Prithviraj Sayajirao
Deshmukh reported in 2024 SCC OnLine SC 1800 had the
occasion to consider the issue of whether the authorised
signatory of a company who had signed a cheque drawn on the
bank account of the company and which got dishonoured
subsequently could be held to be liable for the payment of interim
compensation under Section 143A of the NI Act. This Court while
answering the issue in the negative, applied the doctrine of
separate corporate personality and held that it is only the drawer
of the cheque who could be held to be liable for the payment of
interim compensation under Section 143A of the NI Act and the
authorised signatory of a company cannot be said to be the
drawer of the cheque….
….
…”
8.7. Hence, he prayed to allow the revisions by setting aside the
judgments of convictions and sentences recorded by the trial
Court as well as appellate Court.
4
2022 SCC OnLine SC 579
5
2024 SCC OnLine SC 3833
8
9. Submissions of learned counsel for the complainant:
9.1. Learned counsel appearing for the complainant submits
that the cheques pertain to Adda Bar and Restaurant. Ex.P6,
which is a document pertaining to Customers Accounts Inquiry
reveals that the Adda Bar and Restaurant belongs to accused.
The amount advanced by the complainant to the accused is hand
loan, but not as an investment in Vandana Conceptual Ventures
Private Limited as contended by the learned counsel for the
accused. To prove the said investment, the accused has not
produced any Memorandum of Understanding.
9.2. The purported signatures of the accused on the cheques
are identical with his signatures affixed by him on the
examinations recorded by the trial Court under Sections 251 and
313 Cr.P.C. Though the bank account operating in the name of
Adda Bar and Restaurant was closed on 23.02.2010 and knowing
that the account was closed, the accused who is the authorized
signatory of Adda Bar and Restaurant has issued cheques to the
complainant. The complainant has got issued legal notices to the
accused on 18.04.2016 and the same were received by the
accused on 21.04.2016. However, for the reasons best known to
him, the accused did not choose to give reply to the said legal
notices denying the loan transactions between them and did not
come forward with his defence at the first time by way of reply.
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9.3. The accused has not denied his signature on the cheques
and it is not his case that his signatures on the cheques were
forged by the complainant. Though the accused contended that
the cheques were secured by the complainant through his
common friends to get back his amounts, the accused has not
mentioned as to how and through which common friends the
complainant secured the cheques.
9.4. The Adda Bar and Restaurant is a proprietary concern. It is
well settled that the concept of vicarious liability under Section
141 of the Act is applicable in cases of a Company as defined in
that Section and is not applicable to a proprietary concern. It is
not the defence of the accused that the Adda Bar and Restaurant
is a Company or Corporation or Partnership Firm with other
authorized signatories. Hence, the question of impleading the
Adda Bar and Restaurant does not arise. As the accused failed
to establish that the Adda Bar and Restaurant is a Company or
Corporation or Partnership Firm, the judgments relied upon by the
learned counsel for the petitioner are not applicable to the present
facts of the case.
9.5. During the course of cross examination, the accused
admitted that by 11.12.2013, he was not doing business in the
name and style of Adda Bar and Restaurant and it was entrusted
to some other persons. To prove the same, he has not filed any
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documents. However, it is not his case that the ownership of
Adda Bar and Restaurant was transferred to some other person
and as on the date of issuance of cheques, he was not the owner
of said Restaurant.
9.6. In support of his contention, he relied on the judgment of
the Hon’ble Supreme Court in Raghu Lakshminarayan v. M/s.
Fine Tubes 6, wherein, it is held that the proprietary concern is not
a Company within meaning of Section 141 of the Act and the
proprietor thereof would be solely responsible for conduct of its
affairs.
9.7. He also relied on the judgment of High Court of Delhi in
M.M.Lal v. State NCT Delhi and others 7, wherein, it is held that
obviously Section 141 of the Act is with reference to a Company
or a firm but not to a sole proprietorship concern. It may be said
that the proprietor and proprietary concern are not required to be
separately arrayed as a party/accused. In other words, in a
proceeding under Section 138 of the Act, if the proprietor is an
accused or a proprietary concern represented by the proprietor is
arrayed as an accused would be sufficient compliance of the
requirement of Section 138 of the Act.
6
AIR 2007 SC1634
7
MANU/DE/4881/2012
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9.8. He further relied on the judgment of High Court of
Allahabad in Dhirendra Singh v. State of Uttar Pradesh and
others 8, wherein, it is held that in case of a proprietary concern,
no vicarious liability may ever arise and therefore, the principle
contemplated in Section 141 of the Act is not attracted, and
hence, a complaint cannot be held as not maintainable or
defective on the ground that the proprietary firm has not been
arrayed as an accused.
9.9. Relying on the above judgments, learned counsel submits
that impleading the Adda Bar and Restaurant, as a party to the
complaints, is not necessary. He further submits that the trial
Court as well as the appellate Court has rightly passed the
impugned judgments convicting the accused and the interference
of this Court is unwarranted. Hence, seeks to dismiss these
Criminal Revision Cases.
10. Perused the record.
11. The primary contention of the accused is that he was being
prosecuted in his individual capacity, though he was not even
described as the owner or authorized signatory of the Adda Bar
and Restaurant. The said Restaurant was not impleaded as a
party to the complaints. However, it is not the defence of the
8
(2020) ILR All 215
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accused that Adda Bar and Restaurant is a Company or
Corporation or Partnership Firm with other authorized signatories
and that the said Restaurant was registered as a Company under
the Companies Act. On the other hand, it is the contention of the
complainant that the said Restaurant is a proprietary concern, but
not a Company. As the accused failed to establish that the Adda
Bar and Restaurant is a Company or Corporation or Partnership
Firm, the question of arraying the Adda Bar and Restaurant as an
accused does not arise.
12. It is an undisputed fact that the accused is an authorized
signatory of Adda Bar and Restaurant. The accused never denied
his signature and it is not his contention that the signatures on the
cheques were forged by the complainant. Furthermore, in support
of his contention, the complainant has filed Ex.P6, which is a
document pertaining to Customers Accounts Inquiry and the
same reveals that the Adda Restaurant and Bar belongs to
accused. It is another contention of the accused that as on the
date of issuance of cheques, he is not the owner of Adda
Restaurant and Bar and the same was entrusted to some other
persons. However, the accused never denied his ownership over
Adda Restaurant and Bar and he has not filed any document to
prove that the said Restaurant was entrusted to some other
persons. Therefore, this Court is of the considered view that the
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accused being an authorized signatory of the Adda Bar and
Restaurant has issued the cheques to repay the loan amounts
taken from the complainant and he cannot exonerate from the
liability.
13. The contention of the accused is that the cheques in
question were issued towards investment in Vandana Conceptual
Ventures Private Limited. However, this suggestion has been
denied by the complainant and no material was produced by the
accused to show that the complainant has invested the said
amounts in the Vandana Conceptual Ventures Private Limited. It
is further contention of the accused that to get the said money
back, somehow the complainant got the possession of cheque
leafs pertaining to Adda Bar and Restaurant through other
means/common friends, filled them with his own handwriting and
filed these complaints suppressing the real facts. However, the
accused has not mentioned the names of common friends from
whom and how the complainant has obtained the said cheque
leafs. If the complainant had really secured the said cheques
through illegal means, the accused would not have kept quiet
without taking any action against him.
14. Both the trial Court as well as the appellate Court has found
that the purported signatures of the accused on the cheques are
identical with his signatures affixed by him on the examinations
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recorded by the trial Court under Sections 251 and 313 Cr.P.C.
Though the bank account operating in the name of Adda
Restaurant and Bar was closed on 23.02.2010 and knowing that
the account was closed, the accused, who is the authorized
signatory of Adda Restaurant and Bar, has issued cheques to the
complainant. It shows the deliberate act of the accused to avoid
repayment of amounts to the complainant. The complainant has
got issued legal notices to the accused on 18.04.2016 and the
same were received by the accused on 21.04.2016. However,
the accused failed to give reply to the said legal notices denying
the loan transactions between them and did not come forward
with his defence at the earliest point of time by way of reply.
15. According to Section 139 of N.I. Act, the Court shall draw a
presumption that when the cheque was issued, it is only towards
discharge of legally enforceable debt, until contrary is proved. In
the instant case on hand, the accused did not adduce any
evidence to rebut the presumption under Section 139 of N.I. Act,
on the other hand, admitted his signature on the cheques.
Therefore, in the absence of any evidence to dispel the
presumption under Section 139 of N.I. Act, this Court has no
option except to draw a presumption that the cheques were
issued towards discharge of legally enforceable debt. Though
PW1 was cross examined at length, nothing useful was elicited to
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discredit his evidence. Therefore, I am of the considered view that
the trial Court as well as the appellate Court rightly held that the
accused failed to raise a probable defence which would create a
doubt about the existence of legally enforceable debt and has
rightly passed the impugned judgments of conviction after
considering all the aspects. Hence, there is no infirmity, or
irregularity, or illegality in the impugned judgments passed by the
trial Court as well as the appellate Court. Hence, the Criminal
Revision Cases are devoid of merits and are liable to be
dismissed.
16. Accordingly, both the Criminal Revision Cases are
dismissed, confirming the judgments, dated 06.07.2020 passed in
Criminal Appeal Nos.912 and 913 of 2017 by the learned
Additional Metropolitan Sessions Judge for the Trial of Jubilee
Hills Car Bomb Blast Case-cum-Additional Family Court-cum-
XXIII Additional Chief Judge-cum-IX Additional Metropolitan
Sessions Judge, Hyderabad. This Court, vide its orders, dated
23.07.2020 and 24.07.2020 in I.A.Nos.2 of 2020 directed release
of the accused on bail on the terms and conditions mentioned
therein. In view of dismissal of the Criminal Revision Cases, the
Magistrate concerned shall take immediate steps to apprehend
the accused by issuing NBWs to serve the sentence of
imprisonment. Registry is directed to communicate a copy of this
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order to the Magistrate concerned forthwith. There shall be no
order as to costs.
As a sequel, miscellaneous applications, pending if any,
shall stand closed.
__________________
JUVVADI SRIDEVI, J
Date: 16.06.2025
rev