K Ranganayakulu vs The State Of Telangana

2026 INSC 555
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.2472 of 2026
(@SLP (Crl.) No.1915 of 2025)
K RANGANAYAKULU ..... APPELLANT(S)
VERSUS
STATE OF TELANGANA & ORS. ..... RESPONDENT(S)
O R D E R
1. Leave granted.
2. Appellant stands convicted by the High Court for
committing offence under Section 138 of the Negotiable
Instruments Act, 1881 (NI Act) and has been sentenced to
undergo rigorous imprisonment for one year and fine of
Rs.1,50,00,000/- (Rupees One crore fifty lakhs only), in
default of payment of fine, to undergo default sentence of
additional imprisonment of one year. The High Court has also
directed to cause the appearance of the appellant and send
Signature Not Verified
Digitally signed by
RASHI GUPTA
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Date: 2026.05.26
17:49:38 IST
Reason:

him to prison to serve the remaining period of sentence.
3. It is argued by Mr. Santosh Kumar, learned senior counsel
appearing for the appellant that the appellant not being the
drawer of the cheque, cannot be convicted for the reason that
an authorized signatory is merely authorized to sign on
behalf of the company and does not become the drawer.
Therefore, since penal statutes have to be interpreted
strictly particularly in determining vicarious liability, the
appellant cannot be held guilty for committing offence under
Section 138 of the NI Act. Learned senior counsel would refer
to the law laid down by this Court in (2024) 7 SCR 1211:2024
INSC 551.
4. Per contra, Mr. Ravi Shankar Jandhyala, learned senior
counsel appearing for Respondent No.2 would submit that the
appellant having signed the cheque as Treasurer of TIMES NGO,
with whom Respondent No.2 had entered into an MOU,
outsourcing the work of collection of electricity bills of
domestic consumers, the appellant is liable to incur the
statutory mandate of any penal consequence under the NI Act.
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5. The relationship between the parties emanate from MOU
dated 30.07.2009 captioned as “Memorandum of Understanding”
for collection of electricity bills payments of APCPDCL
thgough M/s. TIMES. It is the appellant who has signed on
this MOU as Treasurer of TIMES. Clause 7, 20 and 28 of the
MOU need reference which is reproduced hereunder:
7. As regards the remittance of collections, TIMES
shall remit the collections of all the Franchises
to the S.A.O. of the respective circle of
APCPDCL / Head Quarters of APCPDCL along with MIS
reports. The TIMES should remit the cash on the
next working day through Cheque / RTGS online
transaction to receipt A/C of the respective
Circle S.A.O / Head Quarters of APCPDCL along with
MIS reports.
20. TIMES stands as guarantor for any financial
loss like fraud / misappropriation and theft etc,
in transfer of electricity bills collected from
consumers to the APCPDCL, the CMD / APCPDCL or the
authority empowered in writing by the CMD /
APCPDCL, is competent to recover the fraud /
misappropriation and theft etc., amount from the
transaction fees to be paid by the APCPDCL to the
TIMES.
28. It is agreed that in case the performance of
TIMES(RAJIV) Franchises is unsatisfactory i.e.
continuous pending transactions without updation,
wrong postings, delays in remittance, delay in
reconciliation of transactions, non-segregation of
classified transactions (c.c. charges, A.C.D.,
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R.C. fees, Misc. charges), suppression of
transactions, multiple receipts issued for single
service and any serious irregularities, Not
accepting bill payments etc., TIMES shall take
necessary action on particular Franchisee upon
intimation from APCPDCL in consultation with
APCPDCL. Not withstanding the above, APCPDCL
reserves the right to terminate the agreement /
MOU by giving 15 days notice.
6. It is thus apparent that it is the appellant alone who was
responsible for all the rights and liabilities arising for or
against TIMES by virtue of the MOU. Although appellant is
only the Treasurer of TIMES but not the owner or Chairman of
the society but the fact remains that the MOU entered between
the parties nowhere cast any liability on the Chairman of the
NGO. If the NGO i.e. TIMES has made the appellant as its
front face by authorizing him to sign all the negotiable
instruments and to make payment of the account to APCPDCL
(Presently Telangana CPDCL) through cheque/RTGS online
transaction, it is only the appellant who shall be
responsible for all the consequences thereof. In
practicality, by virtue of the terms of the MOU, it is the
appellant who becomes the drawer of the cheque on behalf of
the TIMES as the document do not recognize any other entity
who shall be responsible for any action in its transactions
with APCPDCL (Telangana CPDCL).
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7. In view of the above, we are not inclined to accept the
arguments raised at the bar on behalf of the appellant and do
not find any ground to interfere with the impugned judgment.
8. However, considering that the appellant was only the
Treasurer of the society, we deem it appropriate to modify
the sentence by directing that the appellant shall pay a fine
amount of Rs.1.5 crore to Respondent No.2 (now Telangana
CPDCL or Southern Power Distribution Company of Telangana
Limited (TSSPDCL)) in default to undergo Rigorous
Imprisonment of one year. The fine shall be paid within a
period of two months from today. If the amount is not paid
within two months from today, the appellant shall immediately
surrender or taken into custody to undergo the default
sentence of rigorous imprisonment of one year.
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9. The appeal is allowed in part to the above extent.
10. Pending application(s), if any, shall stand disposed of.
….....................J.
(PRASHANT KUMAR MISHRA)
…....................J.
(N.V. ANJARIA)
New Delhi;
May 12, 2026.
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