The High Court · 2025

The State of Telangana, Represented by its Public prosecutor, High Court at Hyderabad Musllafa Kamal Siddiqi, S/o Late G.S.Siddiqi, Aged about 40 years, Occ.Business, Rlo 94-1321N2, Mahaboob Gardlns, Toli Chowki, Fiyderabad. ...Respon d en UC om p la ina nts As per Court order dated 20.06.2025 n lA. No. 3/21 R3 is impleaded Petition under Section 482 o't Cr.P. stated in the Memorandum of Grounds of Cr pleased to quash all further proceedings a 2020 on the file of the Honble lll Spec Nampally At Hyderabad. praying that in the circumstances minal Petition, the High Court may be ainst the Petitioners in CC No 6 of I Magistrate Manoranjan Complex, l.A. NO: 2OF 2021 Petition under Section 482 of Cr.P. stated in the Memorandum of Grounds of C pleased to stay of all further proceedings 2020 on the file of the Honble lll Spec Nampally At Hyderabad pending disposal of praying that in the circumstances minal Petition, the High Court may be gainst the Petitioners in CC No 6 of al Magistrate Manoranjan Complex, he main case l.A. NO: 1OF 2024 Petition under Section 482 of Cr.P stated in the [Vlemorandum of Grounds of C pleased to EXTEND the interim orders dat Crl.P.No.1854 of 202'l until further orders in praying that in the circumstances minal Petition, the High Court may be d 0910312021 in l.A.No.2 of 2021 in he rnterest of justice This Petition coming on for hearing Grounds of Criminal Petition and upon he Reddy, Advocate for the Petitioner and Prosecutor on behalf of the Responde Advocate for the Respondent No. 'l and of the Respondent No. 3. , upon perusing the Memorandum of ing the arguments of Sri K. Pradeep he Sri E. Ganesh Assistant Public t No.2 and Sri Syed Azamthulla, ri Vishwajeet Reddy. D, Advocate for CRIMINAL PETITION NO: 1888 OF 2021 Between: Park Square Properties Pvt Ltd, H Grand Hotel, Road No 'l 1 , Banjara Director Mrs - Syeda Zarina Banu Director of Park Squaare ProPe Mahaboob Gardens, ToliChowki, Hyd Mrs . Syeda Zarina Banu Park Squaare Properties Toli Chowki, Hyderabad. W/O M tdL Pvt R/o ving office 8-2-616184, New Minerva Hills, Hyderabad. Represented by its by its 2tN2, q Rep rti s Pvt Ltd, R/O H.No 9-4-13 M u Stafa Kama S rabad- Kamal Siddiqi Rep by its Director of No 94-1321N2, Mahaboob Gardens, ...Petitioners/Accused No. 2 and 3 1 2 AND

1. M/S Ammaar Properties, Rep bY its MohammaedWaris, Aged 40 Years, ul-Khalr Building, Paramaount Hills, p o I Mo am med h o 8- c B S nCS S u lony Road, ToliChowki , Hyderabad. S/ Lat o P M t64 Dar .J o8t e R 1 ...RespondenUDefacto Complainant .,/

2. The State of Telangana, Represented by its Public Prosecutor, High Court at Hyderabad

3. Musatafa Kamal Siddiqi, S/o Late G.S.Siddiqi, Aged about 40 years, Occ.Business, Rlo 9-4-1321N2, Mahaboob Gardens, Toli Chowki, Hyderabad ...RespondenUComplainants As per Court order dated 20.06.2025 in lA. No. 3/21 R3 is impleaded Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the [Vlemorandum of Grounds of Criminal Petition, the High Court may be pleased to quash all further proceedings against the Petitioners in CC No 7 of 2O2O on the file of the Honbte llt Special Magistrate Manoranjan Complex, Nampally At Hyderabad. l.A. NO: 2 OF 2021 Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to stay of all further proceedings against the Petitioners ln CC No 7 of 2020 on the file of the Honble lll Special Magistrate Manoranjan Complex, Nampally At Hyderabad pending disposal of the main case. I.A. NO: 1 OF 2024 Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to extend the interim orders dated 0910312021 in lA.No.O2 of 2021 in Crl.P.No.1888 of 2021 until further orders. This Petitron coming on for hearing, upon perusing the [/lemorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri K. Pradeep Reddy, Advocate for the Petitioner and the Sri E. Ganesh Assistant Public Prosecutor on behalf of the Respondent No.2 and Sri Syed Azamthulla, Advocate for the Respondent No. I and of Sri Vishwajeet Reddy. D, Advocate for the Respondent No. 3. CRIMINAL PETITION NO: 1889 OF 2021 Between: 1 2 Park Square Properties Pvt Ltd, Having office 8-2-616184, New Minerva Grand Hotel, Road No 11, Banjara Hills, Hyderabad. Represented by its Director Mrs Syeda Zarina Banu , WO Mustafa Kamal Siddiqi Rep py lts Director of Park Squaare Properties Pvt Ltd, R/O H. No 94-1321N2, Mahaboob Gardens, ToliChowki, Hyderabad. Mrs . Syeda Zarina Banu, WO Mustafa Kamal Siddiqi Rep by its Director of Park Squaare Properties Pvt Ltd, R/o H.No 9-4-1321N2, Mahaboob Gardens, Toli Chowki, Hyderabad. ...Petitioners/Accused No. 2 and 3 AND 1 M/S Ammaar Properties, Rep by its P MohammaedWaris, Aged 40 Years, O ul-Khalr Building, Paramaount Hills, C rietor Mohammed Vasee, S/o Late C Business, RYO 8-1-398/PM164, Dar- ony Road, ToliChowki , Hyderabad. ...RespondenUDefacto Complainant

2. The State of Telangana, Represented y its Public Prosecutor, High Court at Hyderabad

3. Musatafa Kamal Siddiqi, S/o Late G.S Occ.Business, No 9-4-1321N2, Maha d d b dAge about 40 ye a rS q Ga rden T S o hC owk H yd a ad b ...RespondenUComplainants As per Court order dated 20.06.2025 in lA. No. 3/21 R3 is imPleaded Petition under Section 482 of Cr.P stated in the Memorandum of Grounds of C pleased to quash all further proceedings 2020 on the file of the Honble I ll Spe Nampally At Hyderabad praying that in the circumstances minal Petition, the High Court may be ainst the Petitioners in CC No B of al Magistrate Manoranjan ComPlex, l.A. NO: 2OF 2021 Petition under Section 482 oI Cr.P stated in the Memorandum of Grounds of C pleased to stay of all further proceeding aga on the file of the Honble lll Special Magistr Hyderabad pending disposal of the main ca C praying that in the circumstances minal Petition, the High Court may be nst the Petitioners in CC No B of 2020 , Manoranjan Complex, NamPallY At e l.A. NO: 1OF 2024 Petition under Section 482 of Cr.P stated in the Memorandum of Grounds of C pleased to EXTEND the interim orders da Crl.P.No.1BB9 of 2021 until further orders. This Petition coming on Memorandum of Grounds of Criminal Petiti Sri K. Pradeep Reddy, Advocate for th Assistant Public Prosecutor on behalf of Azamthulla, Advocate for the Respondent Advocate for the ResPondent No. 3. The Court made the following: ORDER C praying that in the circumstances iminal Petition, the High Court may be ed 0910312021 in l.A.No.2 of 2021 in for hearing, upon perusing the n and upon hearing the arguments of Petitioner and the Sri E. Ganesh the Respondent No.2 and Sri SYed o. 1 and of Sri Vishwajeet ReddY. D .J THE HONOURABLE SRI JUSTICE E.V.VENUGOPAL CRIMINAL PETITION Nos. 18 44, 1854. 1888 & 1889 of2O21 COMMON ORDER: These Criminal Petitions are filed by the petitioners to quash all further proceedings against the petitioners in C.C.Nos.42, 6, 7 and 8 of 2O2O on the file of the learned III Special Magistrate, Manoranjan Complex, Nampally at Hyderabad.

2. The brief facts of the case are that a complaint has been filed under Sections 1 38 and 14 1 of the Negotiable Instruments Act (for short "N.I. Act"), 1BB1 against accused Nos. 1, 2 and 3 for dishonor of cheques for their alleged role in the conduct of the business of the Compaly. While the proceedings in the said C.C.Nos.42, 6, 7 and 8 of 2O2O xe pending before the learned trial court, the present Criminal Petitions have been frled by the petitioners herein - accused Nos.2 and 3 seeking to quash the proceedings against them, invoking the inherent jurisdiction of this Court under Section 482 Cr.P.C.

3. Heard the learned counsel for the petitioners and the learned Assistant Public Prosecutor ard the learned counsel for the un-oflicial respondents.

4. Learned counsel for the petitioners would submit that the petitioner No.1 had issued four cheques bearing Nos. 148561, 148562, 2 crlp_1848_2021 & ::-I^: 148563 and 148565 of Rs.SO 00 O0/- each. However, all the cheques were dishonored for the ason "insufhcient funds" upon presentation. Consequently, the de facto complainant initiated proceedings under Section 138 of NI Act against all the accused, namely Accused Nos.l, 2 and 3, in C.C.Nos.6,- 7, 8 and 42 of 2020. The petitioners herein have been ayed as Accused Nos.2 and 3, alongside Accused No.1, who is the usband of the second petitioner (Accused No.3). Admittedly, the seco d petitioner has been arrayed as accused No.3 in the C.C.Nos.6, 7, and 42 of 2O2O. The disputes arise between the accused Nos.1 to 3 and the complainant, relating to a business understanding between the two entities M/s.Ammaar Properties (complainant's company), d M/s.Park Square Properties Private Limited, in which the accuse No.1 and the accused No.3 are directors. The complainant was als inducted as a director. On the assurance of the first accused, the co plainant invested a substantial sum of money into a real estate p ro ect. Subsequently, the accused No. i incorporatted M/s.Park Square Properties Private Limited, and the complainant was inducted as director, along with A3. The business operations commenced, however, due to subsequent disputes between the complainant an the accused No. 1, issues arose. A resolution dated 24.10.2016 was p d by the Board of Directors, acknowledging the services rende d by ttre complainant. The .; r;;;;,r] :+i i i .. EW, J crlp_1848_2o21 & batch resolution recorded the company's appreciation ald gratitude, and committed to refund the investment made by the complainant within 10 months, along with profits. The said resolution was reflected in Form-I as part of ofltcial records.

5. In furtherance of the above resolution, four cheques bearing Nos. 14856 1, 148562, 148563 and 148565 of Rs.50,00,000/- each were issued by Accused No.1, amounting to a total sum of Rs.2.OO Crores. These cheques were dishonored for the reason "insufficient funds" upon presentation. Consequently, the complainant filed complaints under Section 138 of the NI Act before the tria-l court, which were registered as C.C.Nos.6,7, 8 and 42 of 2O2O

6. However, the learned counsel for the petitioners would submit that arraying the petitioners as accused Nos.2 and 3 in the said criminal complaints before the trial court is misconceived, as the law does not recognize liability of persons who are not part5r to the transaction. The cheques in question were issued solely by accused No.l to the complainant, and the said transactions were exclusively between them. The firm involved is a firm entity, and the petitioners, who are accused Nos.2 and 3, have no involvement in the said transactions. They are not signatories to the cheques in question. Therefore, proceedings against them under Section 138 of the NI Act is - -?erverse and unuralranted. The petitioners seek indulgence of this 4 crlp_1E48_2o21 & Court to quash the proceedings in far as they are concerned and relied upon the judgrnent of the Ho ble Apex Court in AIka Khandu Avhad v. Amar Syamprasad Mis ra and Another r, wherein, 1n similar set of circumstances, it was ld as under: "We have heard learned counsel a g on behalf of the respective parties at length, considered material averments ald a-llegations in the com that the dishonoured cheque was i husbald of the appellant. It u/as original accused No. 1. The dishonou accused No. l. Therefore, the dishonou accused No.1 and it was drawn on the No. 1. The appellant herein-original sign atory to the cheque nor the dishon bank account. That the account in q the light of the aJoresaid facts, it is the appellant herein - original accu offence punishable under Section 138 record and also considered the laint. It emerges from the record ued by original accused No. 1 - wn from the bank account of d cheque was signed by original cheque was signed by original balk account of original accused accused No.2 is neither the ured cheque was drawn from her stion was not a joint account. In ired to be considered whet-her No. 2 can be prosecuted for the /w Section 141 of tle NI Act?"

7. Hence, it is submitted that onl the person who is the signatory to the cheque and the cheque is dra on arl account maintained by such person, arrd the cheque has be issued in discharge, wholly or in part, of any debt or other liability, be prosecuted under Section 138 of the NI Act.

8. The statute does not contemp te prosecution on the basis of joint liability alone, unless the perso sought to be prosecuted is also ' Civil Appeal No.258 of 2O2 1, dated 08.03.2 1 5 EW, J ctlp 1848 2021 & batch the drawer or signatory of the cheque. Even in cases where there is a joint liability between individuals, if the account on which the cheque is drawn is not maintained bv the person and he is not signatory to the cheque, he cannot be held criminally liable under Section 138 of NI Act.

9. Therefore, even if a person might have been civilly or contractually liable along with the drawer, he cannot be prosecuted under Section 138 of NI Act, unless he is also the signatory to the cheque.

10. Learned counsel would respectfully submit that in the present case, neither of the petitioners is the signatory to the cheque in question, nor are the1. joint account holders of the account maintained by Accused No. 1. The onl5r reference to the petitioners in the complaint is in relation to their alleged association tith Accused No.1. Hou,ever, there is no specific averment or material placed on record indicating their role in the transaction leading to the issuance of the cheque. I 1 . Furthermore, the cheque has admittedly not been issued or signed by the petitioners. There is no document produced by the de facto cornplainant to show any direct involvement or privity of contract ti6tween the petitioneriland the complainant. The petitioner No.2 is 6 crlp_1848_2O2L neither a signatory nor has any thorify over the bank account question. In the absence of any pecific allegations or documentary evidence connecting the petitio ers to the alieged offence, the continuation of proceedings again t thern ."vould amount to abuse of process of law

12. Hence, the petitioners seek e proceedings in C.C.Nos.6, 7, B and 42 of 2O2O pending on t e file of the iearned III Special Magistrate, Manoraljan Complex, ampally at Hyderabad be quashed, in so far as they relate to the petiti ners herein

13. On the other hand, the i arned counsel for the un-official respondent No. i would submit at it is an admitted fact that petitioner No.2 is a company. Pe tioner No.3, who has been arrayed as accused N.3 in C.C.Nos.6, 7, 8 nd 42 cf 2O2O along with accused No.2, are nothing but individual with indirect involvement in the tralsactions with the complainant Since accused No.3 is the wife of accrlsed No.1 in the said case, sh has been brought on record only because of that relationship ar-rd at the instance of accused No.1.

14. A11 the transactions have een conducted at the behest of accused No.1, who has solely man ed ald rendered the affairs of A2- Company. Therefore, it cannot be said that accused Nos.2 and 3 are i I I I I I 7 EW' J crlp-l848 2O21 & batch independently responsible for the liability under the dishonored cheques. The truth of the matter carr be elicited only upon full trial.

15. The learned counsel also drawn attention of this Court to the resolution passed by the Company, wherein it is clearly admitted that accused No.l had resigned from the directorship of the Company as per the said resolution. In that resolution, it is recorded that his services were appreciated. It is further submitted that accused Nos.1 ald 3 were directors of the Company at the relevarlt point of time. Accused No.1 tendered his resignation based on certarn representations and assurances made, which were believed in good faith by accused Nos.2 and 3.

16. It was on the basis of those representations and assurances made by accused No.l, that the complainant was induced to accept the cheques, believing that they would be honored upon presentation. However, to the shock of the complainant, the cheques were dishonored 17 . Therefore, the relationship between accused Nos. 1 and 3, and the role of A2 - company are central to the dispute, and they form the basis of the alleged transaction. It is the case of the unofficial respondents that these issues can only be brought to light in the cou&se of a full-fledged triaJ.*Itence, the learned counsel submits that 8 crlp_1848_2o21 & the indulgence of this Court un er Section 482 Cr.P.C. is not warranted at this stage and the matt r should be allowed to proceed to trial for proper adjudication of facts.

18. Learned counsel for the re pondent No.3 sails with the submissions made by the learned co nsel for respondent No.1.

19. Having heard the learned c unsel for the petitioners and considered the decisions relied upon support of the petitioners' case, the Hon'ble Apex Court in N.Ranga hari v. Bharat Sanchar Nigam Limited2, held that the appellant, not being the signatory to the cheque, cannot be held liable to be ed under proceedings initiated under Section 138 of the NI Act.

20. The Hon'ble Apex Court in th matter of Aparna A Shah v. Sheth Developers Private Limited & Anothera, has categorically held that the wife of Accused No.l. ho is arrayed as accused No.3 (petitioner No.1) cannot be prosecute in criminal proceedings merely by virtue of being the spouse of of the cheque

21. This Court, relying upon the s d judgment of the Hon'lcle Apex Court and upon perusal of the facts o the present case, is of the view that no specific or direct allegatio s are made out against the '(2oor) s scc ro8 'JZo_13) 8 scc z1 9 EW, J ctlp _L848 2O21 & batch petitioners herein. Their prosecution would amount to an abuse of the process of law and is not in accordance with the settled legal principles.

22. In the light of the above and the law laid down by the Hon,ble Apex Court, the proceedings against the petitioners in C.C.No s.42, 6, 7 and 8 of 2O2O are liable to be quashed.

23. Accordingly, the proceedings in C.C.Nos.42, 6, 7 and, g of 2O2O, as against the petitioners, shall stand quashed. In the result, all the Criminal petitions are allowed. Miscellaneous applications pending in these petitions, if any, shall stand closed. SD/- MOHD.ISMAIL DEPUTY REGISTRAR //TRUE COPY/I \\('il \ SECTION OFFICER To, '1. The lll Special lvlagistrate lt/lanoranjan Complex, Nampally at Hyderabad. 2. Two CCs to the Public Prosecutor, State of Telangana, High Court Buildings, at Hyderabad (OUT)

3. One CC to Sri K Pradeep Reddy, Advocate IOPUC] 4. One CC to Sri Syed Azamthulla, Advocate [OPUC] 5. One CC to Sri Vishwajeet Reddy. D, Advocate [OPUC] 6. Two CD Copies DUPSLw HIGH COURT DATED:03/07/2025 ii rte srtr^ '2,1 { / l'. \, --. ,+ k 13 rlJB il6 ; a * D ES o r,r C\r COMMON ORDER CRLP.Nos.1848,1854,1888 & 1889 of 2021 ALLOWING CRIMINAL PETITIONS ""ftAq Yr 6{f