Criminal Petition No. 4816 of 2009 · High Court · 2012

Order

This Criminal Petition is filed by the petitioner/A-3 under Section 482 Cr.P.C. seeking to quash the proceedings in C.C.No.267 of 2007 on the file of IX Metropolitan Magistrate, Cyberabad at Miyapur, Ranga Reddy District.

2. The allegation in the complaint would go to show that respondent No.2/de facto complainant is a private limited Company carrying business of manufacture, produce, buy and sell of all kinds of fertilizers. A-1 is the Managing Partner of M/s.Rajeswari Agencies at Ramachandrapuram, East Godavari District (A-4). A-2 and A-3 are the partners. The de facto complainant used to supply their products on placing orders by the accused against payment by cheques and the accused were due some amounts under several invoices. The accused issued four cheques for an amount of Rs.3,68,000/- and when they were presented, they were returned with an endorsement “exceeds arrangements”. After giving a statutory notice, when the accused failed to pay the amounts covered under the dishonoured cheques, the complaint was filed for the offences punishable under Sections 138 and 142 of the Negotiable Instruments Act, 1881 (for short, ‘the Act;). Challenging the same, A-3, who is the wife of A-1, filed the present petition.

3. Learned counsel for the petitioner contended that except alleging that the petitioner was responsible for the conduct of the affairs of the business of the company, there was no specific allegation against her and hence, the case of the petitioner does not fall under Section 141 of the Act and therefore, continuation of proceedings is nothing but abuse of process of Court and hence, prays to quash the proceedings.

4. On the other hand, learned counsel appearing for respondent No.2 contended that the present petitioner is none other than the wife of A-1; that she has not given any reply to the statutory notice and therefore, she is also liable for prosecution for the offence punishable under Section 138 of the Act.

5. Section 138 of the Act, 1881 (for short, ‘the Act’) deals with ‘dishonour of cheque for insufficiency, etc. of funds in the account. Necessary ingredients to be established by the complainant are : (i) a cheque is drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account in the discharge in whole or in part of any debt or other liability; (ii) the cheque is returned by the bank unpaid either because of the amount of money standing to the credit of that account is insufficient t o honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank; (iii) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (iv) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and (v) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

6. T h e cheques in question were not given by the present petitioner. Admittedly, A-1 issued the cheques on behalf of A-4. To make a partner liable for the offence punishable under Section 138 of the Act, the case must fall under Section 141 of the Act, which reads as follows: “Offences by companies: 1.If the person committing an offence under Section 138 is a company, every person who at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence to be proceeded against and punished and shall be accordingly; liable Provided that nothing contained ion this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence. Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government a financial corporation owned or controlled by the Central Government or State Government as the case may be he shall not be liable for prosecution under this chapter. 2) Notwithstanding contained anything in sub-section (1) where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.” The explanation to Section says that expression ‘debt or liability’ occurring in the main enacting clause means a ‘legally enforceable debt or other liability’. Section 139 of the Act incorporates a rule of presumption to the effect that unless contrary is proved, the holder of a cheque received the cheque of the nature referred to in Section 138 of the Act for the discharge in whole or in part of any debt or liability.

7. From the above provision, it is clear that unless a partner is Incharge of, and responsible to, the day-to-day affairs of the company, he cannot be made liable for prosecution. Mere reproducing the words under Section 141 of the Act in the complaint does not make a person vicariously liable for prosecution. The only allegation levelled against the petitioner is that “A-2 and A-3 are responsible for the conduct of the affairs of the business of A-4”. Except that allegation, there are no other allegations against the present petitioner. Therefore, the case of the petitioner does not attract Section 141 of the Act. Hence, continuation of proceedings against the present petitioner is nothing but abuse of process of Court.

8. Accordingly, the Criminal Petition is allowed quashing the proceedings in C.C.No.267 of 2007 on the file of IX Metropolitan Magistrate, Cyberabad at Miyapur, Ranga Reddy District in respect of the present petitioner only. Since the calendar case is of the year 2007, the trial Court is directed to dispose of the case as early as possible preferably within four (4) months from the date of receipt of a copy of this order in respect of other accused.

9. Miscellaneous Petitions pending, if any, in this Criminal Petition shall stand closed. Date: 24.12.2012 AMD ______________________ JUSTICE K.C.BHANU THE HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL PETITION No.4816 OF 2009 DATE:24.12.2012 AMD