M. Senthil Kumar v. M/s. Delta Carriers by itsProprietor N. Rajkumarrepresented by its Power AgentNataraj

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 02.04.2007CORAMTHE HONOURABLE MR. JUSTICE T.SUDANTHIRAMCrl.O.P.No.10098 of 2006andCrl.M.P.Nos. 2633 and 2634 of 2006M. Senthil Kumar ... Petitioner / Third AccusedVersusM/s. Delta Carriers by itsProprietor N. Rajkumarrepresented by its Power AgentNataraj. ... Respondent/Complainant Criminal Original Petition filed under Section 482Cr.P.C. to call for the records in C.C.No.347 of 2005 on the fileof Judicial Magistrate No. I, Udumalpet, Coimbatore and quash theentire proceedings as against the petitioner is concerned.For Petitioner : Mr.V. JeevagiridharanFor Respondent : Mr. V. Nicholas O R D E RThis is a petition seeking to quash the proceedings againstthe petitioner, who is the Accused No.3 initiated by therespondents herein/ complainant along with two other accused for anoffence under section 138 of Negotiable Instruments Act.2. It was contended by the learned counsel for the petitionerthat the petitioner is one of the partner in the firm namely thefirst accused and he has absolutely nothing to do with the allegedoffence under section 138 of Negotiable Instruments Act.3. It was contended by the learned counsel for the petitionerthat the Partnership Dissolution Deed was executed between thepetitioner and the second Accused, another partner on 29.09.2004 https://hcservices.ecourts.gov.in/hcservices/ and it was communicated to the complainant prior to the issuance ofthe Cheque in question. Another contention of the learned counselfor the petitioner was that no specific averment is made in thecomplaint against the petitioner fulfilling the requirements undersection 141(1) of the Negotiable Instruments Act. According tothe learned counsel for the petitioner only a vague allegation wasmade against the petitioner in paragraph 5 of the complaint. Healso placed reliance on the decision of the Hon'ble Supreme Courtin "CDJ 2007 SC 216 (S.M.S. Pharmaceuticals Ltd ..vs.. NeetaBhalla and another ".4. The learned counsel for the respondent was also heard.The learned counsel for the respondent denied with regard to thealleged fact of communication to the complaint about thedissolution of partnership. The learned counsel for therespondent submitted that the averments made in the complaint that,'the second and third accused partners of the firm first accusedwere directly managing the affairs of the company', is sufficientto bring them liable and it is not necessary for the complainant tospecifically reproduce wordings of the section 141 of theNegotiable Instruments Act and the petitioner is vicariouslyliable. In support of his contention, he placed reliance on thedecision of the Hon'ble Supreme Court reported in "(2004) 7 SupremeCourt Cases 15 ( Monaben ketanbhai shah and another ..vs.. State ofGujarat and others " and " (2006) 10 Supreme Court Cases 581( Sabitha Ramamurthy and another ..vs.. R.B.S. Channabasavaradhya)". 5. As far as the first contention of the learned counsel forothe petitioner is concerned, it is not sustainable since a xeroxcopy of the Partnership Dissolution Deed is filed along with quashpetition. At this stage, this court cannot place any reliance onsuch documents and cannot act further to decide the question offact.6. With regard to the second contention of the learned counselfor the petitioner that no specific allegation is made against thepetitioner that he was incharge of and responsible with thecompany/firm in the conduct of its business in the material timewhen the offence was committed; a careful consideration isnecessary. The learned counsel for the respondent placed relianceon the decision reported in "(2004) 7 Supreme Court Cases 15( Monaben ketanbhai shah and another ..vs.. State of Gujarat andothers " wherein it is stated that "It is not necessary to reproduce the languageof Section 141 verbatim in the complaint sincethe complaint is required to be read as awhole. If the substance of the allegations https://hcservices.ecourts.gov.in/hcservices/ made in the complaint fulfil the requirementsof Section 141, the complaint has to proceedand is required to be tried with. It is alsotrue that in construing a complaint ahypertechnical approach should not be adoptedso as to quash the same. The laudable objectof preventing bouncing of cheques andsustaining the credibility of commercialtransactions resulting in enactment of Sections138 and 141 has to be borned in mind. Theseprovisions create a statutory presumption ofdishonesty, exposing a person to criminalliability if payment is not made within thestatutory period even after issue of notice.It is also true that the power of quashing isrequired to be exercised very sparingly andwhere, read as a whole, factual foundation forthe offence has been laid in the complaint, itshould not be quashed. "Though the learned counsel had read out those portions mentionedabove, in the same paragraph, it is further stated that "All the same, it is also to be remembered thatit is the duty of the court to discharge theaccused if taking everything stated in thecomplaint as correct and construing theallegations made therein liberally in favour ofthe complainant, the ingredients of the offenceare altogether lacking. " Now, it becomes necessary to see whether the present case falls inthis category.7. The other decision on which the learned counsel for therespondent relied on " (2006) 10 Supreme Court Cases 581 ( SabithaRamamurthy and another ..vs.. R.B.S. Channabasavaradhya) ". It isstated that " It may be true that it is not necessary forthe complainant to specifically reproduce thewordings of the section but what is required isa clear statement of fact so as to enable thecourt to arrive at a prima facie opinion thatthe accused are vicariously liable."8. In fact, in the same paragraph, it is also observed by theHon'ble Supreme Court that "Before a person can be made vicariouslyliable, strict compliance with the statutoryrequirements would be insisted...............In a case where the court is required to issuesummons which would put the accused to somesort of harassment, the court should insist https://hcservices.ecourts.gov.in/hcservices/ strict compliance with the statutoryrequirements."9. In view of the two decisions cited above, it is to be seenthat whether the words in the complaint against the petitioner makeout a specific allegation against the petitioner. In the decisioncited by the learned counsel for the petitioner reported in "CDJ2007 SC 216 (S.M.S. Pharmaceuticals Ltd ..vs.. Neeta Bhalla andanother " , it is held by the Hon'ble Supreme Court that," The liability of a Director must bedetermined on the date on which the offence iscommitted. Only because Respondent No.1 hereinwas a party to the purported resolution dated15.02.1995 by itself does not lead to aninference that she was actively associated withthe management of the affairs of the Company.This Court in this case has categorically heldthat there may be a large number of Directorsbut some of them may not associate themselvesin the management of the day to day affairs ofthe Company and, thus, are not responsible forconduct of the business of the Company. Theaverments must state that the person who isvicariously liable for commission of theoffence of the Company both was incharge of andwas responsible for the conduct of the businessof the Company. Requirements laid downtherein must be read conjointly and notdisjunctively. When a legal fiction israised, the ingredients therefore must besatisfied."10. In that particular case decided by the Hon'ble SupremeCourt, the allegation made was narrated in paragraph 3."3. In the complaint petition the allegationsmade inter alia are as under:" The Accused No.1 is a duly incorporatedCompany, having its registered office at theaddress mentioned above, represented by theDirector, Accused No.2. The Accused No.3 and4 are also the Directors of the Accused No.1Company and the accused 2 to 4 are activelyinvolved in the management of othe affairs ofthe Accused No.1 Company."For such an allegation, the Hon'ble Supreme Court held that inparagraph 23 that "On a plain reading of the averments made inthe complaint petition, we are satisfied that https://hcservices.ecourts.gov.in/hcservices/ the statutory requirements as contemplatedunder Section 141 of the Act were notsatisfied."11. Now, it is seen the allegations made in the complaint ofthis case, it is no way better than the allegations made in thecomplaint of the case decided by the Hon'ble Supreme Court andinfact only similar to that.12. The averments made in paragraph 5 of the complaint inC.C.No. 347 of 2005 is that 1k; vjphpapd; epWtdj;jpy; 2.3 vjphpfs;g';Fjhuh;fshf ,Ue;J bfhz;L nkw;go epWtdj;jpd;midj;J eltof;iffisa[k; neuoahf eph;thfk; bra;JtUfpd;wdh;/It is clear that it is only stated that the petitioner was managingthe affairs of the Company. Now, this court has no other optionexcept to follow the ratio laid down by the Hon'ble Supreme Courtreported in "CDJ 2007 SC 216 (S.M.S. Pharmaceuticals Ltd ..vs..Neeta Bhalla and another " and hold that the averments made in thecomplaint against the petitioner do not satisfy the requirements ascontemplated under section 141 of the Negotiable Instruments Act,and as such the proceedings against the petitioner in C.C.No.347of 2005 on the file of Judicial Magistrate No. I, Udumalpet,Coimbatore are quashed. The learned Judicial Magistrate No.I,Udumalpet, is directed to expedite the trial as expeditiously aspossible in respect of other Accused. This Criminal OriginalPetition is allowed. Consequently, the connected Crl.M.P.Nos.2633and 2634 of 2006 are also closed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.mra https://hcservices.ecourts.gov.in/hcservices/ ToThe Judicial Magistrate No. I, Udumalpet, Coimbatore1 cc to M/s. V. Jeevagiridharan, Advocate, sr. 210161 cc to M/s. V. Nicholas, Advocate, sr. 21071Crl.O.P.No.10098 of 2006and Crl.M.P.Nos. 2633 and 2634 of 2006RS (CO)kk 9/4