R.Balakrishnan v. A.P.S.Exports Rep by its Managing Partner,Mr.K.M.Dinakar, Karur
Case at a glance
Outcome
Allowed
The Criminal OriginalPetition stands allowed
Provisions considered
Key paragraphs
- Para 1313. In this case, the petitioner has resigned on18.12.2001 from the Company and the same wasregistered with the Registrar of Companies throughForm-32 as on 27.12.2001 long prior to the issuanceof the cheque. Therefore, the petitioner cannot befastened with criminal liability under Section 138of the Negotiable…
Judgment
IN THE HIGH COURT OF JUDICATURE AT MADRASDATED 16.07.2009CORAMTHE HONOURABLE MRS. JUSTICE ARUNA JAGADEESANCrl.O.P.No.31632 of 2006andM.P.No.1 of 2006 R.Balakrishnan .. Petitioner/2nd AccusedVs.A.P.S.Exports Rep by its Managing Partner, Mr.K.M.Dinakar, Karur. .. Respondent/ComplainantCriminal Original Petition filed under Section 482 of CriminalProcedure Code praying for a direction to call for the records of thecomplaint in STC.No.637 of 2006 pending on the file of the DistrictMunsif cum Judicial Magistrate, Paramathi and quash the same. For Petitioner...Mr. S.SethuramanFor Respondent ...Mr.K.BalakrishnanO R D E RThis petition is filed by the second accused in S.T.C.No.637 of2006 on the file of the District Munsif-cum-Judicial Magistrate, Paramathi seeking to quash the proceedings.
The respondent has filed the complaint against thepetitioner and five other accused under Section 138 of the NegotiableInstruments Act, on the basis that the first accused firm has got aliability of Rs.7,67,885.60/- and issued a cheque on 16.04.2006 for asum of Rs.3,14,032/- to the complainant drawn on Bank of Baroda, Karur Branch. The respondent has presented the above cheque forcollection in his bank ( "Indian Overseas Bank", Karur Branch) on04.10.2006 and the cheque was returned on the same day with anendorsement "Exceeds Arrangements" vide memo dated 04.10.2006.Intimation was sent to the respondent on the same day from the Bankand he had sent a statutory notice to the accused on 17.10.2006through his Advocate by registered post. The accused Nos.1,3,5 and 6have evaded the service of the notice and accused Nos.2 and 4 alonehave received notices on 19.10.2006 and 23.10.2006 respectively. The https://hcservices.ecourts.gov.in/hcservices/ petitioner/second accused has responded to the said notice by givingreply on 28.10.2006 reputing the averments made in the notice, andstated that the petitioner ceased to be a partner with effect from1.4.1999 itself and therefore he is not liable for the cheque issuedon behalf of the firm.
The learned counsel for the petitioner would submit thateven in the reply notice sent by him, he has specifically stated thathe is no more a partner in the said firm and he had resigned from thefirm on 1.4.1999 itself. Inspite of it, the complaint has been filedagainst him also which is not sustainable.
On a perusal of the reply notice it is apparent that thepetitioner has stated that he resigned from the firm on 1.4.1999itself and clearly indicated from the Form-A filed under Rule 5 withthe Registrar of Firms. The issuance of cheque is on 06.04.2006whereas the petitioner has resigned from the firm on 01.04.1999itself that is long before the issuance of the cheque by the firm.
In LACHHMAN P.UDHANI AND OTHERS vs. REDINGTON (INDIA) LTD., 2006 (4) CTC 43 This Court has held as under: "7. In a case in M.S.Rama Mohan Rao v. Mrs.S.NaguBai, 2003 Company Cases 403, where the resignationletter of one of the Directors of the Company wasproduced to establish the disassociation of one ofthe Directors from the Company, A.Packiaraj, J.,has observed as follows: " Though the petitioner produced the concernedletter addressed to the complainant in the Court, showing the resignation of the petitioner fromthe Company as director, the Court sitting inrevisionary jurisdiction could not go into thepreliminary issued, since these were matters thatcould be decided only by letting in evidence. " 8. in a case in S.V.Mazumdar and Others v. GujaratState Fertilizers Co. Ltd. and another, 2005 (3)CTC 380, where one of the Directors of the Companydisputed the responsibility fixed on him withrespect to the conduct of the business of the Company, the Hon'ble Supreme Court has observed as https://hcservices.ecourts.gov.in/hcservices/ follows: " Whether a person is in charge of or isresponsible to the Company for the conduct of thebusiness is to be adjudicated on the basis ofmaterials to be placed by the parties.
" 9. Form-32 filed with the Registrar of Companies isa public document as per Section 74 of the IndianEvidence Act, 1872. When the certified extract ofsuch a public document is filed, the Court shallpresume as to the genuineness of such certifiedcopies as per Section 79 of the said Act. 10. The sanctity attached to such public documentsand the presumption the Court is bound to raise asto the genuineness of such documents have not beenbrought to my notice at the time when the judgementin K.Umadevi v. V.Manikandan, Proprietor, ManishaTraders, 2006 (1) CTC 662, was pronounced by me. In view of the importance of the public document asdetailed above, the ratio laid down by me in theaforesaid judgment cries for reconsideration andrestatement. The march of law should be dynamicand it should never be static. If a Judge ifafflicted with infallibility syndrome, the spacefor growth of law is unfortunately smotheredstifled.
11. In a case where certified copy of Form-32 isfiled by the accused Director to show that he hadresigned prior to the issuance of the cheque andthe challenge thereto is inasmuch as no countercredential is projected by the complainant, the Court has to necessarily accept the same andrelieve such a Director from the ordeal of trial. It will be a misuse of process of abuse of law ifsuch an accused- Director who had resigned longprior to the issuance of the cheque and severed hisumbilical root in the Company is implicated in acase under section 138 of the NegotiableInstruments Act. 12. It is always safe to take the date ofregistration of Form-32 to determine the date ofdisassociation of the accused-Director from theconduct of the business of the Company as there ischance for antedating the date of resignation inorder to save the accused-Director fromprosecution. https://hcservices.ecourts.gov.in/hcservices/
Operative part
In this case, the petitioner has resigned on18.12.2001 from the Company and the same wasregistered with the Registrar of Companies throughForm-32 as on 27.12.2001 long prior to the issuanceof the cheque. Therefore, the petitioner cannot befastened with criminal liability under Section 138of the Negotiable Instruments Act. " 7. In the present case, as the petitioner has resigned on01.04.1999 from the partnership firm and the same was registered withthe Registrar of firm long prior to the issuance of cheque. Thereforehe cannot be fastened with criminal liability under section 138 ofthe Negotiable Instruments Act and the criminal prosecution asagainst the petitioner is liable to be quashed. 8. In the result, the criminal proceedings as against thepetitioner, who is the second accused in S.T.C.No.637 of 2006 pendingon the file of the District Munsif-cum-Judicial Magistrate, Paramathi, Salem District, stands quashed. The Criminal OriginalPetition stands allowed. Consequently, connected miscellaneouspetition is closed. Sd/- Asst. Registrar/true copy/ Sub Asst. RegistraramTo1. The District Munsif cum Judicial Magistrate, Paramathi.2. The Chief Judicial Magistrate, Namakkal (for information)+2 cc to Mr.S.Sethuraman, Advocate, SR.No.31837 & 28535 Order in Crl.O.P.No.31632 of 2006JSV {CO}TP/4.8.2009.
Questions this judgment answers
What did the Court decide in this case?
The Court recorded the following disposition: The Criminal OriginalPetition stands allowed
Which statutory provisions did this judgment involve?
IndianEvidence Act, 1872 — s. 74; Negotiable Instruments Act, 1881 — s. 138.
Which court decided this case, and when?
Madras High Court, on 16 Jul 2009. The bench was A PACKIARAJ.
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.