Andhra Pradesh High Court - Amravati
Hafsath Muhammed Sadique vs State Of Andhara Pradesh on 4 January, 2023
Author: R. Raghunandan Rao
Bench: R. Raghunandan Rao
IN THE HIGH COURT OF ANDHRA PRADESH
***
Crl.P.Nos.12454, 12543, 12545, 12612 & 12626 of 2017
And
Crl.P.Nos.508, 515, 763, 818 & 967 of 2018
Crl.P.No.12454/2017
BETWEEN:
# 1. M/s. Priyom Condiments Private Lilmited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
2. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
3. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. Venkata Ramana Traders, rep. by its written authority agent
Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office at Door
No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet, Guntur City.
3. Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
... Respondents
Date of Judgment pronounced on : 04.01.2023
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
1. Whether Reporters of Local newspapers : Yes/No
May be allowed to see the judgments?
2. Whether the copies of judgment may be marked : Yes/No
to Law Reporters/Journals:
3. Whether The Lordship wishes to see the fair copy : Yes/No
Of the Judgment?
2 RRR,J
Crl.P.No.12454 of 2017 & batch
*IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
*HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
Crl.P.Nos.12454, 12543, 12545, 12612 & 12626 of 2017
And
Crl.P.Nos.508, 515, 763, 818 & 967 of 2018
% Dated:04.01.2023
Crl.P.No.12454/2017
BETWEEN:
# 1. M/s. Priyom Condiments Private Lilmited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
2. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
3. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. Venkata Ramana Traders, rep. by its written authority agent
Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office at Door
No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet, Guntur City.
3. Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
... Respondents
Crl.P.No.12543/2017
BETWEEN:
# 1. M/s. Kaula Agro Foods Private Limited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
2. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
3. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
3 RRR,J
Crl.P.No.12454 of 2017 & batch
Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. V.V.V. Spices India Private Limited, rep. by its Authorised
Signatory Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office
at Door No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet,
Guntur City.
3. Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
... Respondents
Crl.P.No.12545/2017
BETWEEN:
# 1. M/s. Priyom Condiments Private Lilmited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
2. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
3. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. Venkata Ramana Traders, rep. by its written authority agent
Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office at Door
No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet, Guntur City.
3. Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
... Respondents
Crl.P.No.12612/2017
BETWEEN:
# 1. M/s. Kaula Agro Foods Private Limited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
2. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
4 RRR,J
Crl.P.No.12454 of 2017 & batch
3. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. V.V.V. Spices India Private Limited, rep. by its Authorised
Signatory Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office
at Door No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet,
Guntur City.
3. Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
... Respondents
Crl.P.No.12626/2017
BETWEEN:
# 1. M/s. Priyom Condiments Private Lilmited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
2. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
3. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. Venkata Ramana Traders, rep. by its written authority agent
Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office at Door
No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet, Guntur City.
3. Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
... Respondents
Crl.P.No.508/2018
BETWEEN:
# Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
....Petitioners (A.1 to A.3)
5 RRR,J
Crl.P.No.12454 of 2017 & batch
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. V.V.V. Spices India Private Limited, rep. by its Authorised
Signatory Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office
at Door No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet,
Guntur City.
3. M/s. Kaula Agro Foods Private Limited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
4. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
5. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
Kerala State.
... Respondents
Crl.P.No.515/2018
BETWEEN:
# Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. Venkata Ramana Traders, rep. by its written authority agent
Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office at Door
No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet, Guntur City.
3. M/s. Priyom Condiments Private Lilmited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
4. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
5. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
Kerala State.
... Respondents
6 RRR,J
Crl.P.No.12454 of 2017 & batch
Crl.P.No.763/2018
BETWEEN:
# Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. Venkata Ramana Traders, rep. by its written authority agent
Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office at Door
No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet, Guntur City.
3. M/s. Priyom Condiments Private Lilmited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
4. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
5. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
Kerala State.
... Respondents
Crl.P.No.818/2018
BETWEEN:
# Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. Venkata Ramana Traders, rep. by its written authority agent
Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office at Door
No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet, Guntur City.
3. M/s. Priyom Condiments Private Lilmited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
4. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
7 RRR,J
Crl.P.No.12454 of 2017 & batch
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
5. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
... Respondents
Crl.P.No.967/2018
BETWEEN:
# Hfsath Muhammad Sadique, Additional Director of M/s. Kaula Agro
Foods Pvt. Ltd., R/o. MPT House, Matool Central, Mattul Kannur -
670302, Kerala State.
....Petitioners (A.1 to A.3)
AND
$ 1. State of Andhra Pradesh rep. by Public Prosecutor, High Court of
Andhra Pradesh.
2. M/s. Venkata Ramana Traders, rep. by its written authority agent
Maddi Vinay Kumar, S/o. Maddi Kasi Viswanadh, reg. office at Door
No.12-27-104/A, 1st floor, Seelamvari Street, Kothapet, Guntur City.
3. M/s. Kaula Agro Foods Private Limited rep. by its Authorized
Signatory, Sameer Muhamed Abdul Rahman, Reg. Office at
VIII/141A, Edavankavu Temple Road, Kurichilakode, Kodanadu Post,
Perumbavoor, Kerala State - 683544.
4. Khaleelu Rahman Kunhammad Haji Challakkara, Managing Director of
M/s. Kaula Agro Foods Pvt., Ltd., R/o. Darunoon House, Mattul P.O.,
Kannur - 670302, Kerala State.
5. Sameer Muhamed Abdul Rahman, Additional Director and Whole time
Director of M/s. Kaula Agro Goods Private Limited, R/o. Shareef
Manzil, Mattambram Puthiyangadi Post, Madayi Kannur - 670304,
Kerala State.
... Respondents
! Counsel for Petitioners : Sri M. Chalapati Rao
^Counsel for Respondent No.2 : Smt. K. Sesha Rajyam Sr. Counsel
representing Smt. Hima Bindu
<GIST :
>HEAD NOTE:
? Cases referred:
1. (2007) 4 SCC 70
2. 2009 (2) ALD (Cri) 801
3. (2000) 2 SCC 745
4. 2018 (1) ALT 684
5. 2016 (2) ALT (CRI) 410
8 RRR,J
Crl.P.No.12454 of 2017 & batch
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
Crl.P.Nos.12454, 12545, 12612 & 12626 of 2017
And
Crl.P.Nos.508, 515, 763, 818 & 967 of 2018
COMMON ORDER:
As these cases relate to a set of transactions between the same parties, which raise common questions of fact and law, the same are being disposed of by way of this common order.
2. The above 10 criminal petitions have arisen out of the issuance of five cheques. The details of the criminal petitions are as follows:
a) C.C.No.412 of 2017 had been filed against a cheque issued for a sum of Rs.68,54,758.70 ps. Accused Nos.1 to 3 in the said case have filed Crl.P.No.12612 of 2017 and accused No.4 has filed Crl.P.No.967 of 2018.
b) C.C.No.30 of 2017 had been filed against a cheque issued for a sum of Rs.25,00,000/-. Accused Nos.1 to 3 in the said case have filed Crl.P.No.12454 of 2017 and accused No.4 has filed Crl.P.No.515 of 2018.
c) C.C.No.31 of 2017 had been filed against a cheque issued for a sum of Rs.25,00,000/-. Accused Nos.1 to 3 in the said case have filed Crl.P.No.12545 of 2017 and accused No.4 has filed Crl.P.No.818 of 2018.
9 RRR,J Crl.P.No.12454 of 2017 & batch
d) C.C.No.133 of 2017 had been filed against a cheque issued for a sum of Rs.26,50,044/-. Accused Nos.1 to 3 in the said case have filed Crl.P.No.12626 of 2017 and accused No.4 has filed Crl.P.No.763 of 2018.
e) C.C.No.29 of 2017 had been filed against a cheque issued for a sum of Rs.1,44,764/-. Accused Nos.1 to 3 in the said case have filed Crl.P.No.12543 of 2017 and accused No.4 has filed Crl.P.No.508 of 2018.
3. The facts in all these cases, according to the complainant, are more or less similar. The 2nd respondent/complainant is a firm, which is carrying on business in dry chillies in Guntur city. The 1st accused, in the case of four cheques, is a private limited company by name M/s. Kaula Agro Goods Private Limited. The 1st accused in the case of the cheque relating to Crl.P.No.12454 of 2017 and Crl.P.No.515 of 2018 is M/s. Priyom Condiments Private Limited. The 2nd accused is the Managing Director of the 1st accused-company. The 3rd accused is said to be an additional and whole time Director of the 1st accused-company and the 4th accused is said to be an Additional Director of the 1st accused-company. Accused Nos.2 to 4 representing the 1st accused-company, are said to have approached the complainant for supply of dry chillies on credit. In this way, the complainant had supplied chillies to the 1st accused-company, on credit, and cheque bearing No.122663 dated 31.10.2016 for a sum of Rs.68,54,758.70 ps.; cheque bearing No.241505 dated 31.08.2016 for a 10 RRR,J Crl.P.No.12454 of 2017 & batch sum of Rs.25,00,000/-; cheque bearing No.241506 dated 31.07.2016 for a sum of Rs.25,00,000/-; cheque bearing No.241510 dated 30.098.2016 for a sum of Rs.26,50,044/-; and cheque bearing No.122664 dated 31.07.2016 for a sum of Rs.1,44,764/-; were issued by the 1st accused- company to the complainant and the same were dishonoured upon presentation. Notices were sent informing the accused of the dishonour of the cheques and calling upon the accused to pay the same. Accused Nos.1 and 4 have received the notices. The accused Nos. 2 and 3 have managed to get the said notices returned. However, the said notices would have to be treated as served and the accused are liable for punishment. It is the further case of the complainant that accused Nos.2 to 4 are in day-to-day business of the 1st accused-company and the cheque that was issued in the name of the 1st accused-company was issued with the consent of accused Nos.2 to 4.
4. The grounds raised in each of these criminal petitions, by Sri M. Chalapati Rao, learned counsel appearing for the petitioners, are as follows:
Crl.P.No.12612 of 2017 and Crl.P.No.967 of 2018
a) The cheque issued by the accused was returned on the ground of "connectivity failure" and not on the ground of insufficiency of funds.
b) The cheque was issued to M/s. Sri Venkataramana Traders while the name of the complainant is M/s. Venkataramana Traders.
11 RRR,J Crl.P.No.12454 of 2017 & batch
c) While the cheque was dated 31.10.2016, the authorisation to file the complaint, filed by the complainant, is dated 17.12.2016 and as such the said authorisation is invalid and cannot be the basis for filing the complaint.
d) The registered notice was sent on the instructions of Sri Maddi Kasi Viswanath, who is the managing partner of the complainant. Consequently, Sri Maddi Vinay Kumar cannot be authorised to file the complaint.
e) The complainant, which is said to be a partnership firm, has not produced any registration certificate and as such the complainant would have to be treated as an unregistered firm, which is not entitled to file the present complaint on account of the bar under Section 69 of the Indian Partnership Act, 1932.
f) The allegation that the 3rd accused had signed the cheque is incorrect as nothing has been placed to show that the 3 rd accused was authorised to sign the cheque.
g) The cheques were signed by an employee and not accused Nos.2 to 4, who are said to be the Directors of the 1st accused company.
h) The actual signatures of the 3rd accused is available at page 22 of Crl.P.No.12612 of 2017 and a comparison of the signatures in this page with the signature on the cheque would show to the naked eye that the 3rd accused had not signed the cheque. Further, this 12 RRR,J Crl.P.No.12454 of 2017 & batch fact has not been denied by the complainant in the vacate petition filed by the complainant in the present case.
i) One Mr. Noushad K., Manager, who had actually signed the cheque, is not a party to the complaint and as such the complaint would have to fail.
j) Para-1 of the complaint states that the complainant is a limited company while para-3 of the very same complaint shows that the complainant is a firm. This clear contradiction, in the description of the complainant, casts any amount of doubt as to the legal status of the complainant and the maintainability of the complaint filed by such an entity.
k) The 4th accused, who is a lady, had resigned as Director of the 1st accused-company on 28.03.2016 itself and cannot be made liable for any offence said to have been committed by the 1st accused- company.
l) The 4th accused has been wrongly described as a man and the complainant has not denied this fact in the vacate petition filed by the complainant. The manner in which the 4th accused had been described as a man would go to show that the petitioner is making blind allegations without knowing the facts and with a view to simply rope in all accused Nos.2 to 4 into the case.
13 RRR,J Crl.P.No.12454 of 2017 & batch
m) The allegations in paragraph-2 of the complaint relating to accused Nos.2 to 4 are not sufficient to fasten any liability on accused Nos.2 to 4 or the Directors of the 1st accused-company. Crl.P.Nos.12454 of 2017 and 515 of 2018; Crl.P.Nos.12543 of 2017 and 508 of 2018; Crl.P.Nos.12545 of 2017 and 818 of 2018; and Crl.P.Nos.12626 of 2017 and 763 of 2018:-
5. Sri M. Chalapathi Rao, apart from reiterating the above grounds, would raise additional grounds in these set of complaints. In C.C.No. 29 of 2017, no certificate of registration has been filed. In the other complaints, the certificate of registration filed by the complainant shows that the firm had not been registered with the Registrar of Firms by the time of the date of the cheque or the date of the legal notice. This gives rise to two disqualifications. The complainant, as an unregistered firm, at the relevant time, cannot file a complaint. Further, as the complainant was not a registered firm, it would not be able to initiate any litigation for recovery of its debts. This would mean that there was no legally enforceable debt existing as on the date of presentation of the cheque or the date on which the legal notice has been issued or on the date on which the time granted for payment of the amounts in the dishonoured cheques had expired. As only cheques issued for discharge of legally enforceable debts can be the basis for a complaint under Section 138 of the Negotiable Instruments Act, the present complaint would have to fail.
14 RRR,J Crl.P.No.12454 of 2017 & batch
6. The complaint does not make any specific averment against the directors of A.1-company, who are arrayed as accused in the complaint. In the absence of specific allegations that the directors are in day to day management of the company with specific allegations relating to the role of each of the directors in the company, the directors of the company cannot be arrayed as accused in the complaint. He relies upon the judgment of the Hon'ble Supreme Court in S.M.S. Pharmaceuticals Ltd., vs. Neeta Bhalla and Anr.,1 and the judgment of the Delhi High Court in Sunita Palta and Ors., vs. M/s. KIT Marketing Pvt., Ltd., in Crl.M.C.No.1410 of 2018 dated 03.03.2020.
7. Smt. K. Sesha Rajyam, learned Senior Counsel appearing for Smt. Hima Bindu, learned counsel for the 2nd respondent-complainant, would submit that the grounds raised by the petitioners would not, in any manner, affect the complaints filed by the 2nd respondent-complainant. She would submit that the allegations and the grounds raised by the petitioners are only for the purpose of delaying the trial in these matters.
8. Smt. K. Sesha Rajyam, would further submit that the description of the lady director as a male director is only a typographical error and that can not mean that the complainant, without even knowing about the role of the lady director, had roped in the lady director as an accused.
1 (2007) 4 SCC 70 15 RRR,J Crl.P.No.12454 of 2017 & batch
9. Smt. K. Sesha Rajyam, learned Senior Counsel would draw the attention of this Court to the specific averments in the complaint, that petitioners 2 to 4 had approached the complainant for supply of cashew nuts with the promise of clearing the cheques issued for payment of such sale of cashew nuts and that the cheques, under consideration, were issued with their consent. She would contend that such allegations are sufficient to meet the objection raised by the petitioners, that specific allegations have not been made against the directors of the company.
10. Smt. K. Sesha Rajyam, further submits that the return of the cheque on the ground of "connectivity failure" is sufficient to maintain a complaint under Section 138 of the Negotiable Instruments Act as the test in such complaints is whether there were sufficient funds in the account to clear the said cheque, and such a test can only be carried out in the course of the trial of the complaint. Consequently, these criminal petitions would have to be dismissed.
11. Smt. K. Sesha Rajyam, would submit that non-inclusion of the Manager of the company, who according to the petitioners, had signed the cheque, would not, in any manner, affect the maintainability of the complaint. It is the drawer of the cheque, who would be the accused and where a cheque is signed on behalf of a company, the said company would be A.1 and the directors who are involved in the day to day affairs of the company and who were aware of the issuance of the cheque and dishonour of the cheque, would be liable to be arrayed as accused in the 16 RRR,J Crl.P.No.12454 of 2017 & batch complaint. As such, non-inclusion of the alleged signatory of the cheque is not fatal to the case.
12. Smt. K. Sesha Rajyam, learned Senior Counsel would also rely upon the judgment of the Full Bench of the erstwhile High Court of Andhra Pradesh in Dr. A.V. Ramanaiah vs. M. Shekhar2 to contend that a criminal complaint is maintainable by an unregistered firm also. She would further submit that an unregistered firm can also seek to recover all its debts by registering itself prior to the filing of the case before the civil Court. She would thus submit that the contention of the petitioners that there is no legally recoverable debt, against which the cheques in question have been issued, would have to be discarded.
Consideration of the Court:
13. Sri M. Chalapati Rao, learned counsel for the petitioners, has raised various preliminary grounds before making his submissions on two grounds - non-registration of complainant firm and the lack of specific averments in relation to the directors of A.1-company. The said objections are being considered before the main objections are being taken up. Crl.P.No.12612 of 2017 and Crl.P.No.967 of 2018
a) The contention of the petitioners is that a complaint under section 138 of the Negotiable Instruments Act, would be maintainable only if the 2 2009 (2) ALD (Cri) 801 17 RRR,J Crl.P.No.12454 of 2017 & batch cheques are returned with the noting that the dishonour is on account of insufficiency of funds, and that a complaint cannot be filed if the cheque is returned dishonoured on the ground of connectivity failure. As contended by Smt. K. Sesha Rajyam, learned Senior Counsel, the question whether there were enough funds in the account, to cover the amount set out in the cheques, would be the subject matter of the trial. In the circumstances, the said question would have to be decided in the trial and cannot be decided by this Court in the present criminal petitions.
b) The difference in the name written on the cheque would not, in any manner, make the complaint invalid. The cheque was presented through the account of the complainant and was returned by the bank of the accused on the ground of insufficiency of funds or connectivity failure and not on the ground of difference in the name of the payee.
c) The contention that the complainant is not maintainable, because the authorisation to file the complaint was given after the date of the cheque, cannot be accepted. The authorisation, for filing a complaint on behalf of a juristic person, need not be obtained even prior to the date of the cheque. In fact, the need for filing a complaint would arise only after the dishonour of the cheque and it is only at that stage that a company or a firm would commence the process of filing a complaint by authorising one or more persons or officers of the company or firm to file the complaint.
18 RRR,J Crl.P.No.12454 of 2017 & batch
d) The contention that the complaint can be filed only by the person, who instructed the counsel to issue the legal notice, and that the complaint would not be maintainable, if any other person is authorised, cannot be accepted. In the course of its business, a company or a firm can always delegate the initial issuance of notice to one of its officers and subsequently delegate the function of filing the complaint to any other officer or person. In the usual course, companies and firms, in business, always have a turnover of employees and firms or companies cannot be non-suited merely because the partner / director / employee, who was initially authorised to issue the legal notice, had left the said company or firm.
e) The question whether non-filing of the registration certificate is fatal to the complaint, is a matter which would have to be considered along with the main objections raised by Sri M. Chalapati Rao.
(f) (g) (h) & (i) The contention of the petitioners is that the cheque in question had been signed by one Sri K. Noushad, who is an employee of the company and the complaint would have to be quashed on the twin grounds of non-inclusion of Sri K. Noushad as an accused and the incorrect submission of the complainant that accused No.3 had signed the cheque. A complaint under Section 138 Negotiable Instruments Act is to be filed against the drawer of the cheque. If the drawer of a cheque is a company or a firm, the signatory to the cheque would not be relevant and it would only be the company or the firm which would have to be arrayed 19 RRR,J Crl.P.No.12454 of 2017 & batch as an accused. However, in the case of a company / firm, the director or a partner who is in the management of the company and / or who are aware of the transaction, issuance of the cheque and subsequent dishonour of the cheque on account of insufficiency of funds, can also be arrayed as an accused in view of the provisions of Section 138 read with Section 142 of Negotiable Instruments Act. In this process, the non- inclusion of the person, who signed the cheque on behalf of the company or firm would not, in any manner, result in the complaint being dismissed. In any event, the question of who signed the cheque is a matter of fact, which has to be determined in the trial.
j) The discrepancy in the description of the complainant as a limited company in one part of the complaint and as a firm in another part of the complaint would not be fatal to the complaint. The basic pleadings in the complaint clearly show that the complainant is a firm. In fact, the main objection raised in the present set of criminal petitions, is that the complainant firm has not registered itself prior to the transactions between the complainant and the petitioners. In such a situation, the minor discrepancy in the description of the complaint, will not detract from the maintainability of the complaint.
(k) & (l) The 4th accused is said to have resigned as a director of A.1-company on 28.03.2016 itself and cannot be made liable for any offence. This contention would require the accused persons, to adduce evidence to show that the 4th accused has resigned as a director of A.1- 20 RRR,J Crl.P.No.12454 of 2017 & batch company on 28.03.2016 itself. Further, the letter of resignation produced by the petitioners in the criminal petition cannot be accepted without the same being tested in the course of trial. As far as description of the 4th accused as a man is concerned, the question whether the said mis- description is on the basis of a genuine ignorance of the gender of the 4 th accused and the role of the 4th accused, if any, in the functioning of A.1- company, or whether it was a genuine typographical error as stated by the de facto complainant, is a matter for trial and cannot be decided by this Court in the present proceedings.
m) The question whether sufficient allegations have been made against accused 2 to 4 to fasten them with the vicarious liability of the dishonour of cheques is one of the main grounds raised by Sri M. Chalapathi Rao, and will be dealt with while dealing with this issue.
14. The above grounds were taken in all these criminal petitions, as such, the said grounds are taken to be raised by the petitioners and answered by this Court, in all the petitions, in the manner set out above.
15. Sri M. Chalapati Rao, learned counsel for the petitioners, would contend that Section 69 of the Indian Partnership Act, 1932 bars an unregistered firm from filing any suit for recovery of money. He would submit that the said bar would extend even to criminal complaints and more specifically to complaints filed under Section 138 of the Negotiable Instruments Act. Sri M. Chalapati Rao, would place reliance upon the following table to contend that the firm was not registered at any stage of 21 RRR,J Crl.P.No.12454 of 2017 & batch the criminal process commencing from the issuance of the cheque to intimation of dishonour of the cheque of the accused / petitioners.
Sl. C.C.No./Crl.P.No Date of Date of Dishonour Cause of Date of Firm
No Cheque Date of legal return of complaint registration
notice cheque date
1 CC: 29 / 2017 31.07.2016 31.08.2016 Funds
CrlP:12543/2017 Rs.1,44,764/- 16.09.2016 insufficient 27.10.2016 Not filed
Crlp:508/2018
2. C.C: 30/2017 31.08.2016 08.09.2016 Exceeds
Crl.P: Rs.25,00,000 16.09.2016 Arrangement 27.10.2016 Filed
12454/2017 /- s 06.10.2016
Crl.P: 515/2018
3. C.C: 31/2017 31.07.2016 31.08.2016 Exceeds
Crl.P: Rs.25,00,000 16.09.2016 Arrangement 27.10.2016 Filed
12545/2017 /- s 06.10.2016
Crl.P: 818/2018
4. C.C: 133/2017 30.09.2016 01.10.2016 Exceeds
Crl.P: Rs.26,50,044 17.10.2016 Arrangement 01.12.2016 Filed
12626/2017 /- s 06.10.2016
Crl.P: 763/2018
5. C.C: 412/2017 31.10.2016 01.22.2016 Connectivit
Crl.P: Rs.68,54,758 19.11.2016 y 02.01.2017 Not filed
12612/2017 /- failure
Crl.P: 967/2018
16. He would submit that the alleged debt against which the cheques were said to have been issued to the complainant firm is not a legally recoverable debt as the complainant firm was not a registered firm when the cheque was presented for payment or when notice of dishonour of the cheque and consequent demand for payment of the dishonoured amount had been issued by the complainant and served on the 22 RRR,J Crl.P.No.12454 of 2017 & batch petitioners. He would submit that in such circumstances, the complaint itself is not maintainable as the cheque was not issued for recovery of a legally enforceable debt.
17. Smt. K. Sesha Rajyam, learned Senior Counsel relies upon the Full Bench judgment of the erstwhile High Court of Andhra Pradesh in Dr. A.V. Ramanaiah vs. M. Shekhar to contend that an unregistered firm is not barred from initiating a complaint under Section 138 of the Negotiable Instruments Act.
18. A perusal of the said judgment would show that the Full Bench was considering the question of whether an unregistered partnership firm could maintain a complaint under Section 138 of the Negotiable Instruments Act. The judgment of the Full Bench is binding on this Court and I am in respectful agreement with the ratio laid down by the Full Bench. However, Sri M. Chalapati Rao, learned counsel for the petitioners would contend that the Full Bench had not considered the question whether the debt against which the cheque is said to have been issued is a legally enforceable debt or not. He contends that the bar under Section 69 of the Indian Partnership Act clearly prohibits recovery of the said debt by legal means as the unregistered firm cannot file a suit for recovery of any debt. He would submit that the issuance of the cheques cannot be treated as cheques being issued for payment of a legally enforceable debt. Consequently, the complaint itself would not be maintainable, even if the judgment of the Full Bench of this Court 23 RRR,J Crl.P.No.12454 of 2017 & batch mentioned above is brought into the picture. He relies upon the judgements in Kusum Ingots & Alloys Ltd., vs Pennar Paterson Securities Ltd.,3 and New India Assurance Co. Ltd., vs. M/s Varsha Aqua Farm Visakhapatnam4.
19. Section 69 of the Indian Partnership Act reads as follows:
69. Effect of non-registration.--
(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm.
(3) The provisions of sub-sections (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect,--
(a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or
(b) the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909 (3 of 1909) or the Provincial Insolvency Act, 1920 (5 of 1920) to realise the property of an insolvent partner.3
(2000) 2 SCC 745 4 2018 (1) ALT 684 24 RRR,J Crl.P.No.12454 of 2017 & batch (4) This section shall not apply,--
(a) to firms or to partners in firms which have no place of business in 8 [the territories to which this Act extends], or whose places of business in 9 [the said territories], are situated in areas to which, by notification under 10 [section 56], this Chapter does not apply, or
(b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in the Presidency-towns, is not of a kind specified in section 19 of the Presidency Small Cause Courts Act, 1882 (5 of 1882), or, outside the Presidency- towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887 (9 of 1887), or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim. State Amendments
20. The said provision prohibits recovery of any debts by way of filing of a suit unless the firm is registered. A learned single judge of this Court, in 2018 (1) ALT 684, New India Assurance Co. Ltd., Vs M/s Varsha Aqua Farm Visakhapatnam, while considering the effect of section 69 of the Partnership Act on a suit filed by an unregistered firm, had held that a suit filed by an unregistered firm would be hit by the bar under Section 69 and subsequent registration would not rectify the said defect. There can be no quarrel with this principle.
21. The bar under the provisions of Section 69 of the Indian Partnership Act would operate only against such firms which file a suit without registering themselves. However, an unregistered firm can always register itself, and then file a suit for recovery of its debts. The question 25 RRR,J Crl.P.No.12454 of 2017 & batch whether the debt is legally enforceable or not, would arise only at the stage of filing of the suit. It cannot be said that the cheque issued for payment of a debt of an unregistered firm would amount to a cheque being issued for clearing a legally unenforceable debt. The judgement of the Hon'ble Supreme Court in Kusum Ingots & Alloys Ltd., vs. Pennar Paterson Securities Ltd., does not set out any principle to the contrary.
22. In the circumstances, the said contention of the petitioners would have to fail.
23. Sri M. Chalapati Rao, learned counsel for the petitioners had taken the objection that the requirement under Section 141 of the Negotiable Instruments Act is that specific allegations relating to the specific role and involvement of directors in the affairs of the company and the specific role and involvement of the directors in transactions relating to issuance and dishonour of the cheques would have to be set out before directors / partners of a company/firm can be read into a Section under the Negotiable Instruments Act. He relies upon the judgements in S.M.S. Pharmaceuticals Ltd., vs. Neeta Bhalla and Anr.,; Narendra Kurangi and Ors., vs. M/s. Greenmint India Agritech Pvt. Ltd.,5; and the judgment of the Hon'ble High Court of Delhi in the matter of Sunita Palta and Ors., vs. M/s KIT Marketing Pvt., Ltd., dated 03.03.2020 in CRL.M.C. 1410 of 2018. 5 2016 (2) ALT (CRI) 410 26 RRR,J Crl.P.No.12454 of 2017 & batch
24. Section 141 of the Negotiable Instruments Act reads as follows:
141. 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 and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in 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 or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter. (2) Notwithstanding anything contained 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.
Explanation.--For the purposes of this section, --
27 RRR,J Crl.P.No.12454 of 2017 & batch
(a) "company" means anybody corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in the firm.
25. The principle laid down in the above judgments is that a bald allegation that the directors / partners of a company / firm are involved in the day to day affairs of a company / firm would not be sufficient. Specific allegations relating to the role and nature of their functions in the company / firm and their involvement, if any, in the transactions relating to the issuance and dishonour of the cheque, have to be specifically spelt out before any director / partner of the company would be arrayed as an accused in such cases. In the present cases, the allegations that are required for making out a case, against the accused no. 2 to 4, in terms of the above judgments, are not available.
26. However, the matter does not end there. Section 141 of the Negotiable Instruments Act has two limbs. The first limb contained in section 141 (1) brings directors and persons responsible for the day to day management of the company into the ambit of section 138. The second limb, contained in section 141 (2), which starts with a non obstante clause, stipulates that if it is proved that any offence under section 138 has been committed with the connivance or consent or neglect of any director, or other officers mentioned therein, the said director or officer would also be liable for the offence.
28 RRR,J Crl.P.No.12454 of 2017 & batch
27. In the present case, the allegation in all the complaints, in relation to petitioners 2 to 4 is as follows:
"The accused No.1, represented by Accused No.1 represented by Accused Nos.2 to 4 have approached the complainant for supply of dry chillies accordingly the supply was made by way of credit and accused and accused No.1, rep. by accused Nos.2 to 4 have availed the credit facility on getting the supplies of dry chillies and in that course all accused have fell in due for the dry chillies supplied as per the khata maintained there is a outstanding balance of Rs.1,00,98,971/- and also the interest payable thereupon.
The complainant firm further submits that as against the said balance on repeated persuasions to discharge the same, the accused No.1 represented by accused No.3 being the authorized signatory with the consent of the accused Nos.2, 3 and 4 who are in day to day business activity have issued a cheque holding by the accused No.1."
28. The said allegations, in terms of section 141(2), make out a case against the accused 2 to 4. The question whether these allegations are true or not, can only be answered after a proper trial is conducted in the matter.
29. For all the aforesaid reasons, these criminal petitions are dismissed. However, the 4th accused in all these cases, who is the petitioner in Crl.P.No.967 of 2018, Crl.P.No.515 of 2018, Crl.P.No.818 of 2018, Crl.P.No.763 of 2018 and Crl.P.No.508 of 2018, is said to be a pardanashin lady. In such circumstances her presence during the trial of 29 RRR,J Crl.P.No.12454 of 2017 & batch the above complaints is dispensed with, except when her presence is necessary for examination.
As a sequel, pending miscellaneous petitions, if any, shall stand closed.
__________________________ R. RAGHUNANDAN RAO, J.
4th January, 2023 Js.
30 RRR,J Crl.P.No.12454 of 2017 & batch HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO Crl.P.Nos.12454, 12545, 12612 & 12626 of 2017 And Crl.P.Nos.508, 515, 763, 818 & 967 of 2018 4th January, 2023 Js.