Andhra HC (Pre-Telangana)
B. Lakshmi vs Trishul Coal Services & Transporters ... on 12 February, 1997
Equivalent citations: 1997(1)ALD(CRI)937, [1998]93COMPCAS292(AP)
Author: T. Ranga Rao
Bench: T. Ranga Rao
ORDER
1. The revision is filed against the orders Dtd. 12-7-1996 in Crl.M.P. No. 2591/1996 in C.C. No. 11/1996 on the file of the XVII Metropolitan Magistrate, Hyderabad.
2. The facts in giving rise to the filing of this revision are, briefly, as follows :-
The third respondent, B. Krishna Rao, filed complaint against M/s. Trishul Coal Services and Transporters, Himayathnagar, Hyderabad; B. Narsing Rao, Managing Partner and also against the petitioner herein Smt. B. Lakshmi w/o B. Narsing Rao, as partners of the said firm under Sections 138 and 142 of the Negotiable Instruments Act alleging that the accused No. 2, Managing Partner of M/s. Trishul Coal Services & Transporters, has issued a cheque for Rs. 50,000/- (Rupees Fifty Thousands only) on 15-4-1995 drawn on State Bank of India, to discharge the hand loan taken from the complainant and the said cheque was dishonoured with an endorsement "Account Closed" and the accused failed to pay the amount in spite of notice.
3. The learned Magistrate took the case on file and issued summons to the accused 1 to 3.
4. The petitioner, who is A-3 in CC No. 11 of 1996 on the file of the XVII Metropolitan Magistrate, Hyderabad filed a petition in Crl.M.P. No. 2591/1996 requesting to discharge her contending that she was implicated as an accused, as partner of the first respondent firm and the complaint is vague and it does not specifically mention for implicating her as an accused in the said case.
5. The complainant filed a counter stating that she is a partner of the firm and every partner is liable for the liabilities of the company.
6. The learned Magistrate on considering the material on record, dismissed the said petition.
7. Aggrieved by the said order, the petitioner filed this revision.
8. The point that arises for consideration is whether the impugned order is unsustainable in law ?
9. The learned counsel for the petitioner submitted that there is no allegation in the complaint that the petitioner was in charge and responsible for carrying on the business of the firm and in the absence of any such allegation, the petitioner cannot be tried for an offence under Section 138 of the Negotiable Instruments Act when admittedly she has not issued the cheque. He further submitted that the learned Magistrate has erred in observing that he has no power to discharge the accused after issuing the summons and the Supreme Court has held that no specific provision is required for the Magistrate to drop the proceedings, that the order issuing the process is an interim order and not a judgment and hence, the observation of the learned Magistrate is incorrect, and he relied on a decision K. M. Mathew v. State of Kerala, , wherein it is held as under at Page 3780; of Cri LJ) :-
".. When the accused enters appearance in response to the summons, the Magistrate has to take proceedings under Chapter XX of the Code. But the need to try the accused arises when there is allegation in the complaint that the accused has committed the crime. If there is no allegation in the complaint involving the accused in the commission of the crime, it is implied that the Magistrate has no jurisdiction to proceed against the accused.
It is open to the accused to plead before the Magistrate that the process against him ought not to have been issued. The Magistrate may drop the proceedings if he is satisfied on reconsideration of the complaint that there is no offence for which the accused could be tried. It is his judicial discretion. No specific provision is required fox the Magistrate to drop the proceedings or rescind the process. The order issuing the process is an interim order and not a judgment. It can be varied or recalled. The fact that the process as already been issued is no bar to drop the proceedings if the complaint on the very face of it does not disclose any offence against the accused ..."
He further relied on a decision Mutthinedi Ramakrishna Chowdary v. Meenavalli Mausalayya Chowdary, 1994 (2) ALT 7 (NRC).
10. The learned counsel for the respondents submitted that the petitioner is also a partner of the said firm and the cheque was issued on behalf of the firm by the Managing Partner/A-2 and she is also liable for the prosecution.
11. It is relevant to extract Section 141(1) of the Negotiable Instruments Act to appreciate the contention of both parties :
"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 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 has exercised all due diligence to prevent the commission of such offence.."
12. It is clear from a reading of Section 141 of the Act that if the offence under Section 138 of the Negotiable Instruments Act is committed by the company or a firm, every person who was in charge and responsible for the affairs and conduct of the business of the company or firm, as the case may be, at the time when the alleged offence was committed, is also liable for prosecution along with the company. It is an admitted fact, in this case, that the cheque was issued by A-2 the Managing Partner of A-1 firm, and undisputably there is no allegation in the complaint that the petitioner herein (A-3) was in charge and responsible for the conduct of the business of the A-1 firm at the time of alleged commission of the offence. Therefore, in the absence of any such allegation and when admittedly, the cheque was issued by A-2, the Managing Partner of A-1 firm and in view of Sections 138 and 141 of the Negotiable Instruments Act, I have no hesitation in holding that the complainant is not entitled to initiate prosecution against every partner of the firm. The same view was taken by the High Courts of Punjab and Haryana in a decision Amrit Rani v. M/s. Malhotra Industrial Corporation, 1992 ISJ (Banking) 129, and hence, the proceedings against the petitioner are liable to be quashed and accordingly quashed.
13. The other contention of the learned counsel for the petitioner that the observation of the learned Magistrate that he is not having power to drop the proceedings, once he issued summons for the appearance of the accused is also incorrect in view of the decision of the apex Court as well as this Court in K. M. Mathew's case and Mutthinedi Ramakrishna Chowdary's case, 1st and 2nd referred to above. The learned Magistrate has got power to drop the proceedings if after appearance of the accused it is found that there is no evidence to be tried against the accused.
14. In the result, the revision is allowed and the order of the learned Magistrate dtd. 12-7-1996 in Crl.M.P. No. 2591/1996 in CC No. 11/1996 is set aside and the proceedings in CC No. 11/1996 insofar as the petitioner concerned, are quashed.
15. Revision allowed.