Madras High Court
M.Velammal vs R.Sasikumar on 2 August, 2018
Author: G.R.Swaminathan
Bench: G.R.Swaminathan
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 02.08.2018
CORAM
THE HONOURABLE MR. JUSTICE G.R.SWAMINATHAN
Crl.O.P.(MD).No.15333 of 2010
and
M.P(MD).Nos.2&3 of 2010
1.M.Velammal
2.V.Praglathan ...Petitioners/Accused 2 & 3
Vs.
R.Sasikumar ...Respondent/Complainant
PRAYER: This Criminal Original Petition has been filed under Section 482 of
Criminal Procedure Code, to call for the records in C.C.No.325 of 2007 on the
file of the learned Judicial Magistrate No.II, Karur and quash the same.
!For Petitioners :Mr.K.Govindarajan
^For Respondent :Mr.Kathirvelu
Senior Counsel for
M/s.M.KarthikeyaVenkitachalapathy
:ORDER
This Criminal Original Petition has been filed to call for the records in C.C.No.325 of 2007 on the file of the learned Judicial Magistrate No.II, Karur and quash the same.
2.The respondent herein is a partner in the firm namely, M/s.Akshy Engineering and Company at Karur. The said firm had carried out certain contract works for Thanthonimalai Panchayat Union. The said Union was legally bound to pay a sum of Rs.10,79,750/- to the said firm. The said amount was paid to the firm by way of two cheques. The petitioners herein were the officers in charge of the local authority during the relevant time. They handed over two cheques to one Rathinakumar who was one of the partners of the firm. The other two persons are namely, Palanichamy and Sasikumar.
3.The specific case of the respondent herein is that the two cheques were given by the petitioners herein to the said Rathinakumar were deposited in the bank account of the third party, namely Selvakumar and encashed. Alleging that there was a collusion between the officials of the local authority and the said Rathinakumar and the person through whose account the cheques were encashed, the present complaint in C.C.No.325 of 2007 was filed before the learned Judicial Magistrate No.II, Karur for the offences punishable under Sections 120(b), 109, 166, 166(A) and 119 I.P.C. Originally the learned Judicial Magistrate dismissed the said complaint. The said order was also confirmed in revision by the learned Sessions Judge, Karur.
4.Questioning the same, the complainant filed Crl.O.P(MD).No.9156 of 2007. This Court by order dated 10.09.2007 set aside the order of the learned Judicial Magistrate and as well as that of the learned Session Judge and remitted the matter to the file of learned Judicial Magistrate No.II, Karur to act as per law and proceed further with the matter. It was for the accused on his appearance to raise all pleas and that should be considered on merits at the appropriate stage as contemplated in the aforesaid precedent.
5.In view of the aforesaid order of this Court, the learned Judicial Magistrate took cognizance of the complaint on 26.10.2007 and directed issuance of summon to the accused. The complaint was filed against the said Rathinakumar, the petitioners herein and against one Selvakumar in whose account the cheques were deposited. Contending that the impugned proceedings deserves to be quashed as far as they are concerned, this Criminal Original Petition has been filed by the officials who had handed over the cheques in question and who had shown as A2 and A3.
6.Heard the learned counsel appearing for the petitioners and the learned Senior Counsel appearing for the respondent.
7.The learned Senior Counsel appearing for the respondent contended that the order passed by the learned Magistrate taking the complaint on file cannot be faulted. This Court is in full agreement with the said submission. His contention would be that once the private complaint has been taken on file, it should be allowed to be proceed as laid down in Chapter 19 Part-B of Cr.P.C. Section 244 of Cr.Pc contemplates that after such private complaint which is instituted otherwise than on a police report is taken on file, the complainant will have to adduce evidence for prosecution. The question of discharge of accused will arise under circumstances set out in Section 245 Cr.P.C.,
8.Though the learned Senior Counsel for the respondent is right in his contention, this Court is of the view that the power of this Court to quash the proceedings under Section 482 Cr.P.C cannot be shut out. The learned Senior Counsel drew the attention of this Court to Rule 32 of Tamil Nadu Village Panchayats (Receipts and Expenditure and Maintenance of the Accounts of Village Panchayats) Rules, 2000. The said provisions reads as follows;
?payments shall be made only by crossed account payee cheques drawn in favour of the parties as per the procedure laid down by the Government from time to time?.
9.The learned Senior counsel brought to the notice of this Court the Circular dated 30.01.2006 issued by the Reserve Bank of India. The said circular reads as follows:
?As banks are aware, an account payee cheque is required to be collected for the payee constituent. As regards account payee cheques drawn in favour of UCBs, banks which credit cheques drawn in their favour by other banks marked ?A/c.payee? to the accounts of constituents who are not named payees therein, without proper mandate of the drawer, do so at their own risk and will be responsible for the unauthorized payment.
2.In view of the recent misuse of Initial Public Officer (IPC) process by certain individuals/entitles and reports received in this regard from SEBI, the Reserve Bank of India took up detailed investigations at some banks to ascertain the modus operandi adopted by different parties in manipulating the system. It has come to our notice that banks had credited the proceeds of individual account payee cheques into the accounts of other customers, at times, under the pretext of prudent market practice. This has resulted in manipulation of the payment system and has facilitated the perpetration of irregularities.
3.Being satisfied that in consonance with the legal requirements and in particular the intent of the Negotiable Instruments Act, and with a view to protect the UCBs being burdened with liabilities arising out of unauthorized collections, and in the interest of the integrity and soundness of the payment and banking systems, and in order to prevent recurrence of deviations observed in the recent past, the Reserve Bank has considered it necessary to prohibit the banks from cheating 'account payee' cheque to the account of any person other than the payee named therein. The Reserve Bank accordingly directs the UCBs that they should not collect account payee cheques for any person other than the payee constituent.
4.Where the drawer/payee instructs the bank to credit the proceeds of collection to any account other than that of the payee, the instruction being contrary to the intended interest character of the 'account payee' cheque, bank should ask the drawer/payee to have the cheque or the account payee mandate thereon withdrawn by the drawer. This instruction would also apply with respect to the cheque drawn by a bank payable to another bank.
5.These directions are issued in exercise of the powers conferred under Section 35A of the Banking Regulation Act, 1949 (AACS)?.
10.The learned Senior counsel for the respondent also brought to the notice of this Court that even though in the Negotiable Instruments Act, 1881, the expression ?account payee? has not been defined, as per banking practice, there is a clear distinction between a ?crossed cheque? and an ?account payee cheque?. He also drew the attention of this Court to the decision of the High Court of Kerala in Crl.M.C.No.424 of 2005 (Kuruvila Vs.Sathi Rajan and another).
11.This Court went through the entire materials on record. This Court is clearly of the view that the complainant is right in his contention that the officials ought to have issued only account payee crossed cheques. They clearly erred in issuing the cheques in question. When the relevant rules mandate that only crossed account payee cheque must be issued, they should have certainly abided by the rules. But then, the question arises whether the petitioners deserve to be prosecuted. The impugned complaint has been filed under Sections 120(b), 109, 166, 166-A and 119 I.P.C. The penal provisions would have been attracted against the petitioners if they had disobeyed the aforesaid statutory mandate with the necessary mens rea.
12.In the present case, it is not in dispute that M/s.Akshy Engineering & Co has three partners namely Rathinakumar, Selvakumar and Palanichamy. The local authority owes money to the said firm. The petitioners had handed over the cheques only to the partner of the firm and not to the third party. It is true that the complainant had caused issuance of notice to the local authority calling upon them not to hand over the cheques in question. But the said notice was received on 08.07.2004. But by then, the cheques already been handed over by the petitioners herein to the said Rathinakumar. It is well settled that as per the Partnership Act, one partner is entitled to act on behalf of the firm and the other partners. The act of one partner would certainly be binding on the other partners. There is no material to show that the petitioners had colluded with one partner of the firm to the prejudice of the other partners.
13.This Court is of the view that the impugned proceedings deserve to be quashed insofar as the petitioners are concerned. Further, due to inter se dispute among the partners, the Government Officials cannot suffer any collateral damage. Therefore, the impugned proceedings stand quashed insofar as the petitioners are concerned. A direction is given to the learned Judicial Magistrate No.II, Karur to conclude the C.C.No.325 of 2007 within a period of three months from the date of receipt of a copy of this order.
14.It is submitted that the petitioners have retired from service. However, they had played a crucial role in the entire transaction. Therefore, the learned counsel for the petitioners undertakes on instructions from the petitioners that the petitioners can be called upon by the trial court as witnesses. Based on the undertaking given before this Court, a direction is issued to the petitioners accordingly.
15.With this observation and direction, the Criminal Original Petition is allowed. Consequently, the connected miscellaneous petitions are closed.
To The Judicial Magistrate No.II, Karur .