Gujarat High Court
Ritaben Kanubhai Patel vs State Of Gujarat on 16 September, 2025
NEUTRAL CITATION
R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 6202 of 2017
With
R/CRIMINAL MISC.APPLICATION NO. 6517 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J. C. DOSHI
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Approved for Reporting Yes No
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RITABEN KANUBHAI PATEL
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR PRAVIN GONDALIYA(1974) for the petitioner in CrMA 6202/2017
MR AMIT R JOSHI for the petitioner in CrMA 6517/2017
MR DIPAN DESAI(2481) for the Respondent(s) No. 2
MR SOHAM JOSHI, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 16/09/2025
ORAL JUDGMENT
1. This common order governs the disposal of captioned petitions as both the petitions arise from selfsame private complaint.
2. Criminal Misc. Application No.6202 of 2017 is filed by the petitioner Ritaben - original accused No.2 for quashing and setting aside proceedings of Criminal Case No.3142 of 2014 filed by the private respondent pending before the learned Addl. Chief Metropolitan Magistrate, Court No.34, Page 1 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined Ahmedabad.
2.1 Criminal Misc. Application No.6517 of 2017 is filed by the petitioner Pareshbhai - original accused No.1 for quashing and setting aside proceedings of Criminal Case No.3183 of 2015 filed by the private respondent pending before the learned CJM, Ahmedabad Rural.
3. Brief facts of the case are as under:-
3.1 Pavan Motors (erstwhile M/s. Yash Car) (in short "partnership firm") is registered under the Indian Partnership Act, 1932. Petitioners are the partners of the partnership firm. Husband of the complainant is friend of the petitioners and therefore, they have homely relations.
3.2 That between the 2011 and 2013, since the petitioners are in financial crunch, the private respondent had lent Rs.75 lakh to the petitioners.
3.3 Thereafter, for repayment of the same, the partnership firms, wherein the petitioners are partners, issued four different cheques to the tune of Rs.75 lakh in favour of the complainant. When the complainant presented said cheques, it were dishonoured.
3.4 Therefore, private complaints being Criminal Case No. Criminal Case No.3142 of 2014 and Criminal Case No.3183 of 2015 are filed, after completing statutory procedure, process Page 2 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined is issued against the petitioners.
3.5 Hence, present petitions for quashment of the complaints.
4. For petitioner Rita Ben, I have heard heard learned advocate Mr. Pravin Gondaliya, for petitioner Pareshbhai, I have heard learned advocate Mr. AR Joshi, learned advocate Mr. Dipan Desai appearing for the private respondent in both the matters and learned APP Soham Joshi for the respondent State is also heard.
SUBMISSIONS FOR THE PETITIONER OF CRMA 6202/2017
5. Learned advocate Mr. Pravin Gondaliya made following submissions:-
5.1 That the petitioner is not the signatory to the cheque.
She is not involved in the day-to-day affairs of the partnership firm. The petitioner is nowhere connected with the transaction alleged in the complaint. That the averments made in the complaint indicates that there was financial or monetary transaction took place between the complainant and accused No.1 Pareshbhai. A reference has been made to para 3 of the complaint that accused No.1 Pareshbhai has put his property for security in the regards to financial transaction being a subject matter of the criminal complaints. Lastly, it Page 3 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined was submitted that the complainant has not joined the partnership firm as a party accused and therefore, there is clear defiance of section 141 of the NI Act.
5.2 Mainly upon above submissions, learned advocate Mr. Gondaliya requests to allow Criminal Misc. Application No.6202 of 2017 and to quash private complaint against the petitioner.
SUBMISSIONS FOR THE PETITIONER OF CRMA 6517/2017
6. Learned advocate Mr. Joshi made following submissions:-
6.1 That the petitioner has resigned from the partnership firm with effect from 31st March 2014. The complaint in question for dishonour of the cheques is filed subsequent there to. That the complainant since has been retired as a partner from the partnership firm, he cannot be prosecuted for the transaction took place with the partnership firm, whereby he was erstwhile partner.
6.2 That the income tax return for AY 2015-16 shows that the petitioner is not the partner in the partnership firm for the financial year commencing from 1st April 2014 to 31st March 2015 and in view of that, it is submitted that the prosecution launched against the petitioner is not only mala fide but vexatious as well. That the partnership firm has not been joined in the complaint and therefore it attracts the breach of Page 4 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined section 141 of the NI Act and as such, the complaint against the partners without joining the partnership firm is not maintainable.
6.3 The aforesaid submissions are made to allow Criminal Misc. Application No.6517 of 2017 by quashing the impugned criminal complaint.
SUBMISSIONS FOR THE PRIVATE RESPONDENT
7. Per contra, learned advocate Mr. Desai for the private respondent would submit that the cheques in question are signed by accused No.1 Pareshbhai. He referred to the copy of the cheques placed on record at page Nos.58, 61, 64 and 67 and submitted that those cheques were signed by accused Pareshbhai prior to resigning from the partnership firm. Signatures are not denied. He would further submit that retirement deed placed by petitioner Pareshbhai to establish that he was retired from the partnership firm w.e.f. 31.3.2014, however, it is unregistered and has been reported to the Registrar of Firms only on 21.4.2016. He would further submit that according to the complainant, petitioner Pareshbhai played major role in commission of offence. He would further submit that another accused Ritaben, who is partner of the partnership firm, in his petition, alleges that entire transaction took place with petitioner Pareshbhai. Whereas, petitioner Pareshbhai in order to shrink his liability, claimed that he has resigned from the partnership firm. Thus, he would submit that it is a systematic and well designed Page 5 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined contentions of both the petitioners to avoid criminal liability.
7.1 Learned advocate Mr. Dipan Desai refers to the judgment of the Hon'ble Apex Court in case of Rallis India Limited Versus Poduru Vidya Bhusan, 2011 (13) SCC 88 to contend that whether the petitioner Pareshbhai has resigned from the partnership firm as partner and did not owe any vicarious liability could not have been the argument or reason for quashing the offence u/s 138 and 141 of the NI Act at threshold. Having referred to the complaint, he would submit that necessary averments are made by the complainant to assign the role to both the partners. Vicarious liablities of the petitioners are prima facie attracted. He would further submit that since requirement of section 141 of the NI Act has fully been satisfied at this juncture, in view of that, he prays that this Court may not exercise the discretion to quash the proceedings of the Criminal Case qua petitioner Ritaben is concerned.
7.2 Lastly, learned advocate Mr. Desai would submit that the Hon'ble Apex Court in case of Dhanasingh Prabhu Vs. Chandrasekar and another, 2025 (3) GLH 342, held that merely non joining of the partnership firm as accused would not fatal to the prosecution. The partnership firm can be arraigned as accused later on by amending the complaint. Therefore, he would submit that the contention that the partnership firm has not been joined as accused now does not survive.
Page 6 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined 7.3 Upon above submissions, learned advocate Mr. Desai requests to dismiss both the petitions.
8. In a private complaint filed u/s 138 of the NI Act, learned APP prays to pass necessary orders.
ANALYSIS AND FINDINGS:-
9. Having heard learned advocates for both the parties and having perused the grounds and reasons of both the petitions as well as giving anxious consideration to the documents placed on record, what could be noticeable that both the petitioners are partners of the partnership firm and they are trying to shrink criminal vicarious liability by putting the case that one of the partners has resigned from the partnership firm w.e.f. 31.3.2014 and therefore, he cannot be prosecuted in a complaint filed later on, as he was no longer surviving partner from the date of filing of the complainant. Whereas, another petitioner Ritaben to unshoulder vicarious liability stated that she is not active partner and she is not involved in the day-to-day affairs of the partnership firm. The common argument was made that the partnership firm has not been joined as accused and in absence thereof, criminal complaint u/s 138 of the NI Act is not maintainable against the partners.
10. Last submission if taken firstly, it appears that the Hon'ble Apex Court recently addressed the issue that whether without joining partnership firm, criminal complaint u/s 138 of the NI Act r/w section 141 of the NI Act is maintainable, in Page 7 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined case of Dhanasingh Prabhu (supra). The relevant paras are para 7.9, 7.20 to 7.24, 8, 8.1, 8.2, 9, 9.1 to 9.11, which read as under:-
"7.9 A partnership firm, unlike a company registered under the Companies Act, does not possess a separate legal personality and the firms name is only a compendious reference for describing its partners. This fundamental distinction between a firm and a company rests on the premise that the company is separate from its shareholders. In that context, the words of Lord Macnaghten in Salomon vs. Salomon & Co. Ltd., [1897] AC 22 (HL), (Salomon) are instructive:
the company is at law a different person altogether from the subscribers......; and though it may be that after incorporation the business is precisely the same as it was before and the same persons are managers and the same hands receive the proceeds, the company is not in law, the agent of the subscribers or trustee for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by the Act.
7.19 The liability of partners for the debts of the business is unlimited and they are jointly and severally liable for all business obligations of the partnership firm. Sections 25 and 26 of the Partnership Act are relevant in this regard, which are reproduced as under:
25. Liability of a partner for acts of the firm.
Every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner.
Page 8 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined
26. Liability of the firm for wrongful acts of a partner. Where, by the wrongful act or omission of a partner acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefor to the same extent as the partner.
Section 25 provides that every partner is liable jointly with all the other partners and also severally for all acts of the firm done by the partner. Since a firm is not a legal entity but only a collective name for all the partners, it does not have any legal existence apart from its partners. Therefore, any liability of a firm has the same effect of a liability against the partners. This is because, the partners remain liable jointly and severally for all acts of the firm, vide Dena Bank vs. Bikhabhai Prabhudas Parekh and Co., (2000) 5 SCC 694 .
7.20 Moreover, the partners of a firm have unlimited liability to the creditors of the firm. This is as opposed to a limited company or a limited liability partnership, wherein the liability of the directors or the shareholders is to the extent of their share in the limited company or limited liability partnership and limited to the nominal value of the shares held by them or the amount guaranteed by the shareholder when it comes to a company. Thus, the debt of the firm is the personal debt of a partner and the debt of the firm has to be incurred by each partner as a financial personal liability.
7.21 Insofar as criminal liability is concerned, once it is established that an illegal act has been committed by the firm or its partners, then the partners will be jointly liable for it. Moreover, the act constituting an offence will also have to be Page 9 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined decided with reference to the statute creating such an offence i.e. the Negotiable Instruments Act, which is the Act under consideration. When Section 25 of the Partnership Act is read together with Section 145 of the Act, in the context of dishonour of a cheque, the partner of a firm who is also liable jointly with a firm, can however rebut the statutory presumption.
7.22 Conversely, Section 26 states that where by the wrongful act or omission of a partner, acting in the ordinary course of the business of a firm, or with the authority of his partners, loss or injuries are caused to any third party, or any penalties are incurred, the firm is liable therefore to the same extent as the partner. The liability of the firm for acts done by the partner would arise when such acts are done in the ordinary course of the business of the firm.
7.23 Moreover, since the firm by itself cannot transact any business, if a partner of the firm commits any breach, all the partners would become liable for the consequent penalties, just as the firm would be liable. Further, if a penalty is imposed on a partnership firm for contravention of a statute, it amounts to levy of penalty on the partners also and there is no separate or independent penalty on the partners for the said contravention.
7.24 However, the liability of a shareholder in a company is limited to the nominal value of shares held by them or the amount guaranteed by the shareholder. The separate property of the shareholder is beyond a creditor seeking to enforce its dues against the company.
8. It is therefore appropriate to remind ourselves that a partnership firm, unlike a company registered under the Indian Companies Act or a Page 10 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined limited liability partnership registered under the Limited Liability Partnership Act, 2008, is not a distinct legal entity and is only a compendium of its partners. Even the registration of a firm does not mean that it becomes a distinct legal entity like a company. Hence, the partners of a firm are co- owners of the property of the firm, unlike shareholders in a company who are not co-owners of the property of the company.
8.1 According to Lindley and Banks on Partnership, 21st Edition, it is important to identify the precise significance of a firm name since it represents an attribute which tends to encourage the commercial rather than the legal view of a firm. According to Lindley, the name under which a firm carries on business is in point of law a conventional name applicable. Only to the persons who on each particular occasion when the name is used, are members of the firm."
8.2 The firm name is thus a convenient method of describing a group of persons associated together in business at a certain point of time: no more or no less. If a number of people carry on business under such name or style, anything which they may do in that name or style will be just as effective as if their individual names had been used. An obvious example of this is the use of firm name on bills of exchange and promissory notes.
9. The aforesaid principles have to be applied to Sections 138 and 141 of the Act. For immediate reference, the said sections are extracted as under:
138. Dishonour of cheque for insufficiency, etc., of funds in the account.
Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, Page 11 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
(a) the cheque has been presented to the bank within a period of six months* from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation.For the purposes of this section, debt or other liability means a legally enforceable debt or other liability.
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141. Offences by companies.
(1) If the person committing an offence under Section 138 is a company, every person who, Page 12 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined 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 subsection (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,
(a) company means any body corporate and includes a firm or other association of individuals; and
(b) director, in relation to a firm, means a partner in the firm.
Page 13 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined 9.1 Section 138 of the Act creates an offence for dishonour of a cheque for, inter alia, insufficiency of funds in the account by a deeming fiction. The complainant who is a victim of the dishonour of cheque issued by an accused has the right to file a private complaint in terms of Section 200 of the CrPC, (equivalent to Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short, BNSS)). When the said offence is proved against an individual/natural person, he is punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque. But when such an offence is committed by a company, which is an artificial juristic entity, Section 141 of the Act applies. The said Section states that if the person committing an offence under Section 138 of the Act 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. Since an artificial juristic entity such as a company cannot be punished with imprisonment, by a deeming fiction certain persons associated with such an artificial juristic entity are deemed to be guilty of the offence and made liable to be proceeded against and punished accordingly. This is an instance of vicarious liability on 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. This is for the reason that a company is a separate entity vis--vis its shareholders or those who are in charge of the conduct of its business since a company is an artificial juristic entity. Thus, the liability would be on the company as well as on the category of persons mentioned above. Such a person must be both in charge of, as well as responsible to, the company for the conduct of the business of the company. However, the aforesaid category of person who is deemed to be guilty of Page 14 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined the offence along with the company, can escape punishment (i) if he can prove that the offence was committed without his knowledge; or (ii) that he had exercised all due diligence to prevent the commission of such an offence. Hence, by way of a proviso to sub-section (1) to Section 141 of the Act, two defences are provided for the category of persons named in sub-section (1) of Section 141.
9.2 The second proviso to sub-section (1) of Section 141 is an exception for a person who is a director of the company who shall not be liable for prosecution under Chapter XVII of the Act. The second proviso is not relevant for the purpose of this case as the said proviso refers to ex-officio directors representing the Central Government or state governments or a financial corporation owned or controlled by the Central Government or the state government, as the case may be.
9.3 Sub-section (2) of Section 141 begins with a nonobstante clause. It extends the scope of categories of persons associated with the company who could also be deemed to be guilty of an offence under Section 138 of the Act and shall be liable to be proceeded against and punished accordingly. Sub-section (2) of Section 141 states that where the offence has been committed by a company and it is proved that the offence has been committed with the (i) consent; or (ii) connivance of; or (iii) is attributable to, any neglect on the part of any director, manager, secretary or other officer of the company, such aforesaid categories of persons shall also be deemed to be guilty, proceeded against and punished accordingly. While sub- section (1) of Section 141 restricts the category of persons who would be deemed to be liable when the offence is committed by a company, sub-section (2) of Section 141 extends the scope of liability to further categories of persons namely, director, manager, secretary or other officer of the company to be made liable provided there is proof that such Page 15 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined category of persons associated with the company had committed the offence with the consent or connivance of, or due to any negligence on their part. The expression shall also be deemed to be guilty in sub-section (2) of Section 141 of the Act would imply that the object and purpose of the said provision is to encompass the categories of persons mentioned in that sub-section owing to a criminal intent or negligence attributable on their part.
9.4 Thus, while under sub-section (1) of Section 141 of the Act, the criminal liability on the category of persons named in the said sub-section is owing to the position that person holds in the company, when the company is said to have committed the offence under Section 138 and therefore the deeming fiction under sub-section (2) of Section 141 of the Act, on the other hand, there has to be a proof with regard to consent or connivance for the committing of the offence or a criminal negligence on the part of the director, manager, secretary or other officer of the company who shall also be deemed to be guilty of the offence under Section 138 of the Act. Thus, under sub-section (2) of Section 141 of the Act, when the company is guilty of the offence under Section 138 of the Act, a director, manager, secretary or other officer of the company shall also be deemed to be guilty of the offence and liable to be proceeded against and punished accordingly, provided there is proof of mens rea on the part of such category of persons. Hence, a director, manager, secretary or other officer of the company cannot be proceeded against per se by virtue of the position they hold in the company but can be proceeded against only when there is proof that the offence under Section 138 was committed by the company with their consent or connivance or due to negligence on their part. The standard of proof is higher under sub-section (2) of Section 141 vis--vis the category of persons mentioned therein with regard to their specific role in the commission of the offence under Section Page 16 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined
138. This implies that the primary liability of the company is transferred to the above categories of persons who are deemed to be guilty vicariously having regard to the deemed penal nature of the offence under Section 138 of the Act.
9.5 The Explanation to Section 141 has two clauses. Clause (a) defines a company to mean any body corporate and includes a firm or other association of individuals. The expression company encompasses, inter alia, a body corporate which refers to a company incorporated under the provisions of the Companies Act or a statutory body. The expression company is inclusive inasmuch as it includes a firm, meaning thereby a partnership firm, as per the provisions of the Partnership Act, as well as a limited liability partnership or other association of individuals. Clause (b) of the Explanation defines a director as mentioned in subsection (2) of Section 141 of the Act in relation to a firm to mean a partner in the firm. Thus by a legislative device an inclusive definition is added by way of an Explanation to Section 141 of the Act inasmuch as in jurisprudence and in law, a company is a distinct body corporate and separate juristic entity as compared to a partnership firm.
9.6 On a conjoint reading of the various clauses of Section 141, what emerges is that the expression company has been used in an expansive way to include not just a company incorporated under the provisions of the Companies Act stricto sensu but also any body corporate such as a statutory company as well as other artificial juristic entity such as a partnership firm or other association of individuals. Hence, the expression director in sub- section (2) of Section 141 is not restricted to a director of an incorporated company or a statutory body, but also includes a partner of a firm. The expression director in sub-section (2) of Section 141 of the Act in relation to a firm means a partner, Page 17 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined which is also a legislative device adopted by the Parliament knowing fully well and being conscious of the fact that a partnership firm, jurisprudentially speaking, does not stand on par with a director of a body corporate. Since the Parliament has used the expression company encompassing all types of juristic persons, it was necessary to give an expanded definition to the expression director in relation to a firm to mean a partner in the firm. Therefore, the inclusion of a firm within the meaning of the expression company is by a legal fiction and by way of a legislative device only for the purpose of creating a liability on the partners of the firm, which in any case, they are liable under the law of partnership in India. But the definition of the word company including a partnership firm has been incorporated in the Explanation for the sake of convenience, as otherwise a similar provision would have to be inserted for the very same purposes. Instead of replicating the same definition for different kinds of juristic entities, the Parliament has thought it convenient to add an Explanation to define a company for the purpose of Section 141 of the Act in the context of an offence committed by, inter alia, a company, as understood within the meaning of the Companies Act, and also include a firm or other association of individuals within the definition of company. Similarly, under clause (b) of the explanation, the expression director, in relation to a firm, means a partner in the firm.
9.7 This also demonstrates the fact that while a director is a separate persona in relation to a company, in the case of a partnership firm, the partner is not really a distinct legal persona. This is because a partnership firm is not really a legal entity separate and distinct as a company is from its directors but can have a legal persona only when the partnership firm is considered along with its partners. Thus, the partnership firm has no separate recognition either jurisprudentially or in Page 18 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined law apart from its partners. Therefore, while a director of a company can be vicariously liable for an offence committed by a company, insofar as a partnership firm is concerned, when the offence is committed by such a firm, in substance, the offence is committed by the partners of the firm and not just the firm per se. Therefore the partners of the firm are liable for the dishonour of a cheque, even though the cheque may have been issued in the name of the firm and the offence is committed by the firm. Therefore, in law and in jurisprudence, when a partnership firm is proceeded against, in substance, the partners are liable and the said liability is joint and several and is not vicarious. This is unlike a company which is liable by itself and since it is an artificial juristic entity, the persons in charge of the affairs of the company or who conduct its business only become vicariously liable for the offence committed by the company.
9.8 However, jurisprudentially speaking, the partners of a partnership firm constitute the firm and a firm is a compendious term for the partners of a firm. This is opposed to the position of a director in a company which is a body corporate stricto sensu and such a company is a separate juristic entity vis--vis the directors. On the other hand, a partnership firm has no legal recognition in the absence of its partners. If a partnership firm is liable for the offence under Section 138 of the Act, it would imply that the liability would automatically extend to the partners of the partnership firm jointly and severally. This underlying distinction between a partnership firm and a company which is a body corporate has to be borne in mind while dealing with an offence committed by a company or a partnership firm, as the case may be, within the meaning of Section 138 read with Section 141 of the Act. To reiterate, in the case of a partnership firm, there is no concept of vicarious liability of the partners as such. The liability is joint and several because a partnership firm is the business of Page 19 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined partners and one cannot proceed against only the firm without the partners being made liable.
9.9 Therefore, even in the absence of partnership firm being named as an accused, if the partners of the partnership firm are proceeded against, they being jointly and severally liable along with the partnership firm as well as inter-se the partners of the firm, the complaint is still maintainable. The accused in such a case would in substance be the partners of the partnership firm along with the firm itself. Since the liability is joint and several, even in the absence of a partnership firm being proceeded against by the complainant by issuance of legal notice as mandated under Section 138 of the Act or being made an accused specifically in a complaint filed under Section 200 of CrPC, (equivalent to Section 223 of the BNSS), such a complaint is maintainable.
9.10 Thus, when it is a case of an offence committed by a company which is a body corporate stricto sensu, the vicarious liability on the categories of persons mentioned in sub-section (1) and sub-section (2) of Section 141 of the Act accordingly would be proceeded against and liable for the offence under Section 138 of the Act. In the case of a partnership firm on the other hand, when the offence has been proved against a partnership firm, the firm per se would not be liable, but liability would inevitably extend to the partners of the firm inasmuch as they would be personally, jointly and severally liable with the firm even when the offence is committed in the name of the partnership firm.
9.11 To reiterate, when the partnership firm is only a compendious name for the partners of the firm, any offence committed under Section 138 read with Section 141 of the Act would make the partners of the firm jointly and severally liable with the firm. If, Page 20 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined on the other hand, the Parliament intended that the partners of the firm be construed as separate entities for the purpose of penalty, then it would have provided so by expressly stating that the firm, as well as the partners, would be liable separately for the offence under Section 138 of the Act. Such an intention does not emanate from Section 141 of the Act as the offence proved against the firm would amount to the partners of the firm also being liable jointly and severally with the firm. Therefore, there is no separate liability on each of the partners unless subsection (2) of Section 141 applies, when negligence or lack of bona fides on the part of any individual partner of the firm has been proved."
11. Having considered the law laid down by the Hon'ble Apex Court in the aforestated judgment, learned advocates Mr. Gondaliya and Mr. Joshi appearing for the respective petitioners would submit that the ground of non- maintainability of criminal complaint u/s 138 r/w section 141 of the NI Act without joining partnership firm is no more available to the petitioner.
12. As far as contention of petitioner Pareshbhai that he has resigned w.e.f. 31.3.2014 from the partnership firm and therefore, he cannot be prosecuted in a criminal complaint filed against the partnership firm is concerned, if we referred the cheques in question, which are dishonoured, all of them are signed by petitioner Pareshbhai prior to 31.3.2014. Moreover, the petitioner Pareshbhai has also replied statutory notice issued by the complainant (page 78). In the said reply, petitioner Pareshbhai did not claim that he has resigned as partners from the partnership firm. Rather, it has been Page 21 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined contended in para 5 of the reply to the notice that entire transaction has been carried out by petitioner Pareshbhai on behalf of the partnership firm. The retirement deed placed on record at Annexure D is unregistered document having no legal value or rather affront to the provisions of law, is inadmissible as much non-relevant document. Perusal of page 103 indicates that this retirement deed has been forwarded to the Registrar Of Firms only on 21 st April 2016. It is also relevant to refer para 2 and 3 of the petition filed by petitioner Ritaben, wherein petitioner Ritaben claimed that the entire transaction has been carried out by petitioner Pareshbhai and not by her and that she is only paper partner. She did not say whisper of words that the petitioner Pareshbhai retired from the partnership firm. Para 2 and 3 reads as under:-
"2. It is submitted that the complaint filed by the respondent No.2 under Sec.138 of the Negotiable Instruments Act speaks transactions and the business relations made by accused No.1 and the complainant. The petitioner is unnecessarily dragged into the litigation only because she was one of the partner of Pawan Motors, a partnership firm which was being managed and looked after by the accused No.1. petitioner was 'not even aware about any such monetary transaction between the accused No.1 and the complainant. The accused No.1 behind back of the petitioner issued the cheque as a security from the account of the partnership firm. None of the cheque is signed by the present petitioner. It is submitted that the petitioner is not the signatory to the so called cheques.
3. It is submitted that the partnership firm namely Pawan Motors was doing the business of sales and purchase of old motor cars. The petitioner being a lady she was the partner on paper. The entire Page 22 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined business was being looked after by the accused No.1. It is submitted that the averment of the complaint cleverly drafted just with a view to drag the present petitioner in the court as a partner of the firm. It is submitted that the petitioner never went to the office of the complainant never had taken any amount from the complainant. The story of giving lakhs of rupees in cash is also not believable. It is further submitted that alleged transaction is taken place between the accused No.1 and the complainant and therefore as per say of the complainant the accused No.1 has given his flat as a security against the so called amount taken by the accused No.1 and the agreement is entered between the complainant and the accused No.2."
13. Apt to note that this petition is filed on 1.3.2017. Aforesaid reply is filed later on. Thus, all the material indicates that the retirement deed on record was created with the purpose of eye-washing the liability. Petitioner accused Pareshbhai, to get away from the vicarious liability, raised contention that he has retired from the partnership firm before issuance of the cheques. However, there is no material on record to buttress his contention. Even otherwise, the issue is squarely clinched by the judgment in case of Rallis India Limited (supra), whereby the Hon'ble Apex Court held that the question as to whether or not accused were partners in the firm as on the date of filing of the complaint is one of fact which has to be established in trial. Para 10 thereof reads as under:-
"10. Thus, in the light of the aforesaid averments as found by us in the Criminal Complaint, we are of the considered opinion that sufficient averments have been made against the Respondents that they were Page 23 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined the partners of the firm, at the relevant point of time and were looking after day to day affairs of the partnership firm. This averment has been specifically mentioned by the Appellant in the complaint even though denied by the Respondents but the burden of proof that at the relevant point of time they were not the partners, lies specifically on them. This onus is required to be discharged by them by leading evidence and unless it is so proved, in accordance with law, in our opinion, they cannot be discharged of their liability. Consequently, High Court committed an error in discharging them. Also, at the cost of repetition, by virtue of their own submissions before the High Court (reproduced in Para 6 above), the Respondents have admitted the fact that the Appellant had referred to them in their capacity as partners who were incharge of the affairs of the firm in the initial complaints. The question as to whether or not they were partners in the firm as on 31.03.2004, is one of fact, which has to be established in trial. The initial burden by way of averment in the complaint has been made by the Appellant."
14. Learned advocate Mr. Gondaliya appearing for the petitioner Ritaben would submit that insufficient averments are made in the complaint to prosecute the petitioner, who is a paper partner. He would further submit that the petitioner being a lady did not carry any business transaction. He would further submit that the complaint also spells that financial transaction took place with petitioner Pareshbhai. Referring to para 3 of the complaint, he would submit that according to the complaint, petitioner Pareshbhai went to the office of the complainant in the month of August 2011 and obtained financial assistance and subsequent thereto, also obtained another financial assistance. It is the petitioner Pareshbhai who has given promise to the complainant to repay the entire Page 24 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined amount within 6 to 8 months and for that, he has also placed his flat towards security to the complainant. In that circumstances, learned advocate Mr. Gondaliya would submit that essentially, it is a transaction between the petitioner Pareshbhai and the complainant. He would further submit that petitioner Ritaben is, since paper partner, did not perform any financial transactions with the complainant or not involved in day-to-day affairs of the partnership firm and therefore, she may not be prosecuted. Learned advocate Mr. Gondaliya referring to proviso to section 141 of the NI Act would submit that the petitioner Ritaban, since has no knowledge about the transaction took place between the parties, she may not be rendered liable to face prosecution.
15. Recently, the Hon'ble Apex Court in case of Hdfc Bank Limited Versus State Of Maharashtra, AIR 2025 SC 2707, surveyed series of authorities and analyzed the issue canvassed by the petitioner in para 34 to 39 and held as under:-
"34. What is important to note is that the repetition of the exact words of the Section in the same order, like a mantra or a magic incantation is not the mandate of the law. What is mandated is that the complaint should spell out that the accused sought to be arrayed falls within the parameters of Section 141(1) of the NI Act. Only then could vicarious liability be inferred against the said accused, so as to proceed to trial. Substance will prevail over form.
35. Strong reliance is placed on Siby Thomas (supra) by learned counsel for the respondent No.2 Page 25 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined to contend that in the absence of the words was in charge of, the present case against respondent No.2 cannot be proceeded. We are unable to countenance the said submission. This Court, in Siby Thomas (supra), on facts, found that on an overall reading of the complaint it did not disclose any clear and specific role to the appellant-accused therein. It was further held that what was averred was only that the accused being partners are responsible for the day-to-day conduct of business of the company. This is vastly different from the averments in the present case as discussed hereinabove. In this case, it is clearly averred that the respondent No.2 along with the accused Nos. 3 and 4 being directors were responsible for its day-
to-day affairs, management and working of accused No.1 - Company. Hence, the judgment in Siby Thomas (supra) can be of no help to the respondent No.2 as the case turned on its own facts.
36. The other aspect of the matter canvassed by the learned counsel for the respondent No.2 is that not only are the basic averments as enshrined in Section141 to be mandatorily incorporated but also the specific role be attributed to the persons who are mere directors or employees of the company. We are unable to agree with the submission of the learned counsel.
37. Recently, this Court in S.P. Mani and Mohan Dairy vs. Dr. Snehalatha Elangovan, (2023) 10 SCC 685 , after reiterating the principle that it was not necessary to reproduce the language of Section 141 verbatim in the complaint further reiterated the holding in K.K.Ahuja vs. V.K. Vora and Another, (2009) 10 SCC 48. I n K.K. Ahuja (supra), it was held that insofar as the director was concerned, an averment in the complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the company was enough and no further averment was necessary though some particulars will be Page 26 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined desirable. Thereafter, this Court in S.P. Mani (supra), in para 58.2 of the judgment concluded as under:-
58.2. The complainant is supposed to know only generally as to who were in charge of the affairs of the company or firm, as the case may be. The other administrative matters would be within the special knowledge of the company or the firm and those who are in charge of it.
In such circumstances, the complainant is expected to allege that the persons named in the complaint are in charge of the affairs of the company/firm. It is only the Directors of the company or the partners of the firm, as the case may be, who have the special knowledge about the role they had played in the company or the partners in a firm to show before the Court that at the relevant point of time they were not in charge of the affairs of the company. Advertence to Sections 138 and Section 141, respectively, of the NI Act shows that on the other elements of an offence under Section 138 being satisfied, the burden is on the Board of Directors or the officers in charge of the affairs of the company/partners of a firm to show that they were not liable to be convicted. The existence of any special circumstance that makes them not liable is something that is peculiarly within their knowledge and it is for them to establish at the trial to show that at the relevant time they were not in charge of the affairs of the company or the firm.
38. As was rightly held therein, the administrative role of each director would be within the special knowledge of the company or the director of the firm and it is for them to establish that they were not in charge of the affairs of the company. In view of this, the contention of the learned counsel for the respondent No.2 that the specific role attributed to the directors should be set out in the complaint does not merit acceptance. Reliance has Page 27 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined been placed on National Small Industries Corporation Limited vs. Harmeet Singh Paintal and Another, (2010) 3 SCC 330 by the learned counsel for the respondent No.2 in support of the proposition canvassed. We are unable to countenance the said submission. If the learned counsel by the said submission seeks to contend that the complainant in a Section 138 complaint is obliged to plead administrative matters which are especially within the knowledge of the company and the directors, then he is completely wrong in the understanding of the ingredients of Section
141. As held in K.K. Ahuja (supra) and reiterated in S.P. Mani (supra), the complainant is supposed to know only generally as to who are in charge of the affairs of the company. Harmeet Singh Paintal (supra) when it holds in para 22 that further, in order to fasten the vicarious liability in accordance with Section 141, the averment as to the role of the Directors concerned should be specific. The description should be clear and there should be some unambiguous allegations as how the Directors concerned were alleged to be in charge of and were responsible for the conduct of the affairs of the company should be understood to only mean vis--vis the transaction concerning the issue of the cheque, in question, which are within the knowledge of the complainant. K.K. Ahuja (supra) where it holds that in the case of a Director, secretary or manager [as defined in Section 2(24) of the Companies Act] or a person referred to in clauses (e) and (f) of Section 5 of the Companies Act, an averment in the complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the company is necessary to bring the case under Section 141(1) of the Act. No further averment would be necessary in the complaint, though some particulars will be desirable. They can also be made liable under Section 141(2) by making necessary averments relating to consent Page 28 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined and connivance or negligence, in the complaint, to bring the matter under that sub-section sets out the correct legal position. A harmonious reading of the judgments in K.K. Ahuja (supra), Harmeet Singh Paintal (supra) and S.P. Mani (supra) brings out the position that there is no obligation on the complainant to plead in the complaint as to matters within the special knowledge of the company or the directors or firm about the specific role attributed to them in the company.
39. Applying the said legal position to the facts of the present case, it is found that the averments in the complaint set out hereinabove against the respondent No.2 Mrs. Ranjana Sharma fulfill the requirement of Section 141(1) of the NI Act, and this is not a case where trial against her can be aborted by quashment of proceedings. The High Court was completely unjustified in quashing the proceedings against her."
16. Applying the aforesaid ratio to the present case, let refer the averments made in the complaint to examine that whether sufficient averment has been made to fulfill the requirement of section 141(1) of the NI Act. Para 4 to 6 of the complaint are material and important, which reads as under:-
"(4) Thereafter, again in the second week, April 2012, the accuse no.1 in the present case came to the office we the Complainant and said to us, "the certain debts of our partnership firm have become doubtful and, at present, there is no possibility of receiving the amounts which were to be received within six to eight months and receiving of such monies is likely to take further six to eight months." Thereafter, the accused No.1 in the present case said, "the promise made by us at the time of borrowing Rs. 10,00,000/- (Rupees ten lakh) from you that we would return the money within six to eight months can't be kept. Because the Page 29 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined condition of our business is not improved due to non-
recovery of our dues. It will be really good if you make arrangements of further Rs. 70,00,000/- (Rupees seventy lakh), considering our good terms." At that time, I the complainant said to the Accused No.1 herein, "the amount asked for is very huge and I am not in any position to take decision in this regard, independently. I will have to ask my husband Shri Sandipbhai for the same, who is out of town for a social work and he is likely to return after two to three days. Therefore, you may come after three days." After about three days, the Accused No.1 and the Accused No.2 came to the office of we the Complainant. At that time, I the complainant and my husband were present at the office. A meeting took place at the office of we the complainant wherein my husband Shri Sandipbhai, I and the accused No.1 and 2 were present. In the meeting, the Accused No.1 and the Accused No.2 in the present case described in detail, before me and my husband, their financial condition and its resultant impact on their business and they requested to lend them further Rs. 70,00,000/- (Rupees seventy lakhs). The accused No.1 and 2 herein said to us, "whatever amount you lend this time will be returned to you, along with the previous amount of Rs. 10,00,000/- lent to us, till 31/05/2013, irrespective of any circumstances." After listening to the accused No.1 and 2 herein and considering their assurance, I the complainant and my husband Shri Sandipbhai agreed to lend more money to the partnership firm of the accused No.1 and 2 to carry its business. Accordingly, I the complainant gave Rs. 20,00,000/- (Rupees twenty lakhs) in cash to the Accused No.1 and 2 on 18/04/2012. The accused No.1 and 2 had come together to collect the money from our office. Thereafter, on 28/06/2012, we the complainant gave cash of Rs. 25,00,000/- (Rupees Twenty Five Lakh) to the Accused No.1 and 2 who had come together to our office to collect the amount in cash. Last, on 24/07/2012, we the complainant gave Rs. 20,00,000/- (Rupees Twenty Lakh) in cash to the Accused No.1 and 2 who had come together to collect the money in Page 30 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined cash from our office. Thus, the Accused No.1 and 2 had cumulatively borrowed Rs. 65,00,000/- (Rupees Sixty Five Lakh) which, along with the amount of Rs. 10,00,000/- (Rupees Ten Lakh) borrowed by the Accused No.1 earlier, aggregated to Rs. 75,00,000/- and the Accused No.1 and 2 had given assurance to I the complainant and my husband Sandipbhai that they would return the aggregated amount till 31/05/2013.
(5) Thereafter, as the deadline of 31/05/2013, as per the assurance given by the accused No.1 and 2, for returning the amount of Rs. 75,00,000/- (Rupees Seventy Five Lakh), borrowed by them, from I the Complainant and my husband Shri Sandipbhai, had passed, I the complainant asked the Accused No.1 and 2 to return the amount. At this time, the accused no.1 and 2 said to us, "it may take further three months to receive our business dues. We are in negotiation with the debtors and therefore, it would be better if we are given further three months' time. We will return you the amount in full within three months." Considering the representations made by the Accused No.1 and the Accused No.2 in the present case, we the Complainant gave them a further extension to repay us the amount till 31/08/2013.
(6) As the period of three months, as was requested by the Accused No.1 and 2 in the present case, had passed and the Accused had not returned us our money, I the complainant and my husband Shri Sandipbhai spoke to the accused in this regard and asked them to come to our office. On 18/09/2013, the Accused No.1 and 2 came to our office. At this time, I the Complainant and my husband Shri Sandipbhai said to the Accused No.1 and 2, "now, we are in need of money to meet the needs of our business. So, please return us the amount of Rs. 75,00,000/-, immediately, which we had lent to your partnership firm M/s. Pavan Motors for its business purposes, on different intervals." At this time, the Accused No.1 and the Accused No.2 said to me and my husband, Page 31 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined "we do not have any arrangement of money and it is very difficult for us to make any such arrangement, immediately." At this time, I the Complainant and my husband Shri Sandipbhai asked the Accused No.1 and 2 to arrange for the money on immediate basis. The accused No.1 said to I the Complainant, "I will execute a deed for the residential flat jointly owned by me and my wife and situated at 501, Sharanya Apartment, Opp. Sharda School, Navrangpura, Ahmedabad, having market value of Rs. 65,00,000/- to Rs. 75,00,000/- against the money lent by you to us." Thus, the Accused No.1 and his wife Tejalben had executed, jointly, a Consent Deed on 19/09/2013 at our office and in presence of the Accused No.2. The Consent Deed came to be registered in the Notary Register of Public Notary Shri Rajeshkumar A. Desai on the same day, i.e. on 19/09/2013, at Sr. No. F121, wherein the Accused No.1 and his wife has clearly consented that, "we the Executors were supposed to render Rs. 75,00,000/- (Rupees Seventy Five Lakh) to the Executee within one year. However, we the Executors have not rendered the amount till date. Therefore, we the Executors convey the property jointly owned by us to the Executees against the stated amount." Apart from that, the Accused No.1 and his wife has accepted in the Consent Deed that, "the above described property is jointly possessed by we the Executors and it continues in all Government and Semi-Government records, accordingly. We the Executors have conveyed the property to the Executees against the amount of Rs. 75,00,000/- (Rupees Seventy Five Lakh). An Agreement to Sell and a final Sale Deed thereof shall be executed by we the Executors as and when asked for by the Executees."
17. The aforesaid averments made in the complaint are sufficient to attract provisions of section 141 of the NI Act also against petitioner Ritaban. The complainant is not at obligation to plead in the complaint special role of each partner, as said matter is within the special knowledge of the Page 32 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025 NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined partnership firm or the partners of the partnership firm to specify the role attributed to them in the partnership firm. Thus, there is no sufficient material available to abort the proceedings against petitioner Ritaban also. It is also to be noted that present petitions have been filed at threshold on issuance of the process. The complaint on its face discloses commission of offence u/s 138 r/w section 141 of the NI Act. Ergo, no case is made out to interdict the impugned order of issuance of process.
18. The Hon'ble Apex Court in case of Nitin Ahluwalia Vs. State of Punjab and others, 2025 INSC 1128, reiterate scope of section 482 of the Code as under:-
"7. The law on the exercise of the High Court's inherent powers under Section 482 of the Code of Criminal Procedure, have been repeatedly expounded and reiterated - to the point that they ought not to require restatement, and hence, we will not go down that route. The scope of the exercise to be carried out by the Court while adjudicating such an application for quashing is also well established. The Court is only to look to the prima facie possibility of the offence having been committed. In this regard reference can be made to CBI v. Aryan Singh5 and Rajeev Kourav v. Baisahab, (2020) 3 SCC 317."
19. In the case of State of Haryana Vs. Bhajanlal & ors., AIR 1992 SC 604, the Hon'ble Apex Court has opined that power of quashing can be exercised very sparingly and that too in rarest of rare case. Relevant observations reads as under:-
Page 33 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025NEUTRAL CITATION R/CR.MA/6202/2017 JUDGMENT DATED: 16/09/2025 undefined "103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whims or caprice."
CONCLUSION:-
20. In the result, both the petitions fail and stand dismissed. Rule discharged. Interim relief granted earlier stands vacated.
(J. C. DOSHI,J) SHEKHAR P. BARVE Page 34 of 34 Uploaded by SHEKHAR P. BARVE(HC00200) on Fri Sep 19 2025 Downloaded on : Sat Sep 20 04:06:30 IST 2025