Delhi District Court
Revisionist vs M/S Balaji Enterprises on 22 January, 2018
IN THE COURT OF DR. NEERA BHARIHOKE
ADDL. SESSIONS JUDGE06:SOUTH EAST
SAKET COURT: NEW DELHI
Criminal Revision No. 204171/16
M/s Fancy Fashions
B1/F3 Mohan CoOperative
Industrial Estate Mathura Road,
New Delhi.
Through its Lawful Attorney
Mr. Sunil Datta, Manager.
. . . . . . . . . . Revisionist
Versus
1. M/s Balaji Enterprises
Opp. Bara Makhan,
Near J.K. Dharam Kanta,
Islamabad, Amritsar, Punjab
A Partnership firm through its Partners.
2. Sh. Raman Sehgal
Partner of M/s Balaji Enterprises
3, Shastri Market,
Amritsarm, Punjab.
3. Sh. Nakul Sehgal
Partner of M/s Balaji Enterprises,
3, Shashtri Market,
Amritsar, Punjab.
4. The State (NCT of Delhi)
Through Standing Counsel (Crl.)
Room No. 437, Delhi High Court,
New Delhi. (Dropped vide order dated 08.08.2014).
. . . . . . . . Respondents.
M/s Fancy Fashions v. M/s Balaji Enterprises and Ors. Page 1 of 9
[ In CC No. 1400/1/09 and 1401/1/09 PS Badarpur, New Delhi.
Under Section 138 NI Act ]
Date of Institution : 08.07.2014.
Date of Arguments : 20.01.2018.
Date of Order : 22.01.2018.
ORDER
1. The present revision petition under Section 397/399 Cr.P.C has been filed for quashing/setting aside the impugned order dated 03.05.2014 in Criminal Complaint Case No. 1400/1/09 and 1401/1/09 titled "M/s Fancy Fashions Vs M/s Balaji Enterprises".
2. The brief submissions of the revisionist/petitioner are that:
a. The revisionist is a Partnership Firm in the name and style of M/s Fancy Fashions and wholesale dealer of clothes. Respondent no. 1 is also a parteenrship firm engaged in business of importexport of textile and respondent No. 2 and 3 partners of the respondent no.1 and responsible for day to day affairs of the business on behalf of respondent no.1.
b. The revisionist firm used to purchase textile from the respondent no.1 and used to import them on demand for garments manufacturers pursuant to which the revisionist firm made advance payments towards the sale price of clothes. Respondent nos.1 to 3 failed to honour the promise/assurance for timely deliver of the textile/fabric.
c. The parties settled their dispute and respondent nos.1 to 3 issued two cheques bearing no. 049430 dated 05.10.2001 and 049431 dated 09.10.2001 of Rs. 10,00,000/ each drawn on Standard Chartered Graindlays Bank, Amritsar duly signed by Vinod Kumar Mehra (now deceased) towards part M/s Fancy Fashions v. M/s Balaji Enterprises and Ors. Page 2 of 9 liquidations.
d. On presentation, both the cheques got dishonoured for the reaosn of "Account Closed" vide Bank Memo dated 13.11.2011. Thereafter, a legal notice dated 20.11.2011 was served upon the respondent nos.1 to 3 demanding payment of dishonoured cheques however on the nonpayment of the said amount, the revisionist firm filed the complaints under Section 138 NI Act before the Ld. Magistrate, New Delhi against the accused persons namely M/s Balaji Enterprises, Vinod Mehra and D.K. Raman Kumar.
e. During the trial before the Ld. Metropolitan Magistrate, accused Vinod Mehra died and the name of the accused D.K. Raman Kumar was corrected as Raman Sehgal vide order dated 13.01.2005. On 20.06.2002, the Ld. Trial Court passed the presummoning order and the evidence by way of affidavit of complainant was filed.
f. On 11.09.2003, accused no. 3/respondent no.2 moved an application under Section 204 and 205/317 Cr.P.C for grant of permanent exemption and recall of summoning order dated 20.06.2002 along with partnership deed dated 19.02.2001 and certificate dated 22.08.2003 which was dismissed by the Ld. Metropolitan Magistrate however vide order dated 13.01.2005 permanent exemption of accused no. 3/respondent no.2 was allowed by Ld. Metropolitan Magistrate.
g. Thereafter, notice under Section 251 Cr.P.C was framed against the accused no. 1 and 3/respondent nos. 1 and 2. On 16.04.2012 both the complaints were dismissed by Ld. Trial Court. However, on 21.01.2013, Hon'ble High Court restored both complaints with cost and the complainant/revisionist on 16.03.2013 filed an application under Section 319 Cr.P.C for summoning the additional accused namely Nakul Sehgal.
h. The revisionist had also filed a separate complaint under Section 200 Cr.P.C vide CC No. 54/3/13 against the respondent nos.1 to 3 for offence under Section 406/420/34 IPC on 09.05.2013 on account of "Account M/s Fancy Fashions v. M/s Balaji Enterprises and Ors. Page 3 of 9 Closed" in which Ld. ACMM, South East had ordered to summon the accused persons for commission of offence under Section 406/420/34 IPC.
i. The Ld. Metropolitan Magistrate vide order dated 03.05.2014 dismissed the application under Section 319 Cr.P.C of the revisionist and being aggrieved from the common impugned order dated 03.05.2014 the revisionist preferred the present revision petition before this court.
3. Notices were sent to the respondents. and Trial Court Record was directed to be requisitioned. Respondent no. 4 was dropped vide order dated 08.08.2014 on the statement of the revisionist stating that he has been wrongly arrayed.
4. Detailed reply has been filed by respondents.
5. The brief submissions of the revisionist/petitioner are that:
a. It is submitted by the Ld. Counsel for revisionist that impugned order dated 03.05.2014 is illegal, unwarranted, arbitrary, unwarranted, prejudicial and is gross abuse of the process of law and learned trial court has committed error while passing the impugned order by not considering the evidence of the complainant and that the status of the respondent no.2 is not changed at all and has similar legal entity and is being governed and controlled by respondent nos. 2 and 3 as partners of the partnership firms/respondent no.1. It is submitted that the common impugned order dated 03.05.2014 is not an interlocutory order whereby the application of the revisionist filed under Section 319 Cr.P.C praying for summoning the additional accused/Nakul Sehgal on the basis of Partnership Deed dated 19.02.2001 was dismissed.
b. Revisionist/petitioner has submitted that learned trial court committed a grave error because it did not notice that present offence was of summons trial in which the evidence of the complainant is recorded on the basis of M/s Fancy Fashions v. M/s Balaji Enterprises and Ors. Page 4 of 9 an affidavit prescribed under section 143 Negotiable Instrument Act read with section 244 Cr.P.C. which along with supporting documents form "a part of evidence" as held in the matter of Sunil Mehta & Anr. Vs State of Gujarat & Anr., JT 2013(3) SC 328 reiterated in the matter of Hardeep Singh vs State of Punjab and others, 2014 (1) Crimes 133 HC.
c. It has been submitted that in the matter of Hardeep Singh vs State of Punjab and others, (supra), the meaning of 'evidence' was discussed and it has been argued that the aspect of evidence for the purposes of summoning the additional accused does not mean to have incriminating evidence. The additional accused can be summoned in summoning cases like under section 138 NI act on the basis of being liable and accountable to the partnership firm.
d. The petitioner has submitted that learned trial court had taken cognizance initially against the offence and not against the offender and thus is within his rights to issue summons to the additional accused. Reliance has been placed on law laid down in Bimla Bharthwal and Ors Vs State through CBI, 2012 III AD (Crl.) (DHC) 540, for the said submission.
e. It has been further averred that respondent number 1 and 3 filed the application under section 204/205/317 CrPC on 22.11.2004 and thus clarified the status of the partnership firm. They filed the partnership deed and from its perusal it is clear that the Respondent No. 1 firm comprised of 2 partners namely Sh. Nakul Sehgal and Sh. Vinod Mehra. However the petitioner had not impleaded Sh. Nakul Sehgal as an accused person as it was not aware of the fact that Sh. Nakul Sehgal is also a partner in Respondent No. 1 firm. It has been argued that learned trial court should have allowed the impleadment of the said Sh. Nakul Sehgal on the basis of the said partnership deed produced by respondent no. 1 and 3 before learned trial court.M/s Fancy Fashions v. M/s Balaji Enterprises and Ors. Page 5 of 9
f. The petitioner has also contended that in the matter of Sarojben Ashwinkumar Vs State of Gujarat & Anr., 2011(4) JCC (NI) 193, it was held that while summoning the additional accused under section 319 CrPC, for the offence under section 138/141 Negotiable Instruments Act, the trial court must see that there has to be evidence at the time when the offence was committed, the partner should be in charge and responsible to the firm in business transaction. The petitioner argued that it had proved all these ingredients before the learned trial court but the same was overlooked by learned trial court and it declined to summon the additional accused.
g. Petitioner has submitted that the impugned order dated 3.5.2014 is not an interlocutory order and thus the present revision petition is maintainable against the impugned order as held in Mohit @ Sonu Vs State of UP SLP (Crl.) No. 1619/10 decided on 01.07.2013.
6. Detailed arguments were advanced by learned counsels for parties
7. Arguments heard. Record perused carefully.
8. It is an admitted case of the parties that the partnership deed dated 19.02.2001was produced before learned trial court by respondent no. 3 of the said complaint along with an application under section 317 CrPC and it was then that the revisionist/petitioner came to know that Sh. Nakul Sehgal is also a partner in Respondent No. 1 firm.. The petitioner has argued that the said partnership deed filed with the said application is evidence for the purpose of section 319 CrPC. On the other hand, respondent No. 1 and 3 in the said complaint argued that since the said partnership deed has not been led in evidence, it cannot be construed as 'evidence' for the purpose of section 319 CrPC.
9. The petitioner had relied upon the law laid down in Hardeep Singh vs State of Punjab and others, 2014 (1) Crimes 133 HC before learned trial court as well as has relied upon the same in the revision petition. However during the course M/s Fancy Fashions v. M/s Balaji Enterprises and Ors. Page 6 of 9 of arguments, learned counsel for the petitioner argued that the observations made in the said judgement were made in a warrants case and not in a summons case. It has been argued that the proceedings under section 138 of Negotiable Instruments Act proceeds like summons case and therefore the observations relied upon by the learned trial court in the impugned order on the law laid down in Hardeep Singh vs State of Punjab and others, 2014 (1) Crimes 133 HC cannot be applied to the facts of the present case.
10. I do not find any merit in this submission of the petitioner as section 319 of Cr.P.C. applies equally to a summons trial case as well as warrants case. Section 319 of CrPC categorically says that where, in the course of an enquiry into, or trial of, an offence, it appears from the 'evidence' that any person not being the accused has committed any offence for which such person could be tried together with the accused, the court may proceed against such person for the offence which he appears to have committed. Thus the material on which a court would rely for summoning of any other person besides accused should be produced before the court as a part of evidence and not otherwise. Mere filing of a document along with the application, i.e. partnership deed in the present case, does not make it a part of evidence. Hon'ble Supreme Court held in Sunil Mehta & Anr. Vs State of Gujarat & Anr. (Supra) that documentary evidence would be evidence only if the documents are proved in the manner recognised and provided for under the Evidence Act which was not done in the case of partnership deed filed by the respondent no. 1 and 3 in the said complaint case before learned trial court. The partnership deed was not tendered by the respondent no. 1 and 3 before learned trial court as evidence.
11. I concur with the submissions of learned counsel for respondents that being a partner in itself is not a sufficient qualification for bringing a person within the ambit of section 138 of Negotiable Instruments Act and being an office bearer is not a qualification sufficient in itself to bring a person within the vortex of section M/s Fancy Fashions v. M/s Balaji Enterprises and Ors. Page 7 of 9 138 of Negotiable Instruments Act unless there are attributes to show the role played by the person in the commission of offence. It is not the designation rather the nature of function which becomes the decisive and the only consideration for bringing a person within the scope of section 138 of Negotiable Instruments Act. Section 141 of Negotiable Instruments Act specifically provides that 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. This vicariously liability can be attached only to a person who was in charge of and was responsible to the company for the conduct of business of a company. There is no merit in the argument of the petitioner that section 141 has no applicability to a partnership/firm in view of explanation (a) of section 141 of Negotiable Instruments Act which specifically provides that 'company' means any body corporate and includes a firm or other association of individuals.
12. In the matter of Sarawathy Amma and Anr. vs. M/s Swil Limited, 83 (2000) DLT 75, it was held by Hon'ble High Court of Delhi that "What is required for holding a person vicariously liable for the offence committed by a company or a firm is the actual role played by such person in the management and conduct of the business of the company or the firm, as the case may be. Simply because a person as a director of the company or a partner of the firm, it does not necessarily mean that he fulfils both the above requirements so as to make him vicariously liable. There must be specific accusation against each of the persons arraigned as accused that such person was in charge of an responsible for the conduct of the business of the company or the format the relevant time when the alleged offence was committed by the company or the firm. It was also observed that the said requirement cannot be left to the wild imagination of the complainant."
M/s Fancy Fashions v. M/s Balaji Enterprises and Ors. Page 8 of 913. It is an admitted case of the petitioner that he was not aware that the proposed accused, i.e. Sh. Nakul Sehgal, the respondent number 3 was a partner in the Respondent No. 1 firm. Thus, obviously the petitioner could not have known the actual role played by Respondent No. 3 in the management and conduct of the business of the Respondent No. 1 firm. In the matter of B. Lakshmi vs Trishul Coal Services & others, 1997 (1) ALD Cri 937, it was held that where there is no allegation in the complaint that such partner was in charge and responsible for the business of firm at the time of alleged commission of the offence and when the cheque was issued by a firm, in view of section 138 and 141 of the Negotiable Instruments Act, the complainant is not entitled to initiate prosecution against every partner of the firm and thus the proceedings against such partner were quashed. The same view was taken by the High Courts of Punjab and Haryana in Amrit Rani v. M/s. Malhotra Industrial Corporation, 1992 ISJ (Banking) 129.
14. In view of these observations there is no merit in the present revision petition and it is accordingly dismissed.
15. Copy of the order be sent to learned trial court.
16. File be consigned to record room.
Announced in the open court (Dr. Neera Bharihoke)
on 22.01.2018 ASJ06/SouthEast/Saket/ND
22.01.2018
M/s Fancy Fashions v. M/s Balaji Enterprises and Ors. Page 9 of 9