Punjab-Haryana High Court
Asheesh Kumar Sharma vs Rajesh Gupta on 14 August, 2013
Author: Rekha Mittal
Bench: Rekha Mittal
CRM M 14752 of 2009 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
-.-
Date of decision: August 14, 2013
1. CRM M 14752 of 2009
Asheesh Kumar Sharma ........ Petitioner
Versus
Rajesh Gupta .......Respondent
2. CRM M 2365 of 2010
Mrs. Kamla Sharma ........Petitioner
Versus
Rajesh Gupta ........Respondent
Coram: Hon'ble Mrs. Justice Rekha Mittal
-.-
Present: Mr. Baldev Singh, Sr. Advocate with
Mr. Deepender Singh, Advocate
for the petitioners
Mr. Gourav Chopra, Advocate
for the respondent
-.-
1. Whether Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in
the Digest?
Rekha Mittal, J.
By way of this order, I shall dispose of CRM M 14752 of 2009 and CRM M 2365 of 2010 as they emerge out of common proceedings of criminal complaint captioned 'Rajesh Gupta v. M/s Commander Poultries etc.' under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter to be referred as, 'the 1881 Act'). However, for facility of reference, facts are being taken from CRM M 14752 of 2009.
CRM M 14752 of 2009 2
Counsel for the petitioner submits that the criminal complaint is pending in the Court of Judicial Magistrate Ist Class, Chandigarh and the summoning order dated 18.07.2006 (Annexure P2) has been passed, whereby the petitioner and his co-accused, namely M/s Commander Poultries, a partnership firm, Manish Sharma and Smt. Kamla Sharma, have been summoned to face trial for commission of offence under section 138 of the 1881 Act, on the allegations that a cheque amounting to Rs.40,00,000/-, issued under the signatures of Manish Sharma and Smt. Kamla Sharma, on behalf of the partnership firm in discharge of a legally enforceable liability qua an agreement to sell of poultry farm, got dishonoured on its presentation to the Bank.
Counsel submits that the criminal complaint was filed on 18.07.2006 and on that very day, statement of the complainant was recorded and summoning order was passed, which shows that the Judicial Magistrate has not complied with the provisions of Section 202 of the Code of Criminal Procedure (hereinafter referred to as, 'the Code'), which requires an inquiry to be conducted as the petitioners are residents of a place outside the local jurisdiction of the Court at Chandigarh. In support of his contention, he has placed reliance upon judgments of this Court in 'S K Bhowmik v. S K Arora and another, 2007(4)R.C.R.(Criminal) 650 and Smt. Neeta Sinha v. P.S. Raj Steels Private Limited, 2010(1)R.C.R.(Criminal) 509.
With regard to quashing of proceedings against Asheesh Kumar Sharma, counsel made additional submissions that Asheesh Kumar Sharma is residing in USA since the year 2000. As per allegations of the complainant (respondent herein), in the year 2003, an agreement for sale of poultry farm was entered into by Manish Kumar and on peritioner's behalf CRM M 14752 of 2009 3 by his attorney Smt. Kamla Sharma. It is none of the plea of the complainant that the petitioner was present on any occasion, i.e., agreement to sell of poultry farm, issuance of cheque, in dispute, its dishonour, receipt of notice or filing of complaint. It is further argued that the petitioner never executed any attorney in favour of his mother, giving her power to execute such an agreement on his behalf. The cheque, which got dishonoured, admittedly does not bear signatures of the petitioner. He was not even a partner of M/s Commander Poultries, on the date of issuance of cheque or its dishonour. The last submission made is that no such allegations have been raised in the complaint, which can make the petitioner liable to face proceedings for offence under Section 138 of the 1881 Act.
Counsel for the respondent, on the other hand, refuted the contentions of counsel for the petitioner by submitting that examination of the complainant as a witness in preliminary evidence is a sufficient compliance with the provisions of Section 202 of the Code. The judgment in S K Bhowmik's case (supra) was discussed at length in 'Pardeep v. State of Haryana and another' (Criminal Misc. M 15252 of 2010, decided on 18.05.2010) and this Court held that examination of the complainant and the witnesses and documents produced in evidence is a sufficient compliance with the requirements of Section 202 of the Code in regard to conducting of inquiry by the Magistrate before issuing process for summoning the accused. He has placed reliance upon judgments of this Court in 'Goenka Tradelinks Pvt. Limited v. Indiabulls Financial Services Limited' (CRM M 34763 of 2012, decided on 22.05.2013), Apex Health Care Private Limited and others v. M/s Alchemist Hospitals Limited, 2012(5) R.C.R. (Criminal) 694 and 'M/s Bharat Trading Company and others v. State of CRM M 14752 of 2009 4 Haryana and another', 2012(2) R.C.R.(Criminal) 154, wherein, the question of conducting an inquiry in proceedings under Section 138 of the 1881 Act, has been dealt in detail and held that the provisions of Section 202 of the Code have no applicability to a complaint under Section 138 of the 1881 Act, as the offence is non-cognizable.
Counsel contends that the question 'whether Asheesh Kumar Sharma was a partner of M/s Commander Poultries in the year 2006 or not', is a question of fact, which requires evidence to be led and, therefore, cannot be adjudicated upon under Section 482 of the Code. It is further argued that as Asheesh Kumar Sharma was a partner of the firm (respondent No. 1 in the complaint), he has incurred criminal liability due to dishonour of cheque, issued on behalf of the partnership firm under the signatures of Manish Sharma (his brother) and Smt. Kamla Sharma (his mother). In support of his contention, he has placed heavy reliance upon judgment of Hon'ble the Supreme Court in 'Rallies India Limited v. Poduru Vidya Bhusan and others', 2011(4) R.C.R. (Criminal) 723.
Another plea raised by counsel is that the petition for quashing has been filed by Asheesh Kumar Sharma through his attorney and thus, liable to be dismissed as an attorney is not competent to maintain a petition under section 482 of the Code for quashing criminal proceedings against an accused. For this, reference has been made to a judgment of this Court in 'Amit Ahuja v. Gian Pakash Bhambri', 2010(3) R.C.R. (Criminal) 586.
I have heard counsel for the parties and perused the case file. On due consideration of the submissions and counter submissions made by counsel for the parties, the three points, which emerge for deliberations and adjudication, are quoted hereinunder:- CRM M 14752 of 2009 5
1) Whether there is non-compliance of the provisions of Section 202 of the Code? If so, its consequence.
2) Whether Asheesh Kumar Sharma is liable to be proceeded against as a partner of M/s Commander Poultries?
3) Whether petition filed by Asheesh Sharma is not maintainable as it has been filed through an attorney?
First of all, I would take up point No. 1, which is common to the petitions. At the outset, it is pointed out that this issue is no longer res integra, thus, needs no debate for its decision. The scope of inquiry under section 202 of the Code, has been discussed in detail by this Court in CRM M 15252 of 2010, wherein a reference has also been made to the decision in S K Bhowmik's case (supra). This Court, on a detailed consideration of amendment made in Section 202 of the Code with effect from the year 2006, has recorded its conclusion that examination of the complainant, witnesses produced to support and corroborate version of the complainant and documents exhibited during evidence are a substantial compliance with the requirements of conducting an inquiry by the Court before issuing of process, in cases, where the accused resides outside the jurisdiction of the court concerned.
This apart, the need to hold an inquiry envisaged under Section 202 of the Code in a case under section 138 of the 1881 Act, has been dealt in Goenka Tradelinks Pvt. Limited and Apex Health Care Private Limited and others (supra), wherein, after a reference to the decision of Hon'ble the Supreme Court in K Bhaskaran v. Sankaran Vaidhyan Balan and another, (1999) 7 SCC 510 and Harman Electronics Private Limited and CRM M 14752 of 2009 6 another v. National Panasonic India Private Limited, (2009) 1 SCC 720, the judgments rendered by Hon'ble the Supreme Court in regard to Courts, which would have territorial jurisdiction to entertain a complaint under Section 138 of the 1981 Act, has held as quoted herein below:-
"27. Taking into consideration the nature of the proceedings under Section 138 of the Act and the law laid down in K. Bhaskaran's case (supra) that the complainant can choose any one of the course having jurisdiction over any one of the local areas in which any one of the five acts i.e. drawing of the cheque; presentation of the cheque to the bank; returning the cheque unpaid by the drawee bank; giving notice in writing to the drawer of the cheque demanding payment of the cheque amount; and failure of the drawer to make payment within 15 days of the receipt of the notice, the provisions of Section 202 Cr.P.C. cannot be said to be applicable in proceedings under Section 138 of the Act, otherwise it would defeat the objectives of the provisions of Section 138 of the Act. However, a Magistrate exercising powers under Section 138 of the Act can himself, while appreciating the preliminary evidence, hold an enquiry for his satisfaction regarding the prima facie commission of offence under Section 138 of the Act when the respondent/ accused is resident of different locality, keeping in mind that the list of the accused has not been unnecessarily enlarged with an oblique motive to cause harassment to the accused described as residents of distant areas but holding of an enquiry by police in every case under Section 138 of the Act under Section 202 Cr.P.C. is not the rule of law. It is not out of place to mention here that the judgment CRM M 14752 of 2009 7 in K.Bhaskaran's case (supra) still holds the field despite a little variance in one of the five circumstances in the recent judgment by the Hon'ble Supreme Court in Harman Electronics Private Limited and another Vs National Panasonic India Private Limited, (2009) 1 SCC 720, in which it was held that the single factor of issuance of notice under Section 138 (b) of the Act will not ipso facto tantamount to conferring a jurisdiction on the Courts of the area from where only notice has been issued. Besides this, the judgment in S.K. Bhowmik's case (supra) did not deal with a case constituting of non-cognizable offences particularly offence under Section 138 of the Act. It is held that in the light of the judgment of K.Bhaskaran's case (supra), the ratio of the judgment of S.K. Bhowmik's case (supra) is not applicable in the complaint under Section 138 of the Act and the summoning order in complaint under Section 138 of the Act cannot be questioned solely on the ground of violation of provisions of section 202 Cr.P.C."
I am in full agreement with the conclusions arrived at by the learned Judges in the judgments referred by counsel for the respondent, keeping in mind that the offence under Section 138 of the 1881 Act is non- cognizable, therefore, need not be assigned to the police for conducting investigation.
However, before parting with the decision on this issue, it is necessary to point out that Section 138 of the 1881 Act was introduced by way of an amendment effective from 01.04.1989. These provisions were introduced with a view to encourage the culture of use of cheques and CRM M 14752 of 2009 8 enhancing the credibility of the instruments. The legislature intended to inculcate faith in the efficacy of banking operations and use of negotiable instruments in business transactions. The penal provision is meant to discourage people from not honouring their commitments by way of payment through cheques. Therefore, the laudable object to prevent bouncing of cheques and sustaining credibility of commercial transactions resulting in enactment of Sections 138 and 141 of the 1881 Act are to be kept in mind while deciding the question of quashing for want of some procedural lapse. In this view of the matter, the challenge of the petitioner to the proceedings for want of compliance with the provisions of Sections 202 of the Code, is no more sustainable and merits rejection.
This brings the Court to other two issues, which are relevant only in the case of petitioner Asheesh Kumar Sharma. Counsel for the respondent is right in his submission that the question 'whether or not Asheesh Kumar Sharma was a partner in the firm on the relevant date', is a disputed question of fact, which can be decided after adducing evidence during trial and is not open to be adjudicated upon in proceedings under Section 482 of the Code. In this regard, I stand fortified with the observations by the Supreme Court of India in Rallies India Ltd.'s case (supra).
Indisputably, the agreement to sell the poultry farm, on behalf of the petitioner was entered through his mother being an attorney. A perusal of averments of the complaint would reveal that it is none of the allegations of the complaint that the petitioner was either present at the time of negotiations, agreement, issuance of cheque or its dishonour etc. Now the question arises, whether the petitioner can be held liable to face trial, in CRM M 14752 of 2009 9 view of the averments that he is a partner of the firm M/s Commander poultries, on whose behalf, the cheque in question was issued under the signatures of Manish Sharma and Kamla Sharma, co-accused in this case. In para 1 of the complaint, the material averment in regard to liability of the accused is quoted thus:-
"1. That an agreement to sell was entered into between accused No. 2 and Accused No. 3(through accused No. 4) with the complainant as well as Shri Ram Kumar Gupta son of Shri Piara Lal Gupta, resident of House No. 15, Sector 10, Panchkula for the sale of a Poultry Farm i.e. M/s Commander Poultries, Village Manaktabara, District Panchkula (Haryana) (Accused No. 1) for a valuable consideration of Rs.1,43,00,000/-. Accused No. 1 is a Partnership concern of Accused Nos. 2 and 3."
In the title of the complaint, Manish Sharma is accused No. 2 and Asheesh Sharma is accused No. 3. The remaining paras of the complaint do not aver with regard to the role/part attributable to the petitioner in respect of affairs and business of the partnership concern.
A similar issue came up before Hon'ble the Supreme Court in Rallies India Limited's case (supra). In the said case, the following plea was raised by the appellant:-
"4. Appellant as Complainant filed a criminal complaint before the Chief Judicial Magistrate, Gautam Budh Nagar, Noida (U.P.) on 23.7.2004, under Sections 138 and 141 of the Act. It was alleged in the said complaint that cheques bearing nos.382874 and 382875 dated 31.03.2004 for Rs.15,00,000/- each drawn on Union Bank of India, Vijaywada Main Branch were issued by the accused CRM M 14752 of 2009 10 persons. The said cheques, when presented to their banker, were returned as unpaid vide Cheques Return Advices dated 29.05.2004, with the remarks, 'Payment stopped by Drawer'. In the said complaint, the following specific plea was raised by the Appellant:
"That the Accused No. 1 is a partnership firm and Accused No. 2 to 7 are partners thereof and Accused No. 3 is signatory of the impugned cheques and all partners are looking after day to day affairs of the accused firm and thus the liability as raised by them is joint and several."
Hon'ble the Supreme Court in para 10 of the judgment, after making a reference to a three Judge decision of the Court in 'S.M.S. Pharmaceuticals Limited v. Neeta Bhalla and another', 2005(4) R.C.R. (Criminal) 141, wherein the specific averment of vicarious liability is mandated by Hon'ble the Supreme Court, the Court held that the specific averment contained in the form mentioned in para 4 hereinabove, amounts to compliance.
In the instant case, there is no such averment contained in the complaint that Asheesh Kumar Sharma is looking after day-to-day affairs of the accused firm or liability of the partners of the firm is joint and several.
In 'Monaben Ketanbhai Shah and another v. State of Gujarat and others', 2004(3) RCR (Criminal) 800, a similar question in regard to liability of a partner of a firm for offence under Section 138 of the 1881 Act, was considered and it was held as under:-
"6 The criminal liability has been fastened on those who, at the time of the commission of the offence, were in charge of and were responsible to the firm for the conduct of the business of the firm. These may be sleeping partners who are not CRM M 14752 of 2009 11 required to take any part in the business of the firm; they may be ladies and others who may not know anything about the business of the firm. The primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every partner knows about the transaction. The obligation of the appellants to prove that at the time the offence was committed they were not in charge of and were not responsible to the firm for the conduct of the business of the firm, would arise only when first the complainant makes necessary averments in the complaint and establishes that fact. The present case is of total absence of requisite averments in the complaint."
The averments contained in the complaint filed by the respondent, when examined in the light of observations made by Hon'ble the Supreme Court in the above referred authorities, I have no hesitation to hold that the petitioner cannot be tried for offence under Section 138 of the 1881 Act, merely on the basis of a recital that the partnership firm consists of partners, namely, Asheesh Kumar Sharma and Manish Sharma.
Counsel for the respondent has laid much stress to contend that the present petition is not maintainable having been filed through an attorney. In Amit Ahuja's case (supra), a Single Bench of this Court, dealing with a petition under section 482 of the Code for quashing of a complaint under Sections 406, 498-A, recorded its conclusions that petition through an attorney can be maintained only if the petitioner was suffering from any disability i.e. he is minor, insane or was suffering from any other CRM M 14752 of 2009 12 disability, which, in law, is recognized as sufficient to permit any other person e.g. next friend, to move the Court, on his behalf. The Court further held that as the petitioner, who is a resident of Dubai, outside India, does not suffer from any such disability, he cannot maintain a petition for quashing criminal proceedings through his attorney. The judgment makes reference to an earlier decision of this Court in 'Gurmit Kaur v. State of Punjab' ( CRM M 13472 of 2000, decided on 06.09.2002), wherein a Single Bench of this Court held that petition under Section 482 of the Code, for quashing proceedings could be filed through an attorney. Gurmit Kaur's case (supra) relates to quashing of a complaint and subsequent proceedings under Section 138 of the 1881 Act. The learned Judge in Amit Ahuja's case (supra) tried to distinguish the decision in Gurmit Kaur's case (supra) with observations that in the judgment of Hon'ble the Supreme Court 'Ravulu Subha Rao v. Commissioner of Income Tax, Madras' 1956 (SC) 604 relied in Gurmit Kaur's case (supra), no such question fell for decision before the Apex Court as to whether the accused could file a petition under Section 482 of the Code for quashing criminal proceedings through an attorney.
Indisputably, the agreement for sale of poultry farm was entered into by the petitioner through his attorney-Kamla Sharma. The petitioner was admittedly not present on any occasions i.e. agreement to sell, issuance of cheque and other relevant events. A perusal of averments in the complaint would reveal that it was the complainant and his father, who raised an issue that as there was no valid authority with Smt. Kamla Sharma, to execute an agreement on behalf of the present petitioner, the accused committed a fraud. They lodged a complaint in the police but later due to intervention of respectables, the matter was settled and the accused CRM M 14752 of 2009 13 agreed to return double the amount received as earnest money and issued a cheque in the sum of Rs.40,00,000/- under the signatures of Asheesh Sharma and Kamla Sharma, on behalf of the partnership firm.
The offence under Section 138 of the 1881 Act is not a crime in its real sense. As stated earlier, the legislature with an intention to create credibility of business transactions through negotiable instruments enacted Sections 138 and 141 and provided penalty, in case, the drawee of the cheque fails to honour his commitment to make payment in discharge of his legal liability. I am of the considered opinion that, in case, the present petition is dismissed merely on the ground that it has been filed through an attorney, it would amount to taking a too technical view of the matter, though the petitioner, otherwise, has a good case on merits.
Keeping in view the entire gamut of facts and circumstances discussed hereinabove, when examined in the light of nature of offence under Section 138 of the 1881 Act, it is not expedient in the interest of justice to hold that the petition is liable to fail for the reason that it has been filed through an attorney. Moreover, if at the initial stage of filing of the petition, the Court had rejected it being not maintainable, having been filed through an attorney, there was every likelihood that the petitioner would have come to India, engage a counsel and file petition for quashing of complaint. A serious prejudice would be caused to the petitioner, in case, the petition is dismissed on the solitary ground that it has been filed through an attorney. I would hasten to add that at the initial stage when the petition was filed, an issue of maintainability of the petition through attorney was raised. A relevant extract from order passed on 27.05.2009, before issuance of notice of motion, reads as follows:-
CRM M 14752 of 2009 14
"Counsel for the petitioner seeks an adjournment to show that criminal petition can be filed on the basis of power of attorney.
Adjourned to 02.07.2009."
Subsequently, on the next date, the Court issued notice of motion, meaning thereby, that the Court was satisfied that the petition is maintainable. In this view of the matter, I do not agree with the contention of the respondent that the petition is not maintainable, as has been filed through an attorney.
In the result, CRM M 14752 of 2009 filed by Asheesh Kumar Sharma, is allowed. The complaint under Section 138 of the 1881 Act and proceedings emanating therefrom qua him are hereby quashed. CRM M 2365 of 2010, filed by Mrs. Kamla Sharma, fails and is, accordingly, dismissed. No order as to costs.
(Rekha Mittal) Judge August 14, 2013 mohan