Gujarat High Court
Krishna B Sharma vs State Of Gujarat on 9 June, 2023
NEUTRAL CITATION
R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 19444 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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KRISHNA B SHARMA
Versus
STATE OF GUJARAT & 1 other(s)
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Appearance:
MR SAMIR AFZAL KHAN(3733) for the Applicant(s) No. 1
MR LB DABHI, APP for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 2
MR NANDESH THAKKAR, APP for THAKKAR AND PAHWA
ADVOCATES(1357) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR
Date : 09/06/2023
ORAL JUDGMENT
1. By this petition, under Section 482 of the Code of Criminal Procedure, 1973 the petitioner seeks to invoke the inherent powers of this Court, praying for quashing of the Criminal Case No.1558 of 2012 pending before the learned Page 1 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023 NEUTRAL CITATION R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023 undefined Additional Chief Judicial Magistrate at Dahod and all the proceedings arising thereto.
2. Heard Mr. Samir Afzal Khan, learned advocate for the petitioner, Mr.Nandesh Thakkar, learned advocate appearing for Thakkar and Pahwa Advocates for respondent No.2 and Mr.L.B. Dabhi, learned APP for the respondent- State.
3. It is the case the petitioner that Mohit Krishna Sharma son of petitioner is running a sole proprietorship namely, M/s. PNK Overseas(for short, "the Firm"). The complainant Laxmi Puls Rice & Roller Flour Mills (for short, "the Mills") has filed a complaint under Section 138 of the Negotiable Instruments Act (for short, "the Act"), 1881 against the Firm. A notice came to be issued to the Firm and Mr. Mohit Krishna Sharma its proprietor. Two cheques under complaint came to be issued in the personal capacity and present petitioner is not partner of the Firm and he has nothing to do with the said Firm. The petitioner is wrongly dragged into this issue by the respondents and filed a complaint against him under Section 138 of the Act in connection with the dishonour of the cheque to the tune of Rs.14,15,500/-, but nowhere in the complaint is stated about the involvement of the present petitioner and no averments is made under Section 141 of the Act. Prima facie, there would be no liability of the petitioner. Merely Page 2 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023 NEUTRAL CITATION R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023 undefined because the petitioner is the father of the payee of the cheque, he has been dragged into this dispute. However, no transaction with ulterior motive took place between the petitioner and respondent No.2- the Mills, the present complaint has been filed. Hence, he requested to invoke the inherent jurisdiction under Section 482 of the Cr.P.C. and quash and set aside the proceedings being Criminal Case No.1558 of 2012 pending before the learned Additional Chief Judicial Magistrate, Dahod under Section 138 of the Act.
4. Per contra, leaned advocate Mr.Nandesh Thakkar for respondent No.2 has submitted that prior to file a complaint, a notice came to be issued and reply has already been given by the accused. However, no where it is stated that he has not connected with the affairs of the Firm. Further he has submitted that the Firm is run by the present petitioner and he entered with all transactions and dealing with the respondent No.2-the Mills in his personal capacity and towards the dues of the Mills. It is further submitted that Mr.Krishna B. Sharma and his son Mr.Mohit Krishna Sharma both are doing business of export of wheat in the name and style of "M/s. PNK Overseas" and as an authorized person Mr.Mohit Krishna Sharma put his signature, but the present petitioner is connected with the business of the Firm. It is further submitted that even in the other dealings, the cheques are issued by the Krishna B. Sharma and another complaint is also going on against the Page 3 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023 NEUTRAL CITATION R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023 undefined present petitioner in Upleta Court. Very first time, the petitioner has taken the ground that he has nothing to do with the affairs of the Firm and cheque is not issued in his personal capacity, but neither any such ground is taken nor any explanation is given in this regard. In reply of the notice, the said defence is also required to be proved after leading the evidence at the trial. The petitioner has misused the entire machinery and with the view to thwart the criminal proceedings, the present petition is filed. To buttress the arguments, he has relied on decision of Apex Court in the case of S.P. Mani and Mohan Dairy versus Dr. Snehlatha Elangovan decided on 16th September, 2022 in Criminal Appeal No.1586 of 2022.
5. Learned advocate for the petitioner has mainly contended that the present petitioner has nothing to do with the Firm and the present petitioner is neither vicariously liable nor associates with the Firm. Hence, as per Section 141 of the Act, proceeding against the present petitioner is required to be quashed and set aside. In support of the said contention, he has produced cheque dated 16 th April, 2012 wherein, signature put by Mohit Krishna Sharma as an authorized signatory for the Firm. Further he has produced the certificate issued by Allahabad Bank, Gandhidham Branch and stated that Mr.Mohit Krishna Bhagwan Sharma is sole proprietor of the said Firm. The said certificate is produced at Annexure-A of the compilation.
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6. Further he has produced the Income Tax Returned Acknowledgment for the assessment years 2012-13 and Importer Exporter Code (IEC) Number issued by the Office of the Development Commissioner, Gandhidham. The complaint is filed by respondent No.2-the Mills through its power of attorney against the present accused persons. In the complaint, it is stated that both the accused are doing business of import and export and both are authorized persons of the Firm and both have purchased wheat flour from the complainant-Mills. The Mills kept the account of accused and on 1st April, 2012 in books of account, the complainant-the Mills outstanding of Rs.29,02,500/- towards the said debt. Accused had issued two cheques in favour of the complainant-the Mills; bearing Cheque No.028197 dated 16th April, 2012 to the tune of Rs.14,19,000/- and Cheque No.28198 dated 16 th April, 2012 to the tune of Rs.14,15,500/-. The cheque No.028198 was signed by accused No.2 as an authorized signatory and the same was dishonoured with endorsement of insufficient fund on 7th July, 2012. Then complainant issued notice to the accused on 16th July, 2012 and notice was duly served. Thereafter, a reply was given by the accused through their advocate on 20th August, 2012. Therefore, a complaint was filed after recording the verification. The learned Magistrate has been pleased to take the cognizance and summon was issued against the accused including present petitioner.
Page 5 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023NEUTRAL CITATION R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023 undefined While taking the cognizance, the learned Magistrate has recorded that the accused persons have purchased the goods from the Mills for their business and then accused persons have issued a cheque towards the dues of respondent No.2-Mills.
7. The main contention of the learned advocate for the petitioner is that the provisions of Section 141 of the Act does not attract as he has nothing to do with the affairs of the Firm. The cheque was issued by the Firm in favour of the original complainant-the Mills and wherein the authorized signatory is accused No.2, but if perused the averments made in this complaint where it is clearly stated that both the accused are running the business and connected with the affairs of the said Firm. The said averments has been made in the notice and reply of the notice is given to the respondent No.2 by the present accused including present petitioner on 20 th August, 2012. In the said notice, no such contention has been raised by the present petitioner that he had nothing to do with the said Firm and has not issued any cheque and he has not connected in any manner with the said transaction.
8. On the contrary, in the reply of notice, it is admitted that though two blank cheques came to be issued towards the security, the quality of goods was not up to the mark. Hence, the accused could not export the said goods.
Page 6 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023NEUTRAL CITATION R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023 undefined However, the issue regarding quality of goods is not raised anywhere in his defence. Even in the complaint produced at Annexure-B, name of the present petitioner is mentioned as an authorized person as Krishna B. Sharma. While cheque issued by the authorized signatory, there is a difference between the authorized person and authorized signatory. In view thereof, the said fact is also required to be decided after full-fledged trial.
9. The learned advocate for the petitioner has also relied on the certificate issued by the Allahabad Bank and Income Tax Return Acknowledgment, but the cheque under the complaint is dated 16th April, 2012 while certificate issued by the Allahabad Bank and Income Tax Return Acknowledgment for the assessment years 2012-13, which are subsequent to issuance of cheque respectively dated 14 th October, 2013 and filing of Income Tax Return Acknowledgment is dated 6th September, 2013 while certificate issued by the Office of the Development Commissioner, Gandhidahm wherein status of the Firm is not clearly mentioned as to whether the said Firm is partnership proprietorship Firm or Private Limited Company.
10. Considering the reply and averments made in the complaint, there is no specific stand or defence put forward by the present petitioner and more particularly, when in Page 7 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023 NEUTRAL CITATION R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023 undefined other litigations, the both accused are impleaded as the accused, obviously in the name of different Firm and there is no bar to form more than one Firm on the different names. However, the petitioner is failed to make out the prima facie, case to invoke the jurisdiction under Section 482 of the Code and to decide the said fact when the full- fledged trial is required considering the disputed question of fact is involved in the matter.
11. It is worth to mention that this Court is aware of provisions of Section 141 of the Act and basic necessity of averments qua vicariously liability on the order summarized by the Hon'ble Apex Court in this regard on the various decisions. However, criminal case is required to be decided on the basis of its own merits and facts.
12. So far as the fact is concerned, the case on hand, no specific defence has been put forward while answering the notice issued by the complainant. After going through the contents of complaint and notice, prima facie, it appears that the present petitioner is connected with the affairs of the Firm under which capacity, he is connected, is also required to be decided at the trial by leading cogent evidence.
13. It is profitable to referred the law laid down by the Hon'ble Apex Court in the case of S.P. Mani and Mohan Dairy versus Dr. Snehlatha Elangovan decided on 16 th Page 8 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023 NEUTRAL CITATION R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023 undefined September, 2022 in Criminal Appeal No.1586 of 2022, more particularly, para 46 and 47 reads as under:
"46. When in view of the basic averment process is issued the complaint must proceed against the Directors or partners as the case may be. But, if any Director or Partner wants the process to be quashed by filing a petition under Section 482 of the Code on the ground that only a bald averment is made in the complaint and that he is really not concerned with the issuance of the cheque, he must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his contention. He must make out a case that making him stand the trial would be an abuse of process of court. He cannot get the complaint quashed merely on the ground that apart from the basic averment no particulars are given in the complaint about his role, because ordinarily the basic averment would be sufficient to send him to trial and it could be argued that his further role could be brought out in the trial. Quashing of a complaint is a serious matter. Complaint cannot be quashed for the asking. For quashing of a complaint, it must be shown that no offence is made out at all against the Director or Partner.
47. Our final conclusions may be summarised as under:
a.) The primary responsibility of the complainant is to make specific averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no legal requirement for the complainant to show that the accused partner of the firm was aware about each and every transaction. On the other hand, the first proviso to sub section (1) of Section 141 of the Act clearly lays down that if the accused is able to prove to the satisfaction of the Court that the offence was committed without his/ her knowledge or he/she had exercised due diligence to prevent the commission of such offence, he/she will not be liable of punishment.
b.) 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 aknowledge 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 Page 9 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023 NEUTRAL CITATION R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023 undefined 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 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.
c.) Needless to say, the final judgement and order would depend on the evidence adduced. Criminal liability is attracted only on those, who at the time of commission of the offence, were in charge of and were responsible for the conduct of the business of the firm. But vicarious criminal liability can be inferred against the partners of a firm when it is specifically averred in the complaint about the status of the partners 'qua' the firm. This would make them liable to face the prosecution but it does not lead to automatic conviction. Hence, they are not adversely prejudiced if they are eventually found to be not guilty, as a necessary consequence thereof would be acquittal.
d.) If any Director wants the process to be quashed by filing a petition under Section 482 of the Code on the ground that only a bald averment is made in the complaint and that he/she is really not concerned with the issuance of the cheque, he/she must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his/her contention. He/she must make out a case that making him/her stand the trial would be an abuse of process of Court"
14. In view of the above, merely based on bald averments made in the complaint, the present petitioner is not concerned with the issuance of the cheque is not enough to invoke the powers under Section 482 of the Code of Criminal Procedure, the petitioner must have to pursue this Court to quash the process either incontrovertible material Page 10 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023 NEUTRAL CITATION R/CR.MA/19444/2013 JUDGMENT DATED: 09/06/2023 undefined or acceptable circumstances to substantiate his contention and he has to make out that the trial would be an abuse of process of the Court.
15. Therefore, in absence of any material on record, the petition stands dismissed. Learned trial Court is directed to decide the liability of present petitioner/accused independently on its own merits based on the evidence produced or adduced by the parties on record without being influenced by the observations of this Court in this order. Rule discharged. Interim relief granted earlier stands vacated.
(HASMUKH D. SUTHAR,J) ALI Page 11 of 11 Downloaded on : Sat Sep 16 20:04:57 IST 2023