Karnataka High Court
Smt Akkamahadevi W/O Venkanagouda ... vs Sri Basanagouda S/O Mallanagouda ... on 26 November, 2021
Author: H.P.Sandesh
Bench: H.P.Sandesh
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IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 26TH DAY OF NOVEMBER 2021
BEFORE
THE HON'BLE MR. JUSTICE H.P.SANDESH
CRIMINAL PETITION No.200896/2021
BETWEEN:
SMT. AKKAMAHADEVI
W/O VENKANAGOUDA PATIL
AGE: 42 YEARS, OCC: BUSINESS
R/O PLOT NO.29
SAJJANASHREE BHARATINAGAR
GOKUL ROAD, HUBBALLI-580030
DIST. DHARWAD
... PETITIONER
(BY SRI MAHANTESH PATIL, ADVOCATE)
AND:
1. SRI BASANAGOUDA
S/O MALLANAGOUDA ALLIKOTI
AGE: 48 YEARS, OCC: BUSINESS
R/O RAGANAKOLLUR, TQ. HUNASAGI
DIST. YADGIRI-585202
2. SRI VENKANAGOUDA
S/O SIDDANAGOUDA PATIL
AGE: 60 YEARS, OCC: BUSINESS
R/O PLOT NO.29, SAJJANASHREE
BHARATINAGAR, GOKUL ROAD
HUBBALLI-580030, DIST. DHARWAD
... RESPONDENTS
(BY SRI R.S.LAGALI, ADVOCATE FOR R1;
SRI GANESH S. KALBURGI, ADVOCATE FOR R2)
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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482
OF CRIMINAL PROCEDURE CODE, PRAYING TO QUASH THE
ORDER DATED 05.03.2021 IN C.C.NO.97/2021
(P.C.NO.05/2021) PASSED BY THE ADDL. CIVIL JUDGE AND
JMFC SHORAPUR AND CONSEQUENTLY QUASH THE CRIMINAL
PROCEEDINGS IN C.C.NO.97/2021 PENDING ON THE FILE OF
ADDL. CIVIL JUDGE AND JMFC, SHORAPUR.
THIS PETITION COMING ON FOR ADMISSION, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
Heard the learned counsel appearing for the petitioner and the learned counsel appearing for respondent Nos.1 and 2.
2. This petition is filed under Section 482 of Cr.P.C., praying this Court to quash the order dated 05.03.2021 passed in C.C.No.97/2021 (P.C.No.5/2021) by the Additional Civil Judge and JMFC, Shorapur and consequently, quash the criminal proceedings in C.C.No.97/2021 pending on the file of Additional Civil Judge and JMFC, Shorapur.
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3. Factual matrix of the case is that respondent No.1 herein has filed private complaint in P.C.No.5/2021 for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'N.I. Act') against the petitioner herein who has been arrayed as accused No.2 and accused No.1. In the complaint it is stated that she is the partner of the firm Vishwas Enterprises and she is the business woman and stated that she is jointly and severally responsible for all the transactions of the firm. The trial Court, after considering the contents of the complaint, has taken cognizance against the petitioner also. Hence, the present petition is filed before this Court.
4. The main contention of the learned counsel appearing for the petitioner is that in order to maintain prosecution against the firm as per Section 141 of the N.I. Act arraigning of partnership firm is imperative. The other contention is that the petitioner is not the signatory to the cheque. The petitioner is a woman and suffering epileptic 4 disorder and residing at Hubballi. Respondent No.1 included the petitioner to settle his personal score without making any allegation against the petitioner. The petitioner being a stranger to the said transaction, she is not a party to the same. Hence, no offence at any stretch of imagination is being committed by her. The learned counsel also submits that on perusal of the complaint averments it is nowhere stated that she was in-charge of the affairs of the partnership firm and summoning of accused in a criminal case is serious matter.
The learned counsel quoted M/s Pepsi Foods Ltd., and another vs. Special Judicial Magistrate and Others reported in JT1997(8) SC 705 and also relied upon the judgment of the Hon'ble Apex Court passed in Criminal Appeal No.258/2021 disposed of on 08.03.2021 in the case of Alka Khandu Avhad vs. Amar Syamprasad Mishra and another wherein at paragraph-7 with regard to Section 138 of the N.I. Act is discussed and it is observed that Section 138 of the N.I. Act does not speak 5 about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than a person who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence under Section 138 of the N.I. Act. A person might have been jointly liable to pay the debt, but if such a person whom might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque.
The learned counsel also brought to the notice of this Court the judgment of the Hon'ble Apex Court passed in Criminal Appeal No.1465 of 2009 disposed of on 17.01.2019 in the case of Himanshu vs. B.Shivamurthy and Ors., wherein at paragraph-8, the Hon'ble Apex Court has relied on the paragraph-58 of the judgment in the case of Aneeta Hada vs. Godfather Travels and Tours Private Limited reported in (2012)5 SCC 661 wherein it is observed that commission of offence by the company is an express condition precedent to attract the 6 vicarious liability of others and the Hon'ble Apex Court has discussed about the scope of Section 141 of the N.I. Act in paragraph-59 wherein it is held that arraigning of a company as an accused is imperative. In paragraph-13 of Himanshu's case supra, it observed that a notice of demand was served only on the appellant. The complaint was lodged only against the appellant without arraigning the company as an accused.
The learned counsel relied upon the judgment of this Court in Criminal Petition Nos.2044, 2045, 2046 and 2047/2015 disposed of on 08.11.2017 in the case of Ankit Bhuwalka vs. Carmel Jyothi Trust and Ors., wherein at paragraph-9 it is observed that it is specifically alleged in the complaint that all the accused persons being the Directors or incharge of running the affairs of the accused Company on day to day business and jointly issued cheque for the legally enforceable debt, due to the complainants. Except this sentence, no other material has been placed in the complaint averments to show that what 7 exactly the role of the present petitioner and what was his duty assigned in the A1-Compnay and what exactly the role played by him is not stated, except stating that A3 and A4 have authorized A2 to act on behalf of the company and to issue the cheques.
The learned counsel also relied upon the judgment of the Delhi High Court in the case of Meera Gupta and Ors., vs. Madan Lal Batra reported in 2012(2) Crimes 351 (Del.) wherein it is observed that to rope in a Director of Company complainant is not only required to make a clear allegation that concerned person was the Director/Subscriber but also to show how and in what manner said Director was in-charge of and responsible for conduct of business of Company.
The learned counsel also relied upon the judgment of the Hon'ble Apex Court in the case of National Small Industries Corporation Limited vs. Harmeet Singh Paintal and another reported in (2010)3 SCC 330 wherein it is observed that mere bald statement that he 8 was in charge of and was responsible to the company for conduct of its business not sufficient. There is no presumption that every Director knows about the transaction. In the absence of specific averment as to the role of co-accused Director, trial Court's order summoning him, rightly quashed by High Court.
The learned counsel also relied upon the judgment of Chhattisgarh High Court in the case of M/s. Anil Rice Mills and Ors., vs. State of Chhattisgarh and Anr., reported in 2012(1) Crimes 672 (Chhatt.) wherein the High Court has discussed about the scope of Section 141 of the N.I. Act and observed that nowhere it was stated that partners other than one who is alleged to have issued cheque at the time of commission of offence were in- charge of day to day affairs and responsible for conduct of business of firm. Except firm and the partner who had issued the cheque, no other partner could be prosecuted.
The learned counsel also relied upon the judgment of Madras High Court in CRL.O.P.No.13147/2015 and 9 CRL.M.P.Nos.1 and 2 of 2015 disposed of on 23.07.2019 in the case of Rangabashyam and another vs. Ramesh wherein at paragraph-19 the Court has observed that Section 141 of the N.I. Act deals with the concept of vicarious liability, wherein for the offence committed by the Company or a partnership firm, the directors or the partners, as the case may, are deemed to be guilty of the offence when it is shown that they are in charge of and responsible for the conduct of the day-to- day affairs of the business or the firm, as the case may be. While interpreting the provision, the Hon'ble Apex Court has categorically held that complaint cannot be maintained against the directors of the Company, without making the company as an accused person. This concept has been extended even for Partnership Firms. The registration or non-registration of the Partnership Firm will have no bearing insofar as Section 141 of the N.I. Act is concerned.
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The learned counsel also relied upon the judgment of the Hon'ble Apex Court in the case of Katta Sujatha (Smt.) vs. Fertilizers and Chemicals Travancore Ltd., and Another reported in (2002)7 SCC 655 wherein the Hon'ble Apex Court considering Sections 138 and 141 of the N.I. Act held that the complaint under Section 138 of the N.I. Act against firm and its partners including a partner to whom no particular act was specifically attributed, maintainability of the complaint against such a partner, no allegation in the complaint that the said partner was in charge of, and was responsible to the firm for, the conduct of the business of the firm, no allegation that the offence was committed with her consent or connivance or that the same was attributable to any neglect on her part in the matter of issuance of the cheque. In such circumstances, held, no case made out against the said partner. Hence, the said complaint, held, not maintainable against her.
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5. Per contra, the learned counsel appearing for respondent No.1/complainant would vehemently contend that in the complaint in paragraph-2 specific averment is made that both accused Nos.1 and 2 are the partners of the firm by name M/s. Vishwas Enterprises and both being the partners of firm M/s. Vishwas Enterprises jointly and severally liable for all the transactions of the firm. The learned counsel also brought to the notice of the Court the reply given by the petitioner along with another accused vide reply dated 27.01.2021 wherein the petitioner has not disputed the fact that both of them are in-charge of the affairs of the partnership firm. When they have not disputed in the reply, now they cannot contend that petitioner is not in-charge of affairs of the partnership firm.
The learned counsel brought to the notice of this Court the judgment of the Hon'ble Apex Court in the case of Ashapura Minechem Ltd., vs. Philip J. reported in AIR Online 2019 SC 730 regarding Sections 138 and 141, offences by the companies, complaint against 12 representative partner of the firm, quashing of complaint by High Court on assumption that partnership firm not made party in complaint, erroneous. The learned counsel brought to the notice of the Court the cause-title which has been extracted in the order wherein also partner name is first mentioned and it is mentioned as partner of particular partnership firm. The learned counsel referring to the judgment brought to the notice of this Court that in the complaint specifically it is mentioned the name of the partner and further mentioned that accused is the contractor and partner of Vishwas Enterprises and in a similarly placed circumstances, the Hon'ble Apex Court quashed the order of the High Court and all other contentions available to the parties are left open including regarding the correctness of the description as given in the concerned complaint and High Court was not right in quashing the complaint on the assumption that partnership firm has not been made as party in the complaint. 13
The learned counsel also relied upon the judgment of the Hon'ble Apex Court in the case of Bhupesh Rathod vs. Dayashankar Prasad Chaurasia reported in AIR ONLINE 2021 SC 1009 and brought to the notice of this Court the principles laid down in the judgment that no case set up by the accused that nature of transaction was of nature which fell beyond scope of Section 138 of the N.I. Act. Order of trial Court and High Court acquitting accused on ground that complaint was filed in personal capacity, unsustainable. However, considering fact that 15 years elapsed from date of filing of complaint, punishment of imprisonment for term of one year and with fine twice amount of cheque would be proper. Signatures on cheques were not disputed by accused. Neither was it explained by way of an alternative story as to why duly signed cheques were handed over to the Company.
The learned counsel also relied upon the judgment of the Hon'ble Apex Court in the case of S.V.Muzumdar and others vs. Gujarat State Fertilizer Co., Ltd., and 14 another reported in 2005 SCC (Cri) 1020 wherein it is held that defence plea that there was neither any material to show that the accused at the time of the alleged offence were in charge of and/or responsible to the Company for the conduct of the business as required under Section 141(1) nor the deeming provision under Section 141(2) (which covers persons with whose consent or connivance or due to whose neglect the Company committed the offence) was applicable nor allegations sufficient to attract culpability and so also with regard to Sections 138 and 141 of the N.I. Act persons deemed to be guilty under Section 141 in such case it is held that burden of proof lies on the accused.
6. Having heard the learned counsel for the petitioner and the learned counsel for respondent No.1/complainant, this Court has to consider the material on record, to consider whether it is a fit case to exercise power under Section 482 of Cr.P.C. The first and foremost contention of the petitioner is that company has not been 15 arrayed as accused. The learned counsel also brought to the notice of this Court Annexure-D-Cheque wherein the partner has signed the cheque for Vishwas Enterprises. Perusal of the contents of the complaint particularly cause- title, name of the partner is mentioned and also his occupation is mentioned as Contractor and also partner referring partnership firm as Vishwas Enterprises as similarly observed by the Hon'ble Apex Court in the recent judgment which is reported in AIR Online 2019 SC 730 in Ashapura Minechem Ltd.,'s case supra. The Hon'ble Apex Court also taking into note of the same, comes to the conclusion that High Court was not right in quashing the complaint on the assumption that partnership firm has not been made as party in the complaint. This judgment is aptly applicable to the case on hand and hence, the very contention of the petitioner that partnership firm has not been made as party to the proceedings is not correct. The Hon'ble Apex Court in the said judgment has also held that Section 138 r/w Section 141 of the N.I. Act is a matter to be analyzed by the trial Court in the first instance. It is 16 further observed that the Court does not intend to answer any other contention except assumption of the High Court for allowing the quashing petition is contrary to the record and for which reason the same is set aside. Hence, it is clear that it is a matter to be analyzed by the trial Court.
7. The other contention of the petitioner that though the petitioner is partner and nothing is averred in the complaint whether she was in-charge of day to day affairs or not. Perusal of paragraph-2 of the complaint discloses that the complainant has stated that accused No.2 is a business woman and wife of accused No.1 and both accused Nos.1 and 2 are the partners in the firm by name M/s. Vishwas Enterprises and further stated that both being the partners of the firm Vishwas Enterprises are jointly and severally responsible for all the transactions of the firm. Having taken note of the said averments, though it is not specifically mentioned that the petitioner is also in- charge of day to day affairs of the partnership firm, it is very specifically stated that both being the partners of the 17 firm are jointly and severally responsible for all the transaction of the firm. In paragraph-4 it is mentioned that accused No.1 is the Managing Partner and authorized signatory to the firm and the same is in respect of signing of cheque. No doubt, the Hon'ble Apex Court and also different High Courts in the judgments referred to supra by the petitioner's counsel held that there must be specific averments that the petitioner whether being Director or Partner is in-charge of the day to day of the affairs of the company or partnership firm. As I have already pointed out, in paragraph-2 specific averments are made that petitioner being the partner in firm jointly and severally liable for all the transactions of the firm, that means, even though no specific word is used that petitioner is in-charge of day to day affairs of the firm, the Court cannot exercise power under Section 482 of Cr.P.C., and cannot say that she has not been in charge of the affairs of the company in view of averments made in paragraph-2 of the complaint. 18
8. Learned counsel for the respondent No.1 brought to the notice of this Court the legal notice which is marked as Annexure-A wherein also in paragraph-1 it is categorically stated that both of them are partners in the firm M/s. Vishwas Enterprises and in paragraph-2, it is mentioned that said cheque was duly signed by accused No.1 being the Managing Partner and authorised signatory and in paragraph-3, it is stated that 'You both being the partners of 'M/s. Vishwas Enterprises' are jointly and severally liable to pay the amount' being the amount due to the complainant and called upon both of them to pay the amount. In terms of Annexure-B reply was given and in reply they have admitted that they are the partners of M/s Vishwas Enterprises and doing the contract business but disputed the liability. Nowhere they have stated that the cheque was given in the exclusive responsibility of the accused No.1 and also no specific reply was given that the petitioner herein was not in the affairs of the firm. 19
9. When the Hon'ble Apex Court in the case of Bhupesh Rathod supra held that company was aware that complaint had to be filed by the company itself and signature on cheque was not disputed by the accused, neither was it explained by way of an alternative story as to why the duly signed cheques were handed over to the company and no case is set up with nature of transaction which availed beyond the scope of section 138 of NI Act and whether the petitioner was in charge of the affair of the firm or not, again it is a disputed fact and I have already pointed out that in paragraph-2 of the complaint, specific averments are made and so also in the legal notice, specific averments are made in respect of both the accused persons and when such being the facts and circumstances of the case, this Court cannot come to the conclusion that she was not in-charge of the day-to-day affairs of the firm and hence, I do not find any force in the second contention of the learned counsel for the petitioner that this petitioner was not in-charge of the day-to-day affairs of the firm.
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10. In view of the discussion made above, I pass the following:
ORDER The petition is dismissed.
Sd/-
JUDGE NB*/VNR