Bangalore District Court
M/S. Next Step India vs Sri. Muralidharan on 29 January, 2022
KABC020027082019
IN THE COURT OF THE JUDGE COURT OF SMALL CAUSES
AND A.C.M.M, AT BENGALURU
Present: UMESHA.H.K, B.A., LL.B.,
JUDGE, Court Of Small Causes,
Bengaluru.
Dated this the 29th day of January, 2022
C.C. No: 537/2019
Complainant: M/s. Next Step India,
Rep. By its Proprietor,
Mr. M Pavan,
# 65, 1st Floor,
Mission Road,
Channamma School Road,
Lalbagh Road,
Bangalore-560022.
(By Sri.Ashwath C.M.- Adv.)
-Vs-
Accused: 1. Sri. Muralidharan
Partner
2. Sri. Raju K. Thomas,
Partner
Both having office at:
M/s. Curtain Studio,
#180/4, T. Govindappa Complex,
B. Narayanapura,
Whitefield Road,
Bangalore-560016.
(By Sri.C.V.Siju-Adv)
SCCH-09 2 CC.537/2019
JUDGMENT
Complainant has filed this private complaint under Sec. 200 of Cr.P.C., against accused for an offence punishable under Sec.138 of Negotiable Instruments Act.
2. It is the case of the complainant that, the complainant is running a proprietary business, in wholesale wallpapers. The accused No.1 & 2 are running a partnership firm in the name and style of M/s. Curtain Studio and running wallpaper retail business and both accused have been a customer of the complainant and they used to purchase wallpapers from complainant very often for their business needs. Both accused No.1 & 2 were used to purchase the wall papers from complainant on credit basis and complainant was maintaining a running account. As on 20.06.2018 complainant's account book was showing a balance of Rs.74,999/- due by both accused No.1 & 2 to complainant. On several repeated requests both accused No.1 & 2 have agreed to repay the amount owed to complainant and both accused No.1 & 2 jointly issued 3 cheques bearing No.177312, 177313 and SCCH-09 3 CC.537/2019 177314 all dated 23.10.2018 for Rs.25,000/- each, all were drawn on IDBI Bank, #17, Ashirwad Towers, Doddanekundi Junction, Marathahalli, K.R. Puram, Ring Road, Bangalore. On presentation of said cheques through his banker i.e.,HDFC Bank, Richmond Road Branch, Bangalore, and said cheques were returned on 30.10.2018. Thereafter complainant informed to accused no.1 and 2 and they requested to represent the cheque after 10 th November. As per request again cheques were represented and again they were returned on 14.11.2018 with endorsement "Funds Insufficient".
3. It is further case of complainant that he issued legal notice, dated 11.12.2018 through RPAD, the said notice was returned with shara as "Unclaimed". However, accused did not paid the aforesaid amount. As such accused committed an offence punishable under Section 138 of N.I.Act and prays to convict accused.
4. My Predecessor in Office by taking cognizance for the offence punishable U/Sec.138 of N.I. Act, registered the case SCCH-09 4 CC.537/2019 as PCR. Sworn statement of complainant was recorded. Thereafter, by perusing the averments of complaint, documents, this court has registered the case as CC in register No.3 and issued summons to accused persons. In pursuance of summons, accused persons appeared through their Advocate and they are on bail. Plea read over as per the provisions of U/Sec.251 of Cr.P.C., accused pleaded not guilty and claimed to be tried.
5. Complainant in order to prove his case, he himself examined as PW1 and got marked documents Ex.P1 to 11. Thereafter, statement of accused U/Sec. 313 of Cr.P.C. was recorded. Accused denied the incriminating evidence available against them and accused no.1 adduced his defense evidence as DW1 and no document marked on their behalf.
6. Heard the arguments of learned counsel for complainant and accused.
7. The following points are arise for my consideration: SCCH-09 5 CC.537/2019
1. Whether complainant proves that the accused have committed an offence punishable under Sec.138 of N.I. Act?
2. What order?
8. My findings on the above points are as under:
Point No.1 : In the Negative; Point No.2 : As per the final order;
for the following:
REASONS
9. Point No.1:- During the course of arguments, learned counsel for complainant has vehemently argued both accused are customers of complainant firm and they are doing business in the name and style of M/s.Curtain Studio and running Wall paper retail business and they have purchased Wall paper on credit basis as on 20.06.2018 as per account balance, accused are due an amount of Rs.74,999/- and for said amount they issued cheques in disputes for Rs.25,000/- each, on presentation, the said cheques were returned for the reasons "Funds Insufficient". Inspite of service of notice, accused No.1 and 2 have remained silent and they have not paid the amount nor issued reply notice as such they have committed an SCCH-09 6 CC.537/2019 offence punishable U/Sec. 138 of N.I.Act. The oral and documentary evidence placed by complainant clearly establishes the ingredients of Sec. 138 of N.I.Act and complainant has proved its case and prays to convict the accused by imposing maximum sentence.
10. On the other hand learned counsel for accused has vehemently argued the very complaint itself is not maintainable because on perusal of Ex.P1, 3 & 5 i.e., cheques in dispute they indicates that three persons have signed the said cheques and the said cheques is pertaining to the account of M/s.Curtain Studio. Complainant has made only two persons as accused and he has not made another person as accused. Further, complainant has not made a M/s.Curtain Studio as accused. In the absence of the firm and another person as accused the complaint itself is not maintainable, then the question of prosecuting the accused no.1 and 2 and convicting them doesnot arise at all. The Hon'ble Apex Court in the decision of Aneetha Hada V/s God Father Travels Pvt. Ltd., reported in (2012) 5 SCC 661 has held that Sec.141 SCCH-09 7 CC.537/2019 of N.I.Act is concerned with the offence by company. It makes the other person vicariously liable for commission of an offence on the part of the company. The vicarious liability gets attracted when the condition precedent laid down in Sec.141 of the N.I.Act, stands satisfied, there can be no vicarious liability unless there is a prosecution against company. So, in the absence of firm the complaint itself is not maintainable. Further, complainant has not issued any notice to the company. When such being the case, the question of attracting the provisions of Sec. 138 of N.I.Act would not arise at all. Further complainant has not produced account book or account statement to show the alleged balance. Since, the transaction is between two firms, it is mandatory on the part of complainant to made M/s.Curtain Studio as one of the accused. So, the complaint is deserves to be dismissed on these grounds and prays to dismiss the complaint. In support of his arguments, he has relied upon the decision reported in (2012) 5 SCC 661 Aneetha Hada V/s God Father Travels Pvt. Ltd., SCCH-09 8 CC.537/2019
11. In the light of above submissions, I have carefully perused the materials on record. Complainant in support of his contention the proprietor of firm viz., M.Pavan is examined as PW1 and during the course of his chief-examination he has reiterated complaint averments in detail on oath and to substantiate his oral evidence he has also placed Ex.P1 to 11 documents. PW1 was thoroughly cross-examined by learned counsel for accused. During the cross-examination he has specifically admitted that - "£À£Àß ºÁUÀÆ DgÉÆæUÀ¼À £ÀqÀÄªÉ MAzÀƪÀgÉ- JgÀqÀÄ ªÀµÀðUÀ½AzÀ ªÀåªÀºÁgÀ EzÉ. PÀlð£ï ¸ÀÄÖrAiÉÆà ºÁUÀÆ £À£Àß ¥ÀsªÀiïð£À £ÀqÀÄªÉ ªÀåªÀºÁgÀ EvÀÄÛ JAzÀgÉ ¸Àj. ¸ÀzÀj PÀlð£ï ¸ÀÄÖrAiÉÆÃUÉ DgÉÆæUÀ¼ÀÄ ¥Á®ÄzÁgÀgÀÄ JAzÀgÉ ¸Àj. F ¥ÀæPÀgÀtzÀ°è PÀlð£ï ¸ÀÄÖrAiÉÆêÀ£ÀÄß ¥ÀPÀëUÁgÀgÁV ªÀiÁr®è JAzÀgÉ ¸Àj. CzÉà jÃw ¸ÀzÀj ¸ÀÄÖrAiÉÆà £ÉÆÃn¸ï PÀ¼ÀÄ»¹®è JAzÀgÉ ¸Àj. ¤.¦.1gÀ ºÀt ªÁ¯ï ¥ÉÃ¥ÀgïUÉ ¸ÀA§AzÀs¥ÀnÖzÀÄÝ. CPËAmï ¥ÀŸÀÛPÀªÀ£ÀÄß ºÁdgÀÄ¥Àr¹¢ÝÃgÁ JAzÀgÉ E®è, ºÁdgÀÄ¥Àr¸ÀÄvÉÛãÉ. DgÉÆæUÀ¼ÀÄ ªÉÄnjAiÀįï ಖರರದಸದ ಸಸಬಸಧ ಇನನನಯಯನನನ ಹನಜರನಪಡಸದದರರನ ಎಸದರರ ಇಲಲ." SCCH-09 9 CC.537/2019
12. From the above said admission, it is crystal clear that the transaction taken place in between complainant firm and M/s. Curtain Studio firm. Admittedly, complainant has not made the said M/s.Curtain Studio as accused in the present case. As rightly contended by learned counsel for accused in the absence of said M/s.Curtain Studio Firm case cannot be proceeded against accused. As the said transaction was between complainant firm and M/s.Curtain Studio. Sec.141 of N.I. Act clearly states - when an offence by company U/Sec. 138 of N.I.Act is committed every person who at the time of offence was committed was incharge 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 proceeded against and punished accordingly. The Hon'ble Apex Court in Aneetha Hada's case, while considering Sec.141 of N.I Act has held that - Sec.141 of N.I.Act is concerned with the offence by company, it makes other persons vicariously liable for commission of offence on the part of company, the vicarious liability gets attracted when SCCH-09 10 CC.537/2019 the condition precedent laid down in Sec. 141 of N.I.Act stands satisfied. There can be no vicarious liability, unless there is a prosecution against the company. So, on perusal of above said decisions and provisions of Sec.141 of N.I.Act without the company being arraigned as an accused is imperative and every person who was responsible to the company for the conduct of business of the said company shall be liable for prosecution and every persons signing the cheque on behalf of the company must arraigned as accused. Admittedly, in the present complaint, complainant has not made M/s.Curtain Studio Firm as accused and also not made another person, who has signed the cheque as accused. On perusal of Ex.P1, 3 & 5 it evident that it has been issued by the company and three persons have signed by the said cheques in the capacity of partners or authorized signatories. As discussed above, in the absence of company/firm as accused, a case cannot be proceeded against present accused. The Hon'ble Apex Court in the said decision has clearly held that as the complaint has not been filed against the company and the company has not been SCCH-09 11 CC.537/2019 made a party/accused, no vicarious liability can be imposed on the accused/applicant. Complaint cannot proceeded against the accused/applicant as the cheque was issued by the company and the accused had signed the cheque as its authorized signatory. Any offence even prima faice has not made out against the applicant/accused U/Sec. 138 of N.I.Act. So, the complaint filed by complainant itself is not maintainable.
13. Further on perusal of entire averments of complaint there is no mention that accused no.1 and 2 have issued the cheque in their personal capacity. On the other hand, the averments of complaint discloses the accused no.1 and 2 are running a partnership firm in the name and style of M/s. Curtain Studio and used to purchase wallpapers from the complainant firm. So, it is crystal clear that the accused have not issued the cheques disputes in their personal capacity and they have issued the said cheques on behalf of M/s. Curtain Studio and in the cheque also the name of firm is clearly mentioned. When such being the case, the presence of M/s. SCCH-09 12 CC.537/2019 Curtain Studio is very much required and in the absence of such M/s. Curtain Studio firm a prosecution against present accused no.1 and 2 cannot be proceeded. Further, as discussed above, there is signature of three persons in Ex.P1, 3 & 5 and complainant does not know, who is another person and he specifically admitted there are three signatures in the cheques and not made another person as accused. So, complaint is not maintainable on this ground also.
14. Further the primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicarious liable. For fastening the criminal liability, there is no presumption that the every partner knows about the transaction. So, under such circumstances, the complainant is required to make necessary averments in the complaint and to establish the fact that so and so persons are liable for the transaction of the firm. Merely by stating that a person is a partner of firm he cannot be arraigned as an accused unless, it is specifically averred in the complaint that such person being a partner, was incharge SCCH-09 13 CC.537/2019 of and was responsible to the partnership firm for the conduct of the business of the firm. Admittedly, no such averments are made in the complaint and the said averments are required to make the present accused vicarious liable and to fastening the criminal liability on them. So, in the absence of such basic averments, a criminal liability cannot be fastened on the present accused merely because they are partners.
15. Further, as rightly contended by learned counsel for accused except some averments in the complaint, complainant has not placed any document before the court to show that there was balance of Rs.74,999/- as on the date of complaint. In fact, during the cross-examination, PW1 has specifically admitted he has not produced account book and invoice for having purchased materials by the accused. In the absence of such material evidence, it creates some doubt regarding the case of complainant. Further, complainant has not issued notice to the firm, which is mandatory under the provisions of Sec.138(b) of N.I.Act. So, in the absence of such SCCH-09 14 CC.537/2019 mandatory requirement, the complaint itself is not maintainable.
16. Thus for the above reasons, the complaint is required to be dismissed on technical grounds, as the complaint has not satisfied the requirements of Sec. 141 of N.I.Act. Hence, for the above reasons, I answer point no.1 in the Negative.
17. Point No.2: In view of the discussion made above. I proceed to pass the following:
ORDER Acting under Section 255[1] of Cr.P.C, the accused no.1 & 2 are hereby acquitted for the offence Punishable U/s. 138 of the N.I. Act.
The bail bond of the accused is hereby stand cancelled.
(Dictated to the stenographer on computer, corrected and then pronounced by me in the open court on this the 29 th day of January, 2022.) (Umesha.H.K) Judge, Court of Small Causes & ACMM Bengaluru.SCCH-09 15 CC.537/2019
ANNEXURE List of Witnesses examined on behalf of complainant:
PW1 M.Pavan List of Documents marked on behalf of complainant:
Ex.P1, 3 & 5 Cheques Ex.P1(a), 3(a) Signature of accused No.1 & 5(a) Ex.P1(b), 3(b) Signature of accused No.2 & 5(b) Ex.P2,4 &6 Bank endorsements Ex.P7 Notice Ex.P8 & 9 Postal receipts Ex.P10 & 11 Unserved postal cover Ex.P10(a) & 11(a) Copy of legal notice
List of Witnesses examined on behalf of accused:
D.W.1 Muralidhara List of documents marked on behalf of accused Nil (Umesha.H.K) Judge, Court of Small Causes & ACMM, Bengaluru.