Madras High Court
Pioneer Engineering Corporation And ... vs N. Jayakar, Asst. Commissioner Of ... on 4 January, 1995
Equivalent citations: [1995]214ITR163(MAD)
JUDGMENT Rengasamy, J.
1. This petition is under section 482 of the Code of Criminal Procedure to quash the proceedings, viz., E.O.C.C. No. 878 of 1991 on the file of the Additional Chief Metropolitan Magistrate (E.O. II), Madras, against the petitioners. The first petitioner is the partnership firm, while petitioners Nos. 2 to 6 are the partners. The respondent has filed a complaint against these petitioners alleging commission of the offences under sections 120B, 34, 193, 196, 420 and 511, Indian Penal Code, and also sections 276C(1), 277 and 278B of the Income-tax Act. This petition has been filed by the accused alleging that except the allegation in the complaint that all the accused conspired to commit the offences mentioned above and they were in charge of the conduct of the business of the first accused, there is no basis for such allegations and there is also no record to accept that accused Nos. 3 to 6 were actually in charge of the administration of the business and, therefore, the proceedings against them have to be quashed.
2. Learned counsel for the petitioners, Mr. K. A. Panchapagesan, conceded that as the first accused being the partnership firm and the second accused, the managing partner, has signed the income-tax returns, the prosecution can proceed against A. 1 and A. 2 but the same has to be quashed against the other petitioners for the reasons mentioned above. Learned counsel, Mr. K. Ramasamy, who is appearing for the respondent, refers to the partnership deed in which every partner has been given a specific responsibility in the administration of the firm and according to him from the responsibility allotted to each partner, it cannot be stated that any one of these partners can be treated as sleeping partner, and, therefore, it has to be treated that all the partners are in charge of the first accused partnership firm. It is true that the partnership deed referred to now makes it clear that each partner has got a specific role to play in the administration of the company and, therefore, they are in actual charge of the administration of the firm. But learned counsel, Mr. K. A. Panchapagesan, relying upon the decision of the apex court in State of Karnataka v. Pratap Chand [1981] 128 ITR 573 would contend that the person in charge means the person who is in overall control of the day to day business of the company or firm, and in this case, even if it is accepted that each partner was in control of certain branches for the purpose of the administration, it will not amount to overall charge of the firm and, therefore, the proceedings against petitioners Nos. 3 to 6 cannot be allowed to continue. In this case, not only for the mere reason that the partners are incharge of the conduct of the business of the first accused firm, but also for their participation in the commission of the offences, the complaint has been launched against them. In the complaint paragraphs 13, 14 and 16, it is specifically alleged that all the accused conspired to fabricate false evidence in the form of books of account referred to in paragraphs 8 and 9 containing false entries with a view to use them as genuine evidence in the income-tax proceedings. It is also alleged in paragraph 14 that all the accused for the purpose of using as genuine evidence in the income-tax assessment proceedings, intentionally fabricated false books of account. Therefore, there are specific allegations against all the accused for the participation in the commission of the offences alleged against them. At this stage, the details of the evidence cannot be gathered against each and every accused, because the participation in the commission of the offences, sometimes may be evident from the conduct of the parties, which can be made clear only at the time of the trial. Apart from the fact that they are in charge of the conduct of the business, as it is alleged that they were also participants in the commission of the offence, I feel that the proceedings cannot be quashed, because the participation can be brought to light at the time of the trial of the case. Hence, as I am not inclined to quash the proceedings, the petitioners have to face the proceedings against them.
3. In the result, this criminal original petition is dismissed.