THE HONOURABLE SRI JUSTICE K.SURENDER
Criminal Petition No.8617 of 2022
ORDER:
1. This Criminal Petition is filed to quash the proceedings against the petitioners/A1 to A3 in S.T.C.No.4314 of 2022 on the file of X Metropolitan Magistgrate, Manoranjan Complex, Gandhi Bhavan, Hyderabad.
2. The case of the 2nd respondent/complainant is that the 1st petitioner company placed purchase orders for purchase of sugar and the same was accordingly delivered by the complainant. Towards the outstanding, cheque for Rs.8,83,997/- was issued. However, when the same was presented, it was returned for the reason of 'payment stopped by the drawer'.
3. Learned counsel for the accused would submit that the entire case of the complainant is fabricated. The transactions as stated by the complainant are incorrect and there is no outstanding and the cheque given towards security was misused.
4. Learned counsel relied upon the judgments i.e., i) Mr.Nagarjun Valluripalli, Director, Surya Ray Elixiris 2 Private Limited v. State of Andhra Pradesh [Laws (APH) 2018 3 56] and ii) N.Vasantha v. R.Srinivasan [Crl.O.P.No.10031 of 2011 and M.P.No. 1 of 2011, dated 17.03.2017].
5. On the other hand, respondents filed counter affidavit giving para-wise replies and urged this Court to dismiss the petition. They relied upon the judgments of Hon'ble Supreme Court in the case of i) S.P.Mani and Mohan Dairy v. Dr.Snehalatha Elangovan [LAWS (SC) 2022-9-79]; ii) N.Rangachari v. Bharat Sanchar Nigam Limited [LAWS (SC)-2007-4-64]. Learned counsel for the respondents argued that the burden is on the Board of Directors or the officers in- charge of the company to show that they are not liable to be prosecuted since there was restriction on their powers or there existed any special circumstance that makes them not liable is something that is peculiarly within their knowledge and it is for them to establish during trial.
6. In the case on hand, 3rd petitioner is the wife of the 2nd petitioner. Except pleading that the 3rd petitioner was also responsible for the day to day affairs of the company, the respondent/complainant has not mentioned as to the manner 3 in which the 3rd petitioner was in any way responsible with the purchase of sugar or any other transactions which transpired with A1 company. The cheque was signed by the 2nd petitioner, who is authorized signatory and unless it is asserted that 3rd petitioner/A3 was complicit in any manner either in the transactions of purchase or issuing cheques, she cannot be made vicariously liable. Even in the judgments cited by the learned counsel for the respondents, the Hon'ble Supreme Court held that when a basis is made to prosecute the directors or officers in charge of the firm or a company, only then the burden shifts on to them to prove that they were not complicit in the offence.
7. In the present case, when there is no basis made for specifically implicating the 3rd petitioner except making a vague statement that she was also responsible for the day to day affairs of the company, would not in any manner satisfy the ingredients of making her vicariously liable. For the said reasons, the proceedings against the petitioner/A3 are liable to be quashed.
8. In the result, the proceedings against the 3rd petitioner/A3 in STC No.4314 of 2022 on the file of X 4 Metropolitan Magistrate, Manoranjan Complex, Gandhi Bhavan, Hyderabad are hereby quashed. However, the Court shall proceed against petitioners 1 and 2/A1 and A2.
9. Accordingly, the Criminal Petition is allowed in part. Miscellaneous applications, pending if any, shall stand closed.
_________________ K.SURENDER, J Date: 13.12.2022 kvs 5 THE HON'BLE SRI JUSTICE K.SURENDER Criminal Petition No.8617 of 2022 Date: 13.12.2022 kvs