THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No.10325 OF 2022
O R D E R:
This Criminal Petition is filed under Section 482 of the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.') by the petitioners/A1 to A3 to quash the proceedings against them in STC No.5990 of 2022 on the file of X Additional chief Metropolitan Magistrate, City Civil Court at Secunderabad.
2. Heard learned counsel for the petitioners and learned Additional Public Prosecutor for 1st respondent-State and perused the record.
3. Briefly, the facts of the case are that the 2nd respondent- firm supplied raw material to the accused meant for chemical industry engineering items such as MS pipes, SS Ball valves, SS View glass, SS nipple, SS bend and MS bends etc. The 2nd respondent/Complainant agreed to supply the material, if the accused pays the bill amount within 15 days, failing which interest of 27% p.a. has to be paid. The amount of Rs.3,19,924/- remained unpaid. On 15.04.2021, the 2 complainant met the 2nd petitioner/A2 and her husband on which date an amount of Rs.2,500/- was paid as part payment and for the remaining amount a post dated cheque bearing No.001205, dated 06.06.2022 for Rs.3,08,299/- was issued.
4. The said cheque when presented for clearance was returned unpaid on 08.06.2022. The same was informed to the 2nd petitioner/A2 who requested to present the cheque again. Accordingly, the cheque was presented again and it was returned unpaid on 11.07.2022. A legal notice was issued on 30.07.2022 and the said notice was returned unclaimed, however a reply dated 09.08.2022 was issued. The 2nd respondent/complainant, further stated in the complaint that he was not aware of the death of the signatory of the cheque Kolli Koteshwar Rao, however the 2nd and 3rd petitioners herein who are wife and son were actively participating in the day-to-day affairs of the firm, for which reason they are liable.
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5. Learned Counsel for the petitioners submits that admittedly, both 2nd and 3rd petitioners are not signatories to the cheque. According to the legal notice dt.30.07.2022, the outstanding arose in the month of July towards six bills and one bill in the month of December, 2019.
6. The petitioners issued a reply notice on 09.08.2022 stating that these petitioners have nothing to do with the business operations of the 1st petitioner-firm. 2nd petitioner's husband Kolli Koteshwar Rao who was running the said firm died on 25.08.2021 and after his death, 3rd petitioner was inducted as partner. There was no amount due since the outstanding amounts were all cleared during the life time of Kolli Koteshwar Rao, in the month of February 2020.
7. On behalf of the respondents, it was argued that since the cheque being issued by the 1st petitioner-firm is admitted, the proceedings have to go on. It is specifically mentioned in the complaint that the 2nd and 3rd petitioners are responsible partners who are running the business activity of the 1st petitioner-firm. In the said circumstances, whether there was 4 any outstanding or not can be decided after trial, giving opportunity to the complainant to adduce evidence.
8. He also relied upon the Judgment of this court in B.Venkat Narendra Prasad and another v. State of A.P. and another 1 and the Judgment reported in P.Ramchandra Reddy and another v. Sanghi Enterprises, Hyderabad and others 2 wherein it was held that every partner is responsible and cannot escape liability stating that he is sleeping partner. He also relied upon the Judgment of the Honourable Supreme Court in S.P.Mani and Mohan Dairy v. Dr.Snehalatha Elangovan 3 and argued that there cannot be any hyper technical approach while dealing with a complaint under Section 138 of the Negotiable Instruments Act to decide criminal liability of the partners/directors in a firm. Further, quashing of the complaint is a serious matter and complaint cannot be quashed unless there is no offence which is made out against the Director or a partner. 1 2003 (1) ALD (Crl.) 538 (AP) 2 2004 (1) ALD (Crl.) 406 (A.P) 3 2022 (3) ALT (Crl.) (SC) 193 (D.B) 5
9. On perusal of the record, admittedly the transactions were in the month of July 2019. The claim of the 2nd respondent/complainant is that Rs.2,500/- was paid on 15.04.2021 and the post dated cheque with date 06.06.2022 was given for a sum of Rs.03,08,299/-.
11. In the present facts and circumstances of the case, when the transaction had taken place in July 2019, a post dated cheque was handed over after 21 months in the month of April 2021, that too with a date after 14 months. The said claim of issuance of cheque itself raises any amount of doubt regarding complainant's version being correct. Further, how the amount of Rs.3,08,299/- was arrived at is also another issue.
12. Though this Court under inherent powers cannot decide upon the correctness or otherwise of the claim made in a complaint, however, when the circumstances are inherently improbable and lack prudence, the powers under Section 482 of Cr.P.C. can be invoked to quash such proceedings. 6
13. In the present case as already stated, the transactions had taken place in July 2019. 21 months thereafter, a cheque is issued by the deceased Kolli Koteshwar Rao for making payments after 16 months which is 06.06.2022. The said cheque in question was signed by Kolli Koteshwar Rao during his life time. When the outstanding itself according to the notice was Rs.3,23,034/- and interest component was 27% p.a. on the bill amounts, why interest was not added to the said amount though payment was being received after three years is intriguing and improbable.
14. During the life time of Kolli Koteshwar Rao, it appears that the transactions were made and cheque was handed over. Since the complainant's version appears to be improbable and suppressing actual facts, this Court finds that there cannot be criminal prosecution of petitioners 2 and 3 who are made vicariously liable on behalf of 1st petitioner firm.
15. For the said reasons, proceedings against the 2nd petitioner and the 3rd petitioner who was inducted after the 7 death of the husband of the 2nd petitioner into the partnership of 1st Petitioner firm, cannot be sustained and liable to be quashed.
16. Accordingly, the Criminal Petition is allowed quashing the proceedings against petitioners A2 and A3 in STC No.5990 of 2022 on the file of X Additional chief Metropolitan Magistrate, City Civil Court at Secunderabad. However the proceedings may continue against 1st petitioner partnership firm and any person representing the firm in the case including the 2nd and 3rd petitioners cannot be sentenced to imprisonment.
Miscellaneous Petitions, pending if any, shall stand closed.
__________________ K.SURENDER, J Date: 27.12.2022 tk 8 THE HON'BLE SRI JUSTICE K.SURENDER CRIMINAL PETITION No.10325 OF 2022 Dt. 27.12.2022 tk