THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION Nos.7511, 7513 and 7515 of 2022
COMMON ORDER:
1. Since the transactions, grounds and also the parties in all the
three Criminal Petitions are the same, they are being heard
together and disposed off by way of this Common Order.
2. Criminal Petition Nos.7511, 7513 and 7515 of 2022 are filed
to quash the proceedings against the petitioners in C.C.Nos.13985
of 2022, 13990 and 13985 of 2022 respectively on the file of VIII
Metropolitan Magistrate at Manoranjan Complex, Nampally,
Hyderabad.
3. Petitioners are arrayed as A3 to A5 who are partners in A1
firm namely M/s.Sri Supraja Infracon(A1), which is being
represented by its Managing partner T.Praveen(A2).
4. The case of the complainant is that the firm A1 represented
by A2 approached the complainant and entered into registered
agreement of sale-cum-Irrevocable General Power of Attorney with
possession vide document No.23387 of 2019, dated 25.05.2019
registered at SRO, Sangareddy for purchase of plots with total
extent of 21245 sq.yds. The said plots were sold at Rs.3,700/-
square yard. In pursuance of the registered agreement of sale-cum-
2
GPA with possession, A1 firm issued post dated cheques which are
001851 in CC No.13990/2022, 001852 in C.C.No.13988 of 2022
and 001853 in C.C.No.13985 of 2022, each for Rs.2.00 Crores,
drawn on DCB Bank, Chandanagar Branch.
5. It is the case of the complainant that the said three cheques
were given towards sale consideration of plots and the same were
returned unpaid when presented for clearance, for the reason of
'funds insufficient'. Aggrieved by the return of cheques, legal
notices were sent. However, reply was given stating that the
amount was already paid in cash, for which reason, there is no
necessity to honor the cheques and accused sought for return of
the cheques in question.
6. Learned counsel for the petitioners would submit that there is
no averment in the complaint that these petitioners, who are
arrayed as A3 to A5 are in-charge or responsible for the conduct of
the partnership firm when the transactions have taken place. In
the absence of such averment, the criminal trial cannot be
proceeded against them. He relied on the judgment of Hon'ble
Supreme Court in the case of Sunita Palita and others v.
3
Panchami Stone Quarry1 and also in the case of S.P.Mani and
Mohan Dairy v. Dr.Snehalatha Elangovan2.
7. In Sunita Palita's case (supra), the Hon'ble Supreme Court
held that a Director of the company who is not in-charge or
responsible for the part of the business of the company cannot be
made vicariously liable only for the reason of holding a designation
or office in a company. It would be a travesty of justice to drag
Directors, who may not even be connected with the issuance of a
cheque or dishonour thereof, into criminal proceedings for the
reason of designation.
8. However, in S.P.Mani's case, the Hon'ble Supreme Court
held that if any director wants the process to be quashed by filing a
petition under Section 482 of Cr.P.C on the ground that only a bald
statement is made, such person must persuade the High Court
either by furnishing some sterling incontrovertible material or
acceptable circumstances to substantiate the contention. Further,
the accused made vicariously liable should make out a case that
standing trial would be an abuse of the process of the Court.
Complaint cannot be quashed on mere asking, it must be shown
that no offence is made out against the Director or the partner.
1
(2022) 10 Supreme Court Cases 152
2
2022 SCC OnLine SC 1238
4
9. On the other hand, learned counsel appearing for the
respondents would submit that it is the specific case that the
partnership deed of the A1 firm indicates that all the partners shall be working partners to look after the day to day business of the partnership and shall devote their time and attention in the conduct and affairs of the firm. He further argued that as per the law relating to partnership, the partners are liable for the acts of the other partner and the partners are liable to discharge the obligations of the partnership, and the partners are liable to pay jointly and severally. Civil suit was also filed by the 2nd respondent/complainant vide OS No.1 of 2021, which is pending before the District Judge, Sangareddy. These petitioners and A1 and A2 are defendants in the suit filed for recovery of money. Accordingly prayed to dismiss the petition.
10. The partnership deed admittedly indicates that all the partners of A1 firm would be responsible for the conduct of business of A1's firm. However, the agreement of sale-cum- irrevocable GPA which was entered into by A1's firm was by A2 on behalf of A1 partnership firm. These petitioners, who are parents and wife of A2 were not made parties to the said transaction nor signatories in any form to the said transaction. No where in the 5 complaint it is mentioned that the complainant has at any point of time in any manner whatsoever either interacted with these petitioners when the business deal of selling of plots was being undertaken or the subsequent negotiations or talks about honouring of cheques.
11. The Hon'ble Supreme Court held in S.P.Mani's case that partner or a director who had been made vicariously liable under Section 141 of NI act, can make out a case under Section 482 of Cr.P.C on the basis of acceptable circumstances to substantiate his claim that he was not responsible for the transactions mentioned in the complaint made under Section 138 of NI act.
12. The offence under Section 138 of the NI Act prescribes punishment up to 2 years if convicted. For said reason, the Courts have to be more conscious while dealing with the complaints filed under Section 138 of the Negotiable Instruments Act making partners or directors vicariously liable in the transactions. It is not the case of the complainant that while dealing with A1 firm on a regular basis regarding multiple transactions, the outstanding arose and the cheques in question were issued. In such circumstances the partners would be liable. The cheques were specifically issued by A1 firm, signed by A2 for the purpose of 6 purchasing of plots, which A2 had entered into on behalf of A1 firm. These circumstances clearly indicate that these petitioners were not parties to the agreement of sale with possession, which has been entered into in between A1 and the 2nd respondent/complainant. Both for the reasons of there being no indication that these petitioners were in any way involved in the sale transaction and also for the reason of there being documentary evidence to which these petitioners are not parties, criminal prosecution making them vicariously liable under Section 138 of the Negotiable Instruments act is liable to be aside.
13. In the result, the proceedings against petitioners/A3 to A5 in C.C.Nos.13985 of 2022, 13990 of 2022 and 13985 of 2022 on the file of VIII Metropolitan Magistrate at Manoranjan Complex, Nampally, Hyderabad, are hereby quashed.
14. Accordingly, the Criminal Petitions are allowed. Consequently, miscellaneous applications pending, if any, shall stand disposed.
__________________ K.SURENDER, J Date:02.03.2023 kvs 7 THE HON'BLE SRI JUSTICE K.SURENDER CRIMINAL PETITION Nos.7511, 7513 and 7515 of 2022 Dated: 02.03.2023 kvs 8