Bombay High Court
Shrinivas Madhav Dolare vs Punamchand Chudaman Holye on 7 October, 2016
Bench: V.K. Jadhav
cran1544.05
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
CRIMINAL APPLICATION NO. 1544 OF 2005
Mr. Shrinivas Madhav Dolare,
Age 40 years, Occ. Business
R/o. Gangaram Plot, Bhusawal,
District Jalgaon ...Applicant
versus
Punamchand Chudaman Holye
Age 71 years, Occ. Retired
R/o. 23, Chudaman Muktanand Colony
Kasturi Nagar, Bhusawal
District Jalgaon ...Respondent
WITH
CRIMINAL APPLICATION NO. 1706 OF 2005
Mr. Shrinivas Madhav Dolare,
Age 40 years, Occ. Business
R/o. Gangaram Plot, Bhusawal,
District Jalgaon ...Applicant
versus
Punamchand Chudaman Holye
Age 71 years, Occ. Retired
R/o. 23, Chudaman Muktanand Colony
Kasturi Nagar, Bhusawal
District Jalgaon ...Respondent
...
Advocate for Applicant : Mr. P S Shendurnikar
Advocate for Respondents : Mr. N.B. Patekar h/f Mr. P.R. Katneshwar
.....
CORAM : V. K. JADHAV, J.
DATED : 7th OCTOBER, 2016
ORAL JUDGMENT:-
1. By both these criminal applications, the applicant is seeking
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quashment of order passed by the learned J.M.F.C. Bhusawal, dated
4.2.2000 thereby issuing process against the applicant, for having
committed offence punishable under Section 138 of Negotiable
Instruments Act. The applicant also prays for quashment of criminal
case Nos. 150 of 2000 and 151 of 2000 pending before the learned
J.M.F.C. Bhusawal.
2. Brief facts giving rise to the present criminal applications are
as follows:-
a) There exist a registered partnership firm, by name "Shri Plast"
of the preset applicant, his brother Milind and son of respondent
Punamchand by name Nitin. The firm was doing the business of
manufacturing polythene milk bags at Block No. 25, M.I.D.C.
Bhusawal. The present applicant has been appointed as power of
attorney holder by other two partners. There is dispute between the
partners about rendition of account however, partnership firm was
not dissolved.
b) On 25.12.1999 respondent Punamchand had issued notice to
the applicant in his personal capacity calling upon him to pay an
amount of Rs.1,10,000/-. It has contended that on 1.11.1999,
3.11.1999 and 5.11.1999, the applicant had issued cheques in the
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name of respondent Punamchand for the aforesaid amount and on
presentation of the said cheques in the bank, the same came to be
dishonoured. Accordingly, respondent Punamchand had issued said
notice to the applicant in his personal capacity. The applicant has
replied the notice and denied the liability in toto. However, the
respondent Punamchand had filed complaints against the applicant
for having committed offence punishable under Section 138 of
Negotiable Instruments Act.
c) The learned J.M.F.C. Bhusawal, in both the complaints, by
order dated 4.2.2000 issued process for the offence punishable
under section 138 of Negotiable Instruments Act. In response to the
said process, the applicant appeared before the trial court and also
filed an application for recalling of order of issuance of process. It
was also prayed to discharge the applicants in both the criminal
cases. However, learned Magistrate has rejected the said
application. Hence, these criminal applications.
3. Learned counsel for the applicant submits that the cheques,
allegedly issued by the applicant accused, indicate that the same
have been issued in the capacity as a partner of M/s. Shri Plast, on
the account maintained by the said partnership firm. The respondent
original complainant Punamchand has issued notice to the applicant
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in his individual capacity, calling upon him to pay the amount under
cheques, within 15 days from the date of receipt of notice. No
transaction had taken place between the applicant and the
respondent original complainant. On bare perusal of said cheques, it
appears that the applicant has signed those cheques in his capacity
as a partner of the firm of said partnership firm. Admittedly, those
cheques are drawn on the account maintained by the partnership
firm. The respondent complainant has not arraigned the partnership
firm as accused though the partnership firm is having legal entity.
Thus the prosecution of the applicant alone in absence of the
partnership firm being implemented or arraigned as an accused, is
not in accordance with the provisions of Section 141 of the
Negotiable Instruments Act and thus the complaints filed by the
respondent have initial defects in its sustainability and this defect
cannot be cured by amending the proceedings by taking recourse to
the provisions of Section 319 of the Cr.P.C.
Learned counsel for the applicant, in order to substantiate his
submissions, places reliance on the judgments in following cases:-
i) Aneeta Hada vs,. Godfather Ravels and Tours Pvt. Ltd. (2012)
5 SCC 661
ii) Oanali Ismailji Sodikot vs. State of Gujarat, reported in 2016 (1)
Crimes 739,
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4. Learned counsel for the respondent original complainant
submits that the applicant had issued said cheques in his individual
capacity for the transaction between him and respondent
complainant and the cheques were drawn by him in his personal
capacity. Though the cheques were drawn on the account
maintained in the name of partnership firm, the applicant had issued
the said cheques in his personal capacity and thus he is liable to face
the consequences, as said cheques, on presentation in the bank,
came to be dishonoured. There is no question of arraigning or
impleading the partnership firm or other partners as accused in the
complaint filed under Section 138 of Negotiable Instruments Act.
Learned counsel for respondent No.2 in order to substantiate
his submissions places reliance on the judgments in following cases:-
i) Mainuddin Abdul Sattar Shaikh vs. Vijay D. Salvi, reported
in 2015 AIR (SC) 2579
ii) P.J. Agro Tech Limited & Ors. vs. Water base Limited,
reported in 2010 AIR (SC) 2596.
5. On careful perusal of complaints bearing Criminal case Nos.
150 of 2000 and 151 of 2000, it appears that the respondent
complainant has alleged in the criminal case No. 150 of 2000 that the
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applicant accused has issued three cheques for amount of
Rs.40000/- each in his individual capacity and in the complaint
bearing Criminal Case No. 151 of 2000 it has alleged that the
applicant accused has issued five cheques of Rs.40,000/- each in his
individual capacity. It has also alleged in the complaint that on
account of some financial difficulties, the respondent complainant
had given amount under the said cheques in cash to the applicant
accused and in order to repay the said amount, the applicant
accused had issued said cheques. Since the said cheques came to
be dishonoured, the respondent complainant has issued demand
notice to the applicant-accused and even the applicant accused has
given reply to the said notice. The respondent complainant has
referred reply of the said notice in his complaint by stating that the
reply is false.
6. On perusal of the said reply, it appears that the applicant
accused has contended that there is partnership firm in existence
and the applicant, his brother Milind and son of respondent
complainant are the partners of partnership firm named and styled as
"Shri Plast". So far as existence of said partnership firm is
concerned, the same is also not disputed by the respondent
complainant. The respondent complainant has produced before the
court alongwith his complaint the said cheques and mere perusal of
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the said cheques, it appears that said cheques have been issued,
drawn and signed by the present applicant accused in the capacity of
partner of M/s. Shri Plast, on the account maintained by the said
partnership firm.
7. In the case of Oanali Ismailji Sadikt vs State of Gujarat
(supra) and relied upon by learned counsel for the applicant,
following three questions fall for consideration of the Supreme Court.
i) Whether a partnership is a legal entity like a company so
far as the offence punishable under Section 138 of the
Negotiable Instruments Act is concerned?
ii) Is the prosecution of the partners of a firm, by virtue of
Section 141 of the Act, maintainable in the absence of the
partnership firm being impleaded or arraigned as an
accused?
iii) When the complaint under Section 138 of the Negotiable
Instruments Act has the initial defect in its sustainability,
can such defect be cured by amending the proceedings by
virtue of an application under Section 319 of Cr.P.C.?
8. The Apex Court has answered first question in affirmative and
answered second question by referring Aneeta Hada's case (supra)
relied upon by learned counsel of the applicant to the effect that the
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partnership firm is required to be impleaded and arraigned as an
accused and the prosecution in absence of partnership firm, being
impleaded as an accused, is not sustainable. So far as the third
question referred to above, is concerned, the Supreme Court has
answered that when the complaint has initial defect in its
sustainability, that defect cannot be cured by amending the
proceeding. Section 319 of Cr.P.C., no doubt, provides for
impleading any other accused, which was party to the commission of
offence. On impleading such co accused under Section 319 of
Cr.P.C. will not have any bearing as to the maintainability of the
proceedings against other accused. It has also observed that
Section 319 of Cr.P.C. is not intended in the Cr.P.C. for curing the
infirmity in the proceedings but only to bring all the culprits before the
court when their role in the commission of the offence was brought to
light only after the evidence before the Court.
9. In the instant case, the allegations have been made against
the applicant accused about the cheques being issued in his
individual capacity for repayment of amount borrowed by him.
However, on perusal of cheques, it appears that the said cheques
have been issued in the capacity as partner of the firm on the
account maintained by the firm.
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10. In view of the observations made by the Hon'ble Supreme
Court in the case of Oanali Ismailji Sadikot (supra) and the ratio
laid down in the said case, which squarely applies to the facts and
circumstances of the present case, in absence of the partnership
firm being impleaded as an accused in the instant complaint, the
complaints have initial defect in its sustainability and in the backdrop
of the allegations made in the complaints, even such defect cannot
be cured by taking recourse to the provisions of Section 319 of
Cr.P.C. The Supreme Court observed that such fundamental defect
cannot be cured by taking recourse to Section 319 of Cr.P.C.
11. In the case of Mainuddin Abdul Sattar Shaikh (supra),
relied upon by learned counsel for the respondent original
complainant, in the facts of said case, the cheque was drawn by the
accused in his individual capacity and not in the capacity of Director.
The cheque was also drawn on personal account maintained by the
accused with the bank. In the said case the accused person was
drawer of the cheque and it is therefore held that the company and
its Director cannot be made liable under Section 138 of Negotiable
Instruments Act, when the cheques were drawn by the accused in his
personal capacity and on his personal account and not on the
account maintained by the company.
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12. In second case i.e. P.J. Agro Tech Limited and others
(supra), relied upon by learned counsel for the respondent
complainant, the appellant company is an agro-based company and
the appellant No.2 and 3 are the Managing Director and Chairperson
of the company. Respondent No.1 company approached the
appellants for distribution of prawn feed manufactured by it.
However, the said venture did not turn out to be very successful.
Consequently, appellant
ig No.1 company took a decision to
discontinue its dealings with respondent No.1 company. Accordingly,
all outstanding dues were settled and further the appellant company
also gave authorization letter to respondent No.1 company to collect
all other dues directly from the customers of appellant No.1
company, who had bought the feed but were yet to pay the price
therefor. Even the appellant company requested respondent No.1
company to coordinate with one K. Balasahnkar Reddy, the then
General Manager at Nellore, for collecting the dues, which were still
outstanding. The respondent company had accepted the said offer.
However, it was found that some of its employees had conspired with
the said K. Balashankar Reddy and had misappropriated some
amounts of money. Even respondent No.1 company requested the
appellant company to take action against said Balashankar Reddy
and its concerned employees. However, said K. Balshankar Reddy
issued cheque drawn on State Bank of Hyderabad, Nellore Branch in
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favour of respondent No.1 company and the same had been returned
dishonoured with an endorsement "account closed". In the facts and
circumstances of this case, the Supreme Court in para 9 of the
judgment has made following observations:-
"9. In the instant case, the cheque which had been dishnoured
may have been issued by the respondent No.11 for discharging
the dues of the appellant No.1 Company and its Directors to the
Respondent No.1 Company and the respondent. Company may
have a good case against the appellant No.1 Company for
recovery of its dues before other fora, but it would not be
sufficient to attract the provisions of Section 138 of the 1881 Act.
The Appellant company and its directors cannot be made liable
under Section 138 of the 1881 Act for a default committed by the
respondent No.11. An action in respect of a criminal or a quasi
-criminal provision has to be strictly construed in keeping with the
provisions alleged to have been violated. The proceedings in
such matters are in personam and cannot be used to foist an
offence on some other person, who under the statute was not
liable for the commission of such offence."
In the instant case, the facts are altogether different and the
petitioner original accused being partner of the firm, issued a cheque
in the capacity as partners of the firm on the account maintained by
the firm. Thus, the ratio laid in the aforesaid case cannot be made
applicable to the facts and circumstances of the present case.
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13. In view of the above discussion, I do not think that the
impugned order is sustainable. Thus, continuation with both the
complaints would be a sheer abuse of process of the Court. Hence, I
proceed to pass the following order:-
ORDER
I. Both the criminal applications are hereby allowed in terms
of prayer clauses 'B'. The complaints bearing criminal Case
Nos. 150 of 2000 and 151 of 2000 pending before the
learned J.M.F.C. Bhusawal are hereby quashed and set
aside.
II. Both the criminal applications are disposed of accordingly.
Rule made absolute in the above terms.
( V. K. JADHAV, J.)
rlj/
