Bombay High Court

Posh Agro, A Partnership Firm, ... vs The State Of Maharashtra And ... on 18 July, 2022

Bench: R. G. Avachat

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               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                          BENCH AT AURANGABAD

                   CRIMINAL WRIT PETITION NO. 844 OF 2021

1. POSH Agro
   A Partnership Firm having its registered office at
   12/13, Moti Mahal, RTO Road,
   Mahesh Nagar, Ahmednagar

2. Mrs. Sharda Gowardhan Bihani
   Age: Major, Occu.: Partner Posh Agro

3. Mrs. Pooja Bhushan Bihani
   Age: Major, Occu.: Partner Posh Agro

4. Mrs. Ankita Akshay Bihani
   Age: Major, Occu.: Partner Posh Agro

   All R/o 12/13, Moti Mahal, RTO Road,
   Mahesh Nagar, Ahmednagar                               ..PETITIONERS

      VERSUS

1. State of Maharashtra

2. Arth Niti Sallagar Pvt. Ltd.,
   Through it's General Manager,
   Mr. Shrikesh Savlaram Dixit,
   Having its registered office,
   Shop No.4, Promoter N Complex,
   Plot No.5, Town Center, Aurangabad                     ..RESPONDENTS

                                      ....
Mr. S.S. Khivansara, Advocate for petitioners
Mrs. G.L. Deshpande, A.P.P. for respondent no.1 - State
Mr. S.A. Deshmukh and Mr. R.B. Muley, Advocate for respondent no.2
                                      ....

                                      CORAM        : R.G. AVACHAT, J.
                                      RESERVED ON  : 15th FEBRUARY, 2022
                                      PRONOUNCED ON : 18th JULY, 2022.


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JUDGMENT :

1. Heard finally with consent of learned counsel for the parties.

2. This petition has been filed for quashment of complaint/criminal

proceeding of Summary Criminal Case No. 2566 of 2021, instituted for the

offence punishable under Section 138 of Negotiable Instruments Act ('N.I.

Act'). The petitioners herein are Accused Nos. 1 to 4 in the said case.

3. The facts, giving rise to the present proceeding are as follows :-

Respondent No.2 is a private limited company engaged in

business of arranging or helping or assisting in fund raising. Petitioner No.1

is a partnership firm. Petitioner Nos. 2 to 4 are it's partners. The petitioners

wanted to set-up a unit for manufacturing jaggery in Maharashtra. They,

therefore, approached Respondent No.2 - complainant for raising of funds for

the proposed project. An agreement in writing came to be executed between

the petitioners and Respondent No.2 on 14 th September, 2020. Respondent

No.2 - complainant claims to have provided all the assistance and ensured

grant of loan by the Central Bank of India for the proposed project. The

petitioners, however backed-out of the transaction. It is also the case of

Respondent No.2 - complainant that since it had to spend a lot, it only raised

a bill of Rs.4,50,000/- (50% of the fixed fees). Accused No.5 in the case, was

looking after the business of Petitioner No.1 - partnership firm. He issued a

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cheque of Rs.4,50,000/- towards payment of Respondent No.2's fees. The

cheque was presented for encashment. It, however returned unpaid for the

reason 'Funds Insufficient'. Respondent No.2 - complainant, therefore, issued

statutory demand notice to the petitioners and Accused No.5. The notice was

replied with false contentions. Prosecution, therefore, came to be initiated.

4. Learned counsel for the petitioners disputed almost all the

averments in the complaint. He denied Accused No.5 to have been anyway

related with Petitioner No.1 - partnership firm. According to the petitioners,

merely a pre-sanction letter was issued by the bank. The services extended

by Respondent No.2 - complainant were unsatisfactory. It was so

communicated to it. The cheque issued by Accused No.5 was under his

signature alone and drawn on his personal account. The petitioner firm and

it's partners no way liable for the offence punishable under Section 138 of the

N.I. Act. Learned counsel has relied on the judgment of the Apex Court in the

case of Alka Khandu Avhad Vs. Amar Syamprasad Mishra and Another,

(2021) 4 SCC 675.

5. Learned counsel for Respondent No.2 - complainant placed on

record an agreement entered into between the petitioner - firm and

Respondent No.2 - company. It has also placed on record a communication

made by Accused No.5 with Respondent No.2, for and on behalf of the

petitioner - firm. Learned counsel has placed reliance on the judgment of the

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Apex Court in the case of S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhall and

Another, AIR 2005 SC 3512. According to him, the complaint contains all the

averments constituting ingredients of an offence of dishonour of cheque.

Whatever contentions the petitioners have raised, are all in the nature of

defence, to be proved during trial. Learned counsel, therefore, urged for

dismissal of the petition.

6. Considered the submissions advanced. Perused the complaint

and the documents relied on. It is not in dispute that agreement in writing

was executed between Respondent No.2 - complainant on one hand and

Petitioner No.1 - partnership firm on the other. Respondent No.2 -

complainant was supplied with the details of promoters and the deed of

Petitioner No.1 - firm, wherein Petitioner Nos. 2 to 4 are shown as partners of

the firm. Accused No.5 was shown as Founder and Managing Director of

Petitioner No.1 - firm. There is evidence to indicate that Petitioner No.1 -

firm had proposed to set-up jaggery manufacturing unit. It, therefore,

engaged Respondent No.2 - company for it's services for raising funds. An

agreement was entered into in that regard. Petitioner No.1 - firm is said to

have backed-out.

7. A cheque dated 08th October, 2020 in the sum of Rs.4,50,000/-

came to be issued on 23rd November, 2020 in the name of Respondent No.2 -

company. The question is whether ingredients of Section 138 of the N.I. Act

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are prima facie made out against the petitioner - firm and it's partners. The

Apex Court in the case of Alka Avhad (supra) has observed thus :-

"9. On a fair reading of Section 138 of the N.I. Act, before a person can be prosecuted, the following conditions are required to be satisfied :

9.1. That the cheque is drawn by a person and on an account maintained by him with a banker.

9.2. For the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability.

9.3. The said cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account.

10. Therefore, a person who is the signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have committed an offence. Section 138 of the N.I. Act does not speak about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than a person who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence under Section 138 of the N.I. Act. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque."

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8. Copy of the cheque issued by Accused No.5 is on record. The

cheque was issued by him, who is the husband of Petitioner No.3, in his

individual capacity i.e. not for and on behalf of Petitioner No.1 - firm.

Moreover, the cheque has been issued on personal account of Accused No.5 -

Bhushan Bihani. As such, it cannot be said that the cheque has been issued

by Petitioner No.1 - firm on an account maintained by it and Petitioner Nos. 2

to 4 - partners, being liable in view of the principle of constructive criminal

liability.

9. The facts of the case of S.M.S. Pharmaceuticals Ltd. (supra) are

altogether different. Although, in the complaint it has been averred that

Petitioner Nos. 2 to 4, being partners of Petitioner No.1 - firm, entered into an

agreement with Respondent No.2 - company, as stated above, no ingredient

of offence punishable under Section 138 of the N.I. Act are made out against

any of the petitioners herein. Allowing the proceeding in S.C.C. No. 2566 of

2021 to continue against the petitioners herein would, therefore, be an abuse