Delhi High Court
Major L.K. Toshkhani Retd. vs Ravi Kumar And Anr. on 24 January, 2007
Author: S R Bhat
Bench: S R Bhat
JUDGMENT
S. Ravindra Bhat, J.
1. By this petition, the criminal proceedings initiated at the behest of the complainant, for offences committed under Sections 138/141 of the Negotiable Instruments Act are sought to be quashed.
2. The complainant had alleged that M/s. Mercury Enterprises in which the petitioner is alleged to be a partner had issued cheque in discharge of its liabilities towards him, for various amounts during the period April 2000 to 5th March, 2002. On these allegations, he had preferred separate complaint proceedings against the firm. The complainant had imp leaded the present petitioner and the second respondent in these proceedings as partners. In these petitions, copies of the complaints have been produced. All of them identically averred, in relation to the accused parties as follows:
That the accused persons are/were doing their business in partnership in the name and style of M/s. Mercury Enterprises.
3. The complainant also alleged that after the cheques were presented they were returned/dishonoured for want of sufficient funds. In spite of issuance of notice, it is alleged, the petitioner and the other accused did not make good the amount. Consequently, the complaints were preferred before the Metropolitan Magistrate who issued summoning orders.
4. It is urged by counsel for the petitioner that averments contained in the complaints which are subject matters of these proceedings, do not satisfy the requirement under the Negotiable Instruments Act, namely, that the petitioner was in-charge and was responsible to the firm for the conduct of its business. It is submitted that vicarious liability of the petitioner in his individual capacity could be fastened by virtue of Section 141 read with explanation 'b' to Section 141 only if specific averments were made in that regard.
5. Learned Counsel relied upon the judgment of the Supreme Court in Monaben Ketanbhai shah and Anr. v. State of Gujarat and Ors. and the recent judgment in SMS Pharmaceutical Ltd. v. Neeta Bhalla (para 12,18 and 19) to submit that the complaints by the respondent do not measure up to the standards indicated by the Supreme Court, in those two judgments; in order to fasten liability on partners, there should be specific averments about the role of such individuals.
6. The trial court by its order dated 6th May, 2003 was of the opinion that the petitioner was not liable and he had not signed the cheque. The order was carried in revision. Learned Additional Sessions Judge relying upon a judgment of the Karnataka High Court, namely, V.N. Samant v. K.G.N. Traders and Anr. 1994 Crl.L.J. 3115 allowed the revision and directed the petitioner to stand trial.
7. Learned Counsel for the respondent complainant resisted the proceedings and urged that the transaction has to be seen as a whole. He submitted that nine cheques had been issued by the accused persons, all of which were returned dishonoured. The underlying transactions were conducted by the petitioner and the other accused who held themselves out as partners of the firm on different occasions. It was urged that the accused persons alternatively dealt with the complainant and issued cheques on separate occasions. In these circumstance, the general law would apply, since the firm being comprised of only two partners, and both were properly joined in all the proceedings pending before the trial court.
8. The above factual narrative would show that the only question involved in these proceedings is whether the complaints so far as the petitioner is concerned, were maintainable and whether they entitled the court to issue process and entertain the proceedings. The Supreme Court in its latest rulings in SMS Pharmaceutical (supra) was undoubtedly dealing with the issue of vicarious liability of Directors of Companies who imp leaded in the proceedings for infraction of Section 138 Cr.P.C. However, it considered the entire gamut of case law including the judgment cited on behalf of the petitioner, namely, Monaben Ketanbhai shah and Anr. v. State of Gujarat and Ors. . In the later judgment (supra) the Court had taken into consideration the circumstance that firms could consist of two or more persons but that the primary responsibility yet lay with the complainant to set-up necessary averments so as to make accused vicariously liable. The Court had held that for fastening of criminal liability, there is no question of accused being under obligation to prove that at the time the offence was committed they were not in-charge and not responsible to the firm; such situation would arise only if the complainant in the first instance made necessary averments and established that fact.
9. In view of the enunciation of law by the Supreme Court, I am of the opinion that the judgment of the learned Additional Sessions Judge, directing the petitioner to stand trial cannot pass muster. The Supreme Court in both the judgments had clearly stated that the complaint ought to disclose specifically the role of the accused/partner in order to fasten vicarious liability. In this case too the complaint had not disclosed to petitioner, who was admittedly not a signatory to the cheque, was responsible to the firm or involved in the sense that he was in control of its affairs.
10. In view of the above discussion, the petition deserves to be allowed; Accordingly the proceedings in Complaint Case No. 287/2002 titled Sh. Ravi Kumar v. Maj. L.K. Toskani (Retd.) and Anr. pending before the learned Metropolitan Magistrate are hereby quashed so far as the petitioner is concerned.
11. The petition is allowed in the above terms.
