Akarshan Gold A Partnership Firm vs State Of Gujarat
2023 Latest Caselaw 2955 Guj

    R/SCR.A/1547/2015                                   ORDER DATED: 17/04/2023




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

          R/SPECIAL CRIMINAL APPLICATION NO. 1547 of 2015

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           AKARSHAN GOLD A PARTNERSHIP FIRM & 4 other(s)
                             Versus
                  STATE OF GUJARAT & 1 other(s)
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Appearance:
MR DEVDIP BRAHMBHATT(3490) for the Applicant(s) No. 1,2,3,4,5
MS SEJAL K MANDAVIA(436) for the Respondent(s) No. 2
MR PRANAV TRIVEDI, APP for the Respondent(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE ILESH J. VORA
                  Date : 17/04/2023
                   ORAL ORDER

1. By this application under Section 482 of the Code of

Criminal Procedure, 1973, the applicants-original accused

nos.4 and 5 seek to invoke inherent powers of this Court

for quashing of criminal proceedings of private complaint

being C.C.No.185 of 2015 filed by the complainant -

respondent no.2, for the offences punishable under

Sections 406, 420, 120(B) and 114 of the Indian Penal

Code which is pending before the Additional Chief

Metropolitan Magistrate Court, Ahmedabad.

2. Necessary facts and circumstances giving rise to file

present application are that accused no.1 is the

partnership firm, whereas accused nos.2, 3, 4 and 5 are

the partners of the firm doing business at Udipi, State:

R/SCR.A/1547/2015 ORDER DATED: 17/04/2023

Karnataka. The complainant - Akarshan Gold, a private

limited company incorporated under the provisions of the

Companies Act, 1956 is in the business of gold jewellery. It

is alleged that in the month of June-2023, accused nos.2

and 3 came at Ahmedabad to purchase gold jewellery and

after due deliberation and upon credential of the accused-

firm and its partners, the complainant was agreed to sell

jewellery on credit basis. It is alleged that between

26.06.2013 to 26.07.2014, there was a huge transaction

amounting to Rs.90,25,361/- and it was agreed by the

accused that within 20 days from the date of the

transaction, they will clear the due amount of purchase

transaction. Initially, three cheques i.e. Rs.5,00,000/- each

were issued by the accused and thereafter, for full and final

payment, the accused had issued cheque amounting to

Rs.1,50,00,000/- dated 01.09.2014, of the Canara Bank.

The cheque of Canara Bank returned unpaid and notice as

contemplated under Section 138 of the N.I. Act was served

upon the accused, however, they failed to honour the

amount within stipulated time and therefore, the complaint

under the provisions of the N.I. Act came to be filed on

22.12.2014. It is further alleged that for the amount of

R/SCR.A/1547/2015 ORDER DATED: 17/04/2023

business transaction, the complainant also filed a

summary suit (2205 of 2014) on 16.09.2014.

3. In the aforesaid facts, the private complaint being

C.C.No.185 of 2015, for the offence of cheating and

criminal breach of trust, allegedly committed by the

accused, was being filed before the Additional Chief

Metropolitan Magistrate Court, Ahmedabad. The learned

Trial Court, vide order dated 23.01.2015, after taking

cognizance of the offence, has issued a summons.

4. Being aggrieved with the order, the accused-firm and its

partners have preferred the instant application. At the time

of admission of the application, counsel for the applicant

did not press the application qua accused-firm and

accused nos.2 and 3 who are active partners of the firm.

Thus, this petition is pressed qua accused nos.4 and 5.

5. This Court has heard learned counsel Mr.Devdeep

Brahambhatt for the applicants, Ms.Sejal Mandavia for the

original complainant - respondent no.2 and Mr.Pranav

Trivedi, learned APP for the respondent - State.

6. Mr.Brahambhatt, learned counsel appearing for and on

behalf of the applicants would submit that so far as

accused nos.4 and 5 are concerned, they are not actively

R/SCR.A/1547/2015 ORDER DATED: 17/04/2023

involved in the day-to-day business of the firm. They have

been arraigned in the complaint on the basis of merely on

their being partners of the firm. He would urge that there

is no any specific allegation in the complaint against the

accused nos.4 and 5 that they had come to Ahmedabad

and lured the complainant and gave a false promise with

an intention to cheat the complainant. The dispute herein

appears to be a purely in nature for which prior to the

criminal proceedings, the complainant resorted the legal

proceedings like filing of the summary suit as well as

criminal proceedings for dishonour of cheque. So far

summary suit is concerned, accused nos.4 and 5 have not

joined as a defendant. The allegations levelled against

accused nos.4 and 5 to the effect that they were party to

the criminal conspiracy hatched by accused nos.2 and 3. It

is in this context, he would urge that mere an association

with the firm in the capacity as a partner would not make

them member of criminal conspiracy. A conspiracy cannot

be established by mere a proof of association of person

with the principal accused nor raising suspicion. The

accused nos.4 and 5 have been arraigned on the basis of

certificate of registration of the firm, wherein accused have

R/SCR.A/1547/2015 ORDER DATED: 17/04/2023

been shown as a partner of the firm. Thus, it is settled

legal position that the partners cannot vicariously liable,

unless the statute specifically provides so. In the facts of

the present case, if we read the contents of the complaint,

nothing being alleged against accused nos.4 and 5 that

they had lured the complainant and made a false promise

to pay amount of business transaction.

7. In the aforesaid contentions, learned counsel

Mr.Brahambhatt would submit that the allegations in the

complaint, so far as applicant nos.4 and 5 are concerned,

do not constitute any offence. Learned Trial Court while

taking cognizance and issuing summons against accused

nos.4 and 5 acted mechanically without application of

judicial mind and therefore, the criminal proceedings of the

private complaint would nothing but an amount to misuse

of process of law and Court, which requires to be quashed

and set aside.

8. On the other hand, Ms.Sejal Mandavia, learned advocate

for the complainant and Mr.Pranav Trivedi, learned APP for

the respondent - State vehemently opposed the plea of

quashing against accused nos.4 and 5 and contended that

the learned Trial Court has not committed any error of law

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while issuing summons against accused nos.4 and 5.

There is a specific pleading in the complaint that the

applicant nos.4 and 5 being partners of the firm were part

of criminal conspiracy hatched by accused nos.1 and 2,

and same is sufficient to hold that there is sufficient

ground to proceed against the accused and considering

this aspect, the learned Trial Court issued summons

against accused nos.4 and 5. Thus, this is not stage where

minute and meticulous exercise with regard to appreciation

of evidence may be done. The truthfulness of the

allegations with respect of criminal conspiracy could only

be tested at the time of trial and therefore, all the

submissions made at the bar relate to the disputed

question of facts which cannot be adjudicated upon by this

Court and proceedings under Section 482 of the Cr.P.C.

Thus, they prayed that the application is misconceived and

liable to be dismissed.

9. Having considered the contentions advanced by learned

counsel for the respective parties and on perusal of the

allegations levelled in the complaint, the issue falls for my

consideration is whether uncontroverted allegations as

made in the complaint against accused nos.4 and 5, prima

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facie established the offence as alleged?

10. Heard at length and perused the material placed on record.

I have also carefully considered the allegations made in the

complaint. So far as applicants are concerned, it is alleged

that they were part of criminal conspiracy hatched by

accused nos.2 and 3. It is not in dispute that the applicant

nos.4 and 5 are the partners of accused no.1-firm. No

allegation made against them, that they having knowledge

about the business transaction allegedly entered into by

accused nos.2 and 3 with the complainant. A sum and

substance of the complaint would be with regard to due

amount of the business transaction. Prior to the filing of

the complaint, the summary suit for recovery of the due

amount was filed by the complainant and also filed a

private complaint under Section 138 of the N.I. Act. In the

summary suit, the applicant nos.4 and 5 have not

impleaded as party defendant. It needs to be noted that the

complainant failed to disclose the facts of summary suit

and complaint filed under the provisions of the N.I. Act. It

is the admission on the part of the complainant that based

on record of registration of the accused-firm, the partners

have been arraigned in the complaint. Reference can be

R/SCR.A/1547/2015 ORDER DATED: 17/04/2023

made to the judgment of the Apex Court in the case of

Sunil Mittal Vs. CBI (2015(4) SCC 409) wherein it is held

that when the company is an offender, vicarious liability of

the Directors cannot be imputed automatically, in the

absence of any statutory provision to this effect. The Apex

Court has further observed that an individually who has

perpetrated the commission of the offence and on behalf of

the company, can be made accused along with the

company, if there is a sufficient evidence of his active role

coupled with the criminal intent.

11. In the facts of present case, the main allegations are

against accused no.1-firm and its two partners i.e. accused

nos.2 and 3. In that view of the matter, it is apt to refer to

and rely on the case of India Infoline Limited (2013 (4) SCC

405), the Apex Court held that in the order issuing

summons, the learned Magistrate has to record his

satisfaction about prima facie case against the accused,

who are M.D., the Company Secretary and role played by

them in their respective capacities which is sine qua non

for initiating criminal proceedings against them. Without

any specific role attributed and role played by them in their

individual capacity, they cannot be arraigned as an

R/SCR.A/1547/2015 ORDER DATED: 17/04/2023

accused.

12. In light of the legal proposition and considering the

peculiar facts and circumstances of present case, this

Court is of the opinion that the learned Trial Court while

issuing summons against accused nos.4 and 5 did not

apply its mind properly and in mechanical manner as no

any specific role being assigned to them and merely on

their being partners as reflected in the certificate of

registration of the partners, they have been arraigned as

accused. Thus, therefore, this Court is of the view that so

far as applicant nos.4 and 5 are concerned, allegations in

the complaint do not constitute the offences as referred

above. The Hon'ble Apex Court in the State of Haryana

Vs. Bhajanlal (1992 (1) Supple. 335) has laid down the

guidelines that must be adhered to while exercising

inherent powers under Section 482 of the Code of Criminal

Procedure, 1973 to quash the FIR and/or complaint. The

case on hands is fully covered by categories (i), (ii), (iii) and

(vii), as enumerated by the Apex Court in Bhajanlal's case.

13. For the foregoing reasons, I am of the opinion that the

applicant nos.4 and 5 have made out a case to exercise

inherent powers under Section 482 of the Cr.P.C. and this

R/SCR.A/1547/2015 ORDER DATED: 17/04/2023

is a fit case to exercise the powers to prevent the abuse of

process of law and Court to quash the private complaint

being C.C.No.185 of 2015, pending before the Additional

Chief Metropolitan Magistrate Court, Ahmedabad qua

applicant nos.4 and 5.

14. Resultently, Criminal Complaint being C.C.No.185 of 2015

pending before the Additional Chief Metropolitan

Magistrate Court, Ahmedabad is quashed and set aside

qua applicant nos.4 and 5. Accordingly, present

application is allowed. Direct Service is permitted.

(ILESH J. VORA,J) Rakesh