Gujarat High Court

Jyotsnaben Sureshbhai Rathi vs Shri Ganesh Khand Sahakari Mandli Ltd. ... on 1 July, 2025

Author: Nirzar S. Desai

Bench: Nirzar S. Desai

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                         R/CR.MA/22282/2022                                              JUDGMENT DATED: 01/07/2025

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                                 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                      R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
                                  FIR/ORDER) NO. 22282 of 2022


                      FOR APPROVAL AND SIGNATURE:


                      HONOURABLE MR. JUSTICE NIRZAR S. DESAI

                      =====================================================

                               Approved for Reporting    Yes     No
                                                         Yes
                      =====================================================
                                    JYOTSNABEN SURESHBHAI RATHI
                                               Versus
                          SHRI GANESH KHAND SAHAKARI MANDLI LTD. THROUGH
                            JAYDEEPSINH YOGENDRASINH MAHARAULJI & ANR.
                      =====================================================
                      Appearance:
                      MR RJ GOSWAMI(1102) for the Applicant(s) No. 1
                      MR ZUBIN F BHARDA(159) for the Respondent(s) No. 1
                      MR RONAK RAVAL ADDITIONAL PUBLIC PROSECUTOR for the
                      Respondent(s) No. 2
                      =====================================================

                         CORAM:HONOURABLE MR. JUSTICE NIRZAR S. DESAI

                                                       Date : 01/07/2025

                                                           ORAL JUDGMENT

1. Heard learned advocate Mr. Rajesh Goswami

appearing for the applicant, learned advocate

Mr. Zubin F. Bharda appearing for the respondent

No.1. and learned Additional Public Prosecutor

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Mr. Ronak Raval appearing for the respondent

No.2 - State.

2. By way of this petition, the applicant has

prayed for quashing and setting aside the

Criminal Case No. 782 of 2022 pending before the

Court of learned Judicial Magistrate First

Class, Valiya, District : Bharuch for the

offence under Section 138 of Negotiable

Instruments Act, 1882.

3. The Co-ordinate Bench of this Court vide order

dated 7.12.2022 observed that there is no

averment in the complaint to the effect that the

present applicant was in charge and/or

responsible for day to day affairs of the

partnership firm and considering the above fact

by taking into consideration the provisions of

Section 141 of Negotiable Instruments Act, the

Co-ordinate Bench vide order dated 7.12.2022 had

issued rule and granted interim relief in terms

of paragraph No.9(c) in favour of the present

applicant and the same is in operation till

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today.

4. Today when the matter was called out, the matter

was taken up for final hearing with the consent

of both learned advocates appearing for the

parties.

5. Brief facts as stated in the petition are as

under:-

6. That the applicant is partner in Mahesh

Enterprise, a partnership firm along with her

husband i.e. Sureshbhai Kishanlal Rathi and she

was taken as partner in the firm. After father-

in-law of the applicant has expired and from the

said date the applicant became the partner of

the firm along with her husband viz. Sureshbhai

Kishanlal Rathi. Husband of the applicant

Sureshbhai Kishanlal Rathi was in the business

of sugar and there were regular business

transaction with the complainant since last many

years and therefore on account of dispute, the

security cheques given to the complainant were

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misused. According to the applicant, one of the

cheque bearing No. 003127 drawn on HDFC Bank,

Shahibaug, Ahmedabad for an amount of Rs.

5,08,68,644/- was given to the complainant

before three years drawn on HDFC Bank. The same

was signed by the husband of the applicant i.e

accused No.2 and the same was deposited on

25.04.2022 and was dishonored on 27.04.2022 with

an endorsement of "insufficient fund" and

therefore, after following due procedure

prescribed under the Negotiable Instruments Act,

1882, the complainant filed a private complaint

before the learned Judicial Magistrate First

Class, Valiya which was registered as Criminal

Case No. 782 of 2022 wherein the partnership

firm viz. Mahesh Enterprise was shown as accused

No.1, husband of the applicant Sureshbhai

Kishanlal Rathi was shown as accused No.2 and

the present applicant was shown as accused No.3.

The learned Judicial Magistrate First Class took

the cognizance of the offence and issued process

against all the accused vide order dated

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23.06.2022 for offence under Section 138 of the

Negotiable Instruments Act and no process under

Section 141 of the Negotiable Instruments Act

was issued. The applicants are duly appearing

in that proceedings. However, the present

petition is preferred by accused No.3 i.e. wife

of the managing partner of the partnership firm

Mahesh Enterprise i.e. Sureshbhai Kishanlal

Rathi who according to the applicant is neither

the signatory of the cheque nor is associated

with day to day affairs of the firm or in charge

of the firm.

7. Learned advocate Mr. Rajesh Goswami appearing

for the applicants submitted before the Court

that the present applicant is a housewife and

though she is a partner in the partnership firm,

she has neither signed the cheque and therefore,

she is not a signatory to the cheque nor she is

associated with day to day affairs of the

Company.

8. Learned advocate Mr. Rajesh Goswami further

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pointed out from the notice given under Section

138 of the Negotiable Instruments Act as also

from the criminal complaint being Criminal Case

No. 782 of 2022 and by taking the Court to the

averments made in the notice as well as

complaint, that there is no averment made in the

notice or complaint stating that the applicant

is engaged in day to day affairs of the Company

or she is in charge of the Company. Learned

advocate Mr. Rajesh Goswami therefore submitted

that in view of specific provisions of Section

141 of Negotiable Instruments Act, the applicant

could not have been arraigned as an accused in

the complaint under Section 138 of Negotiable

Instruments Act and therefore issuance of

process against the present applicant in absence

of there being any specific averment to the

extent that the present applicant was in charge

of the Company or was associated with day to day

affairs of the Company at the time when the

offence was committed, the order issuing process

against the present applicant itself is

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misconceived and therefore entire proceedings

qua present applicant are required to be quashed

and set aside. Learned advocate Mr. Rajesh

Goswami relief upon a decision of the Hon'ble

Supreme Court in case of Siby Thomas Versus

Somany Ceramics Limited reported in (2024) 1 SCC

of the aforesaid decision learned advocate Mr.

Rajesh Goswami submitted that in absence of

there being any specific averment anywhere in

the complaint that the appellant was in-charge

of the conduct of the business of the Company at

the relevant time when the offence was

committed, the present applicant ought not to

have been arraigned as an accused in the

aforesaid complaint and therefore, despite the

fact that there is nothing averred in the

complaint about the role of present applicant to

the effect that she was either in charge of the

Company or was actively involved in the day to

day affairs of the company in light of decision

of Siby Thomas (Supra), the same would be

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applicable squarely in the facts of the case and

therefore, the complaint is required to be

quashed and set aside qua the present applicant.

9. Learned advocate Mr. Zubin Bharda appearing for

the respondent No.1 - original complainant

relied upon a partnership agreement allegedly

executed between the accused No.2 and 3 of the

complaint i.e. Sureshkumar Kishanlal Rathi and

present applicant Jyotsnaben Sureshkumar Rathi

and by relying upon the same and more

particularly, by relying upon clause related to

Partners' Remuneration, learned advocate Mr.

Zubin Bharda pointed out that the partnership

agreement provides that both the partners of the

agreement shall act as working partners and

therefore it cannot be said that the present

applicant was not having any control or say in

the day to day affairs over the company.

However, learned advocate Mr. Bharda despite

trying his best could not point out from the

complaint that there were any averment in the

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complaint or even notice to the effect that the

present applicant can be said to be in charge of

the company or was involved in day to day

affairs of the company or that the present

applicant was signatory to the cheque.

10. However, on the basis of the partnership

agreement, learned advocate Mr. Zubin Bharda

prayed for dismissal of the present petition.

11. No other submissions were made by either of

the learned councils appearing for the

respective parties nor any decision was cited

except the decision in case of Siby Thomas

(Supra) cited by learned advocate Mr. Rajesh

Goswami.

12. I have heard learned advocates appearing

for the respective parties and perused the

record. Controversy as can be seen from the

submissions made by learned advocates for the

parties is in very narrow compass in the present

petition. The only issue that the Court is

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required to adjudicate is that in absence of

there being any averment about the fact that the

accused person is actively involved in the day

to day affairs of the company or that he is in

charge of the company, whether a complaint under

Section 138 of the Negotiable Instruments Act,

1882 would be maintainable against that

particular accused person or not, who is not

even signatory to the cheque.

13. Learned advocate Mr. Rajesh Goswami has

relied upon Section 141 of the Negotiable

Instruments Act and as the entire case of

learned advocate Mr. Rajesh Goswami appearing

for the applicant is based on Section 141 of the

Negotiable Instruments Act, the same is

reproduced as under :-

"Section 141. Offences by companies. --

(1)If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished

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accordingly:

Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:

Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.

(2)Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.--

For the purposes of this section,--

(a)"company" means any body corporate and includes a firm or other association of individuals; and

(b)"director", in relation to a firm,

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means a partner in the firm."

14. The reading of Section 141 of the

Negotiable Instruments Act indicates that the

said section is about the offence by the

companies and the same specifically states that

the person who at the time of commission of

offence was in charge of or was responsible to

the company for the conduct of the business of

the company in that case the person is liable to

to be proceeded against and punished in respect

of offence under Section 138 of the Negotiable

Instruments Act. By relying upon the aforesaid

Section, it was submitted that as there are no

averments in the complaint about the fact that

the present applicant is associated with the day

to day affairs of the company or was in charge

of the company, she ought not have been

arraigned as an accused and therefore, the

provisions of Section 141 of the Negotiable

Instruments Act, 1882 is required to be

considered in light of the decision cited by

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learned advocate Mr. Rajesh Goswami appearing

for the applicant.

15. In case of Siby Thomas (Supra) while

canvassing the case on behalf of the applicant,

it was contended that the complaint against the

appellant is liable to be quashed owing to the

absence of mandatory averments required to be

made in terms of Section 141(i) of the

Negotiable Instruments Act. While noting the

submission of the counsel for the appellant in

paragraph No.4, the Hon'ble Supreme Court

observed as under :-

"4. The learned counsel appearing for the applicant contended that even if it is taken that the factum of his retirement from the partnership firm on 28.5.2013 was prior to the cheque in question on 21.8.2015 is a matter of evidence, the complaint as against the appellant is liable to be quashed owing to the absence of mandatory averments required to be made in terms of Section 141 (1) of the NI Act, in the complaint. In other words, it is submitted that though the respondent had specified or elaborated the role of some of the accused in the complaint as relates the appellant averments elaborating / specifying his role in the day-to-day affairs of the partnership firm much-less mandatorily required averments for his

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prosecution are conspicuously absent in the complaint. To drive home the contentions that the learned counsel for the appellant drew our attention to paragraphs 3 to 6 of the complaint. Learned counsel for the appellant relied on the decisions of this Court in Anita Malhotra v. Apparel Export Promotion Council & Anr.1 and a decision of Two- Judge Bench of this Court in Criminal Appeal No. 879 of 2023 titled Ashok Shewakramani & Ors. v. State of Andhra Pradesh & Anr.2 and connected cases dated 03.08.2023 to buttress the said contentions."

16. Thereafter, in paragraph No.12 of the said

decision, the Hon'ble Supreme Court has observed

as under :-

"12. Bearing in mind the afore- extracted recitals from the decisions in Gunmala Sales Private Limited's case (supra) and S.P. Mani's case (supra), we have carefully gone through the complaint filed by the respondent. It is not averred anywhere in the complaint that the appellant was in charge of the conduct of the business of the company at the relevant time when the offence was committed. What is stated in the complaint is only that the accused Nos. 2 to 6 being the partners are responsible for the day-

to-day conduct and business of the company. It is also relevant to note that an overall reading of the complaint would not disclose any clear and specific role of the appellant."

17. The Hon'ble Supreme Court after elaborately

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discussing the various case laws in paragraph

No.18 has observed as under :-

"18.Thus, in the light of the dictum laid down in Ashok Shewakramani's case (supra), it is evident that a vicarious liability would be attracted only when the ingredients of Section 141(1) of the NI Act, are satisfied. It would also reveal that merely because somebody is managing the affairs of the company, per se, he would not become in charge of the conduct of the business of the company or the person responsible to the company for the conduct of the business of the company. A bare perusal of Section 141(1) of the NI Act, would reveal that only that person who, at the time the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company, as well as the company alone shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished."

18. A conjoint reading of all the aforesaid

three paragraphs would indicate that it is

mandatory in a complaint to make averments in

respect of filing of a complaint against the

company or its Director to the extent that a

person named in the complaint was responsible

for the day to day affairs of the company or he

was in charge of day to day affairs of the

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company. The requirement to make such averment