P. Dinesh Kumar S/O Pariyasamy vs Loonchand Jain S/O Saremal Jain
2022 Latest Caselaw 1536 Kant

           IN THE HIGH COURT OF KARNATAKA
                   DHARWAD BENCH

        DATED THIS THE 2nd DAY OF FEBRUARY 2022

                        BEFORE

        THE HON'BLE MR. JUSTICE M.NAGAPRASANNA

           CRIMINAL PETITION NO. 100521/2021

BETWEEN

P. DINESH KUMAR S/O PARIYASAMY
AGE 47 YEARS, OCC BUSINESS,
R/O 3/162, THATTAN KADU,
THONDIPATTI PUTHUR,
POST AKKALAMPATTI,
TQ THIRUCHENGODE,
DIST NAMAKKAL-637212.
                                            ...PETITIONER
(BY SRI SHRIHARSH A. NEELOPANT, ADVOCATE)

AND :

LOONCHAND JAIN S/O SAREMAL JAIN,
AGE. 50 YEARS, OCC-PROPRIETOR,
JAIN TRADING CO., APMC YARD,
KOTTUR TOWN-583 134, TQ-KUDLIGI,
DIST BALLARI.
                                            ..RESPONDENT
(BY SRI A.S.PATIL, ADVOCATE)

     THIS CRIMINAL PETITION FILED U/S 482 OF CR.P.C.
SEEKING TO QUASH THE IMPUGNED PROCEEDINGS INITIATED
AS AGAINST THE PETITIONER / ACCUSED NO.1 IN
C.C.NO.906/2019 (P.C.NO. 118/2018 ON THE FILE OF CIVIL
JUDGE AND JMFC, KUDLIGI AS PER ANNEXURE-B FOR THE
OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT.
                               2




     THIS PETITION COMING ON FOR ADMISSION THIS DAY,
THE COURT MADE THE FOLLOWING:

                          ORDER

The petitioner is before this Court calling in question

the proceedings in Criminal Case No.906/2019 registered

for the offence punishable under Section 138 of the

Negotiable Instruments Act, 1881 (for short, 'the N.I.Act').

2. Heard the learned counsel Sri Shriharsh A.

Neelopant, appearing for the petitioner-accused No.1 and

Sri A.S.Patil, learned counsel appearing for the respondent-

complainant.

3. Brief facts as projected by the prosecution are

as follows :

The respondent registers a private complaint invoking

Section 200 of the Cr.P.C. for the offence punishable under

Section 138 of the N.I.Act. The complaint is registered on

the premise that the complainant who is engaged in the

business of transportation of agricultural products in the

name and style 'Jain Trading Company' had supplied

agricultural products to the accused, who runs Sree

Lakshmi Feeds Namakkal (for short, 'the firm') and all the

accused according to the complainant were partners in the

firm.

4. Against the said supply the accused had issued

several cheques totally amounting to Rs.5,00,000/-, that

having been returned for want of sufficient funds, led to a

legal notice being issued by the complainant and later

registration of the private complaint under Section 200 of

Cr.P.C. The petitioner is said to be the partner in the said

firm and on that premise has been dragged into these

proceedings. The Police after investigation have also filed

charge sheet in the matter. It is at that juncture petitioner

knocked the doors of this Court in the subject petition.

5. The learned counsel Sri Shriharsh A.Neelopant,

would vehemently argue and contend that the petitioner

has ceased to be the partner in the firm as on the date

when the cheque was issued by other accused ; retiring

partners of the firm and having retired cannot be dragged

into these proceedings for the offence punishable under

Section 138 of the N.I.Act for a cheque there was issued

long after his exit.

6. On the other hand, the learned counsel for the

respondent would vehemently refute the same and contend

that the petitioner is also privy to the entire transaction

and therefore cannot be left of the hook and should now

come out clean in the trial. According to the learned

counsel, settlement of retirement of the petitioner from the

firm happened on 19.12.2017 though his retirement was

on 15.03.2017.

7. I have given my anxious consideration to the

submissions made by the respective counsel and have

perused the material on record.

8. The afore-narrated facts with regard to the

issuance of cheque and business of the petitioner or the

accused is not in dispute and is not necessary for

consideration of the present lis. The case against the

petitioner is for the offence punishable under Section 138

of the N.I.Act. In that light, the presence or absence of the

petitioner in the firm is germane to be noticed. The

undisputed dates in the case at hand are the petitioner

retired from the firm on 15.03.2017. The Retirement Deed

is also appended to the petition. A public notification is

also issued pursuant to the said retirement date indicating

that he has retired from Sri Lakshmi Feeds Namakkal. After

which the document is also placed and accepted by the

Registrar of Firms as could be found in the register

maintained under Section 59 of the Indian Partnership Act,

1932.

9. Therefore, the petitioner came out from the firm as

a partner in accordance with law and has produced such

documents which would vindicate such stand, that he was

not in the firm. The cheque is issued on 28.02.2018, at

which point in time indisputably the petitioner was not a

partner in the firm. The learned counsel for the respondent

submits that the settlement of petitioner for all the amount

that had come from the firm concludes only on

19.12.2017, even if that date is taken into consideration, it

is three months prior to issuance of the cheque. There is no

document which would show that the petitioner did

continue as a partner in the firm beyond the date

15.03.2017, proceedings against him, for a cheque that is

issued on 28.02.2018. Thus, the petitioner cannot be held

responsible or cannot be dragged into the criminal

proceedings initiated for the offence punishable under

Section 138 of the N.I.Act.

10. In the circumstances, it is apposite to refer the

Judgments of the Hon'ble Apex Court in the case of Alka

Khandu Avhad Vs. Amar Syamprasad Mishra and Another,

reported in (2021) 4 SCC 675, wherein the Apex Court has

held as under :

"Section 138 of the NI 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 NI 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."

Concern to the afore quoted Judgment, in the case of

Monaben Ketanbhai Shah and another vs. State of Gujarat

and others, reported in (2004) 7 SCC 15, the Hon'ble Apex

Court has held as follows:

"Section 141 does not make all partners liable for the offence. The criminal liability has been fastened on those who, at the time of the commission of the offence, were in charge of and were responsible to the firm for the conduct of the business of the firm. These may be sleeping partners who are not required to take any part in the business of the firm; they may be ladies and others who may not know anything about the business of the firm. The primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every partner knows about the transaction. The obligation of the appellants to prove that at the time the offence was committed they were not in charge of and were not responsible to

the firm for the conduct of the business of the firm, would arise only when first the complainant makes necessary averments in the complaint and establishes that fact. The present case is of total absence of requisite averments in the complaint."

(Emphasis supplied)

11. In the light of the facts obtaining in the case at

hand and the Judgments rendered by the Hon'ble Apex

Court supra the trial against the petitioner if permitted to

continue would degenerate into harassment and result in

miscarriage of justice.

12. For the aforesaid reasons, the following :

ORDER

(i) The criminal petition is allowed.

(ii) The proceedings in Criminal Case No.

906/2019 (PC.No.118/2018) on the file of

Civil Judge and JMFC, Kudligi is quashed

qua petitioner-accused No.1.

SD JUDGE CKK