Madras High Court

S.A.Khan vs Union Of India on 24 September, 2025

Author: N. Sathish Kumar

Bench: N. Sathish Kumar

                                                                                       Crl.O.P.No.12094 of 2025

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                        Reserved on             :     11.09.2025

                                        Pronounced on           :     24.09.2025

                                                        CORAM :

                            THE HONOURABLE MR. JUSTICE N. SATHISH KUMAR

                                             Crl.O.P.No.12094 of 2025

                   S.A.Khan
                   Ex-Partner,
                   M/s.Printwraps,
                   No.832, 35th Street,
                   Kotturpuram,
                   Chennai – 600 080.                                                          ... Petitioner

                                                              Vs.

                   Union of India, represented by
                   The Assistant Commissioner of
                   Central Excise, Prosecution Unit,
                   Chennai – 34.                                                            ... Respondent


                   Prayer : Criminal Original Petition filed under Section 482 of Code of

                   Criminal Procedure/Section 528 of Bharatiya Nagarik Suraksha Sanhita to

                   quash the proceedings against the petitioner in E.O.C.C.No.166 of 1997

                   pending on the file of the Additional Chief Metropolitan Magistrate, EO1,

                   Egmore, Chennai, in the interests of justice.




                   Page 1 of 17



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                                                                                          Crl.O.P.No.12094 of 2025



                                   For Petitioner         :        Mr.V.K.Sathiamurthy

                                   For Respondent         :        Mr.N.P.Kumar
                                                                   Special Public Prosecutor
                                                                   (Central Excise)


                                                           ORDER

This Criminal Original Petition has been filed to quash the private

complaint filed by the respondent/Assistant Commissioner of Central

Excise, in E.O.C.C.No.166 of 1997 pending on the file of the Additional

Chief Metropolitan Magistrate, EO1, Egmore, Chennai.

2.The following are the brief facts leading to the filing of the criminal

complaint :

A1 is M/s.Printwraps, which is a partnership firm. A2 is the

Managing Partner of the A1 firm and A3 is an ex-partner of A1 firm. It is

the case of the respondent/complainant that, based on the intelligence

gathered as to the persistent and deliberate violations made by the accused

in contravention to the provisions of the Central Excise Act, 1944, an

inspection was conducted on 02.07.1992 in the A1 firm. At that time, A2

S.Subash was present. At the time of search, A3-S.A.Khan, the petitioner

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herein, was also present and he was in-charge of the company. On

inspection, 1738 kg of non-duty paid printed polyester philaminated rolls

valued at Rs.2,52,010/- were found in the residence of A3/petitioner and

various invoices indicating removal of excisable goods valued at

Rs.21,23,113.40 were found and the goods were seized. On the basis of

such search and seizure, as the petitioner was also in-charge of the firm, a

criminal complaint had been filed for various offences under Sections 9(1),

9(1)(b), 9(1)(bb), 11D of Central Excise Act, 1944, r/w. Rules 49, 173F,

52A, 173E, 57F(2), 57A of the Central Excise Rules, 1944, as against the

firm (A1), Managing Partner (A2) and the petitioner, who was the ex-

partner and in-charge of the company (A3). The said complaint was taken

on file by the learned Additional Chief Metropolitan Magistrate, EO1,

Egmore, Chennai, in E.O.C.C.No.166 of 1997. Challenging the same, the

present Criminal Original Petition has been filed.

3.The quashment is sought mainly on the ground that the Managing

Partner of the company (A2) is no more and there is no one to represent the

company, namely A1. Therefore, according to the petitioner, unless some

representative is appointed to represent A1, without the company being

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made as an accused, the very complaint is not maintainable. The undue

delay in examining the witnesses by the respondent/complainant is also

raised as a ground for quashment.

4.Previously, the complainant filed M.P.No.2270 of 2000 before the

learned Additional Metropolitan Magistrate, E.O.I, Chennai, for an order

that the 3rd accused (petitioner herein) shall represent the A1 company, as

the Managing Partner of the firm had passed away and there was no other

person to represent the firm. The said petition was dismissed by the learned

Magistrate. Challenging the same, the complainant preferred a revision

before the learned Principal Sessions Judge, Chennai, in Crl.R.C.No.147 of

2002, which was allowed. Challenging the said order, the 3rd accused

(petitioner herein) filed Crl.R.C.No.1256 of 2003 before this Court. This

Court, by order dated 29.09.2011, accepted the contention of the petitioner

(A3) and held that the petitioner (A3) cannot be compelled to represent the

firm in the criminal prosecution. Thereafter, it appears that, once again, the

petitioner (A3) has filed a Criminal Original Petition in Crl.O.P.No.18577 of

2014 before this Court to quash the complaint on the ground that the

company has not been made as an accused and as per 305 Cr.P.C., the

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method of selecting a person is a unique right vested with the company/firm

and the Court cannot direct any person to represent the firm. This Court, by

order dated 31.07.2020 in Crl.O.P.No.18577 of 2014, had directed the trial

Court to issue summons under Section 63 Cr.P.C. to A1 firm to the present

Principal Officer Ms.Saradha Subbash and thereafter, proceed under Section

305 Cr.P.C. Now, the present Criminal Original Petition has been filed once

again by A3 to quash the complaint. While disposing the earlier Criminal

Original Petition, this Court has taken note of the fact that, by filing one

petition or other, the petitioner has successfully stalled the proceedings in

E.O.C.C.No.166 of 1997 for all these 13 years. Be that as it may.

5.Now, the contention of the learned counsel for the petitioner in the

present petition is that, as the A1 firm is not represented by anyone and the

Principal Officer Ms.Saradha Subbash has not been served, without a

representative of the company, there cannot be any prosecution against the

other partners. Further, it is his contention that the petitioner is shown only

as ex-partner and he was not responsible for the conduct of the business of

the firm. Therefore, the criminal prosecution as against the petitioner may

be quashed.

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6.Whereas, the learned Special Public Prosecutor would submit that

the complaint itself clearly indicates that, at the time of search, A3

(petitioner herein) was very much present in the factory and he was in-

charge of the company. Further, it is his contention that the seizure was

effected from the house of A3 and therefore, when there are incriminating

materials as against the petitioner, the complaint cannot be quashed at this

stage.

7.Heard the learned counsel on either side and perused the entire

materials available on record.

8.The main contention of the petitioner is that he was not in-charge of

the A1 firm at the time of alleged offence. The very averments of the

complaint indicate that, while inspection being conducted by the authorities,

the petitioner (A3) was very much present in the factory and seizure was

effected from him. Therefore, it is now too late for the petitioner to contend

that he is not responsible for the conduct of the business of the firm.

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9.Admittedly, the company was originally made as an accused,

represented by its Managing Partner. Now, the Managing Partner appears to

have died. The petitioner is the remaining partner. Normally, in such

circumstances, the company will be represented by the other partners. But

in the present case, the petitioner has previously challenged such

proceedings to make him as a representative of the firm, in Crl.R.C.No.1256

of 2003 and this Court, while disposing the revision, has directed that the

petitioner cannot be compelled to represent the firm in the criminal

prosecution. Once again, he has challenged the very complaint itself in

Crl.O.P.No.18577 of 2014 and this Court has directed issuance of summons

under Section 63 Cr.P.C. to A1 firm to the present Principal Officer

Ms.Saradha Subbash and thereafter, proceed under Section 305 Cr.P.C.

Now, the only difficulty faced by the prosecution is that the said Principal

Officer Ms.Saradha Subbash also appears to have died and summons have

not been served. Now, only the company alone without any representative

remains as an accused. Therefore, on that ground, now the present petition

has been filed by the petitioner.

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10.Repeated petitions filed by the petitioner make it clear that the

petitioner, somehow or the other, is trying to stall the proceedings. Before

the trial Court, the matter is now at the stage of cross-examination of

witnesses. Though it is stated that the petitioner resigned from the company,

the fact remains that the specific allegations made in the complaint indicate

that the petitioner (A3) was in-charge of the factory at the time of

inspection, besides seizure also effected from him. Therefore, whether he

has resigned or not, or whether he was in-charge of the factory or not, is a

matter of evidence before the trial Court. Admittedly, at the time of

launching prosecution, the firm was represented by its Managing Partner.

The Managing Partner is no more and the Principal Officer is also not

served. Now, the firm is not represented by anyone. The petitioner (A3),

who is already arrayed as accused, had also successfully obtained orders

from this Court in the earlier round of litigation that he cannot represent the

A1 firm. In such view of the matter, this Court is of the view that, in these

circumstances, merely because the A1 firm is not represented by anyone, it

cannot be said that the prosecution is totally incompetent and automatically

vitiated.

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11.Section 9AA of the Central Excise Act deals with the offences of

companies, which reads as follows :

“9AA.Offences by companies.— (1) Where an offence under this Act has been committed by 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 accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, 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.

(2) Notwithstanding anything contained in sub-section (1), where an 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.

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Explanation.—For the purposes of this section,—

(a) “company” means anybody corporate and includes a firm or other association of individuals; and

(b) “director” in relation to a firm means a partner in the firm.”

12.A careful perusal of the above provision makes it clear that, where

an offence under the Act has been committed by 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 and punished accordingly. When the company

was originally made as accused and merely because later, the representative

of the company died and no one was there to represent the company, this

Court is of the view that the entire prosecution cannot be vitiated. As per

the above provision, what is required is the person in-charge of the company

at the time of offence, as well as the company, are deemed to be guilty of the

offence. In such case, when there is no representative for the company,

there will be a difficulty only when the punishment to be imposed on the

company in person in the absence of representation. However, that will not

render the entire prosecution invalid. The Hon'ble Supreme Court, in

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Dhanasingh Prabhu v. Chandrasekar and another reported in (2025) 3

MLJ (Crl) 311 (SC), has held as follows :

“6.9.On considering the aforesaid judgments, we observe that even if we have to come to the conclusion that the juristic entity i.e., the partnership firm is the primary accused in the instant case it would be necessary for us to also state that such a juristic entity, namely, a partnership firm is not distinct from the partners who comprise the partnership. In other words, if the complainant had proceeded only against the partnership firm and not the partners it possibly could have been held that the partnership firm in the absence of its partners is not a complete juristic entity which can be recognised in law and therefore cannot be proceeded against. On the other hand, in the instant case the complainant has proceeded against the two partners. The complainant is aware of the fact that the cheque has been issued in the name of the partnership firm “Mouriya Coirs” and has been signed by one of the partners. The complainant has proceeded against the partners only without arraigning the partnership firm as an accused. It is necessary to reiterate that a partnership firm in the absence of its partners cannot at all be considered to be a juristic entity in law. On the other hand, the partners who form a partnership firm are personally liable in law along with the partnership firm. It is a case of joint and several liability and not vicarious liability as such. Therefore, if the

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complainant herein has proceeded only against the partners and not against the partnership firm, we think it is not something which would go to the root of the matter so as to dismiss the complaint on that ground. Rather, opportunity could have been given to the complainant to implead the partnership firm also as an accused in the complaint even though no notice was sent specifically in the name of the partnership.

...

7.11.The partnership name being only a compendious method of describing the partners, it stands to reason that a reference to the partners in their capacity as partners of the firm will be sufficient to impute liability on the partners themselves, whereas directors of a company are made liable vicariously through the company, upon whom falls the primary liability. Thus, the partners and the partnership firm are one and the same. Unlike a company, a partnership firm has no independent corporate existence and has no distinct legal persona independent of its partners. Similarly, the partners of a firm are co-owners of the property of the firm unlike shareholders in a company who are not co-owners of the property of the company.

....

7.19.Section 25 provides that every partner is liable jointly with all the other partners and also severally for all acts of the firm done by the partner. Since a firm is not a legal entity

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but only a collective name for all the partners, it does not have any legal existence apart from its partners. Therefore, any liability of a firm has the same effect of a liability against the partners. This is because, the partners remain liable jointly and severally for all acts of the firm, vide Dena Bank v. Bikhabhai Prabhudas Parekh and Co., LNIND 2000 SC 721 : (2000) 5 SCC 694 : AIR 2000 SC 3654.

8.It is therefore appropriate to remind ourselves that a partnership firm, unlike a company registered under the Indian Companies Act or a limited liability partnership registered under the Limited Liability Partnership Act, 2008, is not a distinct legal entity and is only a compendium of its partners. Even the registration of a firm does not mean that it becomes a distinct legal entity like a company. Hence, the partners of a firm are co-owners of the property of the firm, unlike shareholders in a company who are not co-owners of the property of the company.

....

9.7.This also demonstrates the fact that while a director is a separate persona in relation to a company, in the case of a partnership firm, the partner is not really a distinct legal persona. This is because a partnership firm is not really a legal entity separate and distinct as a company is from its directors but can have a legal persona only when the partnership firm is considered along with its partners. Thus,

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the partnership firm has no separate recognition either jurisprudentially or in law apart from its partners. Therefore, while a director of a company can be vicariously liable for an offence committed by a company, insofar as a partnership firm is concerned, when the offence is committed by such a firm, in substance, the offence is committed by the partners of the firm and not just the firm per se. ...

9.9.Therefore, even in the absence of partnership firm being named as an accused, if the partners of the partnership firm are proceeded against, they being jointly and severally liable along with the partnership firm as well as inter-se the partners of the firm, the complaint is still maintainable. The accused in such a case would in substance be the partners of the partnership firm along with the firm itself. Since the liability is joint and several, even in the absence of a partnership firm being proceeded against by the complainant by issuance of legal notice as mandated under Section 138 of the Act or being made an accused specifically in a complaint filed under Section 200 of CrPC, (equivalent to Section 223 of the BNSS), such a complaint is maintainable.”

13.In view of the above, as far as the present case is concerned,

merely because there is no representation for the A1 partnership firm, it

cannot be said that the complaint is not maintainable when the other

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partners of the firm are made as accused. Particularly when there are

specific allegations as against the petitioner herein (A3) that he was present

in the A1 firm at the time of inspection as in-charge of A1 firm and seizure

of goods was also effected from him, this Court is not inclined to quash the

complaint at this stage.

14.In such view of the matter, I do not find any merit in this petition.

Accordingly, this Criminal Original Petition is dismissed.

15.The trial Court is directed to dispose of the case in