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Punjab-Haryana High Court

Love Kohli And Others vs M/S Devans Modern Breweries Ltd on 11 December, 2025

                         IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH
                                                     Criminal Miscellaneous No.M-51132 of 2025
                                                            Date of Decision: December 11, 2025


                       Love Kohli & others
                                                                                ..... PETITIONER(S)
                                                          VERSUS

                       M/s Devans Modern Breweries Ltd.
                                                                              ..... RESPONDENT(S)

CORAM: HON'BLE MR. JUSTICE SUBHAS MEHLA

PRESENT: - Mr. Rajesh Lamba, Advocate, with Mr. Abhinav Kaushik, Advocate, for the petitioners.

Mr. Aman Bahri, Advocate, for the respondent.

SUBHAS MEHLA, J

1. At the very outset, the Ld. Counsel for the petitioners submits

that he does not wish to press the present petition qua petitioner Nos.2, 8, 9,

11, 13 and 15.

2. The petition qua petitioner Nos.2, 8, 9, 11, 13 and 15 stands

dismissed as not pressed, vide separate order of even date.

3. This is the second petition for quashing order dated

02.09.2025 (Annexure P-8) vide which revision petition against summoning

order dated 07.03.2020 (Annexure P-2) passed by learned Judicial Magistrate

1st Class, Gurugram, has been dismissed.

4. Brief facts of the case for the adjudication of the present

petition are that respondent-complainant is engaged in business of

manufacturing and selling of beer and Indian Made Foreign liquor. The

petitioners along with one Mr. Adesh Giri, formed an Association of Persons

AVIN KUMAR (in the name & style of M/s Adesh Associates) to carry out the business of

CRM-M-51132 of 2025 [2]

trading and supply of liquor on liquor vends. On 31.05.2017, an Agreement

of Association of Persons (Annexure P-4) was signed between all the

petitioners as well as Mr. Adesh Giri. As per the clause (1) of aforesaid

agreement, business was to be carried out under the name and style of 'M/s

Adesh Associates'. Further in clause (2) of the agreement, it was agreed that a

license allocated to any member of the association shall be deemed as the

business part of the association. In the yearly draw of lots conducted by the

Government, liquor vend licenses were allotted to Petitioner Nos.2, 8, 9, 11,

13 and 15, namely, Sanjay Aggarwal, Suraj, Urmila Devi, Sulochna, Mahesh

Pokhriyal and Surendra Singh Pokhriyal, (qua whom the present petition is

not pressed). Complainant has alleged in the complaint dated 30.09.2017

(Annexure P-1) that all the members of Association of Persons were actively

engaged in day-to-day affairs and were responsible for payments. On the

demand of the individual members of the association, the beer was supplied

by the complainant to M/s Adesh Associates. In order to repay the outstanding

amount towards the Complainant, M/s Adesh Associates issued cheque

bearing No.518906 dated 17.07.2019 for a sum of Rs.45,97,617/- (Rupees

Forty Five Lakh Ninety Seven Thousand Six Hundred and Seventeen), which

on presentation was dishonored and after statutory compliances, the instant

complaint was filed.

5. Learned counsel for the petitioners contended that impugned

orders dated 02.09.2025 as well as 07.03.2020 are liable to be set aside since

the petitioners are sleeping partners in the association and were not

responsible for day-to-day affairs of the association. The petitioners are not

the signatory of cheque which bounced. Agreement of Association of Persons

CRM-M-51132 of 2025 [3]

dated 31.05.2017 is part of trial Court record. As per the clauses (5) and (6)

of the Agreement, solely Mr. Adesh Giri was empowered and authorized to

sign the papers or any type of application or to give any statement to all

concerned departments, and also in judicial matters. The bank account was

only to be operated under the signatures of Mr. Adesh Giri, thus he was the

person managing the business. There are no specific averments in the

complaint against the petitioners and they were not incharge or responsible

for conduct of business of the association.

6. Learned counsel for the respondent-complainant contended

that summoning order dated 07.03.2020 has been passed in accordance with

law. From the agreement forming Association of Persons (Annexure P-4), it

is crystal clear that all the petitioners had been incharge of, and were

responsible for the working of association. Decisions of the Association of

Persons were being taken by mutual consent of its members and were entitled

to profits and withdraw money for their personal needs. Beer was supplied by

the complainant on demand of the individual members of the association.

Earlier also, the petitioners approached the revisional Court by filing Revision

No. CRR/156/2023 which was dismissed as withdrawn on 03.01.2024

followed by filing of quashing petition before this Court viz. CRM-M-2360

of 2024 which was also dismissed as withdrawn on 08.08.2024 with liberty to

take appropriate remedy in accordance with law. Thus, the petitioners filed a

second revision petition against the same order, which was dismissed on

merits by the Additional Sessions Judge, Gurugram vide order dated

02.09.2025. Hence, he prays for dismissal of the present petition.

7. Heard.

CRM-M-51132 of 2025 [4]

8. At the outset, it is pertinent to mention that the present petition

qua petitioner Nos.2, 8, 9, 11, 13 and 15 has already been dismissed as not

pressed. Qua the remaining petitioners, the main contention is that they were

not the incharge or responsible for day-to-day functioning of Association of

Persons, namely M/s Adesh Associates, and hence criminal liability is not

attracted under Section 138 of NI Act r/w Section 141 of NI Act; only Mr.

Adesh Giri was empowered and authorized to operate the bank account under

his signatures, as well as to sign papers/applications or to give statements to

all concerned departments as well as in judicial matters on behalf of the

association.

9. A perusal of agreement (Annexure P-4) reveals that license

allotted to any individual member would be considered to be a part of business

(clause 2); decisions of the association were to be taken by mutual agreement

between them(clause 8); all the members of association would be entitled to

make withdrawals for their personal needs from capital account (clause 9);

members of the association were entitled to salary and other direct expenses

incurred (clause 12); and they had equal share-holding barring Sanjay

Aggarwal, Adesh Giri and Mahesh Pokhriyal who had 5% more

shareholding(clause 15).

10. In support of their contentions, the petitioners have adamantly

sought to rely on clauses (5) and (6) of the Agreement of Association of

Persons Mr. Adesh Giri was empowered and authorized to operate the bank

account as well as represent the association before all departments and in

judicial matters. However, a piece-meal approach cannot be adopted to derive

CRM-M-51132 of 2025 [5]

the true intent of a legal document. Clauses (8) and (9) of the Agreement

(Annexure P-4) are reproduced as follows:

8. That for Financial Year 2017-18 and onwards, the trading of

liquor/beer shop allotted by the government would be mutually decided

among the members and a majority decision shall be applicable and all

the business income derived from the allotted shops in the individual

name of the member of AOP, shall be treated as the income of the AOP.

9. That the members of AOP shall be entitled to make withdrawal for

their personal need from their capital account and same shall be

debited to their respective capital account.

11. Although Mr. Adesh Giri was the authorized person for

carrying out the banking transaction, a combined reading of the clauses

suggests that all members of the association actively participated in the

running of the business of the association, as decisions were to be taken by

mutual consent. Moreover, if one member has been nominated by mutual

consent to be the authorized signatory in banking transactions, it does not

automatically imply that he alone was at the helm of the affairs, especially

when the governing document of the Association of Persons i.e. the

Agreement annexed as Annexure P-1, particularly provides for mutual

consent of all members in all decisions relating to trading carried out by the

association.

12. Further, as the present petition is not being pressed qua

Petitioners Nos.2, 8, 9, 11, 13 and 15, it is pertinent to note that Petitioners

Nos.2, 8, 9, 11, 13 and 15 are the members of the Association who were

allotted the liquor vend licenses through the government lottery draw. In this

CRM-M-51132 of 2025 [6]

regard, even though the present petition is not being pressed qua Nos.2, 8, 9,

11, 13 and 15, it is not enough to arrive at the conclusion that the remaining

petitioners did not actively conduct the affairs of the business of the

associations. Perusal of the Agreement of Association shows that a liquor

vend license allotted to any member would be deemed as part of the business

of the association; and decisions regarding the trade of beer and Indian made

liquor were to be taken with the mutual consent of all the members,

irrespective of the fact to whom the liquor vend license was allotted. Thus,

prima facie, it does not appear that the petitioners were sleeping/dormant

members of the association, and there is nothing on record to suggest that

petitioners were not actively involved in the business of the association.

13. The petitioners have also sought to rely on ratio of law held

in S.M.S. Pharmaceuticals v. Neeta Bhalla & Anr., (2005) 8 SCC 89, and

Ketanbhai Shah & Anr. V. State of Gujarat and others, (2004)7 SCC15,

which were carefully perused by this court.

14. In S.M.S. Pharmaceuticals (supra) the Hon'ble Apex Court

held that it is necessary to aver in a complaint under Section 141 that at the

time the offence was committed, the person accused was in charge of and was

responsible for conduct of the business. It has been averred by the complainant

in para 6 of the complaint (Annexure P-1) as follows:

"All the members (i.e. accused No. 3 to 19) of accused No.1 were

actively engaged in the day to day affairs of accused No.1 and are

responsible for the payment of the cheque in question."

15. The complainant in the present case has made an averment in

its complaint as to the involvement of the petitioners in the day-to-day affairs

CRM-M-51132 of 2025 [7]

of the Association. The Hon'ble Supreme Court has considered S.M.S.

Pharmaceuticals (supra) as well as Ketanbhai Shah (supra) (both authorities

cited by the petitioners) in HDFC Bank Limited v. State of Maharashtra and

Anr., 2025 INSC 759. The Hon'ble Supreme Court held that the averment in

the complaint "responsible for its day-to-day affairs, management and

working of the Accused No.1 Company", was sufficient to comply with the

requirement of Section 141, NI Act. Further, the Supreme Court observed as

follows:

"....the administrative role of each director would be within the special

knowledge of the company or the director of the firm and it is for them

to establish that they were not in charge of the affairs of the company.

In view of this, the contention of the learned counsel for the respondent

No.2 that the specific role attributed to the directors should be set out

in the complaint does not merit acceptance.

... A harmonious reading of the judgments in K.K. Ahuja

(supra), Harmeet Singh Paintal (supra) and S.P. Mani (supra) brings

out the position that there is no obligation on the complainant to plead

in the complaint as to matters within the special knowledge of the

company or the directors or firm about the specific role attributed to

them in the company."

16. Thus, the averment in the complaint that the accused

petitioners were in charge of day-to-day affairs of the association, and were

responsible for the issuance of the payment, satisfies the requirement of

Section 141, NI Act.

CRM-M-51132 of 2025 [8]

17. In Ketanbhai Shah (supra) the Hon'ble Supreme Court has

held vis - a - vis the requirement of Section 141 of NI Act :

"The primary responsibility is on the complainant to make necessary

averments in the complaint so as to make the accused vicariously

liable....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)

The above case is clearly distinguishable from the present case as the cited

case is one of clear non-averment in the complaint regarding the participation

of the accused in the conduct of business, whereas, in the present case, the

complainant has clearly mentioned in his complaint that the all

members/accused of the association were actively involved in the day-to-day

business of the firm.

18. Not only this, the Apex Court in Ketanbhai Shah (supra) has

further held that criminal liability can be "fastened on those who, at the time

of the commission of the offence, was in charge of and was 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". (emphasis supplied).

19. In view of the aforementioned discussion, thus, all that is

required under the scheme of Section 141 NI Act, is an averment in the

CRM-M-51132 of 2025 [9]

complaint to the effect that the accused participated in the conduct of the

business. Once the averment is made, the onus is on the accused to prove that

he/she was not at the helm of affairs, and the same is to be adjudged by the

trial court after appreciating the evidence. Whether or not the petitioners were

actively involved in the business of the association is a question of fact, which

can be determined by the trial court only after appreciating evidence adduced

by the parties.

20. Now coming to the order dated 02.09.2025 (Annexure P-8)

vide which revision petition against summoning order dated 07.03.2020

(Annexure P-2) passed by learned Judicial Magistrate 1st Class, Gurugram,

has been dismissed. While dismissing the revision petition, the Additional

Session Judge, Gurugram, in its order dated 02.09.2025 has held as follows:

"Primary grievance of the revisionist is to the effect that they

were not in charge of adverse responsible for day-to-day functioning of

the acute No. 1 Association of Persons namely M/s Adesh Associates.

However, perusal of agreement dated 31.5.2017 forming Association

of Persons reveal that the association was more in nature of being a

partnership form in which shareholdings of every revisionist/member

of association was shown. The agreement clearly specifies that any

license allotted to any individual member would be considered to be a

part of business. The agreement further provided that all members of

association would be entitled to make withdrawals for their personal

needs from the capital account of the association. The capital of the

association was to be contributed by all the members including the

revisionists. The members of association were entitled for salary and

CRM-M-51132 of 2025 [10]

for their expenses. Decisions of the association were to be taken by the

mutual agreement between the members and almost all members of the

association have equal shareholding barring Sanjay Aggarwal, Adesh

Giri and Mahesh Pokhriyal, who had 5% more shareholding. Thus

from the agreement forming association of persons, it is clear that all

members of the association had an equal say and it was not a case

where any member was sleeping member or sleeping partners, and

had no role in the functioning of the business. Thus even on merits,

there are no grounds for allowing the present revision petition,

especially when first revision petition against same order was

dismissed as withdrawn and quashing petition filed against same

summoning order was also dismissed as withdrawn from Hon'ble

Punjab and Haryana High court. Though liberty was granted to the

revisionists by Hon'ble Punjab and Haryana High court, but this court

is of the opinion that even in exercise of the said liberty, if case is

considered on merits, there are no grounds to grant any relief to the

revisionists."

21. The Additional Sessions Judge has correctly appreciated the

material available on the file, and after perusal of the Agreement of

Association of Persons, held that all members were actively involved in the

business of the association, and there was nothing to suggest that any of them

was a sleeping or a dormant member, unaware of the functioning of the firm.

22. No provision or statute is to be interpreted in such a limited

or strict way that it defeats the end of justice, or rather, impeding the judicial

process altogether. The summoning order of the JMIC was passed in the year

CRM-M-51132 of 2025 [11]

2020, and is now before this Court for quashing, i.e., after a period of five

years.

23. In respect of quashing of proceedings initiated under Section

138 NI Act, the Hon'ble Apex Court in Ketanbhai Shah (supra) observed as

follows:

It is not necessary to reproduce the language of Section 141 verbatim

in the complaint since the complaint is required to be read as a whole.

If the substance of the allegations made in the complaint fulfill the

requirements of Section 141, the complaint has to proceed and is

required to be tried with. It is also true that in construing a complaint

a hyper-technical approach should not be adopted so as to quash the

same....the power of quashing is required to be exercised very

sparingly and where, read as a whole, factual foundation for the offence

has been laid in the complaint, it should not be quashed."

24. Summoning of the accused is the initial stage of the

proceedings under Section 138, NI Act and stalling the proceedings on the

summoning stage itself is not in the interest of justice. Hence, the present set

of facts do not warrant this Court to exercise its extra-ordinary powers to

quash the summoning order.