Ashish Gupta vs The State Of A.P. Another
2021 Latest Caselaw 3243 Tel

Citation : 2021 Latest Caselaw 3243 Tel
Judgement Date : 5 November, 2021

Telangana High Court

Ashish Gupta vs The State Of A.P. Another on 5 November, 2021

Bench: G.Radha Rani

         THE HON'BLE Dr. JUSTICE G. RADHA RANI

             CRIMINAL PETITION No.3187 of 2013
ORDER:

This petition is filed by the petitioner-A2 under Section 482

Cr.P.C. to quash the proceedings against him in CC No.120 of 2012

on the file of XVI Special Magistrate, Hyderabad.

2. The respondent No.2-de facto complainant filed a private

complaint for dishonour of cheque issued by A1, the authorised

signatory on behalf of A3, a proprietary concern. It was alleged that

the 2nd respondent - de facto complainant had supplied equipments

and products including the UPS in the business of Computer Software

and Hardware and A1 issued cheque bearing No.106289 dated

12.06.2009 drawn on United Bank of India, Aizwal Branch, Mizoram

for Rs.10,00,000/- and when the said cheque had been presented for

collection, the same had been returned for insufficiency of funds and a

complaint was filed on 27.01.2010. The learned Magistrate had taken

cognizance of the complaint on 04.06.2010 against A1 to A3 under

Section 138 of the Negotiable Instruments Act (for short 'NI Act')

3. Heard the learned counsel for the petitioner and the learned

Public Prosecutor. There is no representation by the learned counsel

for the respondent No.1-de facto complaint. As the matter is

pertaining to the year 2013, orders are being passed.

4. Learned counsel for the petitioner submitted that the

petitioner was not the authorized signatory on behalf of A3 -

Dr.GRR,J

M/s.Ashish Enterprises. He was no way concerned with the

transactions or day to day affairs of A3. M/s.Ashish Enterprises (A3)

was a proprietary concern and A1 was its authorised signatory.

Therefore, continuation of proceedings against the petitioner was a

gross abuse of process of law and prayed to quash proceedings against

the petitioner.

4. Learned counsel for the petitioner also relied upon the

judgment of the Hon'ble Apex Court in Raghu Lakshminarayanan

v. Fine Tubes1 on the aspect that:

"The concept of vicarious liability was introduced in penal statutes like Negotiable Instruments Act to make the Directors, partners or other persons, in charge of and control of the business of the Company or otherwise responsible for its affairs; the Company itself being a juristic person.

The description of the accused in the complaint petition is absolutely vague. A juristic person can be a Company within the meaning of the provisions of the Companies Act, 1956 or a partnership within the meaning of the provisions of the Indian Partnership Act, 1932 or an association of persons which ordinarily would mean a body of persons which is not incorporated under any statute. A proprietary concern, however, stands absolutely on a different footing. A person may carry on business in the name of a business concern, but he being proprietor thereof, would be solely responsible for conduct of its affairs. A proprietary concern is not a Company. Company in terms of the explanation appended to Section 141 of the Negotiable Instruments Act, means any body corporate and includes a firm or other association of individuals. Director has been defined to mean in relation to a firm, a partner in the firm. Thus, whereas in relation to a Company, incorporated and registered under the Companies Act, 1956 or any other statute, a person as a Director must come within the purview of the said description, so far as a firm is concerned, the same would carry the same meaning as contained in the Indian Partnership Act.

It is interesting to note that the term "Director" has been defined. It is of some significance to note that in view of the said description of "Director", other than a person who comes within the purview thereof, nobody else can be prosecuted by way of his vicarious liability in such a capacity. If the offence has not been committed by a Company, the question of there being a Director or his being vicariously liable, therefore, would not arise."

(2007) 5 SCC 103 Dr.GRR,J

5. Learned counsel for the petitioner had filed a copy of the

certificate issued by the Officer (Operations), United Bank of India,

Aizwal Branch, certifying that M/s.Ashish Enterprises maintained

current account opened with their Branch bearing account

No.1439050011389 was a proprietorship concern and the signatory of

the account is L.N. Gupta.

6. Considering the above documents and the citations relied

upon by the learned counsel for the petitioner as A3 is a proprietary

concern, but not a partnership firm and A1 is said to be the authorized

signatory of A3, it is considered fit to quash the proceedings against

petitioner-A2 in CC No.120 of 2012 on the file of the XVI Special