Smt. Majji Sushma Devi vs Sri Revanth Poreddy And Another
2022 Latest Caselaw 6771 Tel

Citation : 2022 Latest Caselaw 6771 Tel
Judgement Date : 13 December, 2022

Telangana High Court

Smt. Majji Sushma Devi vs Sri Revanth Poreddy And Another on 13 December, 2022

Bench: K.Surender

     THE HONOURABLE SRI JUSTICE K.SURENDER

           Criminal Petition No.8224 of 2021
ORDER:

1. This Criminal Petition is filed to quash the proceedings

against the petitioner/A4 in CC No.348 of 2021 on the file of

Judicial First Class Magistrate at Miryalaguda.

2. The 1st respondent has filed complaint against this

petitioner, who is arrayed as A4 and three others for the

offence under Section 138 of the Negotiable Instruments Act.

3. Briefly, the case of the complainant is that the

petitioner/A4 and others have entered into a financial

agreement with the complainant on 05.08.2014 for executing

a contract to the Irrigation and Command Area Development

(I & CAD) Department. In accordance with the terms and

conditions of the said financial agreement between the

complainant and the accused, the accused were jointly and

severally liable to pay 90% of each and every bill on the actual

payments received. For the said reasons, the accused were

due an amount of Rs.1,05,00,000/-. Upon insistence of the

complainant, five cheques were issued for different amounts

and all the cheques were dated 05.01.2021. When the said

cheques were presented for clearance, they were returned for

the reason of 'insufficient funds'. Though, legal notice was

sent, the accused failed to pay the amount covered by the

cheques as such the present complaint was filed.

4. Learned counsel appearing for the petitioner/A4 would

submit that the petitioner had nothing to do with the

transactions and she retired from the partnership on

19.02.2016 by virtue of reconstruction of the partnership

deed dated 19.02.2016. She is neither a signatory to the said

cheques nor was responsible for the day to day affairs of the

said firm. The said fact was also intimated by way of reply

notice dated 05.03.2021 to the complainant, however the

petitioner was arrayed as A4. He relied upon the judgment of

the Hon'ble Supreme Court in the case of Anita Malhotra v.

Apparel Export Promotion Council and others [(2012) 1

Supreme Court Cases 520], in which, the Hon'ble Supreme

Court relying upon the certified copy of Form 32, accepted

that the appellant therein had resigned and consequently

quashed the proceedings initiated against her for the offence

under Section 138 of the Negotiable Instruments Act.

5. The finance agreement dated 05.08.2014 is filed, which

is not disputed. As seen from the said finance agreement, the

agreement is between A1 company/M/s.Prasad Irrigation

Engineering Consultants and complainant. The petitioner is

not a signatory to the said financial agreement. In the entire

complaint, the complainant had made the said finance

agreement as basis to implicate this petitioner. There are no

averments in the complaint which specifically mention

regarding any role played by this petitioner in the business of

A1 company nor in the financial agreement dated 05.08.2014.

6. To fasten criminal liability against a person running a

firm or company as a director or a partner or an employee,

the role played by such person has to be detailed in the

complaint to infer that such person was in fact responsible for

the affairs of the firm or company on a daily basis and was

also instrumental in the facts leading to issuance of the

cheque. The petitioner is sought to be prosecuted for the

reason of being partner in A1 Company on the basis of

Section 141 of Negotiable Instruments Act. For the sake of

convenience, the same is extracted hereunder:

"1 [ 141 Offences by companies. --

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 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: 22 [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.] 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,--

"company" means any body corporate and includes a firm or other association of individuals; and "director", in relation to a firm, means a partner in the firm.]"

7. In view of provision under Section 141 of Negotiable

Instruments Act, unless a person was in-charge of or

responsible to the company for the conduct of the business of

the company as well as the company can only be made

vicariously liable. As discussed above, the role of the

petitioner is nowhere stated in the entire complaint except

stating that she was part of A1 firm. There are no averments

both oral and/or documentary to sustain the prosecution

against the petitioner making her culpable by virtue of

Section 141 of the Negotiable Instruments Act.

8. For the said reasons, the Criminal Petition succeeds and

the proceedings against the petitioner/A4 in CC No.384 of