T. Supriya And 2 Others vs High Court For The State Of ...
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           THE HONOURABLE SRI JUSTICE K.SURENDER

       CRIMINAL PETITION Nos.7511, 7513 and 7515 of 2022

COMMON ORDER:

1.     Since the transactions, grounds and also the parties in all the

three Criminal Petitions are the same, they are being heard

together and disposed off by way of this Common Order.

2.      Criminal Petition Nos.7511, 7513 and 7515 of 2022 are filed

to quash the proceedings against the petitioners in C.C.Nos.13985

of 2022, 13990 and 13985 of 2022 respectively on the file of VIII

Metropolitan     Magistrate   at   Manoranjan   Complex,     Nampally,

Hyderabad.

3.      Petitioners are arrayed as A3 to A5 who are partners in A1

firm    namely   M/s.Sri   Supraja   Infracon(A1),   which   is   being

represented by its Managing partner T.Praveen(A2).

4.      The case of the complainant is that the firm A1 represented

by A2 approached the complainant and entered into registered

agreement of sale-cum-Irrevocable General Power of Attorney with

possession vide document No.23387 of 2019, dated 25.05.2019

registered at SRO, Sangareddy for purchase of plots with total

extent of 21245 sq.yds. The said plots were sold at Rs.3,700/-

square yard. In pursuance of the registered agreement of sale-cum-
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GPA with possession, A1 firm issued post dated cheques which are

001851 in CC No.13990/2022, 001852 in C.C.No.13988 of 2022

and 001853 in C.C.No.13985 of 2022, each for Rs.2.00 Crores,

drawn on DCB Bank, Chandanagar Branch.

5.   It is the case of the complainant that the said three cheques

were given towards sale consideration of plots and the same were

returned unpaid when presented for clearance, for the reason of

'funds insufficient'. Aggrieved by the return of cheques, legal

notices were sent. However, reply was given stating that the

amount was already paid in cash, for which reason, there is no

necessity to honor the cheques and accused sought for return of

the cheques in question.

6.   Learned counsel for the petitioners would submit that there is

no averment in the complaint that these petitioners, who are

arrayed as A3 to A5 are in-charge or responsible for the conduct of

the partnership firm when the transactions have taken place. In

the absence of such averment, the criminal trial cannot be

proceeded against them. He relied on the judgment of Hon'ble

Supreme Court in the case of Sunita Palita and others v.
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Panchami Stone Quarry1 and also in the case of S.P.Mani and

Mohan Dairy v. Dr.Snehalatha Elangovan2.

7.        In Sunita Palita's case (supra), the Hon'ble Supreme Court

held that a Director of the company who is not in-charge or

responsible for the part of the business of the company cannot be

made vicariously liable only for the reason of holding a designation

or office in a company. It would be a travesty of justice to drag

Directors, who may not even be connected with the issuance of a

cheque or dishonour thereof, into criminal proceedings for the

reason of designation.

8.        However, in S.P.Mani's case, the Hon'ble Supreme Court

held that if any director wants the process to be quashed by filing a

petition under Section 482 of Cr.P.C on the ground that only a bald

statement is made, such person must persuade the High Court

either by furnishing some sterling incontrovertible material or

acceptable circumstances to substantiate the contention. Further,

the accused made vicariously liable should make out a case that

standing trial would be an abuse of the process of the Court.

Complaint cannot be quashed on mere asking, it must be shown

that no offence is made out against the Director or the partner.

1
    (2022) 10 Supreme Court Cases 152
2
    2022 SCC OnLine SC 1238
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9.    On the other hand, learned counsel appearing for the

respondents would submit that it is the specific case that the

partnership deed of the A1 firm indicates that all the partners shall

be working partners to look after the day to day business of the

partnership and shall devote their time and attention in the

conduct and affairs of the firm. He further argued that as per the

law relating to partnership, the partners are liable for the acts of

the other partner and the partners are liable to discharge the

obligations of the partnership, and the partners are liable to pay

jointly and severally. Civil suit was also filed by the 2nd

respondent/complainant vide OS No.1 of 2021, which is pending

before the District Judge, Sangareddy. These petitioners and A1

and A2 are defendants in the suit filed for recovery of money.

Accordingly prayed to dismiss the petition.

10. The partnership deed admittedly indicates that all the

partners of A1 firm would be responsible for the conduct of

business of A1's firm. However, the agreement of sale-cum-

irrevocable GPA which was entered into by A1's firm was by A2 on

behalf of A1 partnership firm. These petitioners, who are parents

and wife of A2 were not made parties to the said transaction nor

signatories in any form to the said transaction. No where in the

complaint it is mentioned that the complainant has at any point of

time in any manner whatsoever either interacted with these

petitioners when the business deal of selling of plots was being

undertaken or the subsequent negotiations or talks about

honouring of cheques.

11. The Hon'ble Supreme Court held in S.P.Mani's case that

partner or a director who had been made vicariously liable under

Section 141 of NI act, can make out a case under Section 482 of

Cr.P.C on the basis of acceptable circumstances to substantiate his

claim that he was not responsible for the transactions mentioned in

the complaint made under Section 138 of NI act.

12. The offence under Section 138 of the NI Act prescribes

punishment up to 2 years if convicted. For said reason, the Courts

have to be more conscious while dealing with the complaints filed

under Section 138 of the Negotiable Instruments Act making

partners or directors vicariously liable in the transactions. It is not

the case of the complainant that while dealing with A1 firm on a

regular basis regarding multiple transactions, the outstanding

arose and the cheques in question were issued. In such

circumstances the partners would be liable. The cheques were

specifically issued by A1 firm, signed by A2 for the purpose of

purchasing of plots, which A2 had entered into on behalf of A1

firm. These circumstances clearly indicate that these petitioners

were not parties to the agreement of sale with possession, which

has been entered into in between A1 and the 2nd

respondent/complainant. Both for the reasons of there being no

indication that these petitioners were in any way involved in the

sale transaction and also for the reason of there being documentary

evidence to which these petitioners are not parties, criminal

prosecution making them vicariously liable under Section 138 of

the Negotiable Instruments act is liable to be aside.

13. In the result, the proceedings against petitioners/A3 to A5 in

C.C.Nos.13985 of 2022, 13990 of 2022 and 13985 of 2022 on the

file of VIII Metropolitan Magistrate at Manoranjan Complex,

Nampally, Hyderabad, are hereby quashed.

14. Accordingly, the Criminal Petitions are allowed.

Consequently, miscellaneous applications pending, if any, shall

stand disposed.

__________________ K.SURENDER, J Date:02.03.2023 kvs

THE HON'BLE SRI JUSTICE K.SURENDER

CRIMINAL PETITION Nos.7511, 7513 and 7515 of 2022

Dated: 02.03.2023

kvs