Telangana High Court
N. V. Bharathi vs The State Of Telangana on 13 March, 2023
Bench: K.Surender
HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No.08 OF 2020
ORDER:
1. This Criminal Petition is filed to quash the proceedings
against the petitioner/Accused in C.C.No.5 of 2019 on the file
of X Special Magistrate, Erramanzil, Hyderabad for the
offences under Sections 138 and 142 of the Negotiable
Instruments Act, 1861 (for short, 'the Act').
2. The petitioner is being prosecuted by the 2nd
respondent/complainant for the offence under Section 138 of
the Act. The case of the complainant is that the petitioner
herein approached her for financial assistance and an amount
of Rs.15.00 lakhs hand loan was advanced. The said loan was
acknowledged and the petitioner agreed to pay 18% interest
per annum. A cheque No.118414 dated 07.05.2018 was issued
for Rs.10.00 lakhs in the name of Shobha Rani N.H/2nd
respondent/complainant. On presentation, the same was
returned unpaid, for which reason, notice was issued. Having
received notice, since the petitioners failed to make the
payment covered by the cheque, present complaint was filed.
3. Learned counsel appearing for the petitioner would
submit that the cheque was issued by the firm proprietary
concern namely Aditya Marine. Since the petitioner is partner
of the firm, the prosecution without making the firm as an
accused, cannot be maintained. Learned counsel relied on the
judgment of High Court of Madras in Criminal O.P.No.13147
of 2015, dated 23.07.2019 in the case of Rangabashyam and
another v. Ramesh. In the said judgment, the Madras High
Court held that under Section 141 of the Act, the partners or
the Directors or the persons in charge of the company would
be made vicariously liable and it has to be shown that they are
responsible for the day to day affairs of the business. Unless
the company or the partnership firm is made as an accused,
the prosecution cannot be maintained against the other
persons. The above said proposition is not in dispute. In the
event of a company or a partnership firm issues a cheque, the
signatory of the cheque and the persons responsible for the
conduct of day to day affairs of the firm/company would be
vicariously liable under Section 141 of the Act. The provision
makes the company or firm liable and the persons responsible
vicariously liable. In the absence of company/firm being made
as an accused, the question of prosecuting the persons in-
charge of such company/firm does not arise.
4. The cheque in question was issued by the proprietor of
Aditya Marine and signed A1/N.V.Bharathi as a
Proprietor/authorized signatory.
5. In the case of proprietary concern, an individual or a
person would be the proprietor and the proprietary concern
would be identified on the basis of the proprietor. There would
be no other persons in a proprietary concern to be made
vicariously liable under Section 141 of the Act.
6. Since the firm or the proprietor are seen as one entity,
even in the absence of a proprietary concern being made as an
accused in a prosecution under Section 138 of the Act, it has
no bearing on the prosecution of the proprietor.
7. The Hon'ble Supreme Court in the case of Raghu
Lakshminarayanan v. Fine Tubes1 while dealing with a
(2007) 5 Supreme Court Cases 103
similar situation held that the proprietary concern stands
absolutely on a different footing. A person carrying on
business in the name of the business concern being a
proprietor would be solely responsible for the conduct of its
affairs. A proprietary concern cannot be company or a
partnership firm, as such, the question of proceeding against
the proprietor within the meaning of Section 141 of the Act
does not arise.
8. For the aforementioned reasons, not making the
proprietary concern as a party is of no consequence.
10. In the result, there are no merits in the petition and the
same is accordingly dismissed. Consequently, miscellaneous
applications, if any, shall stand closed.
__________________
K.SURENDER, J
Date:13.03.2023
kvs
HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No.8 OF 2020
Date: 13.03.2023.
kvs
