V.R. Vignesh vs State Of Telangana
2025 Latest Caselaw 3425 Tel

Citation : 2025 Latest Caselaw 3425 Tel
Judgement Date : 26 March, 2025

Telangana High Court

V.R. Vignesh vs State Of Telangana on 26 March, 2025

       THE HONOURABLE SRI JUSTICE K.SURENDER

       CRIMINAL PETITION Nos.7625 & 7630 OF 2019

COMMON ORDER:

Crl.P.Nos.7625 & 7630 of 2019 are filed by the

petitioner/A-4 questioning the proceedings against him in

C.C.No.4480 of 2019 and C.C.No.3451 of 2019, respectively, on

the file of VIII Additional Chief Metropolitan Magistrate,

Metropolitan Criminal Courts at Kukatpally, Hyderabad, for the

offences under Sections 138 and 141 of the Negotiable

Instruments Act, regarding the dishonor of cheque bearing

No.000557 for Rs.2,47,560/- and cheque bearing No.000556

for Rs.1,64,03,692/-, both dated 28.06.2019, respectively.

2. Since the petitioner is one and the same in both the

criminal petitions, and the issue involved in these petitions

arise out of the very same incident, both the petitions are heard

together and disposed of by way of this common order.

3. Heard the learned counsel for the petitioner and

Sri M.Vivekananda Reddy, the learned Assistant Public

Prosecutor for the respondent - State. Perused the record.

4. The 2nd respondent-The Thick Shake Factory Private

Limited, filed a complaint against M/s.AVS Food & Beverages

as A-1, and A-2 to A-4, who are the partners in the said firm.

According to the complaint, the complainant had permitted A-1

firm to open a franchise store in Chennai. After due diligence,

permission was granted to the accused for opening and running

the franchise store. Over a period of time, the complainant

company supplied specialty ice cream and related products for

use in the said franchise store. As per the agreement, the

accused were required to pay an amount of Rs.1,83,533/-.

Towards payment of the principal and interest amount, the

cheques in question for Rs.2,13,896/- and Rs.2,47,560/- were

issued on behalf of A-1 firm. However, when presented for

clearance, both cheques were returned unpaid.

5. The cheques presented were returned on the ground of

'Payment Stopped by Drawer'. According to the complainant,

the cheques were issued towards a legally enforceable debt

owed by all the accused. Notices were sent, and since the

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

complaint was filed.

6. The present petitioner is arrayed as A-4 in the complaint.

7. Learned counsel appearing for the petitioner would

submit that, firstly the petitioner had resigned long before the

issuance of the cheques in question. Secondly, there are no

averments in the complaint specifically against this petitioner.

Vicarious liability would arise, and a partner can be mulcted

with criminal liability only when specific allegations are leveled

against them with the aid of Section 141 of the NI Act.

8. On the other hand, the learned counsel appearing for the

complainant would submit that the petitioner's contention that

he had retired from the partnership cannot be accepted since

his retirement was not in accordance with law.

9. As seen from the complaint, a general allegation is made

against the petitioner regarding the supply of material over a

period of time. The complaint collectively addresses that all the

accused were responsible for approaching the complainant for

the franchise store and were actively looking after the day-to-

day affairs of A-1 firm. The Hon'ble Supreme Court, in Siby

Thomas vs. M/s.Somany Ceramics Ltd 1, held as under:-

"12. Bearing in mind the afore-extracted recitals from the decisions in Gunmala Sales Private Limited's case (supra) and S.P. Mani's case (supra), we have carefully gone through the

(2023) 13 SCR 821

complaint filed by the respondent. It is not averred anywhere in the complaint that the appellant was in charge of the conduct of the business of the company at the relevant time when the offence was committed. What is stated in the complaint is only that the accused Nos. 2 to 6 being the partners are responsible for the day-to-day conduct and business of the company. It is also relevant to note that an overall reading of the complaint would not disclose any clear and specific role of the appellant. In the statutory notice dated 10.09.2015 (Annexure-P6) at paragraph 3 it was averred thus:-

"16. That for liquidation of the aforesaid legal issued cheque number 005074 dated 21.08.2015, amounting to Rs. 27,46,737/- drawn on Punjab National Bank, Ernhipalam (Kozhikode) branch in favour of my client from the account of noticee No. 1." In response to that in Annexure- P7 reply the appellant herein stated thus:- "In this regard, I would like to convey you that, I have retired from M/s Tile store as partner way back on 28-5-2013 and I am not a partner of M/s. Tile Store any more. (Copy of Retirement deed enclosed). During the time of my retirement, there were no dues to M/s. Somany Ceramics Ltd. from M/s. Tile Store as full payments were made for the consignments taken from them. (Copy of accounts statements up to 31-05-2013 enclosed)"

16. Thus, in the light of the dictum laid down in Ashok Shewakramani's case (supra), it is evident that a vicarious liability would be attracted only when the ingredients of Section 141(1) of the NI Act, are satisfied.

It would also reveal that merely because somebody is managing the affairs of the company, per se, he would not become in charge of the conduct of the business of the company or the person responsible to the company for the conduct of the business of the company. A bare perusal of Section 141(1) of the NI Act, would reveal that only that 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 alone shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished. In such circumstances, paragraph 20 in Ashok Shewakramani's case (supra) is also relevant. After referring to the Section 141(1) of NI Act, in paragraph 20 it was further held thus:

"20 On a plain reading, it is apparent that the words "was in charge of" and "was responsible to the company for the conduct of the business of the company" cannot be read disjunctively and the same ought be read conjunctively in view of use of the word "and" in between."

10. The complainant, except for making general statement

that this petitioner was responsible along with the other

accused, has not specified the role played by this petitioner in

the transactions between the complainant and A-1 firm.

Following the judgment of the Hon'ble Supreme Court in the

above cited judgment, unless the role played by the petitioner

in the transactions is specifically narrated, the question of

continuing the criminal proceedings against this petitioner does

not arise.

11. In view of the same, the proceedings against the

petitioners are liable to be quashed.

12. Accordingly, the Criminal Petitions are allowed and the