Back
ANDHRA PRADESH HIGH COURT AT AMARAVATI
K. Sreenivasa Reddy, J.
Amit Agarwal – Appellant
Versus
State of A. P. – Respondent
Criminal Petition Nos. 5330 of 2021 & 5332 of 2021
Decided On : 28-09-2022
CRIMINAL PETITION - SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 202 OF THE CODE OF CRIMINAL PROCEDURE, 1973 - SECTION 141 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 - QUASHING OF PROCEEDINGS - Petitioners/A.2 and A.6 are neither managing the affairs of A.1 firm nor signatory to the cheques which were issued in the name of the firm; that petitioner/A.6 had submitted her resignation on 30.03.2018 and the same was accepted by the existing partners vide their letter dated 31.03.2018; that the cheques in question were issued on 05.12.2018 and as on the date of issuance of the cheques, petitioner/A.6 was not at all partner of A.1 firm. Held, in the absence of any averment contained in the complaint, continuation of the impugned proceedings against the petitioners, who are residing at far away places, would be oppressive and abuse of process of Court.
Fact of the Case:
A private complaint was filed by 2nd respondent herein before the learned Magistrate against the petitioners and others and the same was taken cognizance by the learned Magistrate as C.C.No.321 of 2019 for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the NI Act').
Finding of the Court:
In view of the facts and circumstances of the case, this Court has no impediment to come to the conclusion that in the absence of any averment contained in the complaint, continuation of the impugned proceedings against the petitioners, who are residing at far away places, would be oppressive and abuse of process of Court.
Issues: Whether the impugned proceedings against the petitioners, who are residing at far away places, would be oppressive and abuse of process of Court in the absence of any averment contained in the complaint?
Ratio Decidendi: 1. Section 202 of the Code of Criminal Procedure, 1973 mandates the Magistrate, in a case where the accused is residing at a place beyond the area of its jurisdiction, to postpone the issuance of process so as to inquire into the case himself or direct an investigation by police officer or by another person. 2. The provisions of Section 202 which mandate the Magistrate, in a case where the accused is residing at a place beyond the area in which he exercises jurisdiction, to postpone the issuance of process so as to inquire into the case himself or direct an investigation by police officer or by another person were introduced by Act 25 of 2005 with effect from 23 June 2006. 3. The rationale for the amendment is based on the recognition by Parliament that false complaints are filed against persons residing at far off places as an instrument of harassment. 4. Section 141 of the Negotiable Instruments Act, 1881 contains requirements for a person making a person liable under the said provision. 5. The complainant has to be examined by the Magistrate in the first instance on the basis of the averments contained therein. 6. If he satisfies that there is material which brings the case within the purview of Section 141 of the NI Act, the learned Magistrate would issue process. 7. Merely stating that the petitioners are Directors would not in any way suffice to satisfy the requirements of Section 141 of the NI Act.
Final Decision: Criminal Petitions are allowed. The proceedings in C.C. No.321 of 2019 on the file of the III Additional Judicial Magistrate of First Class, Tirupati are quashed in sofar as petitioners/A.2 and A.6 are concerned.
COMMON ORDER
1. Petitioner in Criminal Petition No. 5330 of 2021 is A.2, and petitioner in Criminal Petition No.5332 of 2021 is A.6, in C.C. No.321 of 2019 on the file of the III Additional Judicial Magistrate of First Class, Tirupati.
2. A private complaint was filed by 2nd respondent herein before the learned Magistrate against the petitioners and others and the same was taken cognizance by the learned Magistrate as C.C.No.321 of 2019 for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the NI Act'). Brief facts of the case are as follows:
Complainant is a registered company under the provisions of the Companies Act, 1956 with its registered office at Renigunta-Kadapa Road, Karakambadi, Tirupati. It is in the business of manufacturing and sale of Industrial and Automobile batteries both in India as well as various countries of India ocean Rim.
A.1 is a partnership and A.2 to A.7 are its Partners, involved in the business of recycling of used lead acid batteries. Complainant entered into an agreement on 15.03.2018 with accused permitting the accused to collect used batteries and to recycle used lead batteries from the company company and supply re-melted lead ingots at the ratio of 62% for Automotive used batteries collected from franchisees/customers and 60% for Industrial used batteries collected from telecom industrial customers, out of the total volume of used batteries collected on job work basis. As per the agreement, the complainant has to pay a sum of Rs.10,000/- per metric ton of re-melted lead for conversion of used lead batteries by the accused to supply re-melted lead ingots to the complainant company. After completion of contract documentation, accused started collecting the used lead acid batteries from the premises of franchisees/dealers of complainant from 24.03.2018. The accused collected 2,999 MTs of used lead acid batteries and is supposed to supply 1,837.710 MTs of re-melted lead to complainant company. The accused supplied 1,144.325 MTs to the authorized smelter of complainant to manufacture pure lead and supply the same to the complainant company for manufacturing new batteries. The accused has not supplied the balance re-melted lead ingots of 693.385 MTs to the complainant company. The officials of complainant company were surprised to know that the accused have jointly and severally, criminally, dishonestly and fraudulently conspired and sold the remelted lead ingots belonging to the complainant company, which is supposed to be supplied to the complainant company, to third party buyers and amassed crores of money dishonestly and wrongfully and cheated the complainant company by breaching the contract.
The accused has to supply quantity of 730.640 MTs of Re-melted Lead ingots to complainant company, which is sold illegally and unauthorizedly by the accused in open market. The accused promised to supply the said quantity after some days. A.5, who is authorized signatory of A.1, issued cheques bearing Nos.000194 to 000205 drawn on HDFC Bommasandra Industrial Area, Jigni, Bangalore for Rs.12.00 Crores in favour of the complainant company, being the value of re-melted ingots to be supplied to the complainant company, and A.2 to A.7 requested the complainant company to present the cheques after 05.12.2018 and all the accused assured their commitments for and on behalf of A.1 company to the complainant company.
On 17.09.2018, the accused gave post dated cheques bearing Nos. 000194 to 000205, dated 05.12.2018 to the complainant company with an understanding that they would supply re-melted lead ingots weekly once, the worth of re-melted lead to each cheque and would get back the cheques worth of remelted lead supplied and will complete the supply of total balance of 730.640 MTs by 05.12.2018. From 17.09.2018, the accused supplied only 42 MTs of remelted lead ingots to the complainant company and inspite of several reminders and requests, the accused haven ot supplied the
In the absence of any averment contained in the complaint, continuation of the impugned proceedings against the petitioners, who are residing at far away places, would be oppressive and abuse of proc....
(1) Dishonour of cheque – A post-dated cheque issued after debt has been incurred would be covered by definition of ‘debt’ – However, if sum payable depends on a contingent event, then it takes colou....
(1) Dishonour of cheque – Offence by company – For fastening criminal liability, there is no legal requirement for complainant to show that accused partner of firm was aware about each and every tran....
The liability of the company and its officers under Section 141 of the Negotiable Instruments Act was established based on the specific averments in the complaint and the company's reply, and the cou....
Specific averments are necessary to establish the liability of a Director under Section 141 of the Negotiable Instruments Act; mere designation is insufficient.
A person who is not a signatory to the cheque cannot be prosecuted under Section 138 of the Negotiable Instruments Act, 1881, for the offence of dishonour of cheque for insufficiency of funds.
An individual in a company cannot be vicariously liable for criminal offenses under the NI Act unless they are responsible for the company's conduct at the time of the offense.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
