IMPORTANT POINT
The court emphasized that the specific allegations and knowledge of the accused are crucial in determining liability under Section 138 of the Negotiable Instrument Act.

ORDER

1. The present Criminal Petition is filed seeking to quash the proceedings in C.C.No.48 of 2016 on the file of the Court of Judicial First Class Magistrate, Darsi, Prakasam District. The petitioners herein are arrayed as accused Nos.3 to 5, 8 & 9 respectively in the said case, filed against them for the offence punishable under Section 138 of Negotiable Instrument Act(for short 'the Act').

2. As per the complaint lodged by the 1st respondent, the petitioners herein and other accused are Managing Partners of M/s.Sri Lakshmi Narasimha Raw & Boiled Rice Mill, Pasupugallu and they purchased 3530 bags of paddy from him from 29.04.2014 to 29.05.2014 and indebted a sum of Rs.28,80,748/-, out of which, an amount of Rs.15,25,748/- was paid on different dates and for the remaining balance of Rs.13,55,000/-, the Accused Nos.1 and 2 issued a cheque bearing No.308464 dated 22.12.2015 drawn on State Bank of India, Addanki in the capacity of Managing Partners of the said firm to the 1st respondent and the same was returned on 22.01.2016 with a cheque return memo stating that 'Account Closed'.

3. After issuance of statutory legal notice to the accused, the above complaint has been filed against the petitioner/accused under Section 200 of Criminal Procedure Code for the alleged offence under Section 138 of the Act.

4. Learned counsel for the petitioners submits that the cheque in question was issued by Accused 1 & 2 posing as Managing Partners on behalf of a firm, which was non-existent on the date of issuance of the cheque dated 22.12.2015. He submits that the partnership firm i.e., Sri Lakshmi Narasimha Raw & Boiled Rice Mill ceased to exist w.e.f., 13.11.2015, as the rice mill was sold to Sri Raghuram & Boiled Rice Mill, Pasupugallu and contends that as the rice mill was sold on 13.11.2015 and the cheque dated 22.12.2015 was allegedly issued by A1 and A2 on 22.12.2015, the petitioners herein cannot be fastened with any liability. He submits that in fact the petitioners were sleeping partners and even as per the Deed of the Partnership, A1, who was the Managing Partner of the erstwhile firm is responsible for smooth running of the business and supervision of day to day affairs and the bank accounts including loan accounts shall be operated by the accused Nos.1 and 2 jointly. In such circumstances, the learned counsel would submit that the petitioners are not liable for dishonour of the cheuqe, which was allegedly issued by A1 and A2.

He further submits that the petitioners are implicated in the offence only with a view to exert pressure on them and in fact the complaint itself is liable to be rejected, as no specific statutory notice was issued to the partnership firm nor the same was impleaded as a party to the impugned proceedings. Making the said submissions, the learned counsel seeks to allow the Criminal Petition, as no case can be made out against the petitioners, in the facts and circumstances of the case.

5. The learned counsel for the 1st respondent, on the other hand submits that the transactions with regard to purchase of paddy took place prior to selling of the rice mill and the liability of the partnership firm, therefore would not cease. He submits that whether the petitioners are sleeping partners or active partners, is a matter of trial and the petitioners cannot escape their liability on the premise that accused No.1, issued the cheque. He further submits that the plea with regard to non-issuance of statutory notice to the partnership firm and not impleading it as a party respondent to the proceedings/complaint is not tenable in view of the material on record. He also submits that the only intention of the petitioners is to somehow evade payment of the amount due to the 1st respondent and as the cheque issued on behalf of the partnership firm was dishonoured, the petitioners are also liable for the offence under Section 138 of the Negotiable Instrument Act. Stating that there are no merits in the Criminal Petition, the learn