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IN THE HIGH COURT OF BOMBAY
(K. J. Rohee, J.)
D. P. JAIN AND CO. and others - Applicants.
vs.
GREEN EARTH ASPHALT AND POWER PVT. LTD.
and another - Non-applicants.
Advocates Appeared
For applicants: Shyam Dewani
For non-applicant No.1: Nitin Sambre
For non-applicant No. 2/State : D. B. Patel, APP
Negotiable Instruments Act, 1881 - Sections 138 and 141 - Dishonour of cheque issued by Firm. - Since in order to faster vicarious liability against partners of firm there must be clear and specific allegations made in complaint hence a partner of firm cannot be presented on simple accusation in complaint that such person was partner of firm.
Negotiable Instruments Act, 1881 - Sections 138 and 141 - Offence under Section 138 committed by the firm - Vicarious liability of partners of the firm - Averment in the complaint must be specific stating role played by each partner - In order to fasten vicarious liability against the partners of the firm, there must be clear, specific and unambiguous allegations made in the complaint - No prosecution would lie against a partner on the simple accusation in the complaint that such person was the partner of the firm. - In order to fasten vicarious liability against the partners of the firm, there must be clear, specific and unambiguous allegations made in the complaint. Every partner of the firm cannot automatically be roped in. The complainant can proceed only against such persons who at the time the offence was committed by the firm, were in-charge of and were responsible to the firm for the conduct of its business. Such persons must be in overall control of the day-to-day business of the firm. A complaint based on vague statement that one of the partners signed the cheque on behalf of all the partners and the cheque was issued towards the amount due and payable by all the partners is not a complaint in the eye of law. The accusation against each partner must be specific and unambiguous. The role played by each of the accused must be clearly stated in the complaint. No complainant can be permitted to launch prosecution against all the partners of a firm without there being a proper foundation in the complaint itself about the actual role played by them at the material point of time when the offence is committed by the firm. No prosecution would lie against a partner on the simple accusation in the complaint that such person was the partner of the firm. A bare perusal of the allegations in the complaint would show that they fall short to make out any offence under Section 138 read with Section 141 of the Negotiable Instruments Act against the applicants. Summary criminal case pending on the file of the Judicial Magistrate, First Class quashed. Order of the revisional Court is set aside.
2. By this application under section 482 of the Code of Criminal Procedure read with Articles 226 and 227 of the Constitution of India, the applicants seek to quash Summary Criminal Case No. 72/2005 pending before the Judicial Magistrate, First Class, Achalpur.
3. Non-applicant No.1 (hereinafter referred to as the "Complainant") is a company duly registered under the Indian Companies Act, 1956. It is engaged the business of construction. Its registered office is at Achalpur Camp, District- Amravati.
4. Applicant No. 1 is a partnership firm which is also engaged in the business of construction. It has its office at Nagpur. Applicant Nos. 2 to 4 are the partners of applicant No.1.
5. The complainant filed a complaint under section 138 of the Negotiable Instruments Act, 1881 against the applicants alleging therein that the complaint provided plant and machinery on rental basis to the applicants. Towards the payment of rental amount, applicant No.2 (Girish s/o Dharampal Jain) on behalf of all the applicants, issued cheque for Rs. 3 Lacs on 25-10-2004 in favour of the complainant drawn on State of Bank of India, Industrial Finance Branch, Nagpur. The cheque was issued towards the amount due and payable by all the applicants to the complainant and in discharge of their pre-existing debt and liabilities. As per the instructions of the applicants the said cheque was represented by the complainant with its Bank for encashment on 26-2-2005. However, the said cheque was returned dishonoured by the bankers with the remarks "Payment stopped by Drawer" and an intimation to that effect was received by the complainant on 2-3-2005. The complainant issued notice to the applicants 5-3-2005 demanding the amount. The said notice was received by the applicants on 10-3-2005. Despite receipt of the notice the applicants did not make payment within 15 days. Hence the complainant filed complaint in April, 2. After verification the learned Magistrate directed issuance of process und section 138 of the Negotiable Instruments Act against all the applicants by order dated 16-5-2005.
6. On 25-10-2005 the applicants moved an application for dismissal of the complaint. However, by order dated 16-11-2005 the said application was dismissed by the learned Magistrate on the ground that dismissal of the complaint would amount to review of his own order which is not permissible. Thereafter the applicants preferred Criminal Revision Application No. 15512005 and by order dated 28-2-2006 the Additional Sessions Judge, Achalpur dismissed revision application. The applicants have challenged the dismissal of the revision application and have prayed for dismissal of the complaint.
7. The applicants have challenged the proceedings mainly on the ground that the complainant has not stated about the role played by the applicants in the alleged transaction, In fact, no role has been attributed to any of the applicants in the said complaint. In the absence of such averment either in the complaint or in the verification, no offence under section 138 of the Negotiable Instruments Act is made out and the proceedings initiated against the applicants are liable to be squashed and set aside.
8. I have heard Mr. Shyam Dewani, Advocate for the applicants and Mr. Nitin Sambre, Advocate for non-applicant No. 1/original complainant.
9. The learned counsel for the applicants submitted that under section 141 f the Negotiable Instruments Act, if the person committing an offence under section 138 is a company (which includes a firm), every person who, at the time e offence was committed, was in charge of, and was responsible to the company/firm for the conduct of the business of the company/firm, as well as the company/firm, shall be deemed to be guilty of the offence. The learned counsel or the applicants submitted that in order to attract the provisions of section 138 of the Negotiable Instruments Act the
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