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PUNJAB & HARYANA HIGH COURT
K.S. Garewal. J.
Punjab State Coop. Supply & Marketing
Federation Ltd. -Petitioner
versus
Mis. Malerkotla Rice Mills - Respondent
Criminal Revision No. 899 of 1999
Decided on 12-10-2001
Counsel for the parties:
For the Petitioner: Mr. P.S. Thiara, Advocate.
For the Respondent: Mr. Amarjeet Markan, Advocate.
IMPORTANT POINT
In a prosecution under Sections 138/141 of Negotiable Instruments Act where cheque has been issued by a partnership firm all the partners are not liable for prosecution on a contention that their liability was joint but only those partners could be prosecuted who were in charge of and were responsible for conduct of business of firm.
Headnote:Negotiable Instruments Act, 1881 - Sections 138 and 141 Dishonour of cheque - Prosecution - Cheque issued by partnership firm accused respondent No. 1 and cheque was drawn by accused respondent No. 2, the partner - Respondent Nos. 3 and 4 other two partners were discharged - Revision against discharge of respondents 3 and 4 – Cogitation that in case of a firm liability of all partners was joint and respondents 3 and 4 should have been proceeded against - No material to show that these respondents 3 and 4 were in-charge of firm and were responsible for conduct of its business - No illegality in impugned order. (Paras 2 to 4)
Result: Revision dismissed.
K.S. Garewal, J.- The Punjab State Cooperative Supply and Marketing Federation (P) Ltd. has filed this petition to challenge the order of learned Chief Judicial Magistrate. Sangur dated October 15. 1998 whereby the learned Magistrate had framed charges under. Section 138 of the Negotiable Instruments Act only against Mis MaIerkotIa Rice Mills (respondent No. 1) and Kewal Krishnan (respondent 2) but had discharged Surinder Kumar and Aman Jindal (respondents 3 and 4).
2. Learned counsel contends that the complainant had a milling agreement with respondent 1 and in order to discharge liability cheque No. 151333 dated November 6.1995 drawn on State Bank of India. Malerkotla had been issued in favour of the petitioner but the same was dishonoured leading to the filing of the complaint. The learned Magistrate summoned all the four accused but on October 15, 1998 vide the impugned order decided to proceed against respondents 1 and 2 and discharged respondents 3 and 4. The learned Magistrate had come to this conclusion because the -cheque had been issued on behalf of the Malerkotla Rice Mills by one of its partners Kewal Krishan although Surinder Kumar and Arnan Jindal were also partners of the firm but were not in-charge of running of the firm. Learned counsel contends that in the case of a firm the liability of all the partners was joint, therefore respondents 3 and 4 should also be proceeded as accused.
3. The argument of the learned counsel is clearly misplaced because Section 141 of the Negotiable Instruments Act specifically provides that if the offence has been committed by a company then every person who at the relevant time was in-charge of and responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be --proceeded against and punished accordingly. The Act further provides in the explanation to Section 141(2) that a company included a firm and a director in relation to a firm means a partner in the firm. Reference may be made to KPG Nairv. MI s. Jindal Menthol India Ltd.1.
4. In the present case the cheque was issued on behalf of the respondent 1 by respondent 2. Therefore respondents 3 and 4 could not be held liable. There was nothing on record to suggest that they were actually in-charge of the firm and were responsible for the conduct of its business. In the absence of any such evidence respondents 3 and 4 cannot be proceeded against.
5. In view of the above this revision is without merit and the same is here dismissed.
Revision dismissed.
1. 2000 (4) RCR 298.
