SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Article Pause Article
judgment-img

2008 (1) Bankmann 383 (Mad.)
MADRAS HIGH COURT
K. Mohan Ram, J.
P. Lingappan —Petitioner
versus
R. Palanisamy —Respondent
Crl. OP No. 31796 of 2007 and M.P. No. 1 of 2007
Decided on 28.11.2007

Advocates:
Counsel for the Parties:
For the Petitioner:Mr. A.K. Kumaraswamy, Advocate
For the Respondent:Mr. I.C. Vasudevan, Advocate

Headnote:Negotiable Instruments Act, 1881—Sections 138 and 141—Dishonour of cheque issued by firm—Prosecution of firm and its two partners—Petition to quash proceedings against petitioner partner—Legal notice at 7.7.2006 was issued but in a wrong name instead of to petitioner—There was no valid notice as far petitioner was concerned—Rejoinder was sent by correcting the name on 31.7.2006 and being after stipulated period it could not cure the defect—Incorrect name of partner in notice could not be considered to be insignificant mistake—Notice sent to firm and other partner were not actually served but it could be taken as deemed service on them—Such deemed service could not be taken against petitioner—Proceedings against petitioner were liable to be quashed. (Paras 14 and 17)

       Result: Petition allowed.

JUDGMENT

K. Mohan Ram, J.—The brief facts that are necessary for the disposal of the above Criminal Original Petition are set out below:

The respondent herein filed a Complaint for the alleged offence under Section 138 r/w Sections 141 & 142 of the Negotiable Instruments Act against M/s. Rathanam & Rathanam Tannery, a partnership firm, its partner Mr. S.P. Venkatachalam and another partner, the petitioner herein. The Complaint was taken on file as C.C. No. 317 of 2006 and the same is pending on the file of the Judicial Magistrate, Perundurai and the petitioner is arrayed as 3rd accused therein. The petitioner has filed the above Quash Petition to quash further proceedings in C.C. No. 317 of 2006.

2. The case of the petitioner is that the cheque issued by the first accused-Firm was retuned unpaid on 23.06.2006 with an endorsement ‘Account Closed’ and the intimation from the bank was received on 26.6.2006. The respondent herein has issued a legal notice dated 7.7.2006 to the following address:

“P. Loganathan,

Partner: Rathanam & Rathanam,

S/o Porappanna Gounder,

11-Powar House Road,

Erode-1.”

The said legal notice was returned with a postal endorsement “No such person”; thereafter, the respondent has issued a rejoinder on 31.7.2006 to the petitioner and the same was returned on 2.8.2006 with an endorsement “intimation”; neither any reply was given by the accused nor the amount covered by the cheque was paid and hence a Complaint has been filed.

3. The contention of the petitioner is that there is no valid notice as far as the petitioner in concerned and as such no cause of action has arisen for filing Complaint against the petitioner and hence the further proceedings are liable to be quashed.

4. I have heard Mr. A.K. Kumaraswamy, learned counsel appearing for the petitioner and Mr. I.C. Vasudevan, learned counsel appearing for the respondent.

5. Mr. A.K. Kumaraswamy, learned counsel appearing for the petitioner submitted that admittedly a notice dated 7.7.2006 was sent to one P. Loganathan described as partner of

M/s. Rathanam & Rathnam and the same had been returned. Thereafter, after the period of limitation was over, the respondent had sent a rejoinder on 31.7.2006 to the petitioner and the said rejoinder had been returned with an endorsement “intimation”. According to the learned counsel unless and until the notice of demand is actually served on the petitioner and after receipt of such notice if the petitioner had defaulted in complying with the demand within the stipulated time of 15 days then only the cause of action for filing a case against the petitioner would arise and the rejoinder sent by the respondent will not cure the defect in the notice dated 07.07.2006.

6. In support of the above said contentions, the learned counsel appearing for the petitioner relied upon the following decisions, viz.:

(i) B. Raman & 2 others v. M/s. Shasun Chemicals and Drugs Ltd.1

(ii) Poppys Spinning Mills (P) Ltd. v. C. Visalakshi & another.2

7. In the decision reported in B. Raman & 2 others v. M/s. Shasun and Drugs Ltd., 2006 (2) LW (Crl.) 775 (DB) in paragraphs 25 & 27 it is observed as follows:

“25. ………. So, these Sections would provide that when there are directors, who are responsible for the conduct of the business of the Company, and when there are other officers, with whose consent the offence has been committed, the complainant shall make averments to the said effect. In that context, the complainant has to start the process, of getting back the cheque amount from those persons, who represent the Company, in order to avoid the filing of the Complaint against them. In the said process, he has to necessarily make a demand from those persons, who are part and parcel of the drawer. Only when that process fails, the cause of action, as envisaged in Section 138, would arise against them, to enable the complainant to approach the Court, within the stipulated time. So, the starting of the process is, the service of notice on the persons,






























Click Here to Read the rest of this document

1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
whatsapp-icon Back to top