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GUJARAT HIGH COURT
J.B.Pardiwala, J.
Gulf Asphalt Private Limited Known As Aspam Petronergy Pvt. Ltd. —Applicant
versus
Dipesh Sinh Kishanchandra Rao & Anr. —Respondents
Special Criminal Application (Quashing) No.5562 of 2014
Decided on 8.5.2015
Counsel for the Parties:
For the Applicant:Mr AR Gupta, Advocate
For the Respondent No.1:Ms Hetvi H Sancheti, Advocate
IMPORTANT POINT
Complaint u/s 138 N.I. Act filed by payee proprietory firm can be continued with its prosecution by a private ltd company by its substitution when proprietory firm during trial was converted into a Pvt. Ltd. Company.
Headnote:Negotiable Instruments Act, 1881 — Sections 138 and 142 — Prosecution for offence of dishonour of cheque — Complaint to be filed by payee — Substitution of complainant — Complaint was filed by sole proprietorship firm through its proprietor in whose favour cheque was drawn —During pendency of trial proprietory concern got converted into a private limited company — Private Ltd Company through its authorized signatory preferred application for its substitution as complaint — Magistrate allowed the application — Whether offered was illegal ? No.
Held: The payee, in the present case, was the proprietary concern. As a “payee”, the proprietary concern was competent to file the complaint and it did file the complaint. Once the complaint is in the name of the “payee” and is in writing, the requirements of Section 142 are fulfilled. Who should represent the payee where the payee is a company, or how the payee should be represented where the “payee” is a sole proprietary concern, is not a matter that is governed by Section 142, but by the general law. (See Shankar Finance (supra).)
In my view, when the complaint was lodged in the year 2010 by the proprietary concern, the same was maintainable as the proprietary concern was the “payee” of the cheque. At a later stage for the purpose of business convenience, if the entire business of the proprietary concern with all its rights and liabilities were taken over by a private limited company, then such private limited company can seek substitution as a complainant in the complaint so that the private limited company can pursue the complaint further in accordance with law.
The entire reasoning assigned by the Revisional Court are absolutely fallacious. The Revisional Court has thoroughly confused itself with the amendment in the complaint and substitution of the complainant.
The case on hand is not one in which the amendment was prayed for in the pleadings of the complaint. Had it been so, then probably the Revisional Court would have been justified in saying that there cannot be any amendment in the pleadings of the complaint after the complaint is filed and cognizance is taken by the Court.
I may give one simple example. What would happen on the death of the complainant. Is it not permissible to substitute the legal heirs of the complainant on the demise of the original complainant. Will it amount to amendment in the complaint. The answer has to be in the negative. The endeavour must be to do justice and not to take advantage of technicalities. The urge to resort to easy way out must give way to judicial justness. (Paras 30 to 33 & 39)
Result: Petition allowed.
J.B.Pardiwala, J.—By this application under Article 227 of the Constitution of India, the applicant - original complainant calls in question the legality and validity of the order dated 16.10.2014 passed by the learned Additional Sessions Judge, Court No.3, City Civil and Sessions Court, Ahmedabad in the Criminal Revision Application No.191 of 2014, by which the learned Sessions Judge allowed the revision application filed by the respondent No.1 herein - original accused quashing and setting aside the order dated 03.04.2014 passed by the learned Additional Chief Metropolitan Magistrate, Court No.28, Ahmedabad in the Criminal Case No.2592 of 2010 permitting the complainant to be substituted.
2. The facts giving rise to this application are as under: 2.1 A sole proprietorship firm viz. “Aspam Petronergy Private Limited” through its proprietor filed a private complaint against the respondent No.1 - the accused under Section 138 of the Negotiable Instruments Act, 1881 (for short, “the Act”), which came to be registered as the Criminal Case No.2592 of 2010.
3. On filing of the complaint, the learned Magistrate took cognizance upon the same and ordered issue of process against the accused for the offence punishable under Section 138 of the Act.
4. During the pendency of the trial, the proprietary concern got converted into a private limited company namely, “Aspam Petronergy Private Limited”.
5. Since the complaint was filed in the name of the proprietary concern through its proprietor and at a later stage, the proprietary concern got converted into a private limited company, the private limited company through its authorized signatory preferred an application Exh.3 before the trial Court to substitute itself as a complainant in place of the original proprietary concern.
6. The application Exh.3 came to be allowed by the trial Court permitting the private limited company to be substituted as the original complainant for the purpose of proceeding further with the complaint.
7. The respondent No.1 - the original accused being dissatisfied with the order passed by the trial Court below Exh.3 preferred a Criminal Revision Application No.191 of 2014 and challenged the order passed by the trial Court below Exh.3.
8. The Revisional Court, vide order dated 16.10.2014, allowed the revision application and quashed the order passed by the trial Court below Exh.3.
9. The applicant - original complainant being dissatisfied has come up with the present application.
10. Mr. A.R. Gupta, the learned advocate appearing for the applicant vehemently submitted that the Revisional Court committed an error in quashing the order passed by the learned Magistrate below Exh.3 permitting the applicant herein to be substituted as a complainant in place of the proprietary concern.
11. Mr. Gupta submitted that the Revisional Court proceeded absolutely on a wrong footing that the order passed by the trial Court below Exh.3 was in the form of an amendment in the complaint. Mr. Gupta submitted that the substitution of a complainant in the complaint would not amount to amending the complaint. Mr. Gupta submitted that the two decisions relied upon by the Revisional Court, namely (1) Lekhraj Singh Kushwah v. Brahmanand Tiwari, 2014 Cr. L. J. 290. and (2) Suboodh s. Salaskar v. Jayprakash M. Shah and another, AIR 2008 Supreme Court 3086 (1). have no application worth the name in the present case.
12. In such circumstances referred to above, Mr. Gupta prays that there being merit in this application, the same be allowed and the impugned order be quashed.
13. On the other hand, this application has been vehemently opposed by Ms. Hetvi H. Sancheti, the learned advocate appearing for the respondent No.1 - accused. She submitted that no error, not to speak of any error of law could be said to have been committed by the Revisional Court in passing the impugned order. She submitted that although the complaint was lodged in the name of a proprietary concern,
