IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
ARVIND KUMAR VERMA, J.
M/s Techno Dealers – Petitioner
Versus
Rajesh Kumar Jain S/o Late Tarachand Jain – Respondent
Cr. M.P. No. 1458 of 2024
Decided On : 20-08-2024
(A) Negotiable Instruments Act, 1881 - Section 138 - Criminal Procedure Code, 1973 - Section 482 - Dishonour of cheques - Petitioners challenged proceedings under Section 138 of the N.I. Act for dishonoured cheques issued posthumously by a deceased partner - The court held that the petitioners, as partners, are prima facie liable for the firm's debts, but quashed the complaint against one petitioner not involved in the issuance of the cheque. (Paras 3, 5, 10, 11)
(B) Vicarious Liability - Criminal liability of partners - Partners can be held vicariously liable for the firm's debts if specifically averred in the complaint, but this does not lead to automatic conviction. (Paras 7, 8)
Facts of the case:
The petitioners issued two post-dated cheques totalling Rs. 12,50,000/- which were dishonoured. The complaint was filed after the death of one partner, leading to the present petition challenging the proceedings.
Findings of Court:
The court found that the complaint against one petitioner was quashed due to lack of involvement in the cheque issuance, while proceedings against the other petitioners would continue.
Issues: The main issues were the liability of partners for dishonoured cheques and the timing of cheque presentation post the partner's death.
Ratio Decidendi: The court ruled that while partners can be held liable, the specific circumstances of each partner's involvement must be considered, and the complaint against a non-involved partner must be quashed.
Result: Petition partly allowed; complaint against one petitioner quashed.
ORDER :
1. With the consent of the parties, the matter is heard finally.
2. By way of the instant Petition under Section 482 of Cr.P.C. the Petitioner intends to challenge the proceedings initiated under Section 138 of the Negotiable Instruments Act (hereinafter referred to as “the N.I. Act”) by the Respondent-Complainant against the Petitioners through Complaint Case No. 395/2023 filed before the Court of Judicial Magistrate First Class, Raipur:
3. Learned counsel for the petitioners submits that the impugned order dated 15.05.2024 by the learned revisions court as well as the order passed by the learned Judicial Magistrate First Class is illegal and against the facts and law. He submits that the both the courts have failed to appreciate the ingredients of the NI Act as the provisions of Section 143-A has not been complied with. He submits that the both the courts have failed to see that the petitioner No. 2 is not the partner of the M/s. Techno Dealers nor has issued the cheque in favour of the complainant and the petitioner No. 1 has already filed application in her favour and produced the partnership deed. In the clause 12 of the said deed, it is clear that if any legal responsibility arises, the Mulchand Jain would be responsible and unfortunately, he died. After his death the complainant fulfilled the blank cheques which got dishonored. He submits that the complainant has misused the cheque issued by late Mulchand Jain for which the petitioner No. 2 is not responsible nor she has received any amount from the complainant. It is submitted that the complainant had presented the cheques 9 months after the death of Mulchand Jain and therefore he prays that the impugned order dated 15.05.2024 passed by the revisional court as well as the order passed by the Judicial Magistrate First Class Raipur be quashed. He has placed his reliance in the matter of Susela Padmavathy Amma vs. M/s. Bharti Airtel Limited, Arising Out of Special leave Petition (Criminal) No. 12390-12391 of 2022.
4. Learned counsel for the respondent denying the averments made by the counsel for the petitioners submits that it is a settled position of law that under Section 482 of Cr.P.C. the Court should be slow to grant the relief of quashing a complaint at a pre-trial stage. Since the proceedings are pending before the trial court and it is at the stage of framing of charge, appropriate remedy is available to the petitioner to raise all the grounds as stated in the petition before the trial court. He submits that the petition is not maintainable and liable to be dismissed in limine. It is submitted that two cheques bearing amount of Rs. 2,50,000/- and 10,00,000/- (total of Rs. 12,50,000/-) in favour of the respondent were dishonored on presentation, leading to filing of complaint under Section 138 of the NI Act before the learned JMFC, Raipur and subsequently, the petitioners have filed application before the trial court for dismissal fo the complaint which was rejected and against they have filed criminal revision before the revisional court which was also dismissed. He submits that the petitioners being the partners of the petitioner firm, they are jointly and vicariously liable under Section 141 of the Act which reads as under:
Partners can be held vicariously liable for dishonoured cheques issued by the firm, but liability must be established based on specific involvement in the transaction.
Partners of a firm can be individually prosecuted for cheque dishonour despite the firm's acquittal, as the firm lacks separate legal identity.
Complaint under S.138/141 NI Act quashed for failure to implead/notice partnership firm and partners.
Negotiable instruments – Quash of criminal proceedings against one of the Director - petitioner was only a partner of the firm which has issued the cheque and she was not responsible for the conduct ....
A partnership firm cannot be individually liable under Section 138 of the N.I. Act without including all partners in the complaint; liability is joint and several.
The main legal point established in the judgment is the requirement for specific averments to establish vicarious liability of partners in a partnership firm under Section 138 of the NI Act and the n....
Clear and specific averments are necessary in criminal complaints under N.I. Act to hold individuals vicariously liable; mere association with a firm or vague allegations are insufficient.
There is a presumption under Section 139 of the N.I.Act that there exists a legally enforceable debt or liability.
For partners to incur vicarious liability under the Negotiable Instrument Act, the partnership firm must first be convicted of the offense; absence of firm conviction precludes individual partner lia....
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