Partners in a firm are vicariously liable under Section 141 of the NI Act unless they can substantiate their inactive participation in the firm's affairs.

JUDGMENT :

NEENA BANSAL KRISHNA, J.

1. Petition Under Section 482 of the CRIMINAL PROCEDURE CODE , 1973, (hereinafter referred to as CRPC), read with Section 528 BNSS , 2023, seeking quashing of Complaint Case No. 3597/2019, under Section 138 of the Negotiable Instruments Act, 1881, ('NI Act') and consequent proceedings, pending trial before the Learned MM Delhi.

2. Respondent No.2/M/s Whitefox India is engaged in the business of events marketing, celebrity management, and other related activities. Respondent No.2/M/s Whitefox India planned a music concert of a famous International musician Audrey Drake Graham to be held in November 2018, for which Respondent No.2/M/s Whitefox India, through its partner Respondent No. 3/Arun Jain, entered into an Investment Agreement dated 26.06.2018 (“Investment Agreement”) with Respondent No.1/M/s Innocept Global for raising the funds required for the event.

3. Respondent No.1 was required to invest Rs. 4,00,00,000/- of which only Rs. 3,00,00,000/- were invested, and the same were given in the following manner:

i. Rs. 1,00,00,000/- paid on 17.05.2018 by way of RTGS.

ii. Rs. 50,00,000/- paid on 14.06.2018 by way of RTGS.

iii. Rs. 37,50,000/- paid on 10.08.2018 through NEFT.

iv. Rs. 62,50,000/- in cash.

4. Respondent No. 2 made all the necessary arrangements for the Music Concert. While discussions and negotiations were underway with Audrey Drake Graham, he withdrew from the Concert at the last moment.

5. Respondent No.1/Complainant invoked Clause 10.1 of the Investment Agreement vide email dated 06.02.2019, and requested for cancellation and refund of the investment amount of INR 3,00,00,000/- along with a 12% interest.

6. Accordingly, Respondent No.1 and Respondent No.2 (through Respondent No.3) entered into an Addendum dated 19.03.2019 (“the addendum”) to the Investment Agreement. The Respondent No.2 in terms of the Addendum, issued two impugned Cheques bearing No. 000429 dated 20.03.2019 for Rs. 2,00,00,000/- and No. 000527 dated 15.05.2019 for Rs. 1,00,00,000/- for the refund of investment made by Respondent No.1.

7. These two Cheques on presentation were returned dishonored on 19.06.2019 with remarks “Funds Insufficient”. Consequently, the Respondent No.1 issued legal Demand Notice dated 02.07.2019. Thereafter, he filed the present Complaint Case arraying Respondent No.2 as Accused No.1, Respondent No.3 and Petitioner as Accused No.2&3 respectively.

8. The Ld. Trial Court vide Order dated 01.08.2019 issued summons against the Respondents including the Petitioner.

9. During the pendency of the Complaint Case, Respondent Nos. 1 and Respondent No. 2, through its partner Arjun Jain/ Respondent No. 3, entered into a Settlement dated 02.07.2021 whereby the Respondent No.2 was obligated to comply with the terms of the Settlement Agreement, in satisfaction of all the liabilities and obligations.

10. Aggrieved by the pendency of the Complaint Case, the Petitioner has sought its quashing on the grounds that the Petitioner was merely a Sleeping partner in Respondent No.2/M/s Whitefox India, having no role in managing any affairs of the Partnership Firm and was in no way responsible for any affairs, day-to-day functioning and management of the Respondent No.2 Firm including the transactions done between the Respondents herein. The Petitioner has been dragged into the present Complaint without considering the fact that the Petitioner has not been a Party/Signatory to any of the transactions between the Respondents including the Investment Agreement dated 26.06.2018, Addendum dated 19.03.2019, Cheques issued pursuant the