IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SANDEEP N. BHATT, J.
Manojbhai Ramnikbhai (Rojivadiya) Kuvadiya Partner Of Milan Tyres – Appellant
Versus
State Of Gujarat – Respondent
R/CRIMINAL MISC.APPLICATION NO. 13523 of 2019 With R/CRIMINAL MISC.APPLICATION NO. 13524 of 2019 With R/CRIMINAL MISC.APPLICATION NO. 13525 of 2019 With R/CRIMINAL MISC.APPLICATION NO. 13526 of 2019 With R/CRIMINAL MISC.APPLICATION NO. 13527 of 2019
Decided on : 10-07-2023
Code of Criminal Procedure, 1973 - Section 482 - Negotiable Instruments Act, 1881 - Sections 138 and 141 - Dishonour of cheque for insufficiency, etc., of funds in account - Offences by companies - Applications are filed for quashing and setting aside complaints – Held, Huge amount is involved in present cases filed by complainant and applicants also might have not paid huge dues of other persons, but in peculiar facts and circumstances of present case, ingredients of Section 138 read with Section 141 of NI Act are not satisfied qua applicants in all these cases - It is open for complainant to file appropriate civil as well as criminal proceedings, whichever is permissible under law against applicants - Continuation of further proceedings pursuant to said complaints will cause greater hardships to applicants and no fruitful purpose would be served if such further proceedings are allowed to be continued - Court must ensure that criminal prosecution is not used as instrument of harassment or for seeking private vendetta or with ulterior motive to pressurise accused or to settle score - Criminal Case are hereby quashed and set aside qua present applicants only - Applications are allowed.
JUDGMENT :
1. All these applications are filed under Section 482 of the Code of Criminal Procedure, 1973 (`the Code’ for short) for quashing and setting aside the complaints being Criminal Case Nos. 2617 of 2016, 2620 of 2016, 2619 of 2016, 2612 of 2016 and 2616 of 2016 respectively filed under the provisions of the Negotiable Instruments Act (`NI Act’ for short).
2. As the common question of facts and law are involved in all these applications, at the request of learned advocates for the parties, they are heard together and disposed of by this common oral judgment.
3. For the sake of convenience, the facts of Criminal Miscellaneous Application No.13523 of 2019 are considered, which are as under:
3.1 A complaint came to be filed in the year 2007 before the learned Chief Judicial Magistrate, Probandar, thereafter, the case was transferred to the court of 2nd Additional Chief Judicial Magistrate, Rajkot and it was renumbered. However, thereafter, again in view of the amendment in the NI Act, the complaint was transferred to Porbandar and it was given the criminal case number impugned herein. It is the case of the complainant that on depositing the cheques, they were returned with the endorsement `funds insufficient’ and when the demand for the amount was made and it was not complied with, the demand notice was issued, which were returned back with the endorsement `left’.
3.2 It is averred that the Milan Tyre Partnership Firm was initially incorporated with three partners – the applicants herein and one Sanjaybhai Mehta, who retired subsequently. Thereafter, the applicant no.2 herein also retired and her husband joined the firm and new partnership deed was executed. That, the relevant communication was made to the Income Tax Department every time the changes were made and also at the time of dissolution of partnership firm, the relevant communication was made. It is averred that the said partnership firm was dissolved on 30.9.2005, however, the dissolution deed was executed on 30.3.2007. It is the impugned complaints which are made in the year 2007 and renumbered thereafter, which are sought to be quashed by way of these applications.
4. Heard learned advocates for the parties.
4.1 Learned advocate Mr.Pipaliya for the applicants submitted that on bare reading of the complaint, it transpires that the complaint is filed against the partners only without impleading the partnership firm as party. He has submitted, by drawing attention to the notice correspondence that the notice is issued to the partners only and no notice is issued to the partnership firm. He has also drawn the attention of this Court to the communication made to the Income Tax Officer, Rajkot by the partnership firm – Milan Tyre dated 4.12.2007 intimating that the partnership firm is dissolved on 30.9.2005 and PAN card is also surrendered. He has referred to the deed of partnership which is executed between the partners on 28.2.2004 in which the names of the partners were mentioned in the partnership deed and submitted that in view of the provisions of Sections 138 and 141 of the NI Act, more particularly, explanation to Section 141, the partnership firm is also required to be impleaded as party in any proceeding carried out pursuant to the transaction made by the partnership firm. He has submitted that merely impleading the partners in any legal proceeding, more particularly, under Section 138 of the NI Act, will not be maintainable in the eye of law, in absence of partnership firm being impleaded as party.
5. In support of his submissions, learned advocate Mr.Pipaliya has relied on the following decisions:
(2) Ratishbhai D Ramani V/s State of Gujarat and Ors. Reported in 2015(1) GLR 848, more particularly, paragraph 9
(3) Kiritbhai Patel V/s State of Gujarat, decided on 19.1.2016 in Criminal Miscellaneous Application No.16297 of 2011.
6. He, therefore, submit
Aneeta Hada V/s Godfather Travels & Tours Pvt.Ltd.
Inder Mohan Goswami and Another versus State of Uttaranchal reported in (2007) 12 SCC 1
S.P.Mani and Mohan Dairy V/s Dr.Snehalatha Elangovan reported in 2022 SCC Online SC 1238
Ratishbhai D Ramani V/s State of Gujarat and Ors. Reported in 2015(1) GLR 848
The main legal point established in the judgment is the requirement to join all necessary parties as accused under the provisions of the Negotiable Instrument Act, and the vicarious liability of comp....
Partners of a firm are jointly and severally liable for cheque dishonor under the Negotiable Instruments Act, irrespective of whether a partner has formally resigned, as long as they were part of the....
(1) Dishonour of cheque – Offence by company – For fastening criminal liability, there is no legal requirement for complainant to show that accused partner of firm was aware about each and every tran....
Prosecution against a partner of a partnership firm under Section 138 of the N.I. Act is not maintainable without including the firm as an accused, affirming the principle of vicarious liability.
The main legal point established in the judgment is that disputed questions of facts and alleged financial fraud require a full-fledged trial and cannot be decided at the stage of quashing the compla....
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