KERALA HIGH COURT
K. Harilal, J.
Susan Zachariah - Petitioner
Versus
Muthoot Capital Services Ltd. - Respondent
Crl. M.C. No. 3266 of 2006
Decided On : 14-02-2012
K. Harilal, J.
The petitioners are the accused Nos. 3 to 5 in C.C. No. 2737 of 2003 on the file of Judicial First Class Magistrate Court I, Kochi. The first respondent herein is the complainant in the above case. The case of the complainant is that the first accused is a partnership firm and 2nd accused is its Managing Partner and accused Nos. 3 to 5 are partners. The accused availed a hire purchase loan from the complainant company and as part payment towards the above loan, 1st accused issued a cheque dated 31.5.2003 for Rs.1,74,000/- drawn in favour of Canara Bank, Aluva Branch. But the above cheque was dishonoured with an endorsement `exceeds arrangement'. Thereafter legal notice was issued, but not paid the amount and thereby committed offence under Section 138 of the N.I. Act. True copy of the complaint is marked as Annexure A1.
2. This Crl. M.C is filed to quash Annexure A1 complaint on the grounds, inter alia, that there is no statutory compliance under Section 138(b) and the averments in the petition are not in conformity with Section 141 of the N.I. Act. Sri. Shaijan Joseph, the learned counsel for the petitioner mainly submitted two points in support of the grounds pleaded.
i. The first respondent/complainant failed to comply the mandatory requirements under Section 138(b) of the N.I. Act, before filing the complaint. No notice of demand under Section 138(b) had been served against the petitioners 1 to 3 as partners, prior to the lodging of the complaint. Therefore the complaint is not maintainable against the petitioners.
ii. There is no specific averments in the complaint that petitioners were in charge of and was responsible to the firm for the conduct of the business of the firm as well as the firm. The petitioners 1 and 2 are not partners of the 1st accused firm and it is evident from Annexure A2 partnership deed. The third petitioner is only a sleeping partner and he has no role in the day to day administration of the firm as he was excluded from such liabilities by clause 6 of the partnership deed.
3. Per contra, Sri. Millu Dandapani, the counsel appearing for the first respondent stiffly opposed the said arguments. The learned counsel fairly admitted that no notice has been issued against these partners but submits that notice has been issued against first accused firm and second accused Managing Partner and it is sufficient to proceed against the petitioners also. So, the non-service of notice against petitioners 1 to 3 will not affect the maintainability of the complaint. According to him, the averment that 1st accused has issued cheque with `consent' and 'connivance' of all other accused makes the allegation against others in conformity with Section 141(1) of the N.I. Act.
4. I have given my anxious consideration to the rival submissions made by the counsel for the petitioners and respondent. The first question to be considered is whether prosecution under Section 138 read with Section 141 of the N.I. Act against the partner of a firm requires separate notice under Section 138(b), prior to the lodging of complaint? This question has been decided divergently by the Division Benches of two High Courts. In Dilipkumar Jaiswal v. Debapriya Banerji, (1992(2) KLT 35 (Cal.)), a Division Bench of Calcutta High Court held that notice issued to the company is sufficient and separate notice to the directors of the company is not required to be served, prior to the filing of the complaint. Later in Raman v. Sharun Chemicals, (2007 (1) KLT 106 (Mad.) a Division Bench of Madras High Court in a reference held that individual notice under Section 138(b) is required against all partners, before prosecuting them. Though that Division Bench has considered so many decisions (1992(2) KLT 35 (Cal.)) was not brought to the notice of the above Bench. But in between these two decisions, in Target Overseas Exports (P) Ltd. v. Iqbal, (2005 (2) KLT 45) the learned Single Judge of this Court held that "a person facing indictment unde
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