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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE A. PACKIARAJ
Sulochana & Others - Appellant
Versus
M.Kulasekaran - Respondents
Criminal Revision Petition No.1027 of 2001
Decided On : 24 January 2003
Negotiable Instruments Act - Partners' Liability - Section 138 - Section 141 - Section 141(2) - Section 482 Cr.P.C - Quashing of Proceedings
Fact of the Case:
The accused, wives of the partners of a firm, filed a petition to drop proceedings against them, claiming they were not partners and had no involvement in the firm's affairs. The complainant alleged that the accused were partners and responsible for the firm's conduct, based on which the complaint was filed under Section 138 of the Negotiable Instruments Act.
Finding of the Court:
The court found that the complainant failed to provide substantive evidence to support the claim that the accused were partners, and the mere allegation was insufficient for launching prosecution. The court also noted that the complainant did not produce the partnership deed as claimed, and the prosecution lacked materials to establish the accused's liability. The court quashed the proceedings against the accused, ruling that the prosecution was not maintainable.
Issues: The issues involved whether the accused were partners of the firm and whether the prosecution under Section 138 of the Act was maintainable based on the allegations.
Ratio Decidendi: The court held that the complainant's mere allegation of the accused being partners was insufficient to launch prosecution and that substantive evidence was required to establish liability. The court also ruled that the prosecution lacked materials to support the claim and quashed the proceedings against the accused.
Final Decision: The court quashed the proceedings against the accused, ruling that the prosecution was not maintainable.
This revision has been filed by accused 3, 5, 7, 9 and 10 in CC No.91 of 2001 on the file of the Judicial Magistrate No.1, Namakkal, against the order made in Crl.M.P.No.1865 of 2001 in CC No.91 of 2001 on the file of the Judicial Magistrate No.1, Namakkal, dismissing the petition filed by the petitioners to drop proceedings against them.
2.The gist of the complaint is as follows :-
a)The first accused is Kongu Spinning Mills, represented by its Managing Partner, C.Rajendran. The second accused is C.Rajendran, Managing Partner, Kongu Spinning Mills, while the other accused 3 to 11 are alleged to be the partners, who are in-charge of the conduct of the business and responsible for the day to day affairs of the firm.
b)The further case of the complainant is that the accused had borrowed money on behalf of the above said firm, from the complainant on various dates and in order to discharge the above said debt, the second accused, on behalf of the first accused and other accused, had issued a cheque drawn on South Indian Bank Ltd. for Rs.10 lakhs dated 01.11.2000 and the said cheque was signed by the second accused as Managing Partner of the above said firm. The said cheque was presented in the State Bank of India, Namakkal on 29.12.2000 but the same as returned on 03.01.2001, with endorsement, "insufficiency of funds". The complainant received the intimation on 12.01.2001 and on 15.01.2001, he issued a notice, as contemplated under the Negotiable Instruments Act to the accused and it is said that the accused 3, 4, 5, 6 and 10 have received the notice on various dates i.e. on 20.01.2001, 18.01.2001, 18.01.2001 and 24.01.2001, while accused 1, 2, 7, 8, 9 and 11 have refused to receive the notice, even though intimation was given to them. It is further submitted that a reply has been issued on behalf of the accused, containing false averments. Since money has not been paid within the mandatory period, the present complaint has been filed against the accused.
c)Accused 1 and 2 have not preferred any application for dropping the proceedings. But the accused 4, 6, 8 and 11 have filed a petition in Crl.M.P. No.1864 of 2001 before the Judicial Magistrate No.1, Namakkal, to drop the proceedings and the same was dismissed Hence, they have filed revision in Crl.R.C. No.1026 of 2001, before this court, while the accused 3, 5, 7, 9 and 10 had filed Crl.M.P. No.1865 of 2001 before the said Magistrate, for the same relief and it was also dismissed, against which the present revision is filed.
3.The point that has been raised by the petitioners is that the petitioners are not partners of the first accused firm, but are the wives of accused Nos.2, 4, 6, 8 respectively and they have nothing to do with the firm as such, and hence their implication in the case is mala fide and that the proceedings against them has to necessarily be dropped.
4.To substantiate the fact that they are not partners, the petitioners have produced 'Form-A' from the Office of the Registrar of Firms, which indicates that it is only accused Nos.2, 4, 6, 8, 11 and on Periyasami, who is not arrayed as accused, are partners and according to the learned counsel for the petitioners, a bald allegation has been made in the complaint which reads as follows:-
"The accused No.2 is the Managing Partner of the above said firm and the other accused are the partners of the above said firm. The accused firm is a spinning mills producing yarns of various kinds from cotton. The accused 2 to 11 are in-charge and conduct of the business and also responsible for the day to day affairs of the above said firm. The accused 2 to 11 are responsible for the commissions and omissions of the above said firm by virtue of partnership"
5.The sum and substance of the argument of the learned counsel for the petitioners is that there is no material in the entire complaint to substantiate the guilt of the petitioners and the mere allegation not supported with any materials is not enough to launch prosecu
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