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2022 Supreme(Mad) 639
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. Nirmal Kumar, J.
Tough Bags (A Parnership Concern), Madurai & Others – Petitioners
Versus
M/s. Vaaman Capital, Coimbatore, represented by its Managing Partner, P. Karthik – Respondent
CRL. O.P.No.28648 of 2018 & CRL MP. Nos. 16668 of 2018, 4433 of 2019
Decided On : 08-07-2022
For the Petitioners:S. Subbiah, Senior Counsel for M/s. Elizabath Rani, Advocate.
For the Respondent:R1, K.G. Senthil Kumar, Advocate.
The legal point established in the judgment is that mandate holders cannot be held responsible for non-payment under the Negotiable Instruments Act, and separate causes of action should not be clubbed together in a single complaint.
Headnote:
Negotiable Instruments Act - Quashing of Proceedings - Section 138, Section 142 - Summary
Fact of the Case:
The petitioners sought to quash the proceedings in a case where they were accused of issuing cheques with insufficient funds. The petitioners argued that the complaint lacked particulars and failed to establish the accused's active involvement in the firm. They also contended that the cheques created separate causes of action and should not be clubbed together.
Finding of the Court:
The court found that the complaint did not meet the necessary requirements under the Negotiable Instruments Act. It held that the mandate holder could not be held responsible for non-payment and that clubbing the separate causes of action into one complaint was improper.
Issues: The issues revolved around the sufficiency of the complaint, the involvement of the accused in the firm, and the clubbing of separate causes of action.
Ratio Decidendi: The court's decision was based on the interpretation of the roles of mandate holders under the Negotiable Instruments Act and the impropriety of clubbing separate causes of action into a single complaint.
Final Decision: The Criminal Original Petition was allowed, and the proceedings against all the accused were quashed.
JUDGMENT :
(Prayer: Criminal Original Petitions filed under Section 482 of the Code of Criminal Procedure, to call for the records relating to the proceedings in C.C.No.963 of 2018, now pending on the file of the Fast Track Magistrate No.II of Coimbatore, and to quash the same, insofar as the petitioners are concerned.)
1. This Criminal Original Petition is filed to quash the proceedings in C.C.No.963 of 2018, pending on the file of the Fast Track Magistrate No.II, Coimbatore, insofar as the petitioners are concerned.
2. The 1st petitioner/A1is the partnership concern; 2nd and 3rd petitioners / A2 & A3 are the partners of Accused No.1 and the 4th petitioner/A4 is the mother of A2 and A3.
3. The gist of the case is that Accused Nos.2 and 3 taken a loan of Rs.50,00,000/- from the complainant during January 2018. Out of the said loan amount, a sum of Rs.29,00,000/- due and outstanding to them. After repeated request, A2, as power of attorney holder of A1 Company, issued a cheque, drawn on Union Bank, Madurai Main Branch, bearing No.50517, dated 25.05.2018, for a sum of Rs.19,00,000/-. A4 issued a cheque, drawn on State Bank of India, Pasumalai, Madurai, bearing No.942066, dated 25.05.2018, for the balance of Rs.10,00,000/-. On 28.05.2018, when the cheques presented for payment in Kotak Mahendra Bank Ltd, R.S.Puram, the said cheques returned with an endorsement, “Insufficient Funds”. Hence, the complaint.
4. For the sake of convenience and clarity, the petitioners and the respondent are referred to their original rank as in the complaint.
5. Mr. S.Subbiah, the learned Senior Counsel appearing for the petitioner would submit that the complainant has proceeded on a premise that A1 is the partnership Firm, A2 and A3 are its partners and A4 is the mother of A2 and A3. In discharge of their earlier loan availed by A2 and A3, during the month of January 2018, the cheque in question has been issued during May 2018. The complaint is bereft of particulars. Further, the complainant admits that the second accused issued the cheque, as power of attorney holder of A1 Firm. There is no averments to show how the accused as partners actively involved in the day-to-day affairs of the Firm. There is no averments to attract Section 142 of the Negotiable Instruments Act.
6. The learned Senior Counsel contended that that A2 signed as mandate holder for A1. A4 / mother of A2 and A3 issued another cheque in her individual capacity. Thus, clubbing the two cheques of separate cause of action projecting as single cause of action and proceeding against the accused is not proper. It is further contended that on bare perusal of the cheques in question, it is seen that the Cheque bearing No.501757, drawn on Union Bank of India, Madurai Main Branch, dated 25.05.2018, signed by A2, as power of attorney holder. Likewise, the Cheque bearing No.942066, drawn on State Bank of India, Pasumalai, Madurai, dated 25.05.2018, signed by A4, in her individual capacity. The statutory requirement of putting the accused on notice to hold them vicariously liable for the liability of A1 Firm not followed. Thus, the requirement under Sections 138 and 142 of the Negotiable Instruments Act not followed. Further, perusal of the Registration Certificate produced for GST registration as well as Certificate of Registration issued by the Commercial Tax Department, Government of Tamil Nadu, it is seen that A1 Firm is a proprietorship Firm and A4 is its proprietrix .
7. Thus, the complaint lodged against the accused on the premise that A1 is a Firm represented by its partners A2 and A3 is totally incorrect and case cannot be proceeded against A1 to A3. Further, this Court time and again held that mandate holder alone cannot be proceeded in the absence of principle being arrayed as an accused. Likewise, A4 given the cheque in her individual capacity. Both the cheques create different cause of action. Both cause of a cannot be clubbed and proceeded. A1 to A3 cannot be proceeded in a single case. N
