The main legal point established in the judgment is that retirement from a partnership firm subsequent to the issuance of a cheque does not exonerate the partners who had given the cheque when they were at the helm of affairs of the company on the date of presentation of the cheque.

JUDGMENT

(Prayer: Criminal Appeal is filed under Section 378 of Criminal Procedure Code, to set aside the order of acquittal dated 18.03.2014 made in C.A.No.48 of 2012 on the file of the Learned Additional District and Sessions Court, Namakkal (Full Additional Charge) reversal of the conviction imposed in the judgment dated 19.10.2014 made in STC No.49 of 2012 on the file of the Learned Judicial Magistrate, Fast Track Court (at Magisterial level), Tiruchengode by allowing the Criminal Appeal.)

1. Acquittal by the Lower Appellate Court by reversing the judgment of conviction passed by the Trial Court, is the subject matter of this Appeal.

2. The Private Complaint filed under Section 138 of Negotiable Instrument Act, reads as below:-

On 11/08/2006, the 2nd and 3rd accused as Managing Partner and Partner respectively, of first accused M/s “Sri Kumaran & Company”, a Partnership Firm borrowed Rs.5 Lakhs from the complainant. They promised to repay the money within 2 months with 18% interest. On the same day, A2 gave a post-dated cheque for Rs.5,00,000/- duly signed by him on behalf of the first accused partnership firm drawn on Karur Vysya Bank Ltd, Tiruchengode Branch. The complainant presented the cheque for collection on 27/11/2006 through his Banker Indian Overseas Bank, Tiruchengode Branch. The said cheque returned on the next day with an endorsement “Payment Stopped by the drawer”. Hence, after issuing statutory notice to the accused on 22/12/2006, the complaint was filed.

3. To prove his case, 3 witnesses and 12 Exhibits marked. On the side of the defence, 4 witnesses and 8 Exhibits were marked.

4. The Judicial Magistrate, Fast Track Court, Tiruchengode in S.T.C.No.49/2012 held the accused 2 and 3 are guilty of offence under Section 138 of Negotiable Instrument Act and convicted them to undergo 3 months S.I and to pay the cheque amount Rs.5 lakhs as compensation. On appeal by the accused, the Additional District and Sessions Judge, Namakkal in C.A.No.48/2012 reversed the finding of the trial Court and acquitted them.

5. The Judgement of Acquittal, is challenged in this Appeal.

6. The Learned Counsel appearing for the Appellant/complainant submitted that, the Lower Appellate court erred in reversing the well considered judgment of the trial Court. He also submitted that the accused admit the execution of the cheque and the signature. They failed to rebut the statutory presumption through reliable evidence. Without any reason, the Lower Appellate Court has disbelieved the evidence of P.W-1. On the date of borrowing and on the date of issuing the cheque, A-2 and A-3 were partners of the M/s.“Sri Kumaran & Company”. Subsequent to issuance of cheque, they have created record as if, they have retired from partnership Firm prior to institution of the complaint. The Trial Court rightly found that the retirement from the partnership Firm will not exonerate the guilt committed when they were partners. Whereas, the Lower Appellate Court erred in reversing the said finding. Further, for not disclosing the loan transaction in the Income Tax return, the Lower Appellate Court disbelieved the case of the complainant.

7. The respondents/accused through their Counsel, contended that, the Partnership Firm was initially had A2, A3 and one Thiru.Loganathan as its partners. The accounts of the Firm was maintained by Thiru.Senthil Raja and Thiru.Elango. Both of them are sons of Thiru.Sellamuthu. On demise of Thiru.Loganathan, the partnership deed was reconstituted with A2 and A3 alone. Later, Thiru.Sellamuthu and Tmt.Mohanasundari W/o.Senthilraja were inducted into the partnership and subsequently, A2 and A3 retired from the partnership with effect from 04/12/2006. When A2, A3 and one Loganathan were carrying on business in the name of M/s.“Sri Kumaran & Co.,” availed Thiru.Loganathan and Thiru.Senthil Raja for the personal loan from the complainant, the subject cheque was given. Later, Thiru.Loganathan died within one week of his marriage. He had financia