BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
K. MURALI SHANKAR, J.
M. Buvaneswari & Another - Appellant
Versus
S. Dharmaraj (died) & Another - Respondent
Crl. O.P. (MD) Nos. 9784, 9787 & 9788 of 2019 & Crl. M.P. (MD) Nos. 6211, 6212, 6213, 6214, 6215 & 6216 of 2019
Decided On : 16-08-2022
Section 138 of the Negotiable Instruments Act - Quashing of Criminal Proceedings - [NEGOTIABLE INSTRUMENTS ACT] - [Section 138, Section 141]
Fact of the Case:
The petitioner, a teacher, was accused of being a partner in a firm and issuing cheques that were dishonored. The complainant alleged that the petitioner was involved in the business and was aware of the loan obtained and the issuance of the cheques. The petitioner denied any involvement in the business and presented evidence to support her claim.
Finding of the Court:
The court found that there was no prima facie evidence to show that the petitioner was a partner in the firm or involved in its day-to-day affairs. The court also cited legal precedents to establish that the drawer of the cheque alone can be prosecuted for the offence under Section 138 of the Negotiable Instruments Act.
Issues: The main issue was whether the petitioner could be held liable under Section 138 of the Negotiable Instruments Act as a partner in the firm and whether there was sufficient evidence to support the allegations.
Ratio Decidendi: The court relied on legal principles to establish that vicarious liability under Section 141 of the Negotiable Instruments Act can only be imposed when the partner is in overall control of the day-to-day business of the firm. The court also emphasized that the drawer of the cheque alone can be prosecuted for the offence under Section 138 of the Act.
Final Decision: The Criminal Original Petitions were allowed, and the proceedings against the petitioner were quashed. The court directed the trial court to expedite the disposal of the cases.
JUDGMENT
(Prayer: Criminal Original Petition has been filed under Section 482 Cr.P.C, to call for the records pertaining in S.T.C.No.1581 of 2017, filed by the respondent herein before the learned Judicial Magistrate, Tiruchendur and quash the same in respect to the petitioner herein.
Criminal Original Petition has been filed under Section 482 Cr.P.C, to call for the records pertaining in S.T.C.No.1169 of 2017, filed by the respondent herein before the learned Judicial Magistrate, Tiruchendur and quash the same in respect to the petitioner herein.
Criminal Original Petition has been filed under Section 482 Cr.P.C, to call for the records pertaining in S.T.C.No.1739 of 2017, filed by the respondent herein before the learned Judicial Magistrate, Tiruchendur and quash the same in respect to the petitioner herein.)
Common Order
1. These Criminal Original Petitions have been filed, invoking Section 482 Cr.P.C., seeking orders to call for the records pertaining to the cases in S.T.C.Nos.1581, 1739 and 1169 of 2017, pending on the file of the Judicial Magistrate, Tiruchendur and quash the same as against the petitioner.
2. The petitioner is the third accused in all the three S.T.C., cases pending on the file of the Judicial Magistrate Court, Tiruchendur. The original respondent in these Criminal Original Petitions has filed private complaints under Section 200 Cr.P.C., against three persons including the petitioner for the alleged offence under Section 138 r/w 142 of the Negotiable Instruments Act. During the pendency of the above Criminal Original Petitions, the original respondent, who has filed the above private complaints, had died and hence, the present respondent Ganapathy Raja who is the son of the deceased original complainant got himself impleaded as the only respondent in all the above petitions.
3. The case of the complainant is that the first accused is a partnership firm, that the accused 2 and 3 are its partners, that there existed good relationship between the families of the complainant and the accused, that the accused 2 and 3 have borrowed a sum of Rs.5,50,000/- on 30.10.2016 to meet out their urgent business purposes in the presence of the complainant's son Ganapathy Raja, that in order to repay the loan amount, the accused 2 and 3 and on behalf of the first accused and through the second accused, who is the authorized signatory, have issued five cheques for Rs.1,00,000/- each and sixth cheque for Rs.50,000/- drawn on Tamil Nadu Mercantile Bank, Athur Branch in favour of the complainant, that the cheques were presented for collection, but the same were returned for want of sufficient funds in the bank account of the accused, that the complainant has sent a legal notice dated 06.04.2017, demanding payment of the amounts covered by the cheque, that the accused having received the legal notice have neither sent any reply nor made any payment, that the second accused has sent a notice dated 07.02.2017 alleging that he had received only Rs.1,30,000/- as loan and that therefore, the complainant was constrained to lodge the above complaints.
4. The petitioner's case is that she is working as a Teacher in the Girls Higher Secondary School at Eral, that the first accused is a proprietorship concern and not a partnership firm as alleged by the complainant, that the second accused A.R.R.Muthuramalingam is her husband and the proprietor of the first accused concern and that the petitioner has no connection whatsoever with the business of the first accused concern, nor with the issuance of the alleged cheques.
5. It is pertinent to note that the complainant in the complaint has arrayed the first accused M/s Vadivoo Agency as a partnership concern and the second accused A.R.R.Muthuramalingam as partner and authorized signatory and Tmt.M.Buvaneswari as partner of the first accused firm. As rightly contended by the learned Counsel for the petitioner, the complainant has not produced any prima facie material to show that the first accused i
Vicarious liability under Section 141 of the Negotiable Instruments Act can only be imposed when the partner is in overall control of the day-to-day business of the firm, and the drawer of the cheque....
Vicarious liability under Section 141 of the Negotiable Instruments Act requires the accused to be in overall control of the firm's business, and prosecution under Section 138 is limited to the drawe....
Clear and specific averments are necessary in criminal complaints under N.I. Act to hold individuals vicariously liable; mere association with a firm or vague allegations are insufficient.
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.
(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....
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