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2013 Supreme(UK) 670
THE HIGH COURT OF UTTARAKHAND AT NAINITAL
U.C. Dhyani, J.
Arun Bansal - Applicant
Versus
Rajeshwari Joshi - Respondent
Criminal Misc. Application (C-482) No. 12 of 2009
Decided On : August 29, 2013
Advocate Appeared:
Mr. Pawan Mishra, Advocate for the applicant
Mr. K.S. Verma, Advocate for the respondent
The central legal point established is the interpretation of 'company' under Section 141 of the Negotiable Instruments Act to include a firm, leading to the requirement for the partnership firm to be included as a party in the criminal complaint.
Headnote:
Section 138 of the Negotiable Instruments Act - Quashing of criminal proceedings - Partnership firm not arrayed as party - Section 141 of the Act provides for offences by companies - Interpretation of 'company' to include a firm - Rulings supporting the inclusion of partnership firm as a party - Quashing of proceedings allowed under Section 482 of Cr. P.C.
Fact of the Case:
The applicant sought to quash the order and proceedings of a criminal case under Section 138 of the Negotiable Instruments Act. The cheque in question was issued by partners of a firm, and the applicant was one of the signatories. However, the other partner and the firm were not accused in the complaint.
Finding of the Court:
The court allowed the application under Section 482 of Cr. P.C. and quashed the order and proceedings, stating that the partnership firm should have been included as a party in accordance with Section 141 of the Act.
Issues: The main issue was the non-inclusion of the partnership firm as a party in the criminal complaint under Section 138 of the Negotiable Instruments Act.
Ratio Decidendi: The court interpreted 'company' under Section 141 of the Act to include a firm, based on previous rulings, and allowed the quashing of proceedings under Section 482 of Cr. P.C.
Final Decision: The court quashed the order and proceedings of the criminal case, allowing the complainant to initiate fresh proceedings against the partners of the firm and the firm itself.
U.C. Dhyani, J.
By way of present application / petition, moved under Section 482 of Cr. P.C., the applicant seeks to quash the order dated 07.07.2008 as well as the proceedings of criminal case no. 793 of 2008, Smt. Rajeshwari Joshi vs Arun Bansal, under Section 138 of the Negotiable Instruments Act, pending in the court of Special Judicial Magistrate I, Dehradun.
2) A criminal complaint case was filed by the respondent against the applicant under Section 138 of the Negotiable Instruments Act, 1881 in the Court of Special Judicial Magistrate I, Dehradun. On the basis of statements under Sections 200, 202 of Cr. P.C. and the documents, learned Special Judicial Magistrate summoned the accused to face the trial in respect of offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as ‘the Act’ for brevity), vide order dated 07.07.2008. Aggrieved against the said order, present application under Section 482 of Cr. P.C. was moved by the applicant.
3) The cheque was issued in favour of the respondent on 17.02.2008 by two partners of the firm, namely, ACL Capital Plus. One of the signatory of the cheque was the applicant Arun Bansal. The other partner of the firm was not arrayed as party in the criminal complaint.
4) From a perusal of the cheque it is clear that the cheque was issued by the applicant in the capacity of partner of a firm. As said above, the other partner was also a signatory to the cheque, but neither the other partner, nor the firm was arrayed as accused by the complainant. Section 141 of the Act provides for offences by companies. Sub-Section (1) of Section 141 is being reproduced here-in-below for convenience:
“141. Offences by companies –(1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.
Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the state Government, as the case may be, he shall not be liable for prosecution under this chapter.
(2) ………………………………………..
Explanation –For the purposes of this section, -
(a) “company” means any body corporate and includes a firm or other association of individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.”
5) The Explanation appended to Section 141 of the Act says that, for the purposes of this Section, “company” means any body corporate, and includes a firm or other association of individuals. It was held in Monaben Ketanbhai Shah vs State of Gujarat, (2004) 7 SCC 15, that for the purposes of Section 141, a firm comes within the ambit of a company. Thus, in view of Section 141 of the Act, the partnership firm also ought to have been arrayed as party, which was not followed in the instant case.
6) The aforesaid proposition of law is fortified by the rulings of Everest Advertising (P) Ltd. vs State, Govt. of NCT of Delhi and others, (2007) 5 SCC 54; Aneeta Hada vs Godfather Travels and Tours Private Limited, (2012) 5 SCC 661 and S.M.S. Pharmaceuticals Ltd. vs Neeta Bhalla and another, (2005) 8 SCC 89.
7) As a consequences thereof, application under Section 482 of Cr. P.C. is allowed. Order dated 07.07.2008 as well as the proceedings of criminal case no. 793 of 2008, Smt. Rajeshwari Joshi vs Arun Bansal, under Section 138 of the Negotiable Instruments Act, pendi
