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2023 Supreme(Online)(P&H) 18858

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Jasjit Singh Bedi, J
Ravi Kumar Bhateja – Appellant
Versus
S.S. Traders – Respondent
CRM-M-57179-2023



Advocates:
For the Appellants/Petitioners: Sandeep Arora
For the Respondents: Deepak Gupta

A former partner who has resigned and duly notified statutory authorities is not vicariously liable for the dishonour of a cheque issued after their resignation, especially when the complaint contains only omnibus allegations and lacks specific averments of their involvement in the offence.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 read with Section 141 - Quashing of complaint - Petitioner resigned as partner of the firm long before the issuance and dishonor of the cheque - Evidence of dissolution of partnership and communication to statutory authorities provided - Held, where an accused has ceased to be a partner and the fact is duly communicated, and the complaint contains only omnibus allegations without specific details of the role in the day-to-day affairs, the proceedings against such person are liable to be quashed to prevent abuse of process of the Court. (Paras 10, 11, 12, 13)

Facts of the case:
The petitioners sought the quashing of a complaint under Section 138 of the Negotiable Instruments Act, 1881, alleging they were still partners in the firm 'M/s Durga Rice Mills'. The petitioners contended they had resigned and dissolved the partnership in 2020, providing documentary evidence of the dissolution deed and communication to the Registrar of Firms, while the complainant maintained that the petitioners were in-charge and responsible for the firm's business at the time of the cheque's issuance in 2022.

Findings of Court:
The court observed that the petitioners had provided unimpeachable, uncontroverted evidence (dissolution deed and records filed with the Registrar of Firms) that they were no longer partners when the cheque was issued. As the allegations in the complaint were merely omnibus and failed to establish any specific role or consent of the petitioners in the issuance of the cheque, the proceedings were quashed as an abuse of process.

Issues: Whether a former partner, who has resigned and notified statutory authorities, can be prosecuted under Section 138 of the Negotiable Instruments Act, 1881, based on generic allegations of being in charge of the firm's business.

Ratio Decidendi: Criminal liability under Section 138 read with Section 141 of the Act requires specific averments of how a director or partner was in charge of the business at the time of the offence. If a person resigns prior to the offence and provides public/statutory record of such resignation, they cannot be held vicariously liable based on omnibus allegations in a complaint.

Result: Petition allowed; complaint and summoning order quashed qua the petitioners.

Table of Content
1. summary of facts leading to the section 482 petition and the contested cheque dishonour complaint. (Para 1 , 2 , 3 , 4 , 5)
2. contention regarding the effect of resignation from a partnership on vicarious criminal liability. (Para 6 , 7)
3. analysis of legal precedents on resignation and the necessity of specific averments in complaints. (Para 8 , 9 , 10)
4. court's finding that evidence of prior dissolution necessitates quashing the complaint against the petitioners. (Para 11 , 12 , 13 , 14 , 15)

JASJIT SINGH BEDI, J.

The prayer in the present petition under Section 482 Cr.P.C. is for quashing of the complaint No. NACT-30 of 2023 dated 18.01.2023 (Annexure P-1) titled as ‘S.S. Traders and another vs. M/s Durga Rice Mills and others’ under Section 138 of Negotiable Instruments Act, 1881, the summoning order dated 14.07.2023 (Annexure P-2) passed by Judicial Magistrate 1st Class, Faridkot, vide which petitioners have been summoned to face trial under Section 138 of the Act along with all consequential proceedings arising therefrom.

2. The brief facts of the case are that the accused namely Robin Batra the working partner/authorized signatory of the accused partnership concern M/s Durga Rice Mills of which accused Nos.3 to 5 (including petitioner Nos.1 and 2 who are accused Nos.4 and 5 in the complaint) are the other partners, issued a Cheque No.676846 dated 03.10.2022 for an amount of Rs.3 lakhs as part-payment in favour of the complainant’s firm M/s S.S. Traders.

3. The aforementioned cheque got dishonoured leading to the issuance of a legal notice. On non-payment of the amount, a complaint was filed under Section 138 r/w Section 141 of the Negotiable Instruments Act. The copy of the complaint dated 18.01.2023 is attached as Annexure P-1 to the petition.

4. Based on the preliminary evidence led, the Court of the Judicial Magistrate, 1st Class, Faridkot summoned all the accused to face trial vide order dated 14.07.2023. The copy of the summoning order dated 14.07.2023 is attached as Annexure P-2 to the petition.

5. The aforementioned complaint dated 18.01.2023 (Annexure P-1) and summoning order dated 14.07.2023 (Annexure P-2) are under challenge in the present petition.

6. The learned counsel for the petitioners contends that the petitioners were earlier, the partners in the accused firm M/s Durga Rice Mills which was constituted under a Partnership Deed dated 25.09.2017. However, subsequently, the partnership was dissolved on 21.06.2020 and a written dissolution deed was prepared between the petitioners and the other partner namely Robin Batra in which it was duly mentioned that Robin Batra along with the petitioners who were carrying on the business of purchase, sale and husking of paddy and rice in the name and style of M/s Durga Rice Mills at Fazilka were exiting from the partnership and therefore, the dissolution deed dated 22.06.2020 duly signed by the continuing partner Robin Batra as well as retiring partners Ravi Kumar and Surinder Kumar (petitioners) was prepared. A written information of the dissolution was also sent to the Register of Firms maintained under Section 59 of the Indian Partnership Act. After the dissolution of the partnership between the petitioners and Robin Batra, Robin Batra entered into a partnership deed with Mona Rani on 22.06.2020. The cheque is dated 03.10.2022 and was signed by Robin Batra on behalf of the accused No.1-M/s Durga Rice Mills. The petitioners had duly responded to the legal notice apprising the complainant that they had got no concern with M/s Durga Rice Mills having exited from the partnership. Despite the said fact having been brought to the notice of the complainant, the petitioners were still arrayed as accused in the complaint and they have been summoned to face trial. He contends that the Directors/Partners who cease to remain so which fact has been duly communicated to the statutory authorities and against whom in the complaint no specific allegations have b

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