THE HONOURABLE SRI JUSTICE E.V.VENUGOPAL CRIMINAL PETITION Nos.1848, 1854, 1888 & 1889 of 2021

COMMON ORDER:

These Criminal Petitions are filed by the petitioners to quash all further proceedings against the petitioners in C.C.Nos.42, 6, 7 and 8 of 2020 on the file of the learned III Special Magistrate, Manoranjan Complex, Nampally at Hyderabad.

2. The brief facts of the case are that a complaint has been filed under Sections 138 and 141 of the Negotiable Instruments Act (for short “N.I. Act”), 1881 against accused Nos.1, 2 and 3 for dishonor of cheques for their alleged role in the conduct of the business of the Company. While the proceedings in the said C.C.Nos.42, 6, 7 and 8 of 2020 are pending before the learned trial court, the present Criminal Petitions have been filed by the petitioners herein – accused Nos.2 and 3 seeking to quash the proceedings against them, invoking the inherent jurisdiction of this Court under Section 482 Cr.P.C.

3. Heard the learned counsel for the petitioners and the learned Assistant Public Prosecutor and the learned counsel for the un-official respondents.

4. Learned counsel for the petitioners would submit that the petitioner No.1 had issued four cheques bearing Nos.148561, 148562, 148563 and 148565 of Rs.50,00,000/- each. However, all the cheques were dishonored for the reason “insufficient funds” upon presentation. Consequently, the de facto complainant initiated proceedings under Section 138 of the NI Act against all the accused, namely Accused Nos.1, 2 and 3, in C.C.Nos.6, 7, 8 and 42 of 2020. The petitioners herein have been arrayed as Accused Nos.2 and 3, alongside Accused No.1, who is the husband of the second petitioner (Accused No.3). Admittedly, the second petitioner has been arrayed as accused No.3 in the C.C.Nos.6, 7, 8 and 42 of 2020. The disputes arise between the accused Nos.1 to 3 and the complainant, relating to a business understanding between the two entities M/s.Ammaar Properties (complainant’s company), and M/s.Park Square Properties Private Limited, in which the accused No.1 and the accused No.3 are directors. The complainant was also inducted as a director. On the assurance of the first accused, the complainant invested a substantial sum of money into a real estate project. Subsequently, the accused No.1 incorporatted M/s.Park Square Properties Private Limited, and the complainant was inducted as a director, along with A3. The business operations commenced, however, due to subsequent disputes between the complainant and the accused No.1, issues arose. A resolution dated 24.10.2016 was passed by the Board of Directors, acknowledging the services rendered by the complainant. The resolution recorded the company’s appreciation and gratitude, and committed to refund the investment made by the complainant within 10 months, along with profits. The said resolution was reflected in Form-I as part of official records.

5. In furtherance of the above resolution, four cheques bearing Nos. 148561, 148562, 148563 and 148565 of Rs.50,00,000/- each were issued by Accused No.1, amounting to a total sum of Rs.2.00 Crores. These cheques were dishonored for the reason “insufficient funds” upon presentation. Consequently, the complainant filed complaints under Section 138 of the NI Act before the trial court, which were registered as C.C.Nos.6, 7, 8 and 42 of 2020.

6. However, the learned counsel for the petitioners would submit that arraying the petitioners as accused Nos.2 and 3 in the said criminal complaints before the trial court is misconceived, as the law does not recognize liability of persons who are not party to the transaction. The cheques in question were issued solely by accused No.1 to the complainant, and the said transactions were exclusively between them. The firm involved is a firm entity, and the petitioners, who are accused Nos.2 and 3, have no involvement in the said transactions. They are not signatories to the cheques in question. Therefore, proceedings against them under S