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HIGH COURT OF BOMBAY
ROHIT B. DEO, J
Bharuka Trading Company, Risod, Through its Proprietor Durgabai Kachrulal Agrawal – Appellant
Versus
M/s. Hanuman Dal Industries Pvt. Ltd. – Respondent
CRIMINAL WRIT PETITION NO.620 OF 2020
For the Appellants/Petitioners: Mr. Palash K. Mohta
For the Respondents: Mr. M. Anilkumar, Mr. N.S. Rao
Prosecution for cheque dishonour requires proper notice to the drawer; failure to serve the partnership firm invalidates subsequent criminal proceedings.
Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138 and 142 - Issuance of cheques by a partnership firm - Criminal proceedings against a private limited company and its directors without issuance of statutory notice to the firm are invalid. (Paras 20, 24)
(B) Jurisdictional Error - The court maintained that prosecution against directors of a company requires the company to be made a party to the complaint.
Facts of the case:
The complainant, engaged in the wholesale trade, alleged that the partnership firm issued cheques that were dishonoured. Statutory notice was issued to the company instead of the firm.
Findings of Court:
The court ruled that improper notice to the drawer invalidates the prosecution against the firm’s partners and the private limited company.
Issues: The primary issue addressed was the validity of the complaint against the private limited company for cheques issued by a partnership firm and the procedural requirement of statutory notice.
Ratio Decidendi: The statutory notice must be given to the actual drawer of the cheques, and failure to do so renders the complaint invalid against both the firm and its partners.
Result: The petition was dismissed.
| Table of Content |
|---|
| 1. overview of the complaint and parties' roles. (Para 4 , 5 , 6) |
| 2. details of dishonoured cheques and legal entities involved. (Para 9 , 10) |
| 3. contestation of legal standing regarding notice issuance. (Para 14 , 15 , 20) |
| 4. court's observations on statutory compliance and legal distinction. (Para 17 , 21 , 23) |
| 5. judicial reasoning on legal entities and notice requirements. (Para 18 , 19 , 22 , 24) |
2. Rule.
3. With consent, the petition is finally heard.
4. The petitioner, who shall be referred to as the complainant hereinafter, instituted Summary Criminal Case 187/2018 under Sections 138 read with Section 142 of the Negotiable Instruments Act, 1881 (Act for short) arraigning M/s. Hanuman Dal Industries Pvt. Ltd., Nagpur, Ramanarao Muslaji Naggaya Bolla, Tirupatirao Bolla and Vijayalaxmi Bolla as accused 1 to 4 respectively.
5. The complainant is a businessman engaged in wholesale trade in grain under the name and style “Bharuka Trading Company”.
6. It is averred in paragraph 1 of the complaint that the accused 2 to 4 carry on business under the name and style “M/s. Hanuman Dal Industries Pvt. Ltd.,”. It is further averred that “Hanuman Dal Industries” is a registered partnership firm and accused 2 to 4 are the partners of the said firm.
7. In the cause-title, while disclosing the address of the accused, the alternate address disclosed is “M/s. Hanuman Dal Industries”.
8. A conjoint reading of the cause-title and the averments in paragraph 1 would suggest that the complainant was separate and independent existence of “Hanuman Dal Industries” which is a firm. This has some significance since the learned Sessions Judge has quashed the order of issuance of process on the premise that the firm which issued the cheque is not arraigned as accused, which order of the learned Sessions Judge is impugned.
9. Revering to the averments in the complaint, paragraph 2 avers that accused 2 to 4 purchased grain for and on behalf of “M/s. Hanuman Dal Industries Pvt. Ltd.” and that an amount of Rs.54,57,747/- is due and payable as the price of the goods supplied by the complainant.
10. It is further averred in the complaint that accused 2 Ramanarao Muslaji Naggaya Bolla issued five cheques on behalf of the “Partners and Firms” which were dishonoured and that despite the receipt of the statutory notice the accused did not make the payment covered by the dishonoured cheques.
11. Perusal of the statutory notice reveals that the notice is issued to “M/s. Hanuman Dal Industries Pvt. Ltd.” and the accused 2 to 4. The statutory notice refers to “M/s. Hanuman Dal Industries Pvt. Ltd., Nagpur” as a registered partnership firm and to accused 2 to 4 as the partners.
12. The learned Judicial Magistrate First Class, Risod was pleased to issue process under Section 138 of the Act, vide order dated 30.10.2018.
13. The respondents herein – accused preferred revision under Section 397 of the Code of Criminal Procedure, 1973 (Code) challenging the order of issuance of process.
14. The accused contended that the dishonoured cheques were issued by M/s. Hanuman Dal Industries through its partner Ramanarao Bolla and not by the company “M/s. Hanuman Dal Industries Pvt. Ltd. The extension of the contention is that the company “M/s. Hanuman Dal Industries Pvt. Ltd.” and its Directors are unnecessarily implicated.
15. The memo of revision further contends that although the cheque was issued by a partnership firm, the firm was not issued the statutory notice. In paragraph 5 of the memo of revision the constitution of the partnership firm and the company is disclosed.
16. In sum and substance, the contention in the memo of revision is that the learned Magistrate committed a jurisdictional error in taking cognizance of the offence.
17. By the impugned judgment the learned Additional Sessions Judge, Washim was pleased to allow the revision and quash the order of issuance of process.
18. The learned Sessions Judge noted that the dishonoured cheques are issued by the partners
