A further objection was raised by the learned counsel for the 2nd respondent that in the absence of a reply to the statutory notice issued under the Act, a presumption has to be drawn that the said cheque was issued on behalf of proprietary concern. It is true that the 2nd respondent issued notice to the petitioner by describing the petitioner as a sole proprietress of Sai Santosh Constructions. Though the notice was served on the petitioner, no reply was sent to the said notice. Merely because the petitioner was shown as a proprietress and that no reply was given by the petitioner, an adverse inference cannot be drawn against the petitioner when the documents filed along with the complaint and the Acknowledgment of Registration of Firms issued by the Registrar of firms, dated 19.11.2007 establish that Sri Sai Santhosh Constructions was represented as a partnership firm in the year 2007 itself. Therefore, there is no irregularity or illegality in petitioner issuing the cheque as an authorized signatory of the firm. When once it is established, that it is a partnership firm and the cheque was issued by the managing partner of a firm, arraying the firm as an accused is necessary. In view of the judgment of the Apex Court in Aneeta Hada's case, wherein a three judge Bench of the Apex Court, while overruling the view taken in Sheoratan Agarwal v. State of M.P.6, and clarifying judgment in Anil Hada v. Indian Acylic Ltd7, held that for maintaining a prosecution under Section 141 of the Act, arraying of a company as an accused is imperative and other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as stipulated in the provisions.
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Smt. Bommidipati Madha Vs. The State of Andhra Pradesh rep.by Publi
Court : Andhra Pradesh
Judge : HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR
Decided On : Oct-10-2013
: This Criminal Petition, under Section 482 of Criminal Procedure Code, 1973 (for short 'the Cr.P.C.'), is filed by the petitioner - accused who is proprietress of M/s. Sai Santhosh Constructions ( for short 'the firm'), seeking to quash the proceedings in C.C.No.170 of 2012 on the file of the Metropolitan Magistrate, Bheemunipatnam, Visakhapatnam district, initiated by the 2nd respondent - complainant who is proprietor of Vasundara Enterprises against the petitioner for an offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short 'the Act').
2. The allegations in the private complaint filed by the 2nd respondent are as under:- The petitioner approached the 2nd respondent, who is a wholesale dealer, for supply of steel and cement etc., on credit basis. The request of the petitioner was accepted and steel and cement worth of Rs.5,19,600/- was supplied to the petitioner from 11.09.2009 to 01.03.2010. It is alleged that the petitioner paid Rs.1,53,565/-(Rupees one lakh fifty three thousand five hundred and sixty three only) and the balance amount of Rs.3,66,035/-(Rupees three lakhs sixty six thousand and thirty five only) was still due. On repeated demands, the petitioner is alleged to have issued a cheque bearing No.000174, dated 10.11.2011 in favour of the 2nd respondent drawn on Union Bank of India, Chandram Palem, Madhurawada, Visakhapatnam in discharge of the said debt. The said cheque when presented was returned with an endorsement ".insufficient funds".. After complying with the statutory requirements, the present complaint came to be filed before the Court of Chief Metropolitan Magistrate, at Bheemunipatnam, Visakhapatnam district and the same was taken on file as C.C.No.170 of 2012.
3. Heard the learned counsel for the petitioner, the learned counsel for the 2nd respondent, learned Public Prosecutor for the 1st respondent and perused the material on record.
4. The only ground raised by the learned counsel for the petitioner is that the goods were supplied to a partnership firm and initiation of proceedings without making the firm as an accused is bad in law. In support of his contention, he placed reliance on the judgment of the Apex Court in Aneeta Hada v. Godfather Travels & Tours Private Limited1 5. On the other hand, the learned counsel for the 2nd respondent would submit that since the complainant is a proprietary concern, making the proprietary concern as an accused would not arise. His main argument appears to be that in the absence of any reply to a notice, issued by him, wherein the petitioner was portrayed as a sole proprietress of Sai Santosh Constructions, it cannot, now, be contended that it is a partnership firm. Since the issues involved herein are disputed questions of fact, he submits that the same have to be established during the course of trial.
6. Before examining the rival contentions, it is necessary to refer to the scope of interference by this Court under Section 482 of Cr.P.C. The law laid down by the apex Court in State of Haryana v. Bhajanlal2 which has been followed in several other judgments of Supreme Court is that interference is permissible :- (a) where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused; (b) where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code; (c) where the uncontroverted allegations made in the FIR or 'complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused; (d) where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code; (e) where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused; (f) where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party; (g) where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. In State of Karnataka v. L.Muniswamy3, the Apex Court held as under;- Considerations, justifying the exercise of inherent powers for securing the ends of justice vary from case to case and the a jurisdiction as a wholesome as the one conferred by Section 482 of Cr.P.C. ought not to be encased within the strait-jacket of a rigid formula.
7. In Sushil Suri v. Central Buearo of Investigation4, the Apex Court considered the scope and ambit of inherent jurisdiction of the High Court and made the following observations in para 16 of the report which is as under:- ".16. Section 482 Cr.P.C. itself envisages three circumstances under which the inherent jurisdiction may be exercised by the High Court, namely i) to give effect to an order under Cr.P.C.; (ii) to prevent an abuse of the process of Court; and (iii) to otherwise secure the ends of justice. It is trite that although the power possessed by the High Court under the said provision is very wide but it is not unbridled. It has to be exercised sparingly, carefully and cautiously, ex debito justitiae to do real and substantial justice for which alone the court exists. Nevertheless, it is neither feasible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction of the Court. Yet, in numerous cases, this Court has laid down certain broad principles which may be borne in mind while exercising jurisdiction under Section 482 Cr.P.C. Though it is emphasized that exercise of inherent powers would depend on the facts and circumstances of each case, but the common thread which runs through all the decisions on the subject is that the Court would be justified in invoking its inherent jurisdiction where the allegations made in the complaint or charge-sheet, as the case may be, taken at their face value and accepted in their entirety, do not constitute the offence alleged.".
8. Keeping in view the principles of law laid down by the Apex Court with regard to the scope and power of High Court under Section 482 of Cr.P.C., I proceed to deal with the matter.
9. Now the question that arise for determination is whether the petitioner is a proprietress of a firm or a managing partner of a partnership firm?.
10. Before proceeding further, it would be relevant to extract Section 138(c) of the Act which reads as under:- Provided that nothing contained in this Section shall apply unless:- (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. A reading of the said provision would disclose that nothing in the Section shall apply unless the drawer of the cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque within 15 days of the receipt of the said notice.
11. The material, which is filed along with the complaint, i.e. the cheque bearing No.000174, dated 10.11.2011 and the 69 bills would show that the cheque was issued by the petitioner in favour of the 2nd respondent drawn on Union Bank of India, Chandram Palem, Madhurawada, Visakhapatnam as an authorized signatory of Sai Santhosh Constructions and the 9 bills show purchase of the material by Sai Santhosh Constructions.
12. Therefore, the cheque in dispute, was issued by the petitioner as an authorized signatory of Sri Sai Santhosh Constructions. In order to substantiate the said plea namely, that the cheque was issued by the petitioner as a partner of the firm, the learned counsel for the petitioner mainly relied upon the original of acknowledgment of Registration of firm, wherein it is mentioned that the petitioner was running the business in the name of Sai Santhosh Constructions, Ratna Residency, P.M. Palem, Visakhapatnam and the same was entered in the Registrar of Firms as S.No.730/2007 at Visakhapatnam. Along with the acknowledgment of registration of firms, the petitioner also placed on record the original partnership deed entered into between the petitioner and her husband. The certificate of registration of firm would also discloses that the Registrar of firms, Andhra Pradesh, acknowledges the receipt of the statement prescribed under Section 58(1) of Indian Partnership Act.
13. At this stage, the learned counsel for the respondent objected for looking into the said document by contending that the plea taken by the petitioner would be her defence which the petitioner can avail of during the course of trial and the same cannot be accepted at this stage. In support of his contention, he relied upon a Judgment of the Apex Court in Malwa Cotton and Spinning Mills Limited vs. Visa Singh Sidhu and others5. It was a case where Form 32 which has been filed to show that the accused therein resigned from the Directorship of the company prior to the issuance of the cheque, was not taken into consideration by the Apex Court, though the said document was issued by the Registrar of Companies. But a perusal of the said Judgment would disclose that Form 32 was not looked into because of some factual disputes i.e., 1) the effect of delayed presentation before the Registrar of Companies, 2) Whether the respondent No.1 had intimated to the respondent company, 3) Whether there was any resolution accepting the resignation. Since the issues involved in the said case were disputed questions of fact, the Apex Court refused to consider Form 32 though the contents of which are not in dispute.
14. The situation on hand is totally different. Though the counsel for the respondent filed a counter, he did not dispute the authenticity and genuinity of the acknowledgment of registration of firms which is placed on record by the counsel for the petitioner. The contents of the acknowledgment of registration of firms gets corroboration from the documents filed by the 2nd respondent along with the complaint.
15. As stated earlier, the complaint under Section 138 of the Act, can be initiated only when the drawer of such cheque fails to make the payment of the said amount to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. The cheque which is filed along with the complaint would show that the petitioner was an authorized signatory of a partnership firm.
16. A further objection was raised by the learned counsel for the 2nd respondent that in the absence of a reply to the statutory notice issued under the Act, a presumption has to be drawn that the said cheque was issued on behalf of proprietary concern. It is true that the 2nd respondent issued notice to the petitioner by describing the petitioner as a sole proprietress of Sai Santosh Constructions. Though the notice was served on the petitioner, no reply was sent to the said notice. Merely because the petitioner was shown as a proprietress and that no reply was given by the petitioner, an adverse inference cannot be drawn against the petitioner when the documents filed along with the complaint and the Acknowledgment of Registration of Firms issued by the Registrar of firms, dated 19.11.2007 establish that Sri Sai Santhosh Constructions was represented as a partnership firm in the year 2007 itself. Therefore, there is no irregularity or illegality in petitioner issuing the cheque as an authorized signatory of the firm. When once it is established, that it is a partnership firm and the cheque was issued by the managing partner of a firm, arraying the firm as an accused is necessary. In view of the judgment of the Apex Court in Aneeta Hada's case, wherein a three judge Bench of the Apex Court, while overruling the view taken in Sheoratan Agarwal v. State of M.P.6, and clarifying judgment in Anil Hada v. Indian Acylic Ltd7, held that for maintaining a prosecution under Section 141 of the Act, arraying of a company as an accused is imperative and other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as stipulated in the provisions.
17. The issue as to whether the documents filed by the accused can be looked into has come up for consideration in Harshendra Kumar D. v. Rebatilata Koley8 wherein the Apex Court held that ".while exercising inherent jurisdiction under Section 482 of the Cr.P.C. or revisional jurisdiction under Section 397 of the Cr.P.C. where a complaint is sought to be quashed, it is not proper for the High Court to consider the defence of the accused or embark upon an enquiry in respect of merits of the accusations. However, in an appropriate case, if on the face of the documents - which are beyond suspicion or doubt - placed by the accused, the accusations against him cannot stand, it would be travesty of justice if the accused is relegated to trial and is asked to prove his defence before the trial Court. In such a matter, for promotion of justice or to prevent injustice or abuse of process, the High Court may look into the materials which has a significant bearing on the matter at a prima facie stage".. It was also a case where the resignation of the appellant, as a director of the company, was accepted and was duly reflected in the Resolution. Thereafter, the Company informed the same to the Registrar of Companies in prescribed form (Form 32). The Apex Court relied upon Form 32 and quashed the proceedings. As stated above the situation in the present case is some what identical to the Judgment of the Apex Court referred to above. The contents of the acknowledgment of registration of firms were not disputed by the counsel for the respondent except stating that the said document can be used as a defence by the accused. Though a counter was filed by the respondent, the genuinity and authenticity of the said document is not disputed. In view of the above findings, it would be travesty of justice if the petitioner is subjected to the rigmorale of the trial. Ergo, the proceedings against the petitioner need to be terminated.
18. Accordingly, the Criminal Petition is allowed by quashing the proceedings against the petitioner/accused in C.C.No.170 of 2012 on the file of the Metropolitan Magistrate, Bheemunipatnam, Visakhapatnam district.
19. Miscellaneous petitions, if any, pending in this Criminal Petition shall stand closed. ____________________ C.PRAVEEN KUMAR, J Date:10-10-2013
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