IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.02.2010 CORAM THE HONOURABLE MR. JUSTICE C.T.SELVAM CRL.O.P.No.7421 of 2007 and M.P.Nos.1 of 2007 and 1 of 2009 1.J.P.Girish 2.D.Ravichandran ...Petitioners -Vs- Sri Ramakrishna Mills, (Coimbatore Limited) represented by R.Manoharan ...Respondent Criminal Original Petition filed under Section 482 of Criminal Procedure Code to call for the records relating to C.C.No.201 of 2003 on the file of the learned Judicial Magistrate, Satyamangalam and quash the same. For Petitioners : Mr.K.Kalyanasundaram For Respondent : Mr.G.M.Ramasubramanian ***** O R D E R
The petitioners who are arrayed as accused number 1 and 3 in C.C.No.201 of 2003 on the file of the learned Judicial Magistrate, Satyamangalam in respect of an offence under Section 138 of the Negotiable Instruments Act (hereinafter referred as Act) seek to quash of proceedings against them.
2.The complaint in C.C.No.201 of 2003 has been filed on the allegation that the accused were partners of a firm viz., Chamber Cotton Textiles and that they are jointly looking after the conduct of the day-to-day affairs of the business firm. Having purchased cotton from the complainant and being liable to pay a sum of Rs.48,87,911/-, the accused have issued two cheques dated 18.03.2003 for Rs.5,00,000/- and Rs.10,00,000/- respectively towards partial discharge of liability. When the cheques were presented for payment, the same were returned unpaid for the reason that the accused have closed the bank account. The complainant had followed the procedure envisaged under Section 138 of the Act and not having had payment within the stipulated period despite notice, a complaint alleging offence under Sections 138 and 142 of the Act as also offence under Sections 417 and 420 IPC has been filed. The lower Court has taken cognizance for offence under Section 138 of the Act and upon receipt of summons issued by such Court, the petitioners have filed the present petition.
3.The contentions of the learned counsel for the petitioners are as follows:
i.The 1st petitioner never was a partner of the 1st accused firm and as such, he could not be prosecuted.
ii.The cheques giving rise to cause of action have been presented for payment on 28.05.2003. The 2nd petitioner had retired from partnership of the 1st accused firm as early as on 01.08.2002. Such position is evidenced by a release deed dated 01.08.2002 executed by the other partners of the firm. The fact of retirement from the firm stands duly intimated to the Registrar of Firms.
iii.The statutory notice issued by the respondent/complainant is vague, makes a demand for payment of the entire amount due including amounts due on the dishonoured cheques and as such is not keeping with the requirements of the Act.
iv.The averments in the complaint do not specify the role played by the petitioners in the business of the firm and do not inform that they were incharge of the business of the firm at the time of commission of the offence.
4.I have heard the learned counsel for the respondent on the submissions made on behalf of the petitioners.
5.The learned counsel for the respondent fairly concedes that from the material put by the petitioners i.e., typed set and particularly Form-A filed with the Registrar of Firms, which informs the names of the partners of the 1st accused firm, it was clear that the 1st petitioner was not a partner of the 1st accused firm and as such the complaint as against him would not stand.
6.As regards the second contention of the learned counsel for the petitioners, the learned counsel submits that though the release deed is dated 01.08.2002, the fact of the 2nd petitioner having retired from the partnership has been intimated to the Registrar of Firms only on 28.07.2003 and this has been done after receipt of the notice issued on behalf of the respondent/complainant on 23.06.2003. The learned counsel contends that in such circumstance, public notice of retirement from firm can take effect only from 28.07.2003 and as the commission of offence stands completed prior to such date, the 2nd petitioner cannot escape liability.
7.Upon the third contention on behalf of the petitioners, the learned counsel would submit that the cheque amounts has been mentioned in the notice and a due demand stands made and the fact that demands were made also for other sums would not constitute the notice bad. The learned counsel also would contest the fourth contention raised by the learned counsel for the petitioners.
8.I have considered the rival submissions and the decisions relied upon by counsel on either side which will be discussed herein below:
The contention of the learned counsel for the petitioner is that Section 138 B contemplated the making of a demand “for the payment of the said amount of money”. Such said amount of money would only be the cheque amount. In the instant case, as demand had been made for the entire sums due including that which was due under the dishonoured cheques, the notice cannot be found to be in keeping with Section 138 of the Act. Non-compliance with the statutory notice under Section 138 B had criminal consequences and as such requirements regarding notice strictly would be read.
9.In support of the said contention, reliance is placed on the decision of the Honourable Apex Court in Rahul Builders v. Arihant Fertilizers and Chemicals and another (2008) 1 Supreme Court Cases (Cri) 703 and particularly, paragraph 10 thereof, which reads as follows:
“10.Service of a notice, it is trite, is impertaive in character for maintaining a complaint. It creates a legal fiction. Operation of Section 138 of the Act is limited by the proviso. When the proviso applies, the main section would not. Unless a notice is served in conformity with proviso (b) appended to Section 138 of the Act, the complaint petition would not be maintainable. Parliament while enacting the said provision consciously imposed certain conditions. One of the conditions was service of a notice making demand of the payment of the amount of cheque as is evident from the use of the phraseology “payment of the said amount of money”. Such a notice has to be issued within a period of 30 (sic 15) days from the date of receipt of information from the bank in regard to the return of the cheque as unpaid. The statute envisages application of the penal provisions. A penal provision should be construed strictly; the condition precedent wherefor is service of notice. It is one thing to say that the demand may not only represent the unpaid amount under cheque but also other incidental expenses like costs and interests, but the same would not mean that the notice would be vague and capable of two interpretations. An omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law. Respondent 1 was not called upon to pay the amount which was payable under the cheque issued by it. The amount which it was called upon to pay was the outstanding amounts of bills i.e. Rs.8,72,409. The noticee was to respond to the said demand. Pursuant thereto, it was to offer the entire sum of Rs.8,72,409. No demand was made upon it to pay the said sum of Rs.1,00,000 which was tendered to the complainant by cheque dated 30.04.2000. What was, therefore, demanded was the entire sum and not a part of it.” – the reliance is misplaced.
It is only a omnibus notice which does not specify what was the amount due under the dishonoured cheque and did not call for payment of that which was payable under the cheque which would not subserve the requirement of law. In the instant case, the notice of payment gives entire details of the cheque as also amounts due and demand is made for the amounts due as also that under the dishonoured cheques. In such circumstances, it cannot be read that a specific demand has not been made in respect of the cheque amount.
10.Learned counsel also placed reliance on judgment of the Honourable Apex Court in K.R.Indira v. Dr.G.Adinarayana 2003 (4) CTC 252 which was also considered in Rahul Builders v. Arihant Fertilizers and Chemicals and another (2008) 1 Supreme Court Cases (Cri) 703 here again reliance is misplaced.
Paragraph 11 of the judgment relied upon reads as follows:
“The notice in question is imperfect in this case not because it had any further or additional claims as well but it did not specifically contain any demand for the payment of the cheque amount, the non-compliance with such a demand only being the incriminating circumstances which expose the drawer for being proceeded against under Section 138 of the Act.”
11.A proper reading of the said judgment would show that once a demand stands made for the cheque amount, the fact that the demand also covered other sums due would not render the notice bad. The further decision relied upon on behalf of the petitioners is the decision of this Court in P.Snehalatha v. M/s.Victory Leathers and others 2007 (2) MWN (Cr.) DCC 44. In such case this Court had, on the facts and circumstances therein, arrived at a finding that prima facie it was apparent that the petitioner therein had been impleaded as one of the accused on conjectural basis. Such is not the case here.
12.In fine, the petition in so far as the 1st petitioner is concerned is allowed. The petition shall stand dismissed in so far as the 2nd petitioner is concerned. Consequently, the connected miscellaneous petitions are closed.
13.The observations herein above are merely towards disposal of the petition pending before this Court and shall not in any manner influence the lower Court.
gm
To
The Judicial Magistrate,
Satyamangalam