IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 24/01/2003
CORAM
THE HONOURABLE MR. JUSTICE A. PACKIARAJ
Criminal Revision Petition No.1027 of 2001
1.Sulochana
2.Sampooranam
3.Kavitha
4.Rajamani
5.R.Kathirvelu ..... Petitioners
-Vs-
M.Kulasekaran ..... Respondent
Revision filed against the order dated 23.7.2000 made in
Crl.M.P.No.1864 of 2001 in CC NO.91 of 2001 on the file of the Judicial
Magistrate No.1, Namakkal.
!For petitioners : Mr.N.Manokaran
^For respondent : Mr.V.K.Muthusamy, Senior Counsel,
for M/s. M.M. Sundaresh
:O R D E R
This revision has been filed by accused 3, 5, 7, 9 and 10 in CC No.9 1
of 2001 on the file of the Judicial Magistrate No.1, Namakkal, against the
order made in Crl.M.P.No.1865 of 2001 in CC No.91 of 2001 on the file of the
Judicial Magistrate No.1, Namakkal, dismissing the petition filed by the
petitioners to drop proceedings against them.
2.The gist of the complaint is as follows :-
a)The first accused is Kongu Spinning Mills, represented by its
Managing Partner, C.Rajendran. The second accused is C.Rajendran, Managing
Partner, Kongu Spinning Mills, while the other accused 3 to 11 are alleged to
be the partners, who are in-charge of the conduct of the business and
responsible for the day to day affairs of the firm.
b)The further case of the complainant is that the accused had borrowed
money on behalf of the above said firm, from the complainant on various dates
and in order to discharge the above said debt, the second accused, on behalf
of the first accused and other accused, had issued a cheque drawn on South
Indian Bank Ltd. for Rs.10 lakhs dated 01.1 1.2000 and the said cheque was
signed by the second accused as Managing Partner of the above said firm. The
said cheque was presented in the State Bank of India, Namakkal on 29.12.2000
but the same as returned on 03.01.2001, with endorsement, “insufficiency of
funds”. The complainant received the intimation on 12.01.2001 and on
15.01.2001, he issued a notice, as contemplated under the Negotiable
Instruments Act to the accused and it is said that the accused 3, 4, 5, 6 and
10 have received the notice on various dates i.e. on 20.01.2001, 18.01.2001 ,
18.01.2001 and 24.01.2001, while accused 1, 2, 7, 8, 9 and 11 have refused to
receive the notice, even though intimation was given to them. It is further
submitted that a reply has been issued on behalf of the accused, containing
false averments. Since money has not been paid within the mandatory period,
the present complaint has been filed against the accused.
c)Accused 1 and 2 have not preferred any application for dropping the
proceedings. But the accused 4, 6, 8 and 11 have filed a petition in Crl.M.P.
No.1864 of 2001 before the Judicial Magistrate No.1, Namakkal, to drop the
proceedings and the same was dismissed Hence, they have filed revision in
Crl.R.C. No.1026 of 2001, before this court, while the accused 3, 5, 7, 9 and
10 had filed Crl.M.P. No.1865 of 2001 before the said Magistrate, for the
same relief and it was also dismissed, against which the present revision is
filed.
3.The point that has been raised by the petitioners is that the
petitioners are not partners of the first accused firm, but are the wives of
accused Nos.2, 4, 6, 8 respectively and they have nothing to do with the firm
as such, and hence their implication in the case is mala fide and that the
proceedings against them has to necessarily be dropped.
4.To substantiate the fact that they are not partners, the petitioners
have produced ‘Form-A’ from the Office of the Registrar of Firms, which
indicates that it is only accused Nos.2, 4, 6, 8, 11 and on Periyasami, who is
not arrayed as accused, are partners and according to the learned counsel for
the petitioners, a bald allegation has been made in the complaint which reads
as follows:-
“The accused No.2 is the Managing Partner of the above said firm and
the other accused are the partners of the above said firm. The accused firm
is a spinning mills producing yarns of various kinds from cotton. The accused
2 to 11 are in-charge and conduct of the business and also responsible for the
day to day affairs of the above said firm. The accused 2 to 11 are
responsible for the commissions and omissions of the above said firm by virtue
of partnership”
5.The sum and substance of the argument of the learned counsel for the
petitioners is that there is no material in the entire complaint to
substantiate the guilt of the petitioners and the mere allegation not
supported with any materials is not enough to launch prosecution.
6.It is further contended that when a notice was issued by the
complainant to the accused stating that they were the partners of the firm and
were responsible for its conduct, accused Nos. 4, 5, 6, 10 and 1 1 sent a
reply notice stating that they are not in-charge of the conduct of the day to
day business of the complainant mills and that the complainant has
unnecessarily roped in, the wives of accused nos.2, 4 , 6 and 8 who have
nothing to do with the running of the firm. ( Though the reply notice
contains other particulars they may not be very relevant for the purpose of
deciding this case). The complaint has been filed only on the receipt of this
reply notice and the complaint specifically states that A-2 to A-11 are
in-charge of the business and administration of the firm, according to the
partnership deed and it is to be noted that the complainant has failed to
produce any material, much less the partnership deed which would disclose as
to who really the partners are and who is in-charge of the administration and
conduct of the business. On the other hand, the petitioners herein have
produced Form-A certificate, from the office of the Registrar of Firms, which
according to them is a public document and the court is entitled to peruse the
same and that it is seen that these petitioners did not play any part in the
administration of the mills and as such, they cannot be saddled with any
criminal liability. Since this document produced by the petitioners herein is
a public document, which would throw light on the actual partners, it shall be
considered at a later stage, since it has not been brought on record as on
date. Be that as it may, this court is only constrained to find out whether
there is any case made out are not on its own.
7.The fact that the second accused signed the cheque on behalf of A-1
and other accused and issued it to the complainant is not challenged at
present. The only bone of contention in this petition is whether these
petitioners are partners or administrators of the the first accused company
and they are in-charge of the day to day affairs and administration of the
firm and as such, whether they come under the purview of Section 141
Negotiable Instruments Act.
8.Per contra, the learned counsel for the complainant would argue that
the trial has not proceeded and if the allegations in the complaint mentions
that the petitioners are partners and that they are incharge of the day to day
administration of the company, nothing more is needed for the court to take
congnizance. The truth or otherwise in the complaint cannot be gone into by
the magistrate or this court at this stage.
9.In support of his contention, the learned counsel for the respondent
cited the decision reported in Karumuthu C.Sundaran and 5 others vs. Indian
Bank Merchant Banking Services Ltd. reported in 2001 1 LW Crl. 326 wherein
his Lordship M.Karpagavinayagam has considered the various decisions of the
Supreme court and ultimately following the said decisions have held that it is
enough if the complainant mentions that the accused were in-charge and
responsible for the conduct of the business of the company for the magistrate
to take cognizance, which would come within the purview of section 141 of the
negotiable instruments act.
10.Therefore, two questions arise in this case :-
i) Whether there is any material to show that the petitioners are
partners or that mere allegation made by the complainant that they are
partners will ipso facto be sufficient to hold that they are partners ?
ii) What is the allegation or averment that is needed for prosecuting
a person under Section 138 of the Act, who is alleged to be a partner but in
fact, not a partner ?
11.In the present case, no doubt, as stated in the earlier part of
this order, the complainant has averred that A-2 to A-11 are partners and they
are in charge and conduct of the business and are responsible for the day to
day affairs of the said firm. They are responsible for the commission and
omission of the above said firm. Apart from this there is absolutely no other
allegation. The complainant has filed the complaint only on receipt of the
reply notice and the complaint specifically states that A-2 to A-11 are
partners and are in-charge of the day to day affairs of the company as per the
partnership.
12.In normal circumstances, I feel that it would suffice to launch
prosecution under section 138 of the Act. But here is a case when immediately
after the cheque has been dishonoured, a notice has been issued to the
petitioners. However, a copy of the same has not been placed along with the
complaint, though unserved covers to the other accused have been kept.
13.Be that as it may, the petitioners have replied the same and have
clearly come out with a version that they are not partners. In addition, they
have clearly stated that it is only A-2 4, 6, 8, 11 and one Periyasami are
partners. Though the notice speaks of other details, about the difference of
opinion between the partners, it may not be necessary for me to dwell upon all
these particulars. Suffice to say that as early as 8.2.2001, the petitioners
have by way of legal notice indicated to the complainant/respondent that they
are not partners. But still, the respondent has filed the complaint against
them for the above said offences.
14.I am conscious of the fact that when prosecution is launched under
section 138 NIA, there is a rebuttable presumption on the accused and it is
for him to establish that he is not liable to pay the amount. However, in my
opinion, the duty is cast on the complainant to come out with an averment for
which he can fortify with substantive evidence in case of necessity. This is
one such case. The complainant has not only averred that they are partners
but has further gone to the extent of saying that they are partners as per the
‘partnership’. Therefore, when he refers to a particular deed on the basis of
which he terms these petitioners to be partners and when the accused are
denying that they are partners even before the launching of the complaint, the
complainant should have produced that document to establish the same. It
would not be out of place for me to state that when anybody relies on a
document that needs to be registered, oral evidence is prohibited from being
given, except the production of the document itself as contemplated under
section 92 of the Indian Evidence Act. When the said document has already
been admittedly reduced into writing as contemplated under section 91 of the
Indian Evidence Act, in such cases, having stated in the complaint that the
petitioners are partners according to the partnership deed, then the
complainant ought to have produced the partnership deed. In my opinion, the
failure on the part of the complainant to do so and merely asserting that they
are partners, when it has been specifically denied at the earliest stage by
the accused would not be sufficient for launching prosecution.
15.Even at the revision stage, when time was specifically granted to
the petitioners to bring about materials to show that they were partners, the
complainant did not do so.
16.As far as the reliance to be placed on Form -A certificate obtained
from the Registrar of Firms, decisions were cited by the bar on either way
that mere production of a document by the accused without being duly marked
and that too before the commencement of trial should not be considered. Since
there are conflicting views I am not constrained to pass any considered
opinion on that issue. I place reliance on the document namely, partnership
deed in the present case only for my personal satisfaction and to lend
assurance after coming to a conclusion that the prosecution had no other
materials to support their case that they are partners, and since the
complainant has averred that the petitioners are partners as per the
partnership deed.
17.Yet another decision of the Apex Court which supports the claim of
the petitioners is the decision made in G.Sagar Suri and another Vs. State of
UP and others reported in 2000(II) CTC 107, wherein Their Lordships have held
that when the complainant launched a complaint with mala fide motive to rope
in all members of the family for nonpayment of loan amount without regard to
their role or participation, such complaint is an abuse of process of law and
the proceedings are liable to be quashed.
18.Hence, I see that the prosecution against the petitioners cannot
come under the category of Section 141 (1) of the Negotiable Instruments Act.
19.The next question that arises for consideration is what is the
position if they are not partners. If the person who is made an accused is
not partner, section 141(2) of Negotiable Instruments Act, states when the
company has committed offence, any other person is also liable provided, the
said act has been done with the consent or connivance or attributable to any
neglect on the part of any such person i.e. to say that there must be
satisfying materials or averments in the complaint that the petitioners had
committed offence and that the cheque in question was issued with their
consent or connivance or the offence is attributable to any neglect on the
part of the petitioners. This clause also is conspicuously not present in the
complaint and hence the petitioners do not come under the provisions of
Section 141(2) of the Negotiable Instruments Act either.
20.The learned counsel for the petitioner would argue that the
revision itself is not maintainable in law. Since according to the learned
counsel, it is interlocutary order. The learned counsel also placed reliance
on the decision of this court made in Classic Apparels Limited rep. By its
Managing Director Vs. M/s.Arizona Exports made in Crl.R.C.No.999 of 2000,
wherein His Lordship Justice B.Akbar Basha Khadiri has considered the powers
to be exercised under 482 Cr.P.C in dealing with cases of this sort and has
held that as charges could not be framed in a summons case, the question of
discharge does not arise.
21.It is true that discharge does not arise in a summons case. But
even if the petitioner prays for discharge in such cases, we cannot give a
restrictive meaning to the word discharge, instead we can interpret it as
dropping the proceedings against them. As a matter of fact, the Supreme Court
in SLP No.640/99, have in clear terms, stated that the accused can raise these
particular points (involved in that case) and file a petition to discharge.
The said case also relates to prosecution under section 138 N.I.Act.
Therefore, in my opinion, instead of giving a restricted meaning to the actual
words, we have to see the purport of the petition or the result the petitioner
seeks for. In this context, I cannot but refer to the oft quoted decision of
the Supreme Court in Amarnath Vs. State of Haryana reported in 1978 SCC (
Crl,)585 which as follows:-
2.The concept of interlocutory order qua the revisional jurisdiction
of the High Court was completely foreign to the earlier 1898 Corde and the
1955 Amendment to that Code. Under the 1955 Amendment widest possible powers
of revision had been given to the High Court under Sections 435 and 439 of the
1898 Code and the High Court could examine the propriety of any order, whether
final or interlocutory, passed by any subordinate court in any matter. In the
1973 Code Section 397(2) was incorproated with the avowed purpose of cutting
out delays and ensuring that the accused persons got a fair trial without much
delay and the procedure was not made complicated. Section 397(2) provided
that the powers of revision shall not be exercised in relation to any
interlocutory order. The paramount object in inserting this new provision was
to safeguard the interests of the accused.
(3)The term “interlocutory order” in Section 397(2) of the 1973 Code
has been used in a restricted sense and not in any broad or artistic sense.
It merely denotes orders of a purely interim or temporary nature which do not
decide or touch the important rights or the liabilities of the parties. Any
order which substantially affects the right of the accused, or decides certain
rights of the parties cannot be said to be an interlocutory order so as to bar
a revision to the High Court against that order, because that would be against
the very object which formed the basis for insertion of this particular
provision in Section 397 of the 1973 Code. Thus, for instance, orders
summoning witnesses, adjourning cases, passing orders for bail, calling for
reports and such other steps in aid of the pending proceeding, may no doubt
amount to interlocutory orders against which no revision would lie under
section 397(2) of the 1973 Code. But orders which are matters of moment and
which affect or adjudicate the rights of the accused on a particular aspect of
the trial cannot be said to be interlocutory so as to be outside the purview
of the revisional jurisdiction of the High Court.
22.In the present case when the rights of the petitioners are decided
once and for all it certainly amounts to a final order in relation to that
particular issue and consequently a revision is maintainable.
23.Hence I see that the prosecution against the petitioners herein is
not maintainable and accordingly quash the proceedings in so far as it relates
to them.
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tar
To
The Judicial Magistrate NO.1, Namakkal
