M MONCHARAN Vs. C VENKATESH

JUDGEMENT

(1.) The petitioner who is the fourth accused in C.C. No. 656 of 2002 on the file of the Court of Judicial Magistrate No. 1, Tiruppur has come forward to file the above Criminal Original Petition seeking to call for the records in the said calendar case and quash the same on averments such as that the first accused in the complaint filed by the respondent before the Magistrate is a partnership firm of which the petitioner and accused Nos. 2 and 3 in the complaint are partners; that the firm was constituted in 1991; that clauses 8, 9 and 10 of the partnership deed contemplated that M. Rajendran and M. Baskaran shall be the Managing partners; that the managing partners have powers to open bank accounts; that they have also got powers to borrow additional funds required for the purposes of the business; that partnership firm is carried on in accordance with the partnership deed; that the right from the constitution of the firm, the second and the third accused are in charge of the financial dealings of the firm.

(2.) The petitioner would further submit that the second accused in the complaint is said to have borrowed a sum of Rs. 2.5 lakhs from the respondent repayable with interest at 12% per annum and a cheque for Rs. 3.05 lakhs had been issued in favour of the respondent which have been dishonoured and on compliance of the requirements of the Negotiable Instruments Act, the respondent has filed the complaint for an offence under Sections 138 and 142 of the said Act and the same has been taken on file in the above calendar case by the above mentioned Court. Aggrieved against taking the said complaint on file by the said Magistrate, the petitioner has come forward to file the above quash petition on certain grounds as brought forth in the criminal original petition.

(3.) When the above criminal original petition came up for admission, the learned counsel for the petitioner would not only lay emphasis on the averments of the petition, but also would cite the following judgments in support of his case : (i) 1999 (III) CTC 143 (Modern Denim Ltd. v. Lucas TVS Ltd.); (ii) 2001 (2) Crimes 307 (Ashok Muthanna v. Wipro Finance Ltd.); (iii) 1997 (II) CTC 534 (M/s. Agrotech Hatchering v. M/s. Valuable Steel India Ltd.); (iv) 2000 (IV) CTC 432 (K. P. G. Nair v. M/s. Jindal Menthol India Ltd.) ; (v) 1999 Mad LJ (Cri) 713 : (2000 Cri LJ 137) (M. Chockalingam v. M/s. Sundaram Finance Service Ltd.). In the first judgment cited above the learned single Judge of this Court has held that the "First accused is the company and the second accused personally guaranteed payment under cheque Against other accused who are Directors of company except for bald averments there was no evidence to show that they were in-charge of and responsible for the conduct of business of company" and therefore the prosecution against the Directors of the company was quashed. In the second judgment cited above also the learned single Judge of this Court has held that "It is contended by the learned counsel for the petitioners that mere reproduction of the words used in the Section is not sufficient. But, in this case, it is only stated that the petitioners were incharge and responsible for the day to day affairs of the company, but also stated that only on the instructions given by the petitioners, the cheques were issued by A.6 on behalf of the company. Therefore, as per the complaint, they had also taken a vital role in the act of issuance of the cheques." In the third judgment cited above, yet another single Judge of this Court has held that "On a reading of the above provisions, it would be clear that only the person who was in-charge of and was responsible to the company for the conduct of the business of the company at the time of the commission of offence should be deemed as guilty of the offence and liable to be proceeded against and punished for such offence. The use of the words "such person" in Section 138 of the Act would clearly indicate that the person who had drawn the cheque is the person to commit the offence. Section 141 of the Act is not relatable to penal aspect, but only evidence aspect relating to the offence committed under Section 138 of the Act." In the fourth judgment cited above, the Honourable Apex Court has held that "From a perusal of Section 141, it is evident that in a case where a company committed offence under Section 138, then not only the company but also every person who at the time when the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company shall be deemed to be guilty of the offence and liable to be proceeded against and punished accordingly. It follows that a person other than the company can be proceeded against under those provisions, only if that person was in charge of and was responsible to the company for the conduct of its business." In the last judgment cited above, the learned single Judge of this Court has held that : "........The petitioner herein was a Director of the company and from 20-3-1997 he ceased to be a Director of the company. The cheque was issued later i.e., on 27-12-1997 and there is no averment in the complaint filed by the respondent herein that at the time when the offence was comitted, the petitioner was in charge of or was responsible to the company for the conduct of the business of the company. The Apex Court in Sham Sunder v. State of Haryana, AIR 1989 SC 1982 at 1984 : (1989 Cri LJ 2201) held :