P.S. ARUL KUMAR Vs. AJEEZ AHAMED

JUDGEMENT

(1.) The petitioner who is the second accused has filed this Criminal Original Petition to quash the proceedings pending in C.C. No. 3787 of 2011 on the file of the learned Metropolitan Magistrate, FTC-I, Egmore, Chennai-8.

(2.) For better appreciation of the case, relevant paragraphs in the complaint in C.C.No. 3787 of 2011 are extracted hereunder in verbatim. "3. The complainant state that the first accused is a partnership company under the name and style of M/s. SHAAN GRANITES having office at No. 3/2 Canal Bank Road, East CIT Nagar, Nandhanam, Chennai-600 035 as per partnership deed dated 25.03.2008 and carrying out the Granites business. The Second to Fourth accused are partners of the first accused company and also representing the first accused company. While so the Complainant had entered into an agreement dated 27th day of March 2008 with the First Accused Company to raise granite blocks thereby the business commenced between the Complainant and the First Accused Company. During the business transactions the Third Accused had issued a cheque on 15.05.2010 bearing No. 205200 drawn on ICICI Bank Limited, Santhome Branch, Chennai for a sum of Rs. 20,70,000/- (Rupees Twenty lakh and Seventy thousand only) the term of agreements and Memorandum of understanding dated 27.03.2008 and 06.01.2010 respectively but the same was returned with an endorsement "Insufficient Funds". 4. The Complainant further states that when he informed about the dishonour of the cheque the Accused had requested the Complainant to represent the same once again. As per their advise and keeping good faith upon the accused the complainant had re presented the said cheque for collection through AXIS Bank No. 4, Good Shed Street, Madurai but to his shock and surprise the said cheque was once again dishonoured with an endorsement "Insufficient Funds" for which the complainant had caused a legal notice dated 14.07.2010. 5. The Complainant further states that the Accused No. 2 to 4 had come to the Complainant's Office and pleaded apologies on 15.06.2011 and have issued a post dated cheque dated 18.06.2011 for Rs. 45,00,000/- (Rupees Forty Five Lakh only) bearing No. 205198 drawn on ICICI Bank, Santhome Branch, Chennai after calculating the complete due along with the liability amount of Rs. 20,70,000/- (Rupees Twenty lakhs and Seventy thousand only). 6. The Complainant further states that keeping good faith upon the Accused for the second time the Complainant had presented the above said cheque bearing No. 205198 dated 18.06.2011 for Rs. 45,00,000/- drawn on ICICI Bank, Chennai through his banker's Andhra Bank, Triplicane Branch, Chennai-600 005. To his shock and surprise the above said cheque had been returned unpaid by the Banker's of the Accused along with a Memorandum denoting the term "Insufficient Funds" as the reason for the return of the Cheque unpaid dishonoured as per their Memo dated 20.06.2011. 7. The Complainant states that within the stipulated time granted under the Act the Complainant sent a legal notice by Registered Post with acknowledgment due to the Accused on 04.07.2011 calling upon the accused to settle the account within 15 days from the date of receipt of the notice. The Notice sent to Accused 2 to 4 out of which the Second accused received the said notice and the notices sent to other accused were returned un-served. 8. The Complainant stated that the Accused failed to pay the entire cheque amount within 15 days as stated supra. Hence the Complainant is forced to file this Complaint under section 138 of the Negotiable Instruments Act. 9. The cause of action for the above complaint arose at Chennai where the Accused and the Accused Bank lies within the jurisdiction of this Honb'le Court; on 18.06.2011 when the Accused had issued the cheque is in question at Chennai; on 18.06.2011 when the above said cheques was presented for collection; when the above said cheques was returned unpaid as "Insufficient Funds" On 20.06.2011 when the Accused Bank has issued a Memo intimated the above said dishonour; On 04.07.2011 when the Complainant had issued a lawyer's legal notice at Chennai; When the second accused has received the notice; other two accused notices were returned un-served; when the accused had committed an offence punishable under section 138 of the Negotiable Instruments Act and hence the entire cause of action for the above Complaint arose at Chennai. 10. Further, the above complaint is filed within 30 days from the date of expiry of 15 days from the date of receipt of legal notice as per provisions of the Negotiable Instruments Act. Hence, the above complaint is within the limitation period. 11. The Complainant, therefore prays that this Hon'ble Court may be pleased to take up the above complaint to file and issue summons to the accused, try and punish the accused as per sections 138 and 142 of the Negotiable Instruments Act and thus render justice. " 12. The contention raised by the learned counsel for the petitioner is that the 1st accused is an unregistered partnership and that though the petitioner is arrayed as A2 in this case no averment has been made in the complaint that he is in-charge of and responsible to the firm for the conduct of the business of the firm as well as the firm as required under section 141 of the N.I. Act and that he is neither Managing Partner of the 1st accused firm nor the signatory to the cheque in question, and that excepting a bald averment made against the petitioner in para 3 that the second to fourth accused are partners of the first accused company and also representing the first accused company, no other averment has been made that the petitioner is in charge of and responsible for the conduct of the day-to-day affairs of the business of the firm as well as the firm. The learned counsel for the petitioner submitted that the 1st accused being a partnership firm the substance of the allegations in the complaint when read as a whole should be sufficient to fulfil the requirements of Section 141 and there should be specific averments as to the person who was in charge of and responsible for the conduct of the business of the company as well as the company and in the absence of such an averment in the complaint against the petitioner/accused, the complaint against him has to be quashed and relied on the judgments reported in (2014) 16 SCC 1 and (2015) 1 SCC 103 and contended that the proceedings under Section 138 being a quasi criminal case, can be launched only against the "drawer" and cannot be used to foist an offence on some other person, who under the statute is not liable for the commission of such offence. 13. Further, it was also contended by the learned counsel for the petitioner that the respondent/complainant had during the pendency of the case had filed a petition under section 257 of Cr.P.C , 1973in Crl. M.P.No. 1273 of 2013 before the trial court stating that due to the intervention of common friends a compromise was arrived and on 25.08.2013 a Memorandum of Understanding was entered into between the complainant and V.Shanmugasundaram-Accused No. 3, Konidala Anil Kumar, Accused No. 4 and the complainant and had prayed for permission to withdraw his complaint and acquit all the accused. Whereas the learned Magistrate by an order dated 19.11.2013 has passed the following order: "Complainant present. The complainant has filed a petition under section 257 Cr.P.C., 1973 to withdraw the complaint, stating that A3 and A4 and complainant themselves amicably settled their claim of the subject matter of the case. Hence, the complainant wants to withdraw the above said case against A3 and A4 from the file of this Hon'ble Court. Taking into consideration the facts and circumstances, the complainant is permitted to withdraw the complaint against A3 and A4. Hence, the petition is allowed. The complaint is dismissed as withdrawn and A3 and A4 are acquitted under section 257 Cr. P.C&, 1973quot;. 14. It was contended by the learned counsel for the petitioner that though the petition had been filed seeking to withdraw the complaint against all the accused based on a Memorandum of Understanding and without there being any details or particulars with regard to the nature of the memorandum of understanding and with regard to monetary settlement arrived between the parties the learned Magistrate had passed an order dismissing the complaint as withdrawn only against A3 and A4 and acquitting them under section 257 of Cr.P.C , 1973and allowing the complaint to continue against the petitioner alone is illegal. It is also contended by the learned counsel for the petitioner that no reasoning had been given by the Magistrate to continue prosecution against the petitioner when permission had been sought for withdrawal against all the accused. Further it was contended that notice was issued to the firm and only individual notices were issued to the petitioner and other accused, and that the petitioner not being the signatory to the cheque cannot be prosecuted since he is not the person who has drawn the cheque. 15. The learned counsel for the 1st respondent/complainant contended that it is an admitted fact that the firm is a partnership firm and in the partnership deed, it has been stated that the petitioner is major partner who has paid a capital of Rs. 80,000/- into the company, whereas the 3rd and 4th accused have paid only Rs. 10,000/- each and as such it should be presumed that the petitioner is the major partner and also submitted that there is averment against the petitioner that the accused 2 to 4 are partners of the first accused company and also representing the first accused company. He also drew the attention of this court to the partnership deed wherein the petitioner was shown to have invested 80% in the partnership. Admittedly, it is an unregistered partnership but no designation had been given to the partners in respect of managing the firm. 16. Though notice has been ordered and served on the other accused they have neither appeared nor engaged counsels to represent them. This court feels that they are not necessary parties for deciding this petition. 17. Having heard the learned counsels appearing for the parties and having considered the materials, the following issues arises for consideration: