V BALA RAJU Vs. PASHAK FEEDS PVT LTD

JUDGEMENT

(1.) The point for consideration in this petition is whether a person who manages the affairs of proprietary concern can be made liable along with the proprietor of the sole proprietary concern, for the offence under Section 138 of the Negotiable Instruments Act, 1881 (the Act), by invoking the aid on Section 141 of the Act.

(2.) Private complainant filed by the first respondent against the mother of the petitioner (A-1), who is the proprietrix of Kousalya Enterprises, and the petitioner (A-2), alleging that Kousalya Enterprises, which was appointed as the distributor of the poultry feed products being manufactured by it, became indebted to it to a tune of more than Rs. 21,00,000/- while it was being managed by the petitioner and that the cheques for Rs. 18,00,000/- got drawn by the petitioner through his mother on behalf of Kousalya Enterprises towards part payment of that debt, were dishonoured on presentation for payment, and that petitioner and his mother (A-1) in spite of statutory notice being issued to them failed to pay the amounts covered by the dishonoured cheques, and hence, are liable for punishment under Section 138 read with Section 141 of the Act read with Section 420 IPC was taken cognizance of the learned Magistrate after recording the sworn statement of the representative of the first respondent, under Section 138 of the Act only but not under Section 420 IPC against the petitioner (A-2) and his mother. This petition is filed to quash the proceedings against the petitioner (A-2).

(3.) The contention of Sri C. Padmanabha Reddy, learned Senior Counsel for the petitioner, is that since the dishonoured cheques were issued by A-1, mother of the petitioner who is the proprietrix of Kousalya Enterprises, a sole proprietary concern, and since theory of vicarious liability does not apply to Criminal proceedings except as provided by a statute and since vicarious liability envisaged by Section 141 of the Act applies to Companies, Firms and association of individuals but not to proprietary concerns, question of the petitioner being made vicariously liable for the bouncing of the cheques issued by the mother of the petitioner on the ground that he was managing the affairs of the proprietary concern of his mother does not arise, and so the proceedings against the petitioner are liable to be quashed. The contention of the teamed Counsel for the first respondent is that, petitioner being a Government Servant and a Veterinary Doctor, is carrying on business in poultry feed in the name of his mother, who is an old aged woman, and had entered into all the transactions with the first respondent as the defacto-owner of the Kousalya Enterprises, and that the petitioner with a view to cheat the first respondent, got the cheques signed by his mother (A-1) and in the facts and circumstances first respondent can, by invoking Section 141 of the Act, make the petitioner also liable for the offence under Section 138 of the Act committed by A-1, who never even stepped into the shop and with whom first respondent did not deal personally. It is his contention that petitioner has been taking time in the trial Court for production of his mother (A-1) on the ground that she, who is aged 76 years, is bed ridden and since the trial Court is refusing to grant adjournments petitioner came up with this petition with a mala fide intention and so there are no grounds to quash the proceedings against the petitioner.