Brijlal v. Jugal Kishore — 1994 DIGILAW 398 (BOM)

JUDGMENT V.S. Sirpurkar, J. - This is a criminal revision application at the instance of the original complainant, challenging the revisional order passed by the Additional Sessions Judge, Akola, whereby he quashed the complaint filed by the present applicant/original complainant against respondent Nos. 1 to 3 original accused Nos. 1 to 3. 2. The applicant, in his capacity as a partner of the partnership Firm M/s. Brijlal Makhanlal filed a complainant against respondent Nos. 1 to 3 who, in their turn, are the partners of one partnership firm M/s. J.K. Rungta Agencies. In his complaint, the complainant specifically stated that he was filing the complaint in his capacity as a partner of the firm M/s. Brijlal Makhanlal. 3. It seems that the Jirm M/s. Brijlal Makhanlal had to receive some amount from M/s. J.K. Rungta Agencies. It is the applicant/complainant's case that in lieu of this payment, Shri Jugalkishore Rungta, original accused. No.1, signed six cheques. However, these cheques were from the account of another firm M/s. Onkarmal Rungta and Sons, of which accused No.1 is said to be a partner. These cheques were bounced. They amounted to total amount of Rs.1,64,000/-. Therefore, notice came to be given. This notice was given to all the three partners of M/s. J.K. Rungta Agencies. In this notice, which was served on the three accused persons, the said amount was demanded. On the said demand not being fulfilled and on receiving the alleged three false replies through the Advocate of the accused persons, the complainant proceeded to file the complaint. 4. The Trial Court, on the basis of this complaint, as also on the basis of the xerox copies ofthe documents filed on record and after hearing the complainant, was of the opinion that there was a reason for proceeding against the accused persons and, therefore, issued a process for the offence under section 138 as also under Section 142 of the Negotiable Instruments Act to the accused persons. 5. The accused persons challenged this order, by which the Trial Court had taken cognizance, by way of a revision before the 3rd Additional Sessions Judge, which was registered as Criminal Revision No. 234 of 1990. The Revisional Court below took the view that the complaint was not filed by a proper person and that the proper persons were not made parties to the complainant. The Revisional Court below took the view that the complaint was not filed by a proper person and that the proper persons were not made parties to the complainant. It also took the view that there was no notice as contemplated under the provisions given to the accused and in the absence of this notice, the Trial Court could not proceed against the accused persons. In that view ofthe matter, the Revisional Court below allowed the revision. 6. Shri S.C. Mehadia, learned Counsel appearing on behalf of the applicant, strenuously urged that the whole order of the Revisional Court below was patently incorrect in law, as well as on facts. He, first, questioned the legality of the order of the Revisional Court below as, according to him, the order laking-cognizance amounted to an interlocutory order. He secondly contended that the view expressed by the Revisional Court below was wholly incorrect. He pointed out that not only the complaint was filed by the proper person, but it was also filed against the proper persons. As a second leg of his argument, he pointed out that all the formalities of Sections 138 to 148 were completed by the complainant and there was no scope for holding that there was any default in that behalf. The last leg of his argument is that the questions dedded in the revision were unnecessarily rushed with, then, in fact, those questions could be decided only after the proper evidence in that behalf was taken, and the opportunity was given to the parties to prove their respective cases. 7. Shri A.S. Mardikar, learned Counsel appearing on behalf of respondents 1 and 3 original accused Nos. 1 and 3, supporled the order. According to Shri Mardikar, the revision was perfectly maintainable. He reiterated the reasoning by the revisional Court below and relied upon the same. He pointed out that there was no scope to hold that the complaint was filed by the proper person or against the proper persons. 8. To consider the rival contentions, we will have to see as to whether, firstly there is a proper occasion for this complaint. It is stated by the complainant in the complainant that he is a partner of one firm M/s. Brijlal Makhanlal, while the accused Nos. 1 to 3 were the partners of the firm M/s. J.K. Rungta Agencies. 8. To consider the rival contentions, we will have to see as to whether, firstly there is a proper occasion for this complaint. It is stated by the complainant in the complainant that he is a partner of one firm M/s. Brijlal Makhanlal, while the accused Nos. 1 to 3 were the partners of the firm M/s. J.K. Rungta Agencies. It is also said in the complainant that alIthe parlners, i.e., accused Nos. 1 to 3, were in-charge and were responsible for the conduct of the business of the firm M/s. J.K. Rungta Agencies, Akola; that all the partners are residing in one house and looking after the business of the firm and, therefore, they all are liable under Section 141 of the Negotiable Instruments Act, 1981, in respect of the offences committed by the firm. Thus, the complaint has been filed by a partner of the firm against the accused persons who are the partners of another firm M/s. J.K. Rungta Agencies. There is no dispute that the firm M/s. J.K. Rungta Agencies has not been joined as the accused. It is then contended by the complainal1t in the complaint that the complainant had deposited the amount of Rs. 1,64,000/- with the accused and issued cheques, seven in number, for Rs.. 1,64,000/- in favour of M/s. J.K. Rungta Agencies and that the firm M/s. J.K. Rungta Agencies had agreed to return the money whenever the complainant needed the same. It is specifically said in the complaint that the accused persons, in capacity of the partners in firm M/s. J.K. Rungta Agencies, accepted the said deposit of amount of Rs.l,64,OOO/- for and on behalf of the firm. The bond, thus, between the accused persons as individuals inter se and between the said partnership firm was not only asserted but reiterated in the complaint. It has been stated that thereafter tbe accused No.1 Jugalkishore had issued six cheques in favour of the complainant. However, it is pointed out that the accused NO.1 had issued the above six cheques from the account of the find M/s. Onkarmal Rungta and Sons. It is further clarified that the said firm M/s. Onkarmal Rungta and Sons is a sister concern of the accused persons. However, it is pointed out that the accused NO.1 had issued the above six cheques from the account of the find M/s. Onkarmal Rungta and Sons. It is further clarified that the said firm M/s. Onkarmal Rungta and Sons is a sister concern of the accused persons. A letter is also said to have been issued by accused No.1 that he had issued the cheques of his sister concern, but the payment was on behalf of M/s. J.K. Rungta Agencies. Thereafter, it is contended in the complaint that this payment was stopped by the accused persons, and, therefore, the complainant issued a notice through the Counsel on 15.7.1990 and that the said notice was given a false reply through the Advocate of the accused persons which was received on 28.7.1990. It is on this basis that the action under Section 138 of the Negotiable Instruments Act, 1981 is sought against the accused persons. 9. It will be, therefore, seen that here was a case where the cheques were issued and the said cheques were bounced. The due notice was also served and the said notice was not complied with. The Revisional Court below has taken a view that the complaint was not filed by a proper person and against the proper persons. It took a view that the transaction of the deposit took place between a partnership firm called M/s. Brij Lal Makhanlal and another partnership firm M/s. J.K. Rungta Agencies. The Revisional Court further observed that the cheques had been issued in the name of M/s. Brijlal Makhanlal, the partnership firm. However, the complaint had been filed by Brijlal Bansilal Agrawal in his personal capacity. According to the Revisional Court, this filing of the complaint by Brijlal Bansilal Agrawal in his personal capacity was not correct and he had no locus standi to institute and initiate the present complaint. 10. Shri Mehadia has pointed out the contents of the complainant wherein it is clearly suggested that the complainant was a partner of the partnership firm M/s. Brijlal MakhanlaI. The further contents also suggest that the transaction was with the firm. These was no necessity for the complainant to describe himself as a partner, if he had not intended to initiate this action on behalf of the partnership firm. The further contents also suggest that the transaction was with the firm. These was no necessity for the complainant to describe himself as a partner, if he had not intended to initiate this action on behalf of the partnership firm. That part, it will also be debatable as to whether a partner could institute a complaint under Section 138 of the Negotiable Instruments Act, if it was the partnership firm which was to receive the monies. It cannot be said that such complaint itself becomes illegal due to, the absence of locus standi. In the first place, the observation that the complaint was filed in the personal capacity is not correct. The observation that Brijlal bansilal Agarwal was not the payee or the holder, is also not correct, as monies payable to the partnership firm were always the monies payable to the partners themselves. 11. Similar logic has been used by the learned Additional Sessions Judge, while considering the question as towhetMr the accused persons were properly joined. According to him, the money was deposited with M/s. J.K Rungta Agencies, but the accused NO.1 had issued the cheques on behalf of M/s. Onkarmal Rungta and Sons for repayment of the deposited amount. According to the learned Additional Sessions Judge, therefore, the three partners of M/s. J .K. Rungta Agencies could not be made the accused in this case. 12. As I have already pointed out, the whole logic is faulty if the cheques were issued from the account of Mis. Onkarmal Rungta and Sons, that did not mean that they were not towards the payment of the debt on behalf of M/s. J.K. Rungta Agencies. At least, there is a contention in the complaint to that effect. There is also a document on record to that effect that the payments were being made towards the amount which was due to M/s. Brijlal Makhanlal from M/s. J.K. Rungta Agencies. So long as the liability was there, from which account the cheques were paid does not matter. The learned Additional Sessions Judge has completely misread the principles of the Partnership Act. In a firm, a partner acts on behalf of the firm and his actions bind the whole firm. The learned Additional Sessions Judge seems to have been swept away by an irrelevant fact that the cheques were given from the account of M/s. Onkarmal Rungta and Sons. In a firm, a partner acts on behalf of the firm and his actions bind the whole firm. The learned Additional Sessions Judge seems to have been swept away by an irrelevant fact that the cheques were given from the account of M/s. Onkarmal Rungta and Sons. Therefore, there was nothing wrong in proceeding against the partners of M/s. J.K. Rungta Agencies, as the cheques were paid to discharge the liability which was faced by M/s. J.K. Rungta Agencies. There are un doubtedly the allegations made in the complaint that all the three partners live at one and the same place, that they are the partners of the firm M/s. J.K. Rungta Agencies and as such they were being prosecuted. The Revisional Court below should have been alive to these contented in the complaint. The observation by the Revisional Court, therefore, that neither the payee nor the drawer are before the Court, is absolutely incorrect in law. 13. Shri Mehadia pointeo out that in fact the cheques were issued only by accused No.1 and, therefore, there was no propriety to proceed against the other two accused persons, particularly when it is not shown that those two accused persons had anything to do with the signing of the cheques. The argument is not right. It is undoubtedly stated in the complaint that all the partners looked after the business of that firm M/s. J.K. Rungta Agencies. It has also been reiterated that all the three partners took part in running the business of that firm. That part, it would also have to be remembered that the present was not a stage to examine the culpability or otherwise on the part of the two other accused persons. Whether the two other accused persons were liable and could be bound by signing of the cheques of accused No.1, could only be decided after the evidence. It was too earl y on the part of the learned Additional Sessions Judge to delve into that aspect. 14. Shri Mehadia drew my attention toward the language of Section 142 of the Negotiable Instruments Act, which also includes the partners in case of the offences committed by a partnership firm. It was too earl y on the part of the learned Additional Sessions Judge to delve into that aspect. 14. Shri Mehadia drew my attention toward the language of Section 142 of the Negotiable Instruments Act, which also includes the partners in case of the offences committed by a partnership firm. If the complaint is to be read as a whole, it is undoubtedly the case of the complainant that the cheques were issued for and on behalf of the firm M/s. J.K. Rungta Agencies and this was in relation to the payment of debt which was due to the firm M/s. Brijlal Makhanlal. Therefore, it was perfectly justified in law that a partner could in-statute a complaint against the partner of the erring firm, namely, M/s. J.K. Rungta Agencies. In fact, the fourth accused could also r have been joined and that was the firm itself, but non joinder of the firm could not be said to be either fatal or causing such a defect as too prejudice the other accused persons. In that view of the matter, the complainant was perfectly justified in to proceeding against the three accused persons who e were none else but the partners of the erring firm, d for paying whose debt,; the cheques were signed by one of the partners. 15. Shri Mardikar, learned Counsel appearing on behalf of the accused, also contended that there was no proper notice as contemplated under Section 138 of the Negotiable Instruments to Act. The notice is on record. What probably Shri Mardikar submits is that the notice should have p been given to M/s. Onkarmal Rungta and Sons. That the notice was served to the individual partners is not disputed by him. This question also will have to be gone into at the proper stage. But this certainly is not that stage. 16. After all, the accused persons rushed to file revision against the order k'\king cognizance. In fact under Section 204 of the Criminal Procedure Code, the process is issued where the Court taking cognizance is convinced that there is sufficient ground for proceeding. The test to decide whether there was sufficient ground to proceed, would be as to whether there was any material allegation in the complaint or not which, if uncontroverted, would amount to an offence. The test to decide whether there was sufficient ground to proceed, would be as to whether there was any material allegation in the complaint or not which, if uncontroverted, would amount to an offence. If the complaint is to be looked and the verification statement is to be considered, there is such material which, if uncontroverted, would amount to an offence under Section 138 of the Negotiable Instruments Act. There also does not appear any difficulty on account of the non observance of any technicality or any imperative step in law. There also does not appear to be any complaint on account of the limitation. If the Court, therefore, decided to proceed with the matter on the basis of the complaint and if the accused felt aggrieved by it the accused could have raised all these questions in the trial. It is clarified that the accused may raise all the questions in the trial regarding their individual complicity and also regarding the complicity of the firm as such of which they are the partners. However, it is also clarified that the Revisional Court below erred in quashing the order of the Trial Court taking the cognizance and issuing process. 17. I do not want to go into the question as to whether the Revisional Court was right in entertaining the revision, because I find that on the merit itself the Revisional Court below is wholly incorrect. Under the circumstances, the following order is passed. The instant Revision Application is allowed. The impugned order passed by the learned 3rd Additional Sessions Judge is set aside and that of the Trial Court is restored. The Trial Court shall proceed now with the trial as expeditiously as possible. The observations made in this judgment shall be restricted to the scope only. Revision allowed.