Research › Browse › Judgment

Madras High Court · body

1998 DIGILAW 1429 (MAD)

V. Vageesan and Another v. D. Kathirvel

1998-10-27

A.RAMAN

body1998
Judgment :- A. RAMAN J. Accused Nos. 3 and 5 are the petitioners. A complaint was filed against these two petitioners and three others under section 138 of the Negotiable Instruments Act, 1881. The allegation in the complaint is that the first accused-company, which is a partnership firm in which accused Nos. 2 to 5 are partners, had dealings with the complainant and in respect of the said dealings, the second accused issued three cheques for and on behalf of the other accused for a sum of Rs. 3, 90, 000 on July 3, 1997. The complainant presented the said three cheques for collection, and all the three cheques, were returned with the endorsements "payment stopped" and "funds insufficient". In the meanwhile the second accused had written a letter dated July 3, 1997, requesting the complainant not to present the cheques for collection, but the said letter was received by the complainant only on July 8, 1997. The second accused issued the cheques for and on behalf of the other accused, knowing fully well that there were no sufficient funds in the account. The complainant issued a legal notice to all the accused on July 19, 1997. A reply was sent by the third accused and fourth accused, containing false allegations. Hence, the accused had violated the provisions of the Negotiable Instruments Act. This complaint was taken on file in C.C. No. 476 of 1997 and processes were issued to the accused. Accused Nos. 3 and 5, viz., the petitioners herein filed an application under section 245(2) of the Criminal Procedure Code, 1973, praying for their discharge from the case. The same was dismissed by the judicial Magistrate No. 1, Tirupur. Therefore, this revision. Section 141 of the Negotiable Instruments Act reads as follows : "If the person committing an offence under section 138 is a company, every person, who at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be preceded against and punished accordingly. Provided that nothing contained in this sub-section shall render any person liable to punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1) where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary, or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation. - For the purposes of this section, (a) 'company' means any body corporate and includes a firm or other association of individuals; (b) 'director' in relation to a firm means a partner in the firm." Therefore, section 141 of the Negotiable Instruments Act provides that if the person committing an offence is a company or a firm, the person who was responsible to the company or the firm for the conduct of the business of the company or the firm as well as the company or the firm, shall be deemed to be guilty of the offence and sub-section (2) provides that in spite of anything contained in section 141(1), if it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty.In the complaint, it is not alleged that accused Nos. 3 and 5 were in charge of and were responsible to the firm for the conduct of the business of the firm. Nor is it alleged that the offence mentioned under section 138 of the Act was committed with the consent and connivance of accused Nos. 3 and 5 and is attributable to them. Such definite allegations which are essential to sustain a complaint against a person under section 138 of the Act, if he is a director or partner of a company, are not at all made in the complaint. 3 and 5 and is attributable to them. Such definite allegations which are essential to sustain a complaint against a person under section 138 of the Act, if he is a director or partner of a company, are not at all made in the complaint. It is also to be pointed out that the complaint does not mention that the cheques were issued in discharge of any liability or that there was any subsisting debt or enforceable liability as on the date of issuance of the cheques and in payment of the same, the cheques were issued. The complaint simply reads that the accused had dealings with the complainant and in respect of the dealings, the second accused for and on behalf of the other accused had issued three cheques. It further states that the cheques were presented for collection and were returned. Again, it is also stated that the second accused had sent a letter dated July 3, 1997, instructing the complainant not to present the cheques, but it was received only on July 8, 1997. The other allegation is that the second accused was fully aware that there were no funds in their account. Thus, the essential allegations necessary to sustain a complaint against the partners are not at all made in the complaint. Therefore, in such circumstances, the complaint as against the petitioners herein is not maintainable. As the ingredients of section 141 are not satisfied. On the face of it, the complaint cannot be maintained as against the petitioners herein. The rulings reported in Senthil Kumar Tea Industries v. N. Raj Kumar 1994 1 LW Crl. 278 (Mad); Agarwal (R.S.) (Col.) v. Ashoh Leyland Ltd. 1998 1 LW Crl. 24 (Mad); Rajkumar Mangal v. Indo Lowenbrau Breweries Ltd. 1997 4 Crimes 180 (P & H); Sushil Singla v. Haripal Singh 1994 (2) CCR 1429 (P & H); and Lakshmi (B.) v. Trishul Coal Services and Transporters are the rulings on this point. Besides, in another similar matter, I have also held that in the absence of the essential allegations to attract the provisions of section 141 of the Act, the complaint as against the partners of a firm cannot be maintained.Learned counsel for the respondent submitted that in the sworn statement recorded, it has been stated that accused Nos. 2 to 5 have participated in the day-to-day affairs of the company. 2 to 5 have participated in the day-to-day affairs of the company. But a statement made in the sworn statement without an allegation in the complaint on which cognizance was taken, cannot fill up the deficiency. Further, the statement is only to the effect that they participated in the day-to-day affairs of the company. It is not stated that they were responsible for the conduct of the business of the company and that the offence committed has been committed with their consent or connivance or is attributed to their negligence. In such circumstances, it follows that the complaint as against accused Nos. 3 and 5, viz., the petitioner herein cannot be maintained. Hence, it follows that they are liable to be discharged of the proceedings. In the result, the revision is allowed, setting aside the order of the lower court. The petitioners herein viz., accused Nos. 3 and 5 shall stand discharged from the proceedings. Consequently, Crl. M.P. No. 2826 of 1998 shall stand closed.