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Gujarat High Court · body

2019 DIGILAW 960 (GUJ)

Girish Shivashankara Pillai v. State of Gujarat

2019-10-17

S.H.VORA

body2019
ORDER : S.H. Vora, J. 1. By way of this application under Articles 226 and 227 of the Constitution of India read with section 482 of the Code of Criminal Procedure Code, the applicant - accused no. 3 has prayed to quash and set aside the complaint being Criminal Case No. 2548 of 2019 pending before the learned Judicial Magistrate, Ahmedabad (Rural) qua the applicant. 2. Briefly stated, the applicant seeks to challenge legality, validity and propriety of afore-mentioned criminal case filed under section 138 of the Negotiable Instruments Act, 1881 (for short 'the N.I. Act.'). According to the applicant, the applicant is neither signatory nor drawer of the cheque in question and the applicant being partner of partnership firm viz. Mega Trading Corporation cannot be dragged into impugned proceedings, in view of law laid down by the Hon'ble Apex Court in the case of Aparna A. Shah v/s. Sheth Developers Pvt. Ltd. reported in LAW (SC) 2013 (1) 18 rendered in Criminal Appeal No. 813 of 2013. In support of factual submissions, learned advocate Mr. R.C. Jani for the applicant has drawn attention of the Court towards averments made in para 4 and 5 of the complaint. 3. Before the matter is considered on its merits, it is worthwhile to reproduce the observations made by the Hon'ble Apex Court in the case of Pooja Ravinder Devidasani v/s. State of Maharashtra reported in (2014) 16 SCC 1 , more particularly, para 18 to 23, which reads as under:- "18. In Girdhari Lal Gupta Vs. D.H. Mehta & Anr. (1971) 3 SCC 189 , this Court observed that a person 'in charge of a business' means that the person should be in overall control of the day to day business of the Company. 19. A Director of a Company is liable to be convicted for an offence committed by the Company if he/she was in charge of and was responsible to the Company for the conduct of its business or if it is proved that the offence was committed with the consent or connivance of, or was attributable to any negligence on the part of the Director concerned [See: State of Karnataka Vs. Pratap Chand & Ors. (1981) 2 SCC 335 ]. 20. Pratap Chand & Ors. (1981) 2 SCC 335 ]. 20. In other words, the law laid down by this Court is that for making a Director of a Company liable for the offences committed by the Company under Section 141 of the N.I. Act, there must be specific averments against the Director showing as to how and in what manner the Director was responsible for the conduct of the business of the Company. 21. In Sabitha Ramamurthy & Anr. Vs. R.B.S. Channbasavaradhya (2006) 10 SCC 581 , it was held by this Court that it is not necessary for the complainant to specifically reproduce the wordings of the section but what is required is a clear statement of fact so as to enable the court to arrive at a prima facie opinion that the accused is vicariously liable. [pic] Section 141 raises a legal fiction. By reason of the said provision, a person although is not personally liable for commission of such an offence would be vicariously liable therefor. Such vicarious liability can be inferred so far as a company registered or incorporated under the Companies Act, 1956 is concerned only if the requisite statements, which are required to be averred in the complaint petition, are made so as to make the accused therein vicariously liable for the offence committed by the company. By verbatim reproducing the wording of the Section without a clear statement of fact supported by proper evidence, so as to make the accused vicariously liable, is a ground for quashing proceedings initiated against such person under Section 141 of the N.I. Act. 22. As held by this Court in Pepsi Foods Ltd. & Anr. Vs. Special Judicial Magistrate & Ors. (1998) 5 SCC 343 , summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused. 23. In Gunmala Sales Private Ltd. (supra) on which learned counsel for the respondents has heavily relied, this Court at Para 33(c) held: "In the facts of a given case, on an overall reading of the complaint, the High Court may, despite the presence of the basic averment, quash the complaint because of the absence of more particulars about role of the Director in the complaint. It may do so having come across some unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or totally acceptable circumstances which may clearly indicate that the Director could not have been concerned with the issuance of cheques and asking him to stand the trial would be abuse of the process of the court. Despite the presence of basic averment, it may come to a conclusion that no case is made out against the Director. Take for instance a case of a Director suffering from a terminal illness who was bedridden at the relevant time or a Director who had resigned long before issuance of cheques. In such cases, if the High Court is convinced that prosecuting such a Director is merely an arm- twisting tactics, the High Court may quash the proceedings. It bears repetition to state that to establish such case unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or some totally acceptable circumstances will have to be brought to the notice of the High Court. Such cases may be few and far between but the possibility of such a case being there cannot be ruled out". 4. It bears repetition to state that to establish such case unimpeachable, uncontrovertible evidence which is beyond suspicion or doubt or some totally acceptable circumstances will have to be brought to the notice of the High Court. Such cases may be few and far between but the possibility of such a case being there cannot be ruled out". 4. Bearing in mind the test to fasten the legal liability upon the applicant, it is necessary to reproduce the averments made in the complaint under section 138 of the N.I. Act and more particularly para - 4, 5 and 6, which reads as under:- "4. The accused No. 1 Mega Trading Corporation is a registered partnership firm duly administered, operated and managed by its three partners viz. Partner accused No. 2. Mr. K.C. Joseph, partner Accused No. 3 Girish S. Pillai and another partner Mr. Gopan S. Pillai, who is not arrayed as an accused in this complaint. The accused no. 1 was duly formed, executed, established and registered to carry on its business of viz. Exports of Rock builders, supply of rock builders, Cargo Movers, Commission Agent, supplies of Goods and Contractors for Transport of Goods, contractor of all nature, such other business in such line or lines in any other commodity or commodities as may be decided upon by the partners mutually from time to time etc. through its one or more or all partners carried out, on a profit sharing basis. The accused no. 1 is maintaining its bank account in IDBI Bank Ltd., Branch - Sri Renga, Soudham, Near Medical College Hospital Junction, Alappuzha - 680001, Kerala. 5. The accused No. 2 K.C. Joseph is a partner of accused no. 1 partnership firm and also signatory of Banking transactions, business related transactions etc. and taking part in day to day affairs of accused no. 1 firm, who had issued and signed the cheque dishonoured hereunder towards equal legally enforceable debts of accused no. 1 firm. 6. The accused No. 3 Girish S. Pillai is a managing partner of accused no. 1 firm. He had performed all most all business related transactions etc. for an on behalf of accused no. 1 firm Mega Trading Corporation. 1 firm, who had issued and signed the cheque dishonoured hereunder towards equal legally enforceable debts of accused no. 1 firm. 6. The accused No. 3 Girish S. Pillai is a managing partner of accused no. 1 firm. He had performed all most all business related transactions etc. for an on behalf of accused no. 1 firm Mega Trading Corporation. In the month of March 2017 and onwards, he had approached and contacted commercial team of my said company and had expressed desire to do works of supply of rocks/stones and related liaison works with various authorities required for the purpose as per the terms and conditions and annexures to the three (3) LOIs respectively, to the proposed project at Vizhinjam, etc. He had also defined scope of works for sourcing and supply of rocks/stones from various quarries in the state of Kerala and Tamilnadu including obtaining of all permissions, approvals from concerned departments, transportation of rocks/stones from various quarries and temporary load out facilities at Kollam/Thengapattanam, fishing harbor, etc. amongst various kinds of commercial works, activities, technical etc. proposals and presentations, were explained to the commercial and project team of my said company from time to time." 5. Having heard submissions made at bar and considering the averments made in the complaint, more particularly para 6 of the complaint and principles settled in case law cited at bar, it is relevant to note that the applicant has not replied to the notice issued by the complainant. Apart from it, factual averments made in the complaint, more particularly para - 6 reveals that applicant accused no. 3 is managing partner of accused no. 1 firm and he has performed almost all business related transactions for and on behalf of accused no. 1 firm. The applicant also contacted commercial team of the company and had expressed desire to do work of supply of rocks/stones and related liaison work for the purpose of three LOIs. Thus, the applicant was very much involved right from the inception of the transaction and during its implementation including required permission/approval from the concerned department etc. The averments made in para - 6 of the complaint so suggest that the applicant accused no. 3 being managing partner was actively involved in the transaction as asserted in the complaint. Thus, the applicant was very much involved right from the inception of the transaction and during its implementation including required permission/approval from the concerned department etc. The averments made in para - 6 of the complaint so suggest that the applicant accused no. 3 being managing partner was actively involved in the transaction as asserted in the complaint. Therefore, the submissions made at bar to the effect that the applicant was neither signatory nor drawer of the cheque in question hardly matters to be considered at this stage in view of averments made in para 6 of the complaint. The averments so made in the complaint clearly indicates that the offence is committed with the consent or connivance of the accused persons and there are specific averments against the applicant as to how and in what manner he is involved in the transaction in question and thus, the averments made in para 6 of the complaint meet requirement of section 141 of the N.I. Act. Therefore, the submissions made at bar in view of case law cited by learned advocate Mr. R.C. Jani, the Court do not find that the complaint lacks any required averment, as required to make the applicant liable for the offence committed by the partnership firm under section 141 of the N.I. Act. So the case law cited at bar in the case of Aparna A. Shah (supra) is not helpful to the applicant, wherein cheque was issued by the husband of the applicant there from their joint account, whereas, in the case on hand section 141 extends the principle of vicarious liability to partners of the partnership firm also. 6. So in view of the factual averments made in the complaint, more particularly, para - 6 of the complaint, there is no substance in the present application and it being so, the present application is hereby dismissed at admission stage.