Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL.M.C. No. 2795 of 2013 and Crl.M.C. No.2809/2013
th
Date of decision: 24 April, 2014
SHRI R. RAMAMURTHY & ORS. ..... Petitioners
Through: Mr.Ashu Ann Michael &
Mr. Sajith P. Advocates
versus
M/S ITC LIMITED & ORS. ..... Respondents
Through: Mr. Anil K.Kher, Sr. Adv. with
Mr. Ankur Bansal, Adv.
AND
+ CRL.M.C. 2809/2013 & Crl.M.A. No. 10791/2013
R RAMAMURTHY & ORS. ..... Petitioners
Through: Mr.Ashu Ann Michael &
Mr. Sajith P. Advocates
versus
ITC LTD. ..... Respondent
Through: Mr. Anil K.Kher, Sr. Adv. with
Mr. Ankur Bansal, Adv.
CORAM:
HON'BLE MR. JUSTICE VED PRAKASH VAISH
VED PRAKASH VAISH, J. (ORAL)
1. By way of these two petitions under Section 482 Code of
Criminal Procedure, 1973 (hereinafter referred to as `Cr.P.C.’),
the petitioners assails the order dated 21.12.2012 passed by
learned Metropolitan Magistrate in Complaint Case No.988/1/12
titled M/s ITC Limited vs. M/s Srvana Traders & Ors. and
order dated 20.10.2012 passed by learned Metropolitan
Page 1 of 6
Magistrate in Complaint Case No.26/12/12 titled M/s ITC
Limited vs. M/s Srvana Traders & Ors. for the offence under
Section 138 of the Negotiable Instruments Act, 1881 (hereinafter
referred to as `the Act’). Since both the petitions are on identical
grounds and between the same parties, both the petitions are
being disposed of by this common order.
2. Brief facts of the case are that the respondent ITC Ltd. filed the
aforesaid complaints under Section 138 read with Section 142
of the Act against M/s Srvana Traders and its partners
(petitioners and respondents No.2 & 3 herein).
3. The case of respondent No.1/complainant is that the accused
No.1 is a partnership firm and accused No.2 to 6 are its partners
and engaged in the business of distribution/manufacturing/
marketing/commission agent or broker in garments and textiles.
The accused No.2 to 6, for and on behalf of accused No.1 being
desirous of associating with the complainant as a Consignment
Sales Agent approached the complainant and requested that the
accused No.1 may be appointed as Consignment Sales Agent of
the complainant for the branded apparels and accessories of the
complainant. The complainant acceded to the said request and
appointed accused No.1 as their Consignment Sales Agent on
the terms and conditions as mentioned in the agreement entered
into between the accused persons and the complainant on
28.7.2008 at Delhi. The said agreement was signed by the
accused No.2 to 6 on behalf of accused No.1. The complainant
has also stated that along with the accused No.1, the complainant
also has the right to file a complaint against accused No.2 to 6,
as the accused No.2 to 6 are the partners and persons incharge of
the affairs of the accused No.1. The accused No.2 to 6 are
Page 2 of 6
signatories to the agreement in reference and also have been
making representations and assurances to the complainant that
the cheque is being issued to liquidate the debts of the
complainant in part and the said cheque shall be honoured on its
presentation. The accused No.2 to 6 are also responsible for
making the appointment arrangements with the bankers of
accused No.1, so that the cheque in reference is honoured.
Accused No.2 to 6 are jointly, severally and personally liable for
the dishonour of the cheque. The complainant has also stated
that accused No.1 issued a cheque bearing No.225760 dated
3.10.2011 for Rs.20.00 lakhs (Rupees twenty lakhs), Cheque
bearing no. 225761 dated 17.10.2011 for Rs.20.00 Lakhs
(Rupees twenty lakhs) and cheque bearing no. 225763 dated
24.10.2011 for Rs.20.00 lakhs (Rupees twenty lakhs), all drawn
on State Bank of Travancore, Ernakulam. On presentation, the
said cheques in question were dishonoured with the remarks
`Exceeds Arrangement’. A statutory notice dated 4.3.2012 and
2.4.2012 was served and the accused persons failed to make the
payment of the amount of the cheques despite service of notice.
Hence the complaint under Section 138 of the Act was filed.
4. Vide order dated 21.12.2012 in Complaint Case no. 988/1/12,
learned trial court took cognizance of the offence under Section
138 of the Act read with Section 142 of the Act against the
petitioners and respondents No.2 to 3 for dishonour of cheque
bearing no. 225760 dated 3.10.2011 for Rs.20.00 lakhs.
5. Vide order dated 20.10.2012 in Complaint case no. 26/12,
learned trial court took cognizance of the offence under Section
138 of the Act read with Section 142 of the Act against the
petitioners and respondents No.2 to 3 for dishonour of cheque
Page 3 of 6
bearing no. 225761 dated 17.10.2011 and cheque bearing no.
225763 dated 24.10.2011 both for Rs.20.00 lakhs each.
6. Against the impugned orders dated 21.12.2012 and 20.10.2012,
the petitioners have filed the present petition.
7. Learned counsel for the petitioners submits that the petitioners
are not `Drawers’ of the cheque in question and are not liable for
the offence under Section 138 of the Act. Counsel for the
petitioners further contends that the petitioners are not
responsible for the day to day affairs of the accused firm and
they are only partners and, therefore, provisions of Section 141
of the Act are not applicable.
8. In support of his submissions learned counsel for the petitioners
relied upon Mrs. Aparna A. Shah vs. M/s. Sheth Developers
Pvt. Ltd. & Anr. (2013) 8 SCC 71.
9. I have carefully gone through the judgment in Mrs. Aparna A.
Shah ’s case (supra) relied upon by the counsel for the
petitioners. The same is of no help to the petitioner. In the said
case, the cheque was issued by the husband of the petitioner
from their joint account and on dishonour of the said cheque, a
complaint under Section 138 of the Act was filed against the
petitioner Mrs. Aparna Shah and her husband. The petitioner
had challenged the order of summoning on the ground that she
was not the `drawer’ of the cheque. In the instant case,
admittedly the petitioners are partners of the accused firm
namely Srvana Traders.
10. It is settled principle of law that the primary responsibility of the
complainant is to make specific averments in the complaint so as
to make the accused vicariously liable. For fastening the
criminal liability, there is no legal requirement for the
Page 4 of 6
complainant to show that the accused partner of the firm was
aware about the each and every transaction. On the other hand,
proviso to Section 141 of the Act clearly lays down that if the
accused is able to prove to the satisfaction of the Court that the
offence was committed without his knowledge or he had
exercised due diligence to prevent the commission of such
offence, he will not be liable to punishment. Needless to say,
the final judgment and order would depend on the evidence
adduced. Criminal liability is attracted only on those who at the
time of commission of the offence were incharge and were
responsible for the conduct of the business of the firm. But
vicarious criminal liability can be inferred against the partners of
the firm when it is specifically averred in the complaint about
the status of the partners `qua the firm’. This would make them
liable to face the prosecution. But it does not lead to automatic
conviction. Hence, they are not adversely prejudiced if they are
eventually found to be not guilty. As a necessary consequence
thereof would be acquittal.
11. At the threshold, it cannot be said that no cognizance of the
complaint can be taken by the trial court. Unless the parties are
given an opportunity to lead evidence, it is not possible to come
to a definite conclusion as to whether all the partners are liable
for the offence under Section 138 of the Act.
12. Indeed, it would be nothing short of a mockery of justice if the
directors of a company or partners of a firm who have duped a
third party by producing false documents like partnership deed
or making false statements (that some others were incharge of
the company/firm), at a subsequent stage, seek protection from
prosecution on the ground that they were not directly indicted in
Page 5 of 6
the complaint. Such a proposition strikes against one of the very
basic tenets of the law of natural justice, which is, that none shall
be allowed to take advantage of his own default. Of course, the
above observations is of general nature and has no bearing on
the present case. But nevertheless, the power to quash the
criminal proceeding with respect to an offence under Section
141 of the act must be exercised carefully and keeping the
aforesaid caveat in mind.
13. Admittedly, in the instant case the petitioners are partners of the
accused firm and, therefore keeping in view the above said
parameters, all the petitioners are jointly and severally liable for
the acts of the firm.
14. For the foregoing reasons, the present petitions are without any
merits and the same are hereby dismissed.
15. Both the petitions stand disposed of.
Crl.M.As. No.10790/2013 & 10791/2013
Dismissed as infructuous.
(VED PRAKASH VAISH)
JUDGE
April 24, 2014
aj
Page 6 of 6
+ CRL.M.C. No. 2795 of 2013 and Crl.M.C. No.2809/2013
th
Date of decision: 24 April, 2014
SHRI R. RAMAMURTHY & ORS. ..... Petitioners
Through: Mr.Ashu Ann Michael &
Mr. Sajith P. Advocates
versus
M/S ITC LIMITED & ORS. ..... Respondents
Through: Mr. Anil K.Kher, Sr. Adv. with
Mr. Ankur Bansal, Adv.
AND
+ CRL.M.C. 2809/2013 & Crl.M.A. No. 10791/2013
R RAMAMURTHY & ORS. ..... Petitioners
Through: Mr.Ashu Ann Michael &
Mr. Sajith P. Advocates
versus
ITC LTD. ..... Respondent
Through: Mr. Anil K.Kher, Sr. Adv. with
Mr. Ankur Bansal, Adv.
CORAM:
HON'BLE MR. JUSTICE VED PRAKASH VAISH
VED PRAKASH VAISH, J. (ORAL)
1. By way of these two petitions under Section 482 Code of
Criminal Procedure, 1973 (hereinafter referred to as `Cr.P.C.’),
the petitioners assails the order dated 21.12.2012 passed by
learned Metropolitan Magistrate in Complaint Case No.988/1/12
titled M/s ITC Limited vs. M/s Srvana Traders & Ors. and
order dated 20.10.2012 passed by learned Metropolitan
Page 1 of 6
Magistrate in Complaint Case No.26/12/12 titled M/s ITC
Limited vs. M/s Srvana Traders & Ors. for the offence under
Section 138 of the Negotiable Instruments Act, 1881 (hereinafter
referred to as `the Act’). Since both the petitions are on identical
grounds and between the same parties, both the petitions are
being disposed of by this common order.
2. Brief facts of the case are that the respondent ITC Ltd. filed the
aforesaid complaints under Section 138 read with Section 142
of the Act against M/s Srvana Traders and its partners
(petitioners and respondents No.2 & 3 herein).
3. The case of respondent No.1/complainant is that the accused
No.1 is a partnership firm and accused No.2 to 6 are its partners
and engaged in the business of distribution/manufacturing/
marketing/commission agent or broker in garments and textiles.
The accused No.2 to 6, for and on behalf of accused No.1 being
desirous of associating with the complainant as a Consignment
Sales Agent approached the complainant and requested that the
accused No.1 may be appointed as Consignment Sales Agent of
the complainant for the branded apparels and accessories of the
complainant. The complainant acceded to the said request and
appointed accused No.1 as their Consignment Sales Agent on
the terms and conditions as mentioned in the agreement entered
into between the accused persons and the complainant on
28.7.2008 at Delhi. The said agreement was signed by the
accused No.2 to 6 on behalf of accused No.1. The complainant
has also stated that along with the accused No.1, the complainant
also has the right to file a complaint against accused No.2 to 6,
as the accused No.2 to 6 are the partners and persons incharge of
the affairs of the accused No.1. The accused No.2 to 6 are
Page 2 of 6
signatories to the agreement in reference and also have been
making representations and assurances to the complainant that
the cheque is being issued to liquidate the debts of the
complainant in part and the said cheque shall be honoured on its
presentation. The accused No.2 to 6 are also responsible for
making the appointment arrangements with the bankers of
accused No.1, so that the cheque in reference is honoured.
Accused No.2 to 6 are jointly, severally and personally liable for
the dishonour of the cheque. The complainant has also stated
that accused No.1 issued a cheque bearing No.225760 dated
3.10.2011 for Rs.20.00 lakhs (Rupees twenty lakhs), Cheque
bearing no. 225761 dated 17.10.2011 for Rs.20.00 Lakhs
(Rupees twenty lakhs) and cheque bearing no. 225763 dated
24.10.2011 for Rs.20.00 lakhs (Rupees twenty lakhs), all drawn
on State Bank of Travancore, Ernakulam. On presentation, the
said cheques in question were dishonoured with the remarks
`Exceeds Arrangement’. A statutory notice dated 4.3.2012 and
2.4.2012 was served and the accused persons failed to make the
payment of the amount of the cheques despite service of notice.
Hence the complaint under Section 138 of the Act was filed.
4. Vide order dated 21.12.2012 in Complaint Case no. 988/1/12,
learned trial court took cognizance of the offence under Section
138 of the Act read with Section 142 of the Act against the
petitioners and respondents No.2 to 3 for dishonour of cheque
bearing no. 225760 dated 3.10.2011 for Rs.20.00 lakhs.
5. Vide order dated 20.10.2012 in Complaint case no. 26/12,
learned trial court took cognizance of the offence under Section
138 of the Act read with Section 142 of the Act against the
petitioners and respondents No.2 to 3 for dishonour of cheque
Page 3 of 6
bearing no. 225761 dated 17.10.2011 and cheque bearing no.
225763 dated 24.10.2011 both for Rs.20.00 lakhs each.
6. Against the impugned orders dated 21.12.2012 and 20.10.2012,
the petitioners have filed the present petition.
7. Learned counsel for the petitioners submits that the petitioners
are not `Drawers’ of the cheque in question and are not liable for
the offence under Section 138 of the Act. Counsel for the
petitioners further contends that the petitioners are not
responsible for the day to day affairs of the accused firm and
they are only partners and, therefore, provisions of Section 141
of the Act are not applicable.
8. In support of his submissions learned counsel for the petitioners
relied upon Mrs. Aparna A. Shah vs. M/s. Sheth Developers
Pvt. Ltd. & Anr. (2013) 8 SCC 71.
9. I have carefully gone through the judgment in Mrs. Aparna A.
Shah ’s case (supra) relied upon by the counsel for the
petitioners. The same is of no help to the petitioner. In the said
case, the cheque was issued by the husband of the petitioner
from their joint account and on dishonour of the said cheque, a
complaint under Section 138 of the Act was filed against the
petitioner Mrs. Aparna Shah and her husband. The petitioner
had challenged the order of summoning on the ground that she
was not the `drawer’ of the cheque. In the instant case,
admittedly the petitioners are partners of the accused firm
namely Srvana Traders.
10. It is settled principle of law that the primary responsibility of the
complainant is to make specific averments in the complaint so as
to make the accused vicariously liable. For fastening the
criminal liability, there is no legal requirement for the
Page 4 of 6
complainant to show that the accused partner of the firm was
aware about the each and every transaction. On the other hand,
proviso to Section 141 of the Act clearly lays down that if the
accused is able to prove to the satisfaction of the Court that the
offence was committed without his knowledge or he had
exercised due diligence to prevent the commission of such
offence, he will not be liable to punishment. Needless to say,
the final judgment and order would depend on the evidence
adduced. Criminal liability is attracted only on those who at the
time of commission of the offence were incharge and were
responsible for the conduct of the business of the firm. But
vicarious criminal liability can be inferred against the partners of
the firm when it is specifically averred in the complaint about
the status of the partners `qua the firm’. This would make them
liable to face the prosecution. But it does not lead to automatic
conviction. Hence, they are not adversely prejudiced if they are
eventually found to be not guilty. As a necessary consequence
thereof would be acquittal.
11. At the threshold, it cannot be said that no cognizance of the
complaint can be taken by the trial court. Unless the parties are
given an opportunity to lead evidence, it is not possible to come
to a definite conclusion as to whether all the partners are liable
for the offence under Section 138 of the Act.
12. Indeed, it would be nothing short of a mockery of justice if the
directors of a company or partners of a firm who have duped a
third party by producing false documents like partnership deed
or making false statements (that some others were incharge of
the company/firm), at a subsequent stage, seek protection from
prosecution on the ground that they were not directly indicted in
Page 5 of 6
the complaint. Such a proposition strikes against one of the very
basic tenets of the law of natural justice, which is, that none shall
be allowed to take advantage of his own default. Of course, the
above observations is of general nature and has no bearing on
the present case. But nevertheless, the power to quash the
criminal proceeding with respect to an offence under Section
141 of the act must be exercised carefully and keeping the
aforesaid caveat in mind.
13. Admittedly, in the instant case the petitioners are partners of the
accused firm and, therefore keeping in view the above said
parameters, all the petitioners are jointly and severally liable for
the acts of the firm.
14. For the foregoing reasons, the present petitions are without any
merits and the same are hereby dismissed.
15. Both the petitions stand disposed of.
Crl.M.As. No.10790/2013 & 10791/2013
Dismissed as infructuous.
(VED PRAKASH VAISH)
JUDGE
April 24, 2014
aj
Page 6 of 6