Dismissed

M/S Paras Investment and Anr. v. Vijay Kumar Pali and Ors.

Chhattisgarh HC7 Jan 2011CRMP/678/2009

Case brief

AI extract

What is this about?

In an application under Section 482 Cr.P.C. seeking quashing of proceedings for cheque dishonour, the High Court of Chhattisgarh dismissed the petition. The Court held that since the complainant alleged the applicants constituted an association of individuals liable under Section 141 of the Negotiable Instruments Act, the proceedings were maintainable and did not amount to abuse of process.

What did the court decide?

The petition for quashing of criminal proceedings under Section 482 Cr.P.C. was dismissed as it was devoid of merit.

M/S Paras Investment and Anr. Vs Vijay Kumar Pali and… — Cheque Dishonour | Chhattisgarh HC (2011)

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HiGH COURT OF CHHATTiSGARH AT BILASPjJR

Cr.^,P.No.S78Qf200S

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Petitjoners Appiicant No.1	1,	M/s Paras jnvestment, Propriefor-Shri Rajesh Shah 7-A, Rishabh Compiex, M.Q. Road, Raipur (CG).
AppiscantNo.3	2.	Rajesh Shah, S/o Shri Premji Shah, aged about 33 years, 7-A, Rlshabh CompSex, M.G. Road, Raipur (CG). Versus
Respondents Complalnant	1.	Vijay Kumar Pall, S/o Late B.R.Paii, R/o Bajrang Chowk, Mathpara, Rajpur, Pojjce Statlon - PuranJ Basti, Dist-Raipur (CG)
Applicant No.2	2.	Anish Shah, S/o Shri Premji Shah, House No.C-304, Laxmi Compiex, Fafadih, Raipur (CG)
AppiicantNo.4	3.	M/s Tradeiink Security, Proprietor- SmtRupa! Shah, W/o Shri Anish Shah, House NO.-C-304, LaxmJ Compiex, Fafadih, Raipur (CG)

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(Petition^{under Sectlon482of theCr.P.C.)}

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(SB: Hon'bis Mr. T.P. Sharma, J.)

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Present:

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MTS. Fouzia Mirza, counsel forthe petitioners.

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Mr.Y.C.Sharma, counsei for respondent No.1 .

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None present for respondents No.2 and 3,

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ORDER

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(Passed on 7m January, 2011)

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By thls petition under Ssction 482 of the Cr.P.C., the petitioners have prayed for quashment of criminaS proceedSngs pending against them in the instance of respondent No.1 before the Judidai SViagistrate First CSass, Raipur in Crtmina} Cas©No.773/2005 on th©ground that present petitioners and other accused are separate and distinct entity and not Siabie to pay or dischargs the iisbiilty accrued undsr the cheque sssued by respondent No.2 from ths account of respondent No.3, therefore, continuance of criminat proceedjngs wouSd amount to abuse of process of the Court.

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As per compiaint filed on behaif of rsspondent No.1, petitioner No.2 and respondsnt No.2 are engaged in shars business. Potltioner No.2 is proprietor of pet!tton©rNo.1. Respondent No.2 is husband of Smt.Rupai

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Shah, proprietor of respondsnt No.3. Rsspondont No.1 has purchased snare of different companies through the petstioners and respondents No.2 and 3. Respondent No.2 has issued cheques from th© account of respondent No.3 and discharged the liablllty of fh©cheques, sam©were presented for encashment and were dishonor©d. Thereafter, notice for csischarge of iiabiiity was issued by respondent No.1, but the petitloners and respondents No.2and 3 have faiied to discharge their liabiiity. Thereafter, complaint undor Section 138 of tho Negotiabse instruments Act, 1881 (for short 'the Act') was fiied.

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S have heard Soaned counse! for the partses, perused the p^tition and other documents fiied on behalf ofthe petitSoners.

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Loarned counsoi for the petitioners vehementSy argued that tho petitioners and respondonts No-2 and 3 are not member or diroctor of the companies or rustic person, thoy are distinct entsty not tiabie for the act of each othor. The petitioners have not issued any cheque in favour of rsspondent No.1, therefore, they are not iiabie for discharge of any liabHsty or payment of debt. in the present case, the pstitioners are not necessary party or accusecf in the compiaint case, therefore, continuance of crimmaS proceedings against the petitioners wouid be abuse of process ofthe Court.

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On the other hand, iearned counsel for respondont No.1 opposed the petition and argued that prssent respondent No.1 has categorieatiy aileged In his comptaint that tho petitioners and rospondents N6.2 and 3 are engaged in share broker. Prosent rospondont NoJ has purchased share of different companies from the petitioners and respondents No.2 and 3 ®nd discharge iiability of said share. Respondont No.2 has issued cheque from the account of respondent No.3. The petitioners and respondents No.2 and 3 and ars companies (as defined under Section 141 of the Act as they are assodation of indivsduais) liabie for discharge of dsbt. Present pstitioners and respondents No.2 and 3 ar© accused in the aforssaid crlmina! compSaint case, therefore, continuancs of criminai proceedings would not amount of abuse of process of the Court.

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Power under Section 482 ofthe Cr.P.C. is exceptlonaS in nature ancS shouid be used sparingiy. Whtte dealing wsth exercise of power under Sectlon 482 ofthe Cr.P.C. in th©matter of Mis. Zandu Pharmaceuflcaf Works Ltd. and

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^r-^^ s€^$%^ j

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others v. Md. Sharaful Haque and others1 the Supreme Courl has heki thus,

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"8. Exercise of power under Section 482 of the Code in a case of this naturo js the exception and not the ruie. The Section does not confor any new powers cn the High Court. St onSy saves the inhorent power which the Court possessed bofore the enactment of the Code. !t envisages three circumstances undsr which the inherent jurisdiction miay be exorcised, nameSy. (2) to give effect to an order under the Code, (ii) to prevent abuse of the process of court, and (lil) to othorwise secure the onds of justsco, it is nelther possible nor dessrabie to iay down any inftexiblo rule which wouid govern tho exercise of inherent jurisdictson...«....."

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in the presont case, as per copy ofthe compiaint, present petltionors and respondents No.2 and 3 are jointiy deaiing wlth the share. Present respondent No.1 has purchased share of different companies through the petationers and respondents No.2 and 3, present petstioners and respondents No.2 and 3 are liabie to discharge the liability accrued under the cheque in question but they have failed to discharge their liabiiity. On the aforesasd basis, complaint against the petitioners and respondents No.2 and 3 has been fiSed by respondent No.1.

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For the purpose of iiabiiity against tho company, company has been definod in Section 141 ofthe Act which reads as under:-

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"141. Offencesbycompanies.-(l)

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xxx xxx xxx

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(2) xxx xxx xxx

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Explanation.-For the purposes ofthis section,"

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(a) "company" means any body corporate and includes a firm or other association of individuals; and

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(b) "director", in relation to a firm, means a partner in the firm"

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As per definition of company under Section 141 of the Act, "company means any body corporato and excludes a fsrm or "other assodation of individua!s":

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^ 1AIR2005SC9

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10.Sn the present case, definitely the petitioners and respondents No.2 and 3 ar© not directors or responsible authorities of any body corporate or registered firm but they are association of mdividuats as per ailegation made in the comptaint.

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te^sg^'"

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11 .At the stage of taking cognizance, Courts ar©required to consider th©case on the basis of aiiegation made in the compiaint and material coiiected on behalf of the complainant.Allegation made in the compiaint reveais that present^{complainanVrespondentNo.1hasfsiedcomptaintfortheoffenc©} punishabie under Section 138 of the Act against the petitioners and respondents No.2 and 3 as association of individuals and such complaint is maintainable in terms of Section 141 of th©Act. in these circumstances, continuance of criminaS proceedings against the petitioners wouid not be abuse of process of the Court.

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Sd/T.P. Sharma Judge

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^fe^lN-II

M/S Paras Investment and Anr. v. Vijay Kumar Pali and Ors.

Case brief

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M/S Paras Investment and Anr. v. Vijay Kumar Pali and Ors.

Case brief

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