Allowed

M/S Sai Srushti Estates v. Smt Rathnamma

Karnataka HC9 Feb 2023WP/6216/2019

Case brief

AI extract

What is this about?

In a writ petition under Articles 226 and 227 of the Constitution read with Section 482 Cr.P.C., the High Court quashed criminal proceedings for cheque dishonour under the Negotiable Instruments Act. The court held that since the sale agreement was not registered and the cheque was issued conditionally, no legally enforceable debt existed.

What did the court decide?

Petitions allowed; Criminal proceedings in C.C.No.33916/2018 and C.C.No.33921/2018 quashed.

M/S Sai Srushti Estates Vs Smt Rathnamma — Cheque Dishonour | Karnataka HC (2023)

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WP No. 6216 of 2019 C/W WP No. 6215 of 2019

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 9^TH DAY OF FEBRUARY, 2023

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR

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WRIT PETITION NO. 6216 OF 2019 (GM-RES)

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C/W

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WRIT PETITION NO. 6215 OF 2019 (GM – RES)

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IN W.P. NO.6216/2019

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BETWEEN:

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M/S SAI SRUSHTI ESTATES & PROJECTS LLP,

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Digitally signed by R HEMALATHA Location: HIGH COURT OF KARNATAKA

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NOW KNOWN AS M/S SAI SRUSHTI PROJECTS (YELAHANKA) LLP, A REGISTERED PARTNERSHIP FIRM, HAVING IT'S A REGISTERED OFFICE AT NO.18, KAY KAY TOWERS, 9^TH MAIN ROAD, 17^TH CROSS, 7^TH SECTOR, HSR LAYOUT, BENGALURU – 560 102. REPRESENTED BY ITS PARTNER SRI. N. SREENADHA REDDY, MAJOR, S/O DR. JANARDHANA REDDY.

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M/S. SRI SRUSHTI ESTATES

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& PROJECTS LLP, NOW KNOWN AS M/S SAI SRUSHTI PROJECTS (YELAHANKA) LLP, A REGISTERED PARTNERSHIP FIRM, HAVING ITS A REGISTERED

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WP No. 6216 of 2019 C/W WP No. 6215 of 2019

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OFFICE AT NO.18, KAY KAY TOWERS, 9^TH MAIN ROAD, 17TH CROSS, 7^TH SECTOR, HSR LAYOUT, BENGALURU – 560 102. REPRESENTED BY ITS PARTNER SRI. N. SREENADHA REDDY, MAJOR, S/O DR. JANARDHANA REDDY. REPRESENTED BY HIS SPECIAL POWER OF ATTORNEY HOLDER, D.SIVA KUMAR, MAJOR, S/O R DURAI SWAMY.

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P2 DELETED AS PER COURT ORDER DATED 14.02.2019

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…PETITIONERS

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(BY SRI.D.R.RAVI SHANKAR, SENIOR COUNSEL FOR M/S.LAX NEXUS, ADVOCATE)

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AND:

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SMT. RATHNAMMA, W/O LATE SHYAMANNA, AGED ABOUT 56 YEARS, R/AT RAMGONDANAHALLI VILLAGE, YELAHANKA HOBLI, BENGALURU NORTH TALUK, BENGALURU – 560 064.

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…RESPONDENT

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(BY SRI.V.VIJAYASHEKARA GOWDA, ADVOCATE)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA READ WITH SECTION 482 OF CR.P.C. PRAYING TO SET ASIDE THE ORDER DATED

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3 - WP No. 6216 of 2019 C/W WP No. 6215 of 2019

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22.12.2018 AS PER ANNEXURE - H IN CC.NO.33916/18 PASSED BY THE XVIII ACMM AT BANGALORE CITY AND ETC.,

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IN W.P.NO.6215/2019

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BETWEEN:

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M/S SAI SRUSHTI ESTATES & PROJECTS LLP, NOW KNOWN AS M/S SAI SRUSHTI PROJECTS (YELAHANKA) LLP, A REGISTERED PARTNERSHIP FIRM, HAVING ITS A REGISTERED OFFICE AT NO.18, KAY KAY TOWERS, 9^TH MAIN ROAD, 17^TH CROSS, 7^TH SECTOR, HSR LAYOUT, BENGALURU – 560 102. REPRESENTED BY ITS PARTNER SRI. N. SREENADHA REDDY, MAJOR, S/O DR. JANARDHANA REDDY.

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M/S. SRI SRUSHTI ESTATES & PROJECTS LLP, NOW KNOWN AS M/S SAI SRUSHTI PROJECTS (YELAHANKA) LLP, A REGISTERED PARTNERSHIP FIRM, HAVING ITS A REGISTERED OFFICE AT NO.18, KAY KAY TOWERS, 9^TH MAIN ROAD, 17^TH CROSS, 7^TH SECTOR, HSR LAYOUT, BENGALURU – 560 102. REPRESENTED BY HIS PARTNER SRI. N. SREENADHA REDDY, MAJOR, S/O DR. JANARDHANA REDDY. REPRESENTED BY HIS SPECIAL POWER OF ATTORNEY HOLDER, D.SIVA KUMAR,

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WP No. 6216 of 2019 C/W WP No. 6215 of 2019

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MAJOR, S/O R DURAI SWAMY.

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P2 DELETED AS PER COURT ORDER DATED 14.02.2019

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…PETITIONERS

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(BY SRI.D.R.RAVISHANKAR, SENIOR COUNSEL FOR SRI.SARAVANA S, ADVOCATE)

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AND:

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SRI.MANJUNATHA, S/O LATE SHYAMANNA, AGED ABOUT 36 YEARS, R/AT RAMGONDANAHALLI VILLAGE, YELAHANKA HOBLI, BENGALURU NORTH TALUK, BENGALURU – 560 064.

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…RESPONDENT

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(BY SRI.V.VIJAYASHEKARA GOWDA, ADVOCATE)

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THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA READ WITH SECTION 482 OF CR.P.C. PRAYING TO SET ASIDE THE ORDER DATED 22.12.2018 AS PER ANNEXURE - H IN CC.NO.33921/18 PASSED BY THE XVIII ACMM AT BANGALORE CITY AND ETC.,

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THESE PETITIONS, COMING ON FOR PRELIMINARY

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HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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A Private complaint under Section 200 of Cr.P.C was filed by the respondent for the offence under Section 138 of the Negotiable Instruments Act, alleging that the cheque which was issued towards the part payment of the sale consideration in pursuance of agreement of sale entered into between the complainant and the accused when presented for realization was dishonoured for want of funds.

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Learned Magistrate took cognizance after

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recording the sworn statement and registered the case and issued summons.

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Sri. D.R.Ravishankar, learned Senior Counsel

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for the petitioners submits that the cheque is alleged to have been issued towards part payment of the sale consideration subject to condition that the complainant secures other executants of the agreement to admit the execution of the agreement of the sale before the subregistrar, and the complainants having not secured their

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6 - WP No. 6216 of 2019 C/W WP No. 6215 of 2019

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presence, the said agreement of sale is pending consideration before the sub-registrar for registration and in the absence of legally enforceable debt, the registration of the complaint against the petitioners/accused is impermissible. He further submits that the partners having not been arraigned as accused to the complaint, the accused No.1/Registered Partnership Firm cannot be held vicariously guilty as specified under Section 142 of the N.I. Act.

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I have examined the submissions made by the

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learned counsels for the parties.

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A perusal of the agreement of sale indicates that the complainant was required to secure presence of other executants to admit the execution of the agreement of the sale before the Registrar, and the said cheque is alleged to have been issued subject to complainant securing the presence of the executants. Admittedly, the agreement of sale was not registered, since the complainant did not secure the presence of other

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executants to admit the execution of agreement of sale. The complainant having not performed his obligation under the agreement of sale, the cheque issued was not towards legally enforceable debt.

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Even otherwise, the partners of the

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accused/firm have not been arraigned as accused so as to hold the partnership firm vicariously guilty as specified under Section 142 of the N.I. Act, the cognizance taken is impermissible.

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In view of the same, the continuation of the criminal proceedings against the petitioner/accused will be an abuse of process of law. Accordingly, I pass the following:

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ORDER

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i. Petitions are allowed.

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ii. The impugned proceedings in C.C.No.33916/2018 and C.C.No.33921/2018 on the file of XVIII ACMM at Bangalore City, is hereby quashed.

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Sd/JUDGE

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RKA

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List No.: 1 Sl No.: 37

M/S Sai Srushti Estates v. Smt Rathnamma

Case brief

What is this about?

What did the court decide?

M/S Sai Srushti Estates v. Smt Rathnamma

Case brief

What is this about?

What did the court decide?

What the court decided

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