High Court acquitted accused partners in a cheque bounce case, holding that the complaint lacked the mandatory averment under Section 141 of the Negotiable Instruments Act that they were in-charge and responsible for the firm's business.
Conviction and sentences set aside; revision petitioners acquitted and set at liberty; fine deposit refunded.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT :
THE HONOURABLE MR. JUSTICE V.RAMKUMAR
MONDAY, THE 10TH SEPTEMBER 2007 / 19TH BHADRA 1929
Crl.Rev.Pet.No. 2194 of 2004(D)
------------------------------CRA.122/2002 of ADDL. SESSIONS COURT (ADHOC)-II, ALAPPUZHA CC.340/1999 of JDUL.MAGISTRATE OF FIRST CLASS, RAMANKARI
REVN. PETITIONER:
RANI GEORGE, W/O.GEORGE,
PALLADANS, CMC 23, CHERTHALAI.
BY ADV. SRI.M.T.SURESHKUMAR SRI.M.T.SURESHKUMAR
RESPONDENTS:
HIGH COURT OF KERALA, ERNAKULAM.
BY PUBLIC PROSECUTOR SRI. K.S. SIVAKUMAR
SRI.V.RAJENDRAN (PERUMBAVOOR)
THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 10/09/2007, ALONG WITH CRRP NO. 2330 OF 2004 CRRP NO. 2352 OF 2004 THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
V. RAMKUMAR, J.
*** * * * * * * * * * * * * * * * * * Crl.R.P.Nos. 2194/04,2352/04 and 2330/04**
*** * * * * * * * * * * * * * * * * * Dated: 10**th day of September 2007
ORDER
The revision petitioner in Crl.R.P. 2194 of 2004 are accused Nos. 5 and 7, the revision petitioner is Crl.r.P. No. 2330 of 2004 are accused Nos. 5 and 6 and the revision petitioner in 2352 of 2004 is the 3rd accused in C.C.340 of 1999 on the file of the J.F.C.M. Ramankary. A partnership firm by name “Matha Modern Mills” and seven of its partners were prosecuted in the said case by the first respondent herein by filing a private complaint alleging the commission of an offence punishable under Sec. 138 of the negotiable Instruments Act, 1881 ( N.I. Act for short) .
The second accused is the Managing partner and accused Nos. 3 to 8 are active partners entitled to share the profits of the first accused partnership firm. The 2nd accused is conducting the business on behalf of the first accused firm. The 2nd accused is the Managing Partner entitled to enter into financial dealings on behalf of the other partners. Accused Nos. 2 to 8 are responsible for the debts and liabilities of the said firm. The 2nd accused acting on behalf of the firm
Crl.R.P.Nos. 2194/04,2352/04 and 2330/04 -:2:-
borrowed a sum of Rs. 4,25,000/- from the complainant and in discharge of the said liability he executed the original of Ext.P2 cheque for the said amount. The cheque when presented before the drawee bank was dishonoured for want of sufficient fund in the account of the accused. Thereafter, the original of Ext.P4 statutory notice was issued to the accused. Even after due receipt of the statutory notice the accused have not paid the amount covered by the cheque within the statutory period. Hence, the complaint.
Crl.R.P.Nos. 2194/04,2352/04 and 2330/04 -:3:-
fine of Rs. 5,000/- and on default to pay the fine to undergo simple imprisonment for three months.
points were stressed in support of the revisions:-
appearing for the first respondent complainant made the following submissions:-
The averment in the complaint that accused Nos. 3 to 8 are active partners entitled to share the profits is wide enough to bring
Crl.R.P.Nos. 2194/04,2352/04 and 2330/04 -:4:-
the case under Section 141 of the Negotiable Instruments Act. The exact averment in the complaint reads as follows:-
“മ�ന� മ�തല എട� വര� പ�ത�കള ട� സ��നത�ര� ��ഭവ�ഹ�ത��ഭ�ക�ന അരഹതയ�ള സജ%വ �ങ�ള�കള�ണ�.”
The aforesaid averment makes it beyond doubt that A3 to A7
are also active partners who are entitled share the income of the firm. A verbatim reproduction of the wording of Section 141 of the N.I. Act is not called for. Moreover, P.W.1 the complainant examined as P.W.1 has in unmistakable terms deposed before court that accused Nos. 2 to 8 are conducting the day-today affairs of the firm and are sharing the share profits and are also bound to discharge the debts of the firm. The complaint cannot be read in isolation but has to be read along with the testimony of the complainant./ Hence the complaint does not suffer from any of the deficiencies alleged against it. With regard to the alleged composition covered by Annexure 2 order a reading of sub Section 8 of Sec. 320 Cr.P.C. will clearly shows that the composition will have the effect of an acquittal only those accused with whom the offence has been compounded. Even assuming that the offence has been compounded as against the firm, that by itself will not absolve the other partners of their liability and they will continue to be liable for the offernce notwithstanding the
Crl.R.P.Nos. 2194/04,2352/04 and 2330/04 -:5:-
composition of the offence.
“�ണട�� പ�ത� മറ� പ�ത�കളക� വവണട� സ���ത�ക ഇട��ട�കള നടത�ന അധ�ക��ര0ട Managing Partner ആണ�”
The opening paragraph of the complaint itself avers that the 2nd accused is the Managing partner of the firm. So, if the second accused in his capacity as Managing Partner is admittedly authorised to enter into financial transactions on behalf of the other accused as pleaded in the complaint, it is futile for the complainant to contend that accused Nos. 3 to 8 were in-charge of and were responsible to the firm for the conduct of the business of the firm so as to be made liable. The legal position is no more res integra. The matter has been authoritatively pronounced upon in the decisions reported in Binod Kumar Gupta and Others v. Ram Ashray Mahoto and Others -2005 (4) SCC 209, S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr. - JT 2007 (4) SC 230, Sabitha Ramamurthy & Anr. v. R.B.S. Channabasavaradhya - AIR 2006
Crl.R.P.Nos. 2194/04,2352/04 and 2330/04 -:6:-
SC 3086 and Raghu Lakshminarayanan v. M/s. fine Tubes - JT 2007 (5) SC 552. Unless the complaint contains an averment to the effect that the person made as an accused was in-charge of and was responsible to the firm in the conduct of the business of the firm such person cannot be proceeded again. There is no averment in the complaint under Sub Sec. (2) of Section 141 as well so as to proceed against any of the partners other than the managing partner. In the cases cited even an averment that the accused was actively involved in the management of the company was found insufficient to launch a prosecution against such accused.
Crl.R.P.Nos. 2194/04,2352/04 and 2330/04 -:7:-
passed against the revision petitioners cannot therefore be sustained and are accordingly dislodged.
V. RAMKUMAR, (JUDGE)
ani.
Crl.R.P.Nos. 2194/04,2352/04 and 2330/04 -:8:-
2 issues framed by the court
Whether prosecution of partners other than the managing director under Section 141 of the Negotiable Instruments Act requires a specific averment in the complaint that they were in-charge and responsi
Whether the compounding of the offence against the firm exonerates all partners from further prosecution.
Colour shows how this judgement treated each authority
Binod Kumar Gupta and Others v. Ram Ashray Mahoto and OthersReferred¶52
Binod Kumar Gupta and Others v. Ram Ashray Mahoto and Others -2005 (4) SCC 209 · Who else cites this
S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr.Referred¶52
S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr. - JT 2007 (4) SC 230 · Who else cites this
Sabitha Ramamurthy & Anr. v. R.B.S. ChannabasavaradhyaReferred¶52
Sabitha Ramamurthy & Anr. v. R.B.S. Channabasavaradhya - AIR 2006 SC 3086 · Who else cites this
Raghu Lakshminarayanan v. M/s. fine TubesReferred¶52
Raghu Lakshminarayanan v. M/s. fine Tubes - JT 2007 (5) SC 552 · Who else cites this
3 provisions across 2 enactments
RANI GEORGE
THRESIAKKUTTY CHERIAN
STATE OF KERALA
V. RAMKUMAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
