Petitioners challenged their prosecution in a cheque dishonour case before quashing, arguing they had resigned. The court held the complaint failed to allege necessary facts for vicarious liability under Section 141 of the N.I. Act and quashed proceedings.
Proceedings against petitioners in C.C. No.1598 of 2016 are quashed.
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 JUDICATURE AT MADRAS
DATED : 18.08.2016
CORAM
THE HONOURABLE MR.JUSTICE P.N.PRAKASH
Crl.OP No.12567 of 2016 & Crl.M.P. No.6486 of 2016
1.Othisamy Nanjappa Gounder
3.Ellapalayam Ramasamy Elango
4.Ellapalayam Palani Gounder Rajendiran.... Petitioners
Vs
E. Velu
.... Respondent
Prayer:- Criminal Original Petition filed under Section 482 Cr.P.C., for direction to call for the records in C.C. No.1598 of 2016 on the file of the Learned XVII Metropolitan Magistrate at Saidapet, Chennai insofar as the Petitioners / Accused 5,6,8 and 9 are concerned and to quash the same.
For Petitioners Mr.S. Kaithamalai Kumaran
For Respondent Ms. Sangeetha Rajkumar
ORDER
This Criminal Original Petition has been filed seeking a direction to call for the records in C.C. No.1598 of 2016 on the file of the XVII Metropolitan Magistrate Court at Saidapet, Chennai insofar as the Petitioners / Accused 5,6,8 and 9 and to quash the same.
2 Heard Mr. Kaithamalai Kumaran, learned counsel for the petitioners/accused and Ms. Sangeetha Rajkumar, learned counsel for the complainant.
3 For the sake of convenience, the parties will be referred to by their name.
4 It is the case of E. Velu (complainant) that C.A.V.Cotton Mills Private Limited (A1) had borrowed Rs. 2 crores in September 2015 and in discharge of the said liability, had issued four cheques dated 19.01.2016 for Rs.50/-lakhs each, which, when presented by Velu, were dishonoured. Velu issued a
statutory notice under Section 138 of the Negotiable Instruments Act, 1881 (for short “the NI Act”) on 29.01.2016 and since C.A.V. Cotton Mills Pvt. Ltd.(A1), did not make the payment, he has launched a prosecution in CC No.1598/2016 before the XVII Metropolitan Magistrate Court, Saidapet, Chennai against C.A.V. Cotton Mills Pvt. Ltd. and 8 others, challenging which, Othisamy Nanjappa Gounder(A5), Sivasamy Nanjappa Gounder (A6), Ellapalayam Ramasamy Elango (A8) and Ellapalayam Palani Gounder Rajendiran (A9), are before this Court.
5 Mr. S. Kaithamalai Kumaran, learned counsel for the petitioners/accused submitted that the petitioners/accused had resigned from C.A.V. Cotton Mills Pvt. Ltd. way back on 15.02.2013 and in support of that, he produced Form 32.
6 Ms. Sangeetha Rajkumar, learned counsel for Velu submitted that at the time of availing the loan, C.A.V. Cotton Mills Pvt. Limited (A1) had issued the minutes, wherein, the names of these petitioners are shown as active Directors and in the teeth of such assertion, it is indeed a disputed question of fact as to whether they had resigned, as alleged by them now.
7 Be that as it may, on a close reading of the complaint filed by Velu, it is seen that the minimum averments that are required to fasten vicarious liability under Section 141 of the NI Act are absent. In the absence of even the minimum averments, I am afraid that this prosecution against these petitioners cannot be maintained.
In the result, this Criminal Original Petition is allowed and the proceedings against these petitioners in C.C. No.1598 of 2016 on the file of the XVII Metropolitan Magistrate Court, Saidapet, Chennai is hereby quashed. Connected Crl.M.P. is closed.
-s/d-
True Copy
Sub-Assistant Registrar
To
1 The XVII Metropolitan Magistrate Saidapet, Chennai
2 The Public Prosecutor High Court of Madras Chennai 600 104
+1 cc to M/s.A.K.Kumarasamy Advocate sr 47186
+1 cc to Mr.J.J.R.Edwin Advocate sr 47419
Crl.OP No.12567 of 2016
aa08/09/2016
1 issue framed by the court
Whether the prosecution for cheque dishonour can be maintained against petitioners when the complaint lacks minimum averments for vicarious liability under Section 141 of the N.I. Act.
3 provisions across 2 enactments
Othisamy Nanjappa Gounder
Sivasamy Nanjappa Gounder
Ellapalayam Ramasamy Elango
Ellapalayam Palani Gounder Rajendiran
E. Velu
P.N. Prakash
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
