Anas Industries vs Suresh Bafna

Bakhar Basha khadiri, J.—The petitioner invokes the inherent jurisdiction of this Court to call for the records relating to C.C. No. 1684 of

1998 on the file of VIII Metropolitan Magistrate, George Town, Madras and quash the same.

This Crl. O.P. has arises in this way:-

The petitioner herein received a loan of Rs. 50,000/- from the respondent and issued a cheque dated 9.11.1997 for Rs. 1,10,000/- towards the

principal and interest. The cheque was presented in the bank on 9.12.1997, but it was returned on 10.12.1997 with an endorsement ''refer to

drawer''. Then the respondent issued statutory notice u/s 138 of the Negotiable Instruments Act on 13.12.1997. The petitioner acknowledged the

receipt of notice on 16.12.1997, but he failed to make payment. Therefore, the respondent preferred the complaint against the petitioner and

others u/s 138 of the Negotiable Instruments Act on 21.1.1998.

The petitioner who is an accused before the trial Court seeks to quash the proceedings on two grounds, namely, (1) Anas Industries is not a

judicial person to come under the criminal prosecution; further Anas Industries being a sole proprietorship concern, Section 141 of the Negotiable

Instruments Act would not apply; (2) the Statutory notice was not received by the petitioner.

Heard both the sides. The learned Counsel for the petitioner submitted that ''Anas Industries as a proprietorship concern and Ram Mohan is

only the Proprietor of Anas Industries, that instead of suing Ram Mohan, the respondent has instituted proceedings against the petitioner herein. In

the complaint, the respondent herein has described the first accused as under: Anas Industries, having its office at No. 3, Poomagal Street, Ambal

Nagar, Chennai 600097, by its Proprietor, Sri S. Ram Mohan. It is therefore, evident that the accused is not Ram Mohan, but Anas Industries,

who is represented by Ram Mohan.

In M/s. Sri Sivasakthi Industries v. M/s. Arihant Metal Corpn., 1992 M.L.J. (Cri.) 102 Pratap Singh, J. had an opportunity to consider an

identical question wherein the respondent therein filed a private complaint against one Raman as the first accused in his capacity as a representative

of a firm and as the second accused in his personal capacity. Pratap Singh, J. has observed as under:-

Proprietary concern is not a firm. A firm is a partnership firm consisting of partners. In this case, the first accused is not a firm. It is only a

proprietary concern.... only the drawer of the cheque can be prosecuted. As such the proceedings against the first accused represented by its

proprietor are to be quashed.

What has been observed by the noble Judge squarely applies to the facts of the instant case. At last in that case, one Raman was shown as

Accused Nos. 1 and 2, i.e., as the representative of M/s. Sri Sivasakthi Industries, Madras, a Proprietorship concerned and again in his personal

capacity.

In the instant case, Anas Industries is the accused, and it is being represented by Ram Mohan. When Anas Industries is not a juridical person, it

cannot be said that Ram Mohan can represented a non-juridical entity.

In the instant case, Anas Industries is the accused. Failure to make payment within specified time after the receipt of statutory notice becomes an

offence, because such failure is an illegal act with requisite mens rea. Here, it cannot be said that Anas Industries can be attributed with any mens

rea, when it is not a juridical person.

The learned Counsel for the respondent brought to my attention the decision rendered by my learned brother R. Balsubramanian, J. in Egmore

Benefit Society Ltd. v. K. Balasigamani, 1998(11) C.T.C. 372. The facts of the case reported are entirely different from the case on hand. That

was a case where the prosecution wads against a partner of a firm, who alone had signed the cheque. Referring to earlier decisions reported in

Commissioner of Wealth Tax, Gujarat-II, Ahmedabad Vs. Arvind Narottam (Individual), and U.P. Pollution Control Board v. M/s. Modi

Distillery. AIR 1988 SC 1128, my learned brother R. Balasubramanian, J. has held that the prosecution against the partner alone without

impleading the firm is valid. My learned brother has also held that in the case of a company or firm, the company or person in charge or

responsible, or both can be prosecuted u/s 141 of the Negotiable Instruments Act.

In the instant case, the prosecution having been lodged against the proprietorship suffers from inherent defect.

The learned Counsel for the petitioner pointed out that statutory notice had not been received by the petitioner therein. It appears, the notice

was received by one Jagannathan. It is not known in what capacity the said Jagannathan has received notice, when Anas Industries is admittedly a

sole proprietorship concern, receipt of notice by any other person may not be an acceptable and valid acknowledgement of the notice. This Crl.

O.P. is therefore, allowed. The further proceedings in C.C. No. 1684 of 1998 on the file of the VIII Metropolitan Magistrate, George, Town,

Madras stands quashed, Consequently, Crl. M.R. Nos. 8633 and 8634 of 1998 are closed as no orders are necessary.