Kahan Chand Gupta vs Raj Kumar

G.S. Chahal, J.—This order will dispose of seven connected petitions Crl. M. 5557-M of 1993, 5558-M/93, 5559-M of 1993, 5560-M/93, 5561-M of 1993, 5562-M of 1993, 5563-M/93. Since common question of law and facts are raised in these petitions, they are being disposed of together.

The petitioners by means of these petitions seek quashing of complaints filed by Raj Kumar respondent for offence u/s 138 of the Negotiable Instruments Act (for short the Act) against the petitioners, and the summoning order passed by JMIC, Malerkotla.

The facts are being drawn from Cr. M. 5557-M of 1993. Raj Kumar respondent brought a complaint u/s 138 of the Act against M/S Concord Mills and its partners Narinder Kumar Sharma, Kahan Chand Gupta and Sandeep Gupta (all of whom are collectively described as the accused). The respondent is running the business of sale and purchase of coal in the name and style of M/s. R.K. Coal Traders, Malerkotla of which he is the sole proprietor. The petitioner and Narinder Kumar are described as the co-sharers (meant to be partners) who are responsible and incharge of the business of the firm. The firm had opened an account No. 1183 in Canara Bank Branch, Malerkotla and availed the facility of cheque from the Bank. The respondent had been continuously supplying coal to the firm and receiving payments. On April 1, 1991 a sum of Rs. 1,66,924.85 was the outstanding balance with respect to the price of coal supplied. The accused issued the cheque dated May 25, 1992 for a sum of Rs. 15,000/ - in part payment of the price of coal and the same was drawn on Canara Bank Branch, Malerkotla. This cheque was presented for payment but was returned with the remarks of insufficient of funds in the account and a memo dated September 24,1992 was received. Registered notice dated Oct. 1,1992 was sent to the accused through the counsel while the same was served on accused 3 and 4. The other notices were received back with the remarks of refusal to receive. The payment having not been made after the expiry of the period of notice, offence u/s 138 of the Act had, been committed.

The only argument advanced by Mfrs. Shikha Roy is that the present petitioners who are no doubt the partners, but were not incharge and responsible to the firm and were the sleeping partners and that the complaint did not contain enough pleas to make the petitioners liable criminally for the dishonoring of the cheque.

I find no force in the contention of the learned Counsel. In paragraph 2 and 9 of the complaint it has been specifically mentioned that the present petitioners as well as Narinder Kumar Sharma were the incharge and responsible for the business of the firm. Section 141 of the Act provides as follows:

Offences by companies: (1) If the person committing an offence u/s 138 is company every person who at the time the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company was well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

Provided that nothing contained in this sub section shall render any person liable to punishment if he proves that the offence was committed without his knowledge. Or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub Section (1) where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company such director, manager secretary or the other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation for the purpose of this section:

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

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

Whenever an offence is committed by a company the company as well as the persons incharge and responsible to the company for the conduct of the business of the company becomes liable for the offence u/s 138 of the Act. The company includes a firm and partners of the firm will be deemed to be director of the firm.

There being specific allegation in the complaint that the petitioners were responsible for the business of the firm, the foundation has been laid to make the petitioner liable. In case the petitioners have defence to show that they were not incharge of the business or responsible to the company, they can show it to the trial Court. That however, does not make out a case for quashing of the complaint.

On the oral request of the learned Counsel for the petitioners it is directed that on the next date on appearance before the trial Court, before the trial Court Kahan Chand on moving of a proper application in each of the complaint shall be exempted from personal appearance till his presence is so required for a specific purpose. With these directions, all the petitions stand disposed of.