Luxmi Devi vs Puran Chand

T.P.S. Mann, J.—The petitioners are seeking quashing of the complaint Annexure P5 and the order Annexure P6, whereby they have been

summoned for an offence u/s 138 of the Negotiable Instruments Act, hereinafter referred to as ""the Act"".

Complainant Puran Chand alleged in the complaint that he had dealings with M/s. Jain Trading Company for the purchase of wheat from the

area of Fatehabad district in the year 2004-05. Bhagwan Dass, Ramesh Kumar, Sham Lal, Rikash Kumar and Smt. Luxmi Devi were incharge

and responsible for the conduct of business of M/s Jain Trading Company. At the time of settlement of accounts in March, 2005, an amount of Rs.

10 lacs remained outstanding as legally enforceable liability. Accused Bhagwan Dass being the partner and authorised signatory on behalf of the

firm and other partners issued cheque dated 31.3.2005 for Rs. 10 lacs to complainant Puran Chand. The complainant thereafter presented the

cheque for collection, which was dishonored on the ground that there were insufficient funds in the account. A legal notice was thereafter served by

the complainant upon the accused firm and its partners, calling them to make the payment of cheque amount to the complainant within a period of

15 days from its receipt. As the accused did not pay the amount of the cheque within the stipulated period, the present complaint was filed on

10.12.2005.

After recording the preliminary evidence. Chief Judicial Magistrate, Fatehabad found sufficient material on record to proceed against all the

accused u/s 138 of the Act.

Learned counsel for the petitioners has contended that as per the provisions of Section 141 of the Act, all the partners of the firm could not be

summoned without there being an averment in the complaint that they were incharge and responsible to the firm in the conduct of the business of

the firm. Further that the summoning order was a serious consequence and the same could not be passed in a routine manner without looking into

the contents of the complaint as well as the legal notice and the fact that all the accused were being summoned. Lastly, it was contended that the

filing of the complaint as well as passing of the summoning order was a clear abuse of process of law.

u/s 141 of the Act, every person, who at the time the offence was committed, was incharge of and was responsible to the firm for the conduct of

the business of the firm, could be hauled up and liable to be proceeded against and punished. However, if any person proves that the offence was

committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence, he could avoid punishment.

The said provision is reproduced herein below :-

Offences by companies. - (1) If the person committing an offence u/s 138 is a 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, as 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 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.

5A. In the present case, there was a specific averment in the complaint that M/s. Jain Trading Company was a partnership firm and accused Nos.2

to 6, namely, Bhagwan Dass, Ramesh Kumar, Sham Lal, Rikash Kumar and Smt. Luxmi Devi were partners of the firm and these five persons

were incharge and responsible for the conduct of business of M/s. Jain Trading Company. Para 1 of the complaint reads as under :-

That the accused No. 1 M/s. Jain Trading Company is partnership firm and accused No. 2 to 6 Bhagwan Dass etc. mentioned above are

partners of accused No. 1 M/s. Jain Trading Company and accused No. 2 to 6 are incharge and responsible for the conduct of business of M/s.

Jain Trading Company and this company use to sale and purchase of seasons crops on commission basis etc.

The aforementioned facts stated in the complaint were further supported by complainant Puran Chand by filing an affidavit wherein he staled that

the cheque of Rs. 10 lacs was issued by accused No. 2 (Bhagwan Dass) on behalf of accused No. 1 i.e. M/s. Jain Trading Company and that

accused Nos.2 to 6, namely, Bhagwan Dass, Ramesh Kumar, Sham Lal, Rikash Kumar and Smt. Luxmi Devi were incharge and responsible for

the conduct of business of accused No. 1.

In view of the above, it cannot be said that any of the petitioners was prima facie not incharge or responsible to the firm for the conduct of the

business of the firm.

In S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another, , the Hon''ble Supreme Court, after referring to a catena of authorities, held that

it was necessary to specifically aver in the complaint u/s 14 of the Act that the accused was incharge of and responsible for the conduct of business

of the company. Para 19(a) of the said judgment is as under:-

In view of the above discussion, our answers to the questions posed in the reference are as under :-

(a) It is necessary to specifically aver in the complaint u/s 141 that at the time of the offence was committed, the person accused was in charge of,

and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a

complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.

In Pepsi Foods Ltd. and Another Vs. Special Judicial Magistrate and Others, the Hon''ble Supreme Court laid down guidelines in respect of

passing of an order while summoning an accused in a criminal case. It was held as under :-

Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the

complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The mode of the

Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to

examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient

for the complainant to succeed in bringing charge home to the accused.

Chief Judicial Magistrate, Fatehabad, while passing the order whereby the petitioners were summoned, referred to the complaint filed by

complainant Puran Chand as well as to his affidavit wherein details were given regarding the issuance of cheque by the accused and the said

cheque being dishonored on account of insufficient funds. The complainant had also placed on record a number of documents like original cheque

Ex.Pl, memo issued by the bank Ex.P2 and Ex.P3, postal receipt Exs.P5 to P10, notice Ex.P4 and registered envelope Ex.P 11 to Ex.P 15,

receipts Ex.P 11 /A to Ex.P 15/A and receipt ExP16.

After noticing the preliminary evidence, the Magistrate found material to proceed further against all the accused as accused Nos.2 to 6

mentioned in the complaint were incharge and responsible persons of the firm M/s. Jain Trading Company i.e. accused No. 1. Perusal of the

summoning order, thus, indicates that the nature of allegations made in the complaint and the evidence in support thereof were sufficient for the

complainant to succeed in bringing charge home to the accused.

There is no sufficient material available on the file of the present case from which it could be said that the complaint and the summoning order

were an abuse of the process of the law.

In view of the above, the present petition is without any merit and is dismissed in limine.

The observations made by this Court while disposing of the present petition be not construed as final expression on the merits of the case. The

trial Court shall not be influenced by any observation made by this Court.