R. Pandiar vs The State

S. Tamilvanan, J.—The criminal revision has been preferred u/s 397 & 401 of Cr.P.C., challenging the order dated 08.03.2011 made in

Crl.M.P.No. 92 of 2008 on the file of the learned Special Judge for (TNPID) Act cases, Madurai in C.C.No. 45 of 2008. Heard the learned

counsel appearing for the petitioner as well as the learned Government Advocate (Crl. side) appearing for the respondent.

It is seen that the revision petitioner was arrayed as A4 in the case in C.C.No. 45 of 2008 registered for an offences punishable under Sections

406, 420, 120(b)I.P.C. and 5 of TNPID Act, 1997. The petitioner herein had filed criminal revision before the Court below seeking discharge by

filing petition u/s 227 of Cr.P.C., and the same was dismissed by the Court below, aggrieved by which, the revision has been preferred.

Mr. Shajahan, learned counsel appearing for the petitioner submitted that the petitioner/A4 is an innocent person and he had joined in Navaguru

Auto Finance Firm, as a partner on 23.01.1998. However, he was only a sleeping partner and subsequently he voluntarily retired from the

partnership on 26.02.2004. The petitioner has also duly informed the public about his retirement from the partnership firm by publishing the same in

a popular Tamil daily newspaper viz., Dhinamalar on 11.04.2006. The alleged occurrence relating to the offence had happened only subsequent to

his retirement from the partnership firm and therefore, there is no prima facie case made out against the petitioner/A4 and on the aforesaid grounds,

learned counsel for the petitioner pleaded for allowing this criminal revision and to discharge the petitioner/A4, after setting aside the impugned

order.

In the counter filed by the respondent, dated 21.11.2011, the respondent has averred that there was no dissolution of partnership firm on

25.02.2004 as alleged by the petitioner / A4 in his petition. Similarly, the averments of the petitioner / A4 that he had settled the entire dues

payable to the firm and relieved from the partnership firm is denied as not true in the counter filed by the respondent. According to the respondent /

complainant, the petitioner / A4 is not entitled to seek discharge.

Mr. Shajahan, learned counsel appearing for the petitioner submitted that as per the materials and evidence available on record, the petitioner /

A4 was relieved from the firm and he also gave advertisement in the newspaper about his retirement from the Navaguru Auto Finance firm. In view

of the same, he is entitled to get discharge as per Section 227 of the Code of Criminal Procedure. In support of his contention, the learned counsel

appearing for the petitioner relied on the following decisions :

Harshendra Kumar D. Vs. Rebatilata Koley Etc.,

K.K. Ahuja vs. V.K. Vora & Anr., 2009-2-LW (Crl) 1386

B. Jagadeesh & Others vs. The Deputy Superintendent of Police, EOW II, Namakkal, 2011-2-LW (Crl) 421

In Harshendra Kumar D. Vs. Rebatilata Koley Etc., the Hon''ble Supreme Court has held that an Ex-Director cannot be made accountable and

fastened with liability for anything done by company after the acceptance of his resignation by the company. As per the decision, it is seen that the

resignation of the appellant / accused therein as Director of the company was accepted and also notified to Registrar of Companies in the

prescribed form (Form 31). Hence, the criminal case registered against the Ex-Director of the company was quashed.

In K.K. Ahuja vs. V.K. Vora & Anr., reported in 2009-2-LW (Crl) 1386, a case was registered against the Deputy General Manager (DGM)

of the company, under Sections 138, 141 (1), (2) r/w 420 IPC. As he was not a person responsible for the conduct of the business of the

company, it was held that he was not vicariously liable u/s 141 (1) of the Act. When the cheque issued by the company, being dishonoured, the

Managing Director of the company is prima facie incharge and responsible for the company''s business and affairs and hence, the Deputy General

Manager could not be prosecuted for the offences and other directors could be prosecuted only if they were incharge and responsible for the

conduct of the company''s business. It was further held in the decisions as follows :

9...The prevailing trend appears to require the complainant to state how a Director who is sought to be made an accused, was in charge of the

business of the company, as every director need not be and is not in charge of the business of the company. If that is the position in regard to a

director, it is needless to emphasise that in the case of non-director officers, there is all the more the need to state what his part is with regard to

conduct of business of the company and how and in what manner he is liable.

The Hon''ble Supreme Court has held that there could be no criminal liability as that of vicarious liability in Sham Sunder vs. State of Haryana

(SCC p.632 para 9) as follows :

But we are concerned with a criminal liability under penal provision and not a civil liability. The penal provisions must be strictly construed in the

first place. Secondly, there is no vicarious liability in criminal law unless the statute takes that also within its fold. Section 10 does not provide for

such liability. It does not make all the partners liable for the offence whether they do business or not.

In B. Jagadeesh & Others vs. The Deputy Superintendent of Police, EOW II, Namakkal, reported in 2011-2-LW (Crl) 421, based on the

materials available on record, it was held that there was no common intention to commit the offence by the petitioners / accused therein, so as to

invoke Section 34 IPC with the related other penal provisions of law.

As per Section 227 of the Code of Criminal Procedure, it is made clear that the Court having jurisdiction, after considering the record of the

case, documents submitted by the prosecution and hearing the submissions of the accused and the prosecution, if it finds that there is no sufficient

ground for proceeding against the accused, shall discharge the accused and record the reason for the discharge. Section 227 of the Code reads as

follows :

Discharge - If upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the

accused and the prosecution in this behalf, the Judge considers that there is not sufficient ground for proceeding against the accused, he shall

discharge the accused and record his reason for so doing.

It is seen that Crl.M.P.No. 92 of 2008 was filed by the revision petitioner / A4 before the Court below, seeking discharge, on the ground that

he was an agriculturist, aged about 78 years and that he was suffering from arthritis, an orthopaedic disease for the past 20 years and he was only

a sleeping partner in Sri Navagaru Auto Finance, as per the partnership deed, dated 23.01.1999, along with other partners. As per the deed, one

managing partner and two other partners were authorised to do the day to day affairs of the business of the firm and the petitioner herein did not

participate in the day to day affairs of the firm. On 26.02.2004, he retired voluntarily from the firm and he was not a partner in Sri Akshaya Auto

Finance. After his retirement from Sri Navaguru Auto Finance firm, he published the news in Dinamalar, Tamil Daily on 11.04.2006 about his

retirement from the firm. In the aforesaid circumstances, he has stated that he is an innocent person, not liable to be prosecuted u/s 5 of TNPID

Act and other provisions of the penal code and accordingly, pleaded for discharging from the case.

In the counter filed by the respondents, it is specifically stated that FIR had been registered against the petitioner / A4 and other accused in

Cr.No. 27 of 2006 on the file of the respondent police herein only on 26.05.2006 and after the investigation, charge sheet was filed on

21.05.2007 against all the accused, including the petitioner / A4.

Learned Government Advocate appearing for the respondent has not disputed the fact that petitioner / A4 had given public notice in a popular

Tamil daily, Dinamalar, Madurai edition, dated 11.04.2006 through his counsel Mr. S. Chandrasekaran, stating that he had retired from Sri

Navaguru Auto Finance on 26.02.2004 and towards his retirement, he paid a sum of Rs. 3,50,000/- to the existing partners of the firm, P.

Veerasamy and P. Anandan on 23.12.2005. The said amount was asked by the existing partners towards the loss incurred by the said firm and

that he was no way connected with Sri Navaguru Auto Finance and this notice was given to the public.

Mr. Shajahan, learned counsel appearing for the petitioner also drew the attention of this Court to the copy of the letter, dated 23.12.2005,

receipt issued by Sri Navaguru Auto Finance, C. Pudupatti, Theni District, which is in the letter head, signed by P. Veerasamy, as Managing

Partner and another partner, P. Anandan, that a sum of Rs. 3,50,000/- was received from the petitioner / A4 for Sri Navaguru Auto Finance. In

this receipt, the seal of the firm and the seal of the managing partner of the said firm are also available. He has further submitted that the petitioner /

A4 had obtained loan from the State Bank of India, Cumbum branch, in order to settle the dues payable to the firm, The Branch Manager,

Cumbum branch has issued a certificate with the heading ""To whomsoever it may concern"" that the petitioner herein, P. Pandiyar had received a

loan of Rs. 3,23,000/- from the Bank.

Learned counsel appearing for the petitioner submitted that on the date of filing of the revision, the petitioner was aged about 82 years and

even on the date of filing of the criminal miscellaneous petition, he was only a senior citizen, an agriculturist, having orthopaedic ailment and in view

of the firm running in loss, administered by its Managing Partner and other two partners, having obtained loan from State Bank of India, the

petitioner herein settled the dues and also made advertisement by way of public notice in a popular newspaper, even prior to the date of filing of

the FIR by the respondent police against the petitioner and the other accused. Hence, on the aforesaid facts and circumstances, it has been made

clear that the petitioner had acted as a reasonable prudent man in discharging his liability and there is no sufficient ground for proceeding against the

petitioner / A4 u/s 5 of TNPID Act and other penal provisions of the IPC, to infer that he had conspiracy with the other accused in committing the

offence.

In the counter, the respondent has stated that amounts were received from four persons and the tabular column, Sl.Nos. 1 to 4 are available in

the typed set of papers, showing the deposit numbers and names of the depositors and accordingly, the amounts stated as Rs. 60,000/-, Rs.

65,000/-, Rs. 80,000 and Rs. 25,000/- respectively, however, the second column relating to the relevant dates is left blank for the reasons best

known to the respondent. It is seen that the respondent herein has furnished only an incomplete particulars leaving an important column blank

cannot be accepted.

It cannot be disputed that criminal liability is different from civil liability. A partner is liable, jointly and severally for the act done by the other

partners of the firm, which could be construed only as civil liability. As per the latin maxim, to constitute an offence, there must be ''actus rea'', an

act for the commission of the offence and ''mens rea'', mental element, namely, culpability of mind, which are the two mandatory requirements for

constituting an offence and if one element is not available, the same could not be construed as an offence.

In the instant case, admittedly, the petitioner herein filed his criminal miscellaneous petition before the Court below at the age of 78 years and

also gave a public notice about his retirement from the partnership firm on 26.02.2004 itself. The aforesaid factum has been proved by producing

supporting documents, which is not in dispute. It is seen that the Managing Partner has failed to intimate the retirement of the petitioner / A4 to the

Registrar of Firms, though it is not in dispute that an amount Rs. 3,50,000/- was paid by the petitioner / A4 to the Managing Partner towards the

loss incurred by the firm. After his retirement from the firm, the payment of the aforesaid amount towards the loss incurred by the firm was also

paid by the petitioner and the public notice, dated 11.04.2006 was also given by him. It is seen that the present case was registered only on

26.05.2006 as per the FIR. The undisputed factum would show that the petitioner / A4 had been a reasonable prudent man and it is not in dispute

that there is no bad antecedent against the petitioner and no other criminal case is pending against the petitioner herein.

Having perused the impugned order, the counter filed by the respondent and the material papers available on record along with the supporting

documents, I am of the considered view that there is no sufficient ground for proceeding against the petitioner / A4. Though he was an agriculturist,

a senior citizen, even on the date of filing of the petition, he has acted as a reasonable prudent man and according to his conscience, made payment

to the firm towards the loss incurred by the firm and that was accepted by the Managing partner and the other partner, who are entrusted with the

power of administering the partnership firm. As it is established that the petitioner / A4 is an innocent person, who has nothing to do with the

alleged offence, he need not have mental agony as an accused till the disposal of the criminal case, at the evening years of his life. Accordingly, the

petitioner is entitled to be discharged, in the light of various decisions rendered by the Hon''ble Apex Court, as there is no prima facie culpability of

mind or mens rea on the petitioner to implicate him as one of the accused. In the result, this criminal revision petition is allowed and the impugned

order passed against the petitioner / A4 in Crl.M.P.No. 92 of 2008 in C.C.No. 45 of 2008 is set aside and accordingly, the petitioner is

discharged from the case in C.C.No. 45 of 2008 on the file of the Special Judge for TNPID Act cases, Madurai. Consequently, connected

petitions are closed.